Technological Change and Geographical Reallocation of Labour: On the Role of Leading Industries

This paper analyses inter-regional labour reallocation in Sweden over the period 1985-2008 and assesses the effects of technology-induced structural change on the ability of regions to attract and retain workers. The findings suggest that (1) the regional presence of leading industries associated with technological change has a significant effect; (2) the importance of leading industries is of dynamic character as various functional groups of leading industries play different roles at different stages of the technology-induced transformation process; and (3) while manufacturing branches act as a stabilizing factor, i.e. helping regions to retain workers, service industries drive labour reallocation in terms of attracting workers to regions.