Today’s economy, which is based on the access to the right manpower and the spread of knowledge, has fundamentally changed the conditions for economic development in sparsely populated areas. However, despite a concentration of markets in urban areas, there are good examples of companies that have succeeded in more sparsely populated areas.
Companies are growing increasingly dependent on knowledge, through both education and exchange with similar companies. Often, different companies establish themselves in the same heavily populated regions in order to be close to education opportunities, knowledge exchange and potential personnel. However, despite these collected efforts to concentrate the market, there are good examples of companies that manage quite well in more sparsely populated areas. Many of these local companies that have succeeded have an economy based on regional specialization and clusters of similar economic operations. They often have a local background that goes a couple generations back in time, allowing them to take advantage of the proximity to the countryside. The companies learn, develop, adapt and vary themselves in order to follow along with a changing demand and produce new products without necessarily dispensing with their heritage.
Good examples of vital companies in rural areas
The existence of well-functioning labor markets with competitive forestry companies in rural areas can be seen against the background of the fact that there has been a need for forest to be felled and transported, and that those who worked with this have often been found in rural areas. As the forest industry was increasingly mechanized, with the advent of the chainsaw in the 1950s, new products and methods were developed in close collaboration between local work groups and forestry companies. Being near forest land was important, which contributed to the vitality of the rural area. Some of these companies created during the rapid development that began in the 1950s are still in operation. In Vindeln in Västerbotten, 50 km northwest of Umeå there is: Cranab, Indexator, and Vimek. In 2015, Indexator’s Vindeln operations had 130 employees and a turnover of 230 million Swedish Crowns (SEK), with exports making up 80%. Its products are developed in close collaboration with leading machine manufacturers, such as John Deere and Komatsu.
Martinsons is one of the largest family-owned wood processing and sawmill companies in Sweden. It has its roots in Västerbotten and its head office is in Bygdsiljum, where it began in the 1920s as a mobile sawmill. In 2015 the company had around 400 employees and a turnover of a million SEK. Today it has sawmills in Bygdsiljum, Kroksjön and Hällnäs, all smaller areas in the Swedish forest management landscape. The company makes wood products that are used in construction, and is a market leader in laminated wood. Most of its production is exported.
While there are certain geographical factors that can explain the economic development in both urban and rural areas, there is no reason to believe that companies in rural areas cannot be highly productive and successful.
Facts
Urban Lindgren, Jonathan Borggren, Svante Karlsson, Rikard H Eriksson, Bram Timmermans (2017), “Is there an end to the concentration of businesses and people?” in: E. Carina H. KESKITALO (ed.) Globalisation and Change in Forest Ownership and Forest Use. Natural Resource Management in Transition. Ed. by E. Carina H. Keskitalo. London: Palgrave Macmillan UK.
The study was conducted within the framework of PLURAL, a project financed by FORMAS “Starka forskningsmiljöer” 2012-2017.