Annual EBHS Conference, 39th Annual Economic and Business History Society Conference

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The Impact of the First World War on Swedish Economic Performance: a Case Study of the Ball Bearings Manufacturer SKF
Eric Golson, Jason Lennard

Last modified: 2014-03-10


From the outbreak of the First World War to 1916, Sweden enjoyed substantial economic growth, rising exports (particularly with the belligerents), and a surge in net capital flows (Schön & Krantz, 2012; Mitchell, 1975).  These facts combined account for the largest balance of payments surplus in Swedish history (Schön, 2010).  Standards of living also rose substantially and Sweden overtook France and Germany in terms of GDP per capita (Maddison, Bolt and Van Zanden, 2013).  This paper aims to use Swedish ball bearings manufacturer, Svenska Kullagerfabriken AB (SKF), as a case study to explain the impact of the First World War on short and long-run Swedish economic performance.  SKF was at the forefront of Swedish industrial growth during this period, with increased mechanisation in the war driving additional sales of specialist ball bearings, essential for allowing the free movement of tank axles and airplane rotors, amongst other items. Combining specific Swedish natural resources (iron ore) with new industrial knowledge and manufacturing techniques. Demand for its products during the war led to substantial changes in company configuration, expansion of operations and into conflict with both belligerents. As with the wider economy during the war, SKF recorded substantial profits, rising exports, and ultimately overtook Germany as Europe’s leading supplier of bearings. 

SKF’s wartime success had long-run positive consequences for Swedish economic performance.  In the case of SKF, the firm invested its profits in overseas manufacturing facilities.  By 1929 these investments were bearing fruit with the firm producing one-third of the entire world production of bearings.  This rise represented a permanent technology transfer from Britain and Germany to Sweden, which would later be exploited in the Second World War.  More generally in Sweden, the country invested its wartime profits into electrification and the mechanisation of industry (Schön, 2010). The results were decisive: ten years after the Treaty of Versailles, Sweden still posted average annual growth rates in excess of four per cent.  This study will draw upon Swedish economic history literature in addition to primary sources from NARA (DC, USA), The National Archives (London), and Riksarkivet (Stockholm, Sweden).