Stockholm becomes an industrial city
Lars Magnus Ericsson lived during a time when Sweden was transformed from a poor and backward agricultural society to a technologically advanced and relatively rich industrial nation. He and his company were at the forefront of this transformation, which in most important respects took place in Stockholm.
The set-backs suffered in the Napoleon wars and the loss of Finland affected Sweden for some time. Economically and demographically, Stockholm was stagnant during the first decades of the 19th century. The golden age of manufacturing had passed, and lacking hydro power for powering machinery, the capital city was forced through more than half a century to relinquish its leading role in industrial enterprise to Norrköping and Gothenburg.
The importance of the textile industry declined without any other industry that could take its place. When Samuel Owen began introducing steam in 1804 for the powering of machinery in workshops and on ships, this was a hopeful sign. The Swedish market, however, was not yet ready for more advanced industrial products, and Owen's company was finally forced to shut down.
Ironically, at just this time, a turning point was reached. Almost simultaneous with Owen's bankruptcy in 1844, four shipyards and mechanical engineering shops began a new era in Stockholm's commercial history. Initially, growth was modest, but with the upturn in the economy in the 1850s, it accelerated.
Increasing trade, expansion of communication networks, the blossoming of the sawmill industry in Northern Sweden, increasing mechanization of agriculture and increased construction created major new markets for the workshops. Bergsunds in southern Stockholm and Bolinders on Kungsholmen took the lead with a broad and extremely varied product mix consisting of boilers and steam engines, ships, bridges, factory machinery, stoves and other cast iron goods for buildings, interiors and public parks. Every individual request could be satisfied. Specialization and long production series were as yet notably absent. The metal industry was now the largest industry.
By 1853, Stockholm's population had exceeded 100,000, a figure that was to triple by the end of the century. However, the increase was due to a large surplus in people moving to Stockholm. The death rate was still significantly higher than the birth rate. Poor housing, poverty and malnourishment, and deplorable sanitary conditions combined to make Stockholm one of Europe's most hazardous cities from a health standpoint. The authorities had become aware, however, that radical measures were required to alleviate the problems and planning began for a better and healthier city. Achieving results was made easier after the enactment of new municipal laws that included provisions for taxing city residents.
The opening of a water purification plant in 1859 and a water works two years later were milestones in the revival of Stockholm. Clean water and effective sanitation were necessary prerequisites for a healthy city. Streets were improved and gas lighting introduced in 1853. The railway reached Stockholm in 1862, and steamboats and ferries began crossing the inland waters in an ever-denser network. Steamboat traffic extended inward to Lake Mälaren, out to the archipelago and across the seas and increased in intensity. This created greater opportunities to bring in bulky materials and to distribute heavy industrial products to the country's inland markets, as well as to export markets.
Financing of industry was initially provided by private capital, not least from wholesalers and in large part from outside Sweden. During the 1870s, radical changes took place in this sector, with commercial banks coming on the scene and the larger firms being incorporated as limited liability companies. Easier access to risk capital enabled new businesses to be started on a larger scale. A typical example was Atlas, which just one year after its founding was Stockholm's largest company, with 610 employees. Atlas also differed from older engineering companies by specializing in railway rolling stock and bridge constructions.
During the last decades of the 1800s, the inventor became an increasingly important person in Stockholm's companies. Innovative industries began to emerge. The first successful entrepreneur in this category was Alfred Nobel, who by patenting detonators and later dynamite was able to more or less successfully tame the explosive power of nitroglycerine. On January 1, 1865, he started his business in Vinterviken. Thereafter, the business expanded rapidly with factories in several other countries.
1878 was a magical year, when Gustaf de Laval founded his company for the production of dairy separators and Lars Magnus Ericsson created the first Swedish manufactured telephone using the Bell design as a model. The expansion and consolidation of these companies, which would become world leaders, progressed relatively slowly. By the mid-1880s, neither of them had more than 80 employees. The major breakthrough was not achieved until the 1890s, when Laval's company Separator built its large factory on Flemminggatan and Ericsson moved to Tulegatan. By the turn of the century, both companies had more than 1,000 employees, and Ericsson would become Stockholm's largest company.
Other examples of industrially important inventions were J V Svensson's primus stove and ignition bulb engine, Gustaf Dalén's innovations in gas technology , Jonas Wenström's generator and later Munters von Platen's refrigerator.
A common theme for these innovative industries was that they were focused on export markets from the start. This meant that domestic inventions were not the only catalyst for successful industrial operations, but that awareness of technical developments in other parts of the world was equally important. The introduction of German brewing methods from Bayern enabled breweries to expand quickly during the latter half of the 19th century. German compressed air technology was successfully applied by Atlas-Diesel, and similar important innovations were introduced in several other industries.
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