On the importance of knowledge and international
exchange - how Sweden grew rich
Author: Åsa Östling Norrman, the County Adminstration of Västmanland.
Translation: John Jones, Mälardalen University.
Introduction
Bergslagen – the counties of Värmland, Västmanland, Närke and southern Dalecarlia –
constitute Sweden’s industrial cradle. Here, as early as the 12th century, the beginnings of
industrial development were to be found. Evidence of this is the discovery of a primitive blast
furnace, the oldest in Europe, at Lapphyttan in Norberg. From these mining operations, there
developed, over the centuries, an industry which has given birth to several large-scale
international enterprises based on pioneering technology in addition to early-developed
international sales organisations. The pioneers are to be found among descendants of the old
master miners as well as among foreign technologists, financiers and tradesmen.
Fundamental natural resources as the basis of industry
The basis of industrial development in Bergslagen has been iron ore with its low phosphorus
content, well suited for blast furnace operations. Here there was also copper, silver and even a
little gold. The forest provided the fuel. Running water set into motion the mine pumps, the
blast furnace bellows, the forgers’ tilt hammers and in due course the electrically-operated
industrial machines. Thus, in the heart of Sweden, in Bergslagen, the foundation of an
industrial and welfare nation was built.
The Middle Ages
In its oldest form, the iron industry did not mean mining. It was established on deposits of
lake and mire ore, and was a subsidiary industry to agriculture. The production of iron from
mire and lake ore occurred as early as prehistoric times and was still predominant during the
early Middle Ages. As far as can be judged, even this iron was exported to some extent. The
manufacturing of mire ore was eventually replaced by rock mining in quarries. How old this
branch of the mining industry is cannot be stated with certainty, but the sources which name
this process do not go further back than the 14th century and apply to the Norberg mining
district in the north of Västmanland.
The change that lay in the rise of a true mining industry was very great. Rock ore mining
demanded a real organisation and therefore created a separate industry. A feature of this is
that the world’s oldest company, Stora Kopparberg, was established in Falun.
When, during the later centuries of the Middle Ages, Sweden had acquired a mining industry
in no less than three metals (iron, copper and silver) and exports of at least two (iron and
copper) the acquisition of capital and trading for these purposes created tasks that went
beyond the abilities of the Swedes of that time. Those who were then called in were Northern
Europe’s leading tradesmen, the Hanseatic League and next their incomparably most
influential group, the Lübeckians. As early as in the 14th century Lübeckians are reported as
part-owners of the Falun mine and later, the German influence can be traced over the whole of
Bergslagen. Place names such as Garpenberg and Garphyttan indicate traces of Germans:
Garp was a nickname for Germans. Saxhyttan and Saxåhyttan referred to Saxons. This was
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the first foreign influence that had significant importance to Sweden’s economic development
and this influence was not solely restricted to iron mining.
The important role of immigrants as bearers of knowledge
Apart from our natural resources, immigrants and the knowledge they brought with them have
been a basic prerequisite for the development of the Swedish economy. Practically everything
new that has occurred in this area has depended on initiatives from immigrants. Incomparably
foremost in the areas where immigrants have had the greatest importance is the iron industry.
Crown ”bruks” (works) – German hammersmiths
Bergslagen was a theatre of war during Engelbrekt’s revolt against the Danes in the 15th
century and during the continued fighting that did not cease until Gustav Vasa established
himself as the country’s strong man and new King in the 1520s. Gustav Vasa had the first
proper ironworks, the Crown works, built in order to improve, to a greater degree, Swedish
iron within the country.
The ”bruk” represented a special system, almost unique to Sweden, of organising production
as well as social relationships. These bruks fulfilled their function right up to the beginnings
of the modern welfare state in the 19th century. The bruk was both a company and a
municipality, and was organised hierarchically. Families spent their whole lives in the
community, which comprised the bruk.
German hammersmiths were called in to build up a more organised production of hammered
iron. They originated from Austria and south-eastern Germany. Previously the Swedish iron
that had been exported had mostly had the form of osmund iron, an iron which has been
forged and chopped into lumps, osmunds, of uniform weight and controlled quality. German
forging means that the pig iron is wrought directly in connection with a single forge of
glowing coal. The finished bar steel had a wide field of application, from nails and building
materials to horseshoes, tools etc.
In Bergslagen there were at the most 400 blast furnaces. The whole of Bergslagen resembled,
for a period, a large industrial area, inhabited by master miners, charcoal-burners, mining- and
foundry-workers and proprietors.
The National Board of Mining and Metal Works
In the 17th century, the fear that the country would be affected by a shortage of forests resulted
in the introduction by the Crown of special mining legislation, and in 1637 the National Board
of Mining and Metal Works was established with the task of controlling regional development
with regard to the works and foundries.
The Swedish Steel Producers Association
In 1747 the Swedish Steel Producers Association was established in order to work for
reasonable prices for iron of different kinds and to facilitate the financing of the iron trade.
The Swedish Steel Producers Association was later granted the right to run their own loan
business together with consultancy and research. The Swedish Steel Producers Association
became the trade organisation of the Swedish works.
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An export industry
From the very beginning, mining in Bergslagen was a typical export industry. During the
Middle Ages and the 16th century Swedish iron was shipped mainly via the Hanseatic League
to the Baltic harbours such as Lübeck and Danzig. Above all it was osmund iron.
As the works expanded and hammered iron increased in proportions, exports were directed
towards more western European markets. During the first half of the 17th century Holland was
predominant and during the 1660s England became definitely the largest market for Swedish
iron.
Swedish copper dominated the European market completely during the 17th century. Copper
and iron created the basis of the Swedish Great Power period. They were strategic metals
which, among other things, were used for the manufacture of cannon. The country that
provided, without comparison, the most important leaders of Swedish industry during the
Great Power period was the Netherlands.
The De Geer Group
The mining industry grew quickly and by the end of the 17th century there were 334 works in
Sweden. The new proprietors came primarily from three different groups: wealthy foreigners,
the nobility and the merchants in the cities.
At an early stage the Walloon and Amsterdam banker Louis De Geer, with roots in the
industrialised Liège area, predominated. For a time the De Geer Group included, among
others, the Dannemora mine with Österby Bruk and the works in Leufsta, Forsmark, Gimo,
Kroppa, Finnåker and Finspång. Here there are interests in the Copper Mine in Falun, and
cannon foundries, weapon factories, brassworks, blast furnaces and German forges.
Louis De Geer co-operated closely with the de Besche brothers who were responsible for the
technical and industrial development. Louis De Geer himself was primarily in charge of
financing and marketing.
From the point of view of those in power, Louis De Geer’s most important contribution was
the constantly troublesome financing of the Swedish Crown. In that way he also became the
merchant who, more than any, came to trade in Swedish copper as well as being the foremost
supplier of cannon and weapons.
De Geer was also the greatest industrialist in the country and above all the initiator in the
reform of the Swedish iron industry. He ran all kinds of manufacturing processes, brassworks,
steel production, tin shops, wireworks, papermills, clothes factories, had a large shipping and
shipbuilding company and undertook two large projects to equip the Navy during the Danish
war of 1644-1645. For his growing claims against the Crown he was largely remunerated in
the form of so-called estate purchases and thereby became a landed proprietor of great stature.
De Geer’s behaviour was not particularly considerate, which did not make him very popular,
not even among those in power. On the other hand, this did not have such great significance
as many were dependent on his knowledge, for example as a man of ideas and as economic
adviser. Although he became a Swedish nobleman it is doubtful if he thought of himself as a
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Swede. He had kept his trading house in Amsterdam and also died there. All indications
suggest that he never learnt Swedish. His letters to Royalty and Privy Councillors were
always written in Dutch, German or French.
Walloons
With the families of Louis De Geer and de Besche followed a large-scale immigration of
Walloons during the 17th century, bringing with them their forging skills to Sweden. They
came from parts of today’s Belgium and northern France, which had at times suffered from
production problems during the Dutch war of freedom (1579-1648). The Walloon works
produced their crude iron themselves with ore from the Dannemo mine, containing elements
of minerals which gave an iron of extraordinary quality. The Walloonian iron became the
”alloy steel” of its time and was exported principally to the Sheffield area in England to be
used for tools, saws, scissors etc.
Walloonian forging is a method of decarburisation in the open hearth furnace for the
production of forgeable steel from crude iron. The hearth on which the iron was decarburised
was designed with only one tuyère (opening for blast air). The crude iron was melted down
and not decarburised straight away, as for example in German forging and the Lancashire
process, but a long pig iron ingot, as it is called, was fed in from the back of the hearth and
allowed to melt away during the whole process. Walloonian forging was carried out chiefly at
the Uppland works, for example Lövsta, Forsmark and Österby which were owned by Louis
De Geer.
Industrial knowledge in the sphere of bar iron manufacturing was kept almost completely a
secret by the Walloons and their descendants.
Of the total number of Walloons, the smiths and foremen at the blast furnaces accounted for
around 25 per cent. The remainder were woodcutters and charcoal burners together with
craftsmen at the works who repaired and maintained the industrial plants.
Financing
The immigrants also played important parts as financiers on behalf of the Crown. Before the
appearance of the commercial banks during the later part of the 19th century, international
credit granting was maintained chiefly through personal connections between the various
trading towns. These connections had as a rule their basis in family ties. In order to provide
the states with foreign credit it was therefore almost necessary to have family connections in
the main European trading cities. Louis De Geer worked together with Dutch relatives, in
particular the Trip family.
The state threw its doors wide open to all foreigners.
Golden age
The 18th century was a golden age for the works in Bergslagen. At the middle of the 18th
century Sweden accounted for three quarters of England’s import of iron. Sweden accounted
for a total of one third of Europe’s entire iron production.
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Master miners get competition – the puddle process
During the second half of the 18th century, iron production i Russia increased greatly. Russian
iron eventually took over the leading role of iron in England. At the beginning of the 19th
century the English learnt how to produce forgeable iron from coke pig iron using coal as
fuel, in the puddle process, as it is called. The industrial revolution that occurred in England
in the 18th and 19th century had great after-effects in Bergslagen. Henry Cort created, by his
puddle process, the conditions for a strong rise in the domestic production of iron in England.
Swedes and Russians were in principle obliged to seek new markets, in among others the
USA. The Swedish iron exporters also succeeded in keeping their traditional markets such as
Germany, France and Portugal and the East Indies.
Innovative crisis – English influence
As early as the 1840s the puddle process became a success in the USA too and the import of
Swedish iron declined. At the same time there came an unexpected recovery of exports to
England and above all to the Sheffield area, the greatest stronghold of Swedish iron. What
was in demand was iron for springs for railway carriages and machine parts, an iron that the
Swedish works produced by the Lancashire process. This method originated in Lancashire in
England and was brought to Sweden during the 1830s. The last manufacturing in Sweden by
the Lancashire process was done in Ramnäs, in the County of Västmanland, in 1964.
The introduction of the Lancashire process meant a substantial restructuring of the Swedish
works. Many old German forges were superseded by Lancashire foundries. The Swedish iron
industry acquired an entirely new structure and product mix. Every works with the ambition
of expanding acquired a rolling mill. The smaller works found it increasingly more difficult
to keep up with the competition. In the middle of the 1870s the first great works crises began
to hit Bergslagen. Here begins the growth period of industry. Here new dynasties such as
Wallenberg and Ax:son Johnson are established.
Bessemer and Göransson
Right up to the introduction of the Lancashire process, the quarry works had been applying
the principles that had been established as early as the Middle Ages. Pig iron had been
produced in the master miners’ blast furnaces with a carbon content of about 4%. The pig iron
had then been heated up again, decarburised in the works’ foundries after which was obtained
a soft forgeable iron of which the carbon content was 0.1%. What the market was demanding
more and more, concurrently with the industrial revolution, was a somewhat harder iron that
could be used for, among other things, details in steam engines and other machine equipment.
The ideal was an iron of which the carbon content was about 1%, in other words steel. The
ingot steel methods had great importance for the production of this type of steel. Its pioneer
was the British engineer Henry Bessemer (1813-1898) whose method, the Bessemer process,
came to revolutionise the steel industry. The method was patented in 1855 and was epochmaking for the development of the iron industry and was the first of the ingot steel processes,
that is, processes whereby steel is produced directly from crude iron into a castable product.
The Bessemer process is a steel production process by which the carbon content in molten
crude iron is decreased through oxidation by means of air blown in through the iron bath in a
tilting furnace.
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Bessemer himself did not succeed in producing ingots of satisfactory quality. The founder of
Sandvikens Jernverk (Ironworks), Göran Fredrik Göransson (1819-1900), was the first to
succeed in carrying out the process with technologically and financially good results.
Göransson’s development of the Bessemer method made possible the extension of railway
networks on a large scale over the entire world. Through his efforts in Edsken and Högbo he
lay the foundation for the global combine that is today called Sandvik.
More ingot steel processes
In the same way that the lancashire process, two decades earlier, had begun to spread over
Bergslagen, new Bessemer works were now growing there at, among other places, the large
steelworks in Domnarfvet, which is started up in the war year of 1878.
Hardly had the Bessemer method completed its triumphal procession over the world when
another ingot steel process is discovered. Whereas the bessemer affected the process in the
steel furnace by blowing air through, other inventors were working to find methods to obtain
a sufficiently high temperature for the smelting of steel in a furnace. One such method was the
Martin method which was developed by the brothers Emile and Pierre Martin in conjunction
with Wilhelm Siemens in the 1880s. By the Martin process, even scrap metal could be used as
raw material, which marked a breakthrough in the Swedish iron industry.
A new technical method which was called the Thomas process, after its English inventor,
made it also possible to exploit the metalliferous mountain rock in northern Sweden. By this
method, high quality steel could be produced from phosphorous ores.
The ingot steel methods led to a concentration of production to large units. The major
companies led the way and during the later part of the 19th century, operations were
concentrated at Stora Kopparbergs Bergslags new works, Domnarvet and at Uddeholms
works in Hagfors and also Munkfors. Many smaller works were closed down.
During the 20th century the oxygen gas steel process and the electrical steel process have had
great importance in the steel industry.
Swedish inventions pave the way för the expansion of the engineering industry
The engineering industry began early in Sweden. One of the forerunners was Motala works,
which was established in the 1820s and which later came to build railway engines.
In the 1870s great changes occurred in the engineering industry. These changes were
connected with the mechanisation of agriculture, the building of railways and steamships and
the need of industry for special machines.
A period of great expansion in the engineering industry took place around the turn of the 20th
century. At this time a large number of specialised companies, based on Swedish inventions,
were formed:
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Alfred Nobel’s explosives which contributed towards creating the modern Bofors.
Gustav de Laval who constructed the cream separator which was taken over by the
company Separator.
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Gustav de Laval also developed the steam turbine which became the most widely-used
source of steam power in the world.
Gustav Daléns invention of the gas accumulator lay the foundation for the company
AGA’s work which revolutionised the beacon system all over the world.
Jonas Wenström’s invention of a dynamo machine, which made it possible to transmit
high-voltage alternating current over long distances. It was upon this invention that ASEA
lay the foundation for its worldwide activity.
Lars Magnus Eriksson constructed a telephone apparatus which achieved worldwide
distribution through the company L M Eriksson.
Sven Wingquist invented a self-generating ball bearing, which in 1907 formed the basis of
Svenska Kullagerfabriken, SKF (the Swedish Ball Bearing Company).
Information technology
Sweden has recently been recognised as the European centre of IT, information technology,
particularly in wireless communications.
Sources:
Blomé Göran, Rydberg Sven. Bergslagen Sveriges Hjärta. Gullers Förlag AB. Örebro 1992.
Hagstrom Jerry. To Be, Not To Be Seen - The Mystery of Swedish Business. The George
Washington University School of Business and Public Management. SkanAtlantic Press.
Middleburg 2001.
Heckscher Eli F. Svenskt arbete och liv. Albert Bonniers förlag AB. Stockholm 1985.
Hildingson Lars, Kjellin Gunnar, Norman Torbjörn, Westin Gunnar T, Åberg Alf. Två sekler.
Natur och kultur. Örebro 1978.
Nationalencyklopedin.
Tynderfeldt Bo, red. Västmanland. Utbildningsförlaget Brevskolan. Stockholm 1993.
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