Örjan Sölvell

The case profiles the economic development of the Gothenburg region in Western Sweden, and the efforts of the regional economic development agency. During this period the region's traditionally strong automotive cluster started to transform towards e-mobility technologies. The case discusses the role of Business Region Göteborg (BRG), the regional economic development agency, in this process. The case includes exhibits with some key facts about the regional economy, the institutions engaged in economic development in the region, and the structure of BRG.

The downsizing of traditional employment in Arjeplog, a rural village in Northern Sweden, resulted in some taking the opportunity to become self-employed. Some locals exhibited extraordinary knowledge about ice, which became an important core competence for a new industry and later a whole cluster. Regional entrepreneurs met German engineers who were searching for a location for winter testing of new car models and components. Social capital such as trust, a friendly community and informal business relations contributed to the Germans' decision to try winter car testing in Arjeplog. Based on some factor endowments and entrepreneurship a new cluster took form. Factors like arctic climate and infrastructure together with the importance of proximity are captured in Porter's diamond. However, the case shows that these factors alone are not sufficient to explain the evolution of the cluster. The entrepreneurial environment and the attitude of the community affect social capital. The strength of relationships and the emergence and presence of networks and organisations facilitate co-operation and the formation of new, fruitful relationships. The entrepreneurs in each phase, aided by new values and norms, took the cluster to a new level. These elements combined contributed to a positive spiral and growth of the cluster, both through attraction of inward investment and immigration and through a redeployment of local resources and capabilities. This case shows that there are different needs in each phase of the cluster evolution.