Immigration increases foreign trade: study

Increased immigration to Sweden in recent years has helped boost the country’s foreign trade, a new study shows.

• Sweden announces EU immigration reform plans (25 Aug 09)
• Sweden fifth best country for trade: report (8 Jul 09)
• Sweden's annual immigrant tally hit six figures in 2008 (18 Feb 09)
• Skilled workers set sights on Sweden (13 Jan 09)

Between 2002 and 2007, roughly 200,000 people immigrated to Sweden. During the same period, the total value of Sweden’s imports and exports nearly doubled, and according to research carried out by economist Andreas Hatzigeorgiou, there is a connection between the two phenomena.

By looking at both trade and immigration statistics for the five year period, Hatzigeorgiou concluded that every 10 percent increase in the number of immigrants to Sweden from a specific country increased Sweden’s exports to that country by 6 percent.

At the same time, imports from the same country increased by 9 percent on average.

“The study shows that if immigration increased by about 12,000 people, that leads to an increase in exports of about 7 billion kronor ($1 billion),” Hatzigeorgiou said in an interview posted on the Swedish foreign ministry website.

Currently, immigrants account for roughly 20 percent of all new companies formed in Sweden, with an estimated 250,000 companies run by residents with foreign backgrounds.

According to Hatzigeorgiou, immigrants contribute to increased foreign trade by offering specialized knowledge, cultural competence, and contacts to Swedish businesses looking to export to new markets.

“[Immigrant entrepreneurs] are well-equipped to do business in their former homelands and can also serve as guides to Swedish companies who want to establish themselves abroad,” he said.

Hatzigeorgiou's work, which is set for publication in November in Ekonomisk Debatt, a Swedish economic journal, has been used as the basis for a new project to help expose foreign-born business owners in Sweden to business opportunities abroad.

“We have a unique resource among our foreign-born which we haven’t paid enough attention to. This study shows that immigration is something extremely positive for Sweden,” trade minister Ewa Björling told the Dagens Nyheter (DN) newspaper.

The project, entitled Kosmopolit, calls for the creation of networks of foreign-born entrepreneurs that will allow them to exchange information and experiences with one another.

“In other countries, like the United States, for example, these sorts of networks get created on their own,” said Hatzigeorgiou.

“In Sweden, these sorts of networks don’t exist in the same way.”

Currently, the network consists of about 50 mostly small- and medium-sized businesses, but according to Björling, large, traditional Swedish companies likes Ericsson, Volvo AB, and Scania have also shown an interest in the project.

“It’s important for large companies to absorb these lessons and understand the importance of employing people with foreign backgrounds,” she told DN.