Ericsson's Flight from Kista: Red-Green Government Invests 100 Million to Prevent Ghost Town

Kista has long been synonymous with Swedish technology industry and innovation. For several decades, the area attracted some of the country’s largest tech companies as well as international corporations, earning the nickname “Sweden’s Silicon Valley.” However, in recent years, the development has gone in the opposite direction as companies have left the area due to extensive safety issues. Now, Stockholm’s red-green city government is taking new measures to reverse the trend by putting lipstick on a pig with an initial investment of 100 million SEK of taxpayers’ money to prevent the area from turning into a ghost town.

One of the biggest setbacks came when Ericsson announced that the company plans to move its operations from Kista to Hagastaden starting in 2028. The move means that around 8,500 jobs will leave the area, which risks worsening an already strained situation.

Kista has for some time struggled with a growing number of empty office spaces. A significant portion of the office premises are already without tenants and several well-known companies have left the area. Officially, lack of safety is rarely cited as a reason, but employees at IT companies testify that the perceived lack of security has been a recurring factor behind the exodus.

To counter this, Stockholm’s red-green city government has now decided to form a new municipal development company focused on strengthening Kista’s appeal for businesses, investors, and new ventures. This is reported by Dagens Nyheter.

The municipal company is tasked with working together with property owners to create modern and attractive premises. Efforts might include adapting existing buildings for new needs or converting properties for other uses when the demand for offices declines.

They believe that the solution lies in developing Kista into a more vibrant and diverse district through more housing, a broader range of services, and more activities outside office hours. The ambition is said to be to create a more mixed urban life that makes the area attractive to both residents and companies.

The idea is to concentrate resources on particularly strategic projects that can have a larger positive impact on the entire area. The goal is not to carry out many small measures, but to identify key investments that can serve as catalysts for continued development.

100 million to start with

The City of Stockholm is allocating 100 million SEK of taxpayers’ money as seed funding for the new company. Even though the operation is expected to run at a loss during the startup phase, the ambition is for it to become financially sustainable in the long run.

– The point is to ensure that we no longer have the current vacancy rate. That, together with private property owners, we get more people to want to move here and grow, says finance commissioner Karin Wanngård (S) to DN.

Karin Wanngård (S) / Stock photo Kista galleria. Facsimile Facebook / Youtube

”Ghost town”

Not all parties agree with the red-green government. The opposition has long claimed that security issues are one of the main reasons companies choose to leave the area.

Opposition city commissioner Christofer Fjellner (M) believes that investments in properties are not enough if the perceived safety does not improve.

– The situation was already serious in Kista but now it is likely to become the ghost town we have warned about. This could be the final nail in the coffin for Kista as Sweden’s Silicon Valley and means that Järva will lose its largest employer, Fjellner tells DN.