Knowledge can travel

When companies move their production abroad, it usually causes strong emotions. In a new thesis, Peter Warda shows the benefits to Swedish manufacturing companies.

Among other things, Peter Warda studies how the domestic production is affected when companies import machines (that need technicians) and components of various types of quality (which need to be put together).

“You often hear that jobs disappear, but outsourcing jobs actually frees resources that can be used to develop, innovate and compete in the global market. If Sweden can be a country with companies that are innovative and competitive, we won’t lose jobs, but instead we create a need for new types of jobs,” says Peter Warda.

During the early 2000s there was a shift in the Swedish manufacturing industry. From being an industry where many employees lacked higher education, today higher education and specialization is often required, and the employees are also much more likely to further their education mid-career.

Peter Warda’s research shows that companies that import high-tech goods hire more workers with advanced degrees. This applies regardless of company size. However, large Swedish companies importing cheap goods do not have the same need for highly skilled employees.

In the last two chapters of his thesis Peter Warda investigates a different type of knowledge transfer. He shows that companies that have a higher rate of developing new products and exporting them to global markets, have many highly skilled employees and also have better access to services such as IT and legal professions (so-called knowledge-intensive business services). You could say that employees with higher education contribute to a company’s ability to pick up ideas, impressions and knowledge from its surroundings, making it more innovative and competitive.

A similar positive effect can be seen within regions and between countries. In this case, innovation is measured by the number of patents produced. More research and development in a region increases the number of applications for patents from the same region. Even when research and development is increasing in for example Germany, this has a positive effect on patent applications in France. Knowledge can travel, and travels in different ways.

Peter Warda successfully defended his thesis in Economics, “Knowledge, Location and Trade” at Jönköping International Business School on 30 January. External examiner at the defence was Professor Holger Görg, Christian-Albrecht University of Kiel, Germany. Members of the examining committee were Professor Maureen Kilkenny, Senior Fellow at the National Center for Food and Agriculture Policy in Washington D.C., USA and Honorary Doctor at Jönköping International Business School, Sweden, Professor Frank van Oort, Utrecht University, The Netherlands, and Professor Giulio Cainelli, University of Padova, Italy. Chairperson at the defence was Professor Charlie Karlsson, Jönköping International Business School.

For more information please contact Peter Warda

Link to thesis