Kai Hammerich: Sweden’s salesman

TEXT: LESLEY VIET JACOBSEN PHOTO: INVEST IN SWEDEN AGENCY (ISA)

In 1995, when Saab-Scania AB was dissolved, the Swedish government invited its executive vice-president Kai Hammerich to set up an Investment Promotion Agency (IPA) to promote and compete for inward foreign investment in Sweden.


            “At the age of 52, I felt immensely privileged to do something like this for my country,” Hammerich recalls.
            “I have never done any planning. I have, however, grabbed opportunities when they passed before me.” This is how Kai Hammerich, 62, President and Director-General of the Invest in Sweden Agency (ISA) describes his remarkable career.
           He graduated in Law and Social Science in Stockholm and France and worked as a correspondent for European affairs in Brussels. “The skills I learned as a journalist have served throughout my whole life,” he explains.
           He cemented his reputation as Deputy Director and Head of the Press and Information Department at the Council of Europe in Strasbourg between 1977 and 1980.
            “I learned how international relations worked. It isn’t enough to be ‘right’ – you have to convince people to believe in your argument. It is the work of compromise and in any negotiation there must always be two winners.”
           After 12 years abroad, he returned to Sweden with a tremendous asset: “I could now judge my country from a distance and put Sweden in an international context.” His experience earned him a job at Saab-Scania AB and he became Executive Vice President of the company in 1987. This experience completed his authority in global business and economics.
           He has just celebrated his 10th anniversary as President of the ISA and continues to be outspoken on Sweden’s role in globalisation.
            “For solid economic growth we need to compete and be successful in attracting foreign investors. We must balance outgoing Swedish investments with incoming foreign investments and provide for an increased influx of qualified personnel. If industry in Sweden is to prosper in the future, the country must be populated by many more foreign players than it is today.”
           Offshoring is an exploding trend and has helped many businesses stay competitive; Hammerich warns, however, of the “tranquilising effect” of blindly shipping production out to low-wage economies: “Perhaps making decisions based solely on unit cost will not produce a sustainable return on investment”.
           He also cautions not to underestimate the ambition of emerging economies: “Much attention is focused on China, and the development that is taking place there is indeed impressive. But the changes go far beyond China and embrace many other emerging economies. These nations are not only competing for low-cost production but are rapidly moving up the value chain. They will soon be important overseas investors themselves and we need to harness our own key competences in order to compete for their investment.”
           He calls these key competences ‘clusters’ or ‘centres of excellence, and aims to create a critical mass of presence in each. He directs the ISA in aggressive moves to promote Sweden’s expertise in pharmaceuticals, bio-technology, life sciences, Information and Communications Technology and areas specific to the use of natural resources. “Sweden, with its small domestic market yet highly educated population, has often been seen by other countries as an incubator for innovation. If we do not succeed in taking advantage of globalisation, then we have no one to blame but ourselves,” he says.
           Given the ingenuity of developing nations, this is a shrewd warning. Not just China and India, but also Russia, South Korea, Taiwan, Malaysia, Brazil, Mexico, South Africa and Turkey, all suddenly have the chance to benefit from globalisation. They want to build strategic alliances and buy competences and technology that they do not possess. They are making rapid inroads in established sectors by buying existing brands for their own portfolios. Asked whether this concerns him, he answers: “If anything concerns me, it is the risk of Europe failing to get its act together and slipping into protectionist measures as a result.”
           Kai Hammerich is also President of the World Association of Investment Promotion Agencies (WAIPA) and is Chairman of the Board of the Swedish Agency for Economics and Regional Growth (Nutek) and of Almi Business Partner AB (parent company of 21 regional business agencies).
           For someone who didn’t plan his career, he could not have designed a more coherent set of achievements.

“Much attention is focused on China, and the development that is taking place there is indeed impressive. But the changes go far beyond China and embrace many other emerging economies. These nations are rapidly moving up the value chain.”