Companies within the service sector have begun relocating units. Information technology guarantees their ability to communicate from remote areas. In addition companies have suffered from high costs in the Stockholm area mainly during the 1980’s. This report aims to identify the effects the relocations have had on the companies, the regions and the process of finding a new site including the financial support from regional funds. The study was based on 57 different relocations.

The study has shown that 63% of the companies have been more effective after relocation. The main reason for this has been the use of the specific advantages the new site may offer such as lower employee turnover and lower rents. Along with the local advantages the most successful companies have used IT not only in order to increase production, but also in order to change the organisation. With technical support communication both within the organisation and with the customers is improved, which decreases the costs for transactions.

The communities to which the companies have relocated the units have been within regional support areas, which entitles the companies to governmental support. The relocated units have had a very positive impact on the community. The reason has been that the areas very often are dominated by a single industry and have a low employment rate, leaving youth and women without jobs and resulting in emigration. The new companies usually hire people within these sectors, which means that the effect not only increases the employment rate, but also within a desired sector. It must however be remembered that there is a limited effect on the rest of the community. Indirectly the settlements will cause good will and a positive atmosphere, but they will not create a large number of jobs, since the companies do not use suppliers or transportation services.

Since 1983 representatives for the government have actively encouraged companies to relocate units. Besides the centrally financed funds there has been support from both regional and local governments. Added together the total support for each job guaranteed for five years averages 350.000 SEK, which is far more than expected. The reason for the excess contributions is the uncoordinated and overlapping contributions from different actors at various stages of the relocating process.

Besides the increased efficiency of the companies, IT offers local communities in remote areas new possibilities for development. Taken altogether and keeping in mind that the improvements have been made within the expanding service sector, the effects may lead to national growth.