Abstract
For centuries Sweden had a significant small arms industry, dominated by Husqvarna Vapenfabriks Aktiebolag in Husqvarna (founded in 1689) and Carl Gustafs Stads Gevärsfaktori in Eskilstuna (founded in 1812). However, at the end of the 20th century the industry (including both military and civilian production) was virtually gone, and only an insignificant number of artisan manufacturers remained. At the same time, small arms manufacturing continued to flourish in other countries such as the U.S., Germany, Italy, Japan and Finland, indicating that it was indeed possible to survive also where labor costs were high. At the same time the Swedish manufacturers chose not to introduce new labor saving machinery, e.g. CNC machines, metal injection molding, and, despite the increased competition, failed to introduce new attractive products (e.g. over-and-under shotguns). In this paper it is explored why the Swedish manufacturers in contrast to foreign competitors failed to adopt new labor saving technology and how institutional factors, including new restrictions on the number of guns hunters may legally own, and restrictions on retailers (limiting competition and driving up prices) may have destroyed the home market. The paper also covers the role of the national small arms industry played in Swedish defense planning and how the end of the Cold War affected the industry.