The economic foundation was laid in the mid 18th century, with tar manufacturing and tobacco packaging at its centre. Trade started to develop rapidly in Jakobstad as of 1765, when the cities along the Finnish shore of the Gulf of Bothnia were granted privileges by the Swedish crown to trade directly with foreign countries. This also led to shipbuilding becoming a major activity in Jakobstad. The first ships to sail with goods to foreign countries were the galeas Jacobstads Wapen and the brig Enigheten. Trade and shipbuilding made Jakobstad a wealthy city, and a notable businessman of that time was the merchant and shipbuilder Adolf Lindskog, who also became one of the richest men in Finland.
The early 19th century was a time of upheaval, which saw the 1808–1809 war between Sweden and Russia, as well as a devastating fire in 1835 that destroyed approximately half of the city. Despite this, the economic progress continued, and a brewery, a matchstick factory and several banks were founded after 1850. In 1859, the merchant and ship-owner Peter Malm started a steam powered sawmill, which was only the second such installation in Finland. The Crimean War was a major setback to shipping industry, as the British navy puts up an effective blockade and the shipping fleet in Jakobstad is reduced from 26 ships to 9.
Notable businessmen in the 19th century were Otto Malm and Wilhelm Schauman, the latter founding a chicory (coffee substitute) factory in Jakobstad in 1883. This moment in time is usually considered as the start of industrialization in Jakobstad. In 1900, the Strengberg tobacco factory was the largest employer in Jakobstad
