Sweden’s membership of the EU from 1995, the EU’s enlargement and the gradual intensifying of the EU’s common market have been significant factors here. New, large markets, such as China, India and the earlier planned economies in eastern Europe are being rapidly integrated into the world economy. Trade barriers and customs duties between countries have declined. Technological developments make it easier for companies to build up global trade and production networks. This has resulted in a strong increase in world trade. In Sweden, this is reflected in the fact that exports have increased from around 30 per cent of GDP in 1990 to around 50 per cent in 2006. Another tendency that is related to globalisation is that integration of companies over national borders has increased. Studies by the OECD indicate that a country's productivity increases if companies in the country have a large degree of foreign ownership. 1 Quite simply, a multinational company must be better than the local competitors in order to outweigh the handicap of operating in a foreign country. Compared with other European countries, Sweden has a high percentage of foreign-owned companies. This percentage has increased substantially since the mid-1990s. In the manufacturing industry around 40 per cent of the  1  2  Criscuolo (2005). BIS Review 12/2008  employed are now working in foreign-owned companies. The corresponding figure in the services sector is 55 per cent. 2 IT is another factor that has probably contributed to the rapid rate of increase in productivity over the past 10-15 years.

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