Sveriges Riksbank staff memo finds Sweden’s accelerating services trade since 2019 is driven by a handful of multinationals

Sveriges Riksbank published a staff memo reviewing Sweden’s foreign trade in services over the past 20 years and concludes that the sharp acceleration since 2019 is largely explained by a small number of multinational enterprises. The analysis links the trend to corporate structures where head office functions, research and development, and intangible assets are located in Sweden, generating sizeable cross-border services flows within corporate groups. The memo is a staff publication and does not set out policy conclusions. The memo highlights a marked rise in services trade relative to GDP, with services exports and imports at 19.2 per cent and 20.5 per cent of GDP in 2024, up by 3.8 and 5.2 percentage points since 2019. Growth is concentrated in a limited set of “modern” service categories, including fees for the use of intellectual property rights, data and telecommunication services, and research and development and other business services, while transport and travel have declined as a share of total services trade. Concentration among firms has also increased, with the ten largest companies accounting for 30 per cent of total trade in services in 2023, up nine percentage points since 2005, and explaining 33 per cent of cumulative growth from 2005 to 2023. Looking ahead, the memo points to factors that could support continued growth in services trade, including digitalisation and greater availability of skilled labour in emerging economies, while flagging uncertainties from geopolitical tensions, potential trade barriers, and tax and regulatory changes that may influence where multinationals locate intangible assets and head office functions. It also stresses that Sweden’s services trade is particularly sensitive to the performance and organisational choices of a small number of companies.