The relocation effect: a productivity increase when service activities where relocated from city areas to rural areas

Contacts with companies that had relocated service activities from the Stockholm city area to rural areas during the seventies, eighteens and the nineties, pointed to a phenomenon of increased productivity. A small study in 1995 also confirmed the experience of a positive leap in productivity. Previous research in the field is limited and mostly related to manufacturing industry. The literature reports no evidence of a positive change in productivity after relocation into rural areas. In 2000 – 2002, we conducted a study of 26 companies/organisations that has relocated service activities from the Stockholm city area into rural areas, mostly in northern Sweden. 80 % of the respondents reported an increase in productivity less than 1.5 years after the relocation and over 70 % reported an increase in quality 1.5 years after the relocation. The aim of this paper is to create an interest for our ResearchinProgress, and to be able to present our findings at the ECIS 2003 conference in Naples, Italy, June 16-21, 2003. The study will be completed during spring 2003.