Swedish Services on Export

Swedish service on export has increased greatly in recent years. The Swedish exports of services have established themselves strongly in the international market and surely are here to stay. It is more uncertain how the global economic downturn will affect the Swedish service exports during the next six months to come.

If you bring up the subject of services on export there are many who look bewildered. Tourism, transport, and IT are part of Swedish exports that take place in the shadows of goods supplied internationally. But there is reason to look at the increased sales of Swedish services abroad.

Exports of services constitutes a third of the total Swedish exports, and as a nation, Sweden has quickly strengthened its position on the world market. Even before the year 2000, Sweden’s share on the world market for services increased greatly. The annual growth in recent years, in services exported, has been substantially higher than the average of other OECD countries.

Services exported accounts for about 15 percent of GDP, so it is an important source of income for Sweden. In real terms, the export of services has had an average annual growth of 8 percent between 1995 and 2009 and growth continues.

Sweden’s competitiveness lies in service sectors that use a large part qualified workforce. When Swedish authorities analyzed sectors sails data and information; services ended up on top of the list. It is also the service group where exports have grown the most, both in Sweden and in other OECD countries. Other sectors that increase are tourism and communication services, but also sectors that are not directly related to the export of services increased as services in Swedish corporate groups. Transactions between foreign affiliates and parent companies in Sweden, calculated as Export Council contribute to the export of services by about SEK 30 billion.

SEK 490 billion was the Swedish export value of services last year (net: SEK 133 billion). Goods exports during the same period were more than twice as large, SEK 1213 billion but income was only SEK 73 billion.

One reason is that service means a lot to exports of goods and commodities, while the reverse does not apply. Value added is often less in goods production than in the production of services. Take for example a car, many of the parts come from other countries, and it is only assembled in Sweden.

Productivity also increases markedly in Swedish companies exporting goods and services, compared to companies that export only one or the other. Trade Council’s analysis also shows that manufacturing service revenue has increased at turbo speed.

The exports of services are clearly affected later in the cycle of an economic crisis and not so hard. Probably because services are often delivered over a longer period but it is also easier to cut back on purchases of goods than to stop consuming quality services in crisis.

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