The Strength of Swedish Business

Even with a population of just 10.5 million, Sweden is a leader in innovation.

The country’s social stability, people’s access to government support, and high levels of equality—combined with a skilled workforce, clear business procedures, and low corporate taxes—have created a low-stakes business environment that fosters innovation and entrepreneurship. This helps explain why Sweden is the birthplace of several successful companies established in the United States and around the world.

The Swedish economy is supported by a highly educated workforce (college is free for Swedish citizens and about one-third of the population has post-secondary education) and significant investments in research and development (R&D). At 3.4%, the proportion of Sweden’s GDP that goes to R&D is one of the highest in the world. Early efforts to promote digitalization has also turned Sweden into one of the most connected countries in the world; today, more than 95 percent of Swedes have access to the internet.

The Swedish capital, Stockholm, is second only to Silicon Valley in the number of successful start-ups per capita in the world—a so-called unicorn factory. Given the small size of the Swedish market, many Swedish entrepreneurs plan for scaling globally from day one. Today, start-ups are a key part of the broader innovation strategy for Swedish competitiveness and growth, and the government aims to foster an environment in which creative individuals feel financially secure enough to dare to test their ideas. You may recognize the names of some successful start-ups from Sweden: Spotify, Skype, Klarna, King (creator of Candy Crush Saga), and Mojang (creator of Minecraft).

Sweden has a long tradition of supporting employees to bolster business resilience and efficiency, including through vocational training systems and job security councils. Workers’ rights are one of the cornerstones of the modern Swedish labor market, and a majority of the working population is unionized. Collective bargaining has created an environment in which the health and safety of employees is a key priority. Labor unions also work with employers and the government to support laid-off workers rather than preserving outdated job functions. Sweden’s strong support for workers, in combination with exposure to global competition, has allowed Swedish companies and industries to reinvent themselves without leaving their employees behind. In international comparisons, Swedes stand out as holding overwhelmingly positive views about job prospects in areas such as technology, robotics, and artificial intelligence. By encouraging shared participation in childcare and offering generous and gender-neutral parental leave, Sweden makes it possible for both parents to combine work and family life.