Capital - Stockholm (GMT+1) Largest City - Stockholm Population - 9,031,088 est. Languages - Swedish Demonym - Swede, Swedish Currency - Swedish Krona (SEK) GDP per capita - $31,600 est. Calling Code - +46 Internet TLD - .se
Sweden, officially the Kingdom of Sweden (Swedish: Konungariket Sverige), is a Nordic country on the Scandinavian Peninsula in Northern Europe. Its capital city is Stockholm. It is surrounded by Norway (west), Finland (northeast), the Skagerrak, Kattegat and Oresund straits (southwest) and the Baltic Sea (east). It has maritime borders with Denmark, Germany, Poland, Russia, Lithuania, Latvia, and Estonia, and it is also linked to Denmark (southwest) by the Öresund Bridge. It has been a member of the European Union since 1995.
At 449,964 km² (173,720 square miles), Sweden is the third largest country in Western Europe. Sweden has a low population density except in its metropolitan areas; 84 percent of the population lives in urban areas, which take up only 1.3 percent of the total land area. The citizens enjoy a high standard of living and the country is generally perceived as modern and liberal, with an organizational and corporate culture that is non-hierarchical and collectivistic compared to its Anglo-Saxon counterparts. Nature conservation, environmental protection and energy efficiency are generally prioritized in policy making and embraced by the general public in Sweden.
Economy
Sweden has a long tradition as a major exporter of iron, copper and timber. Improved transportation and communication allowed more remote natural assets to be utilized on a larger scale, most notably timber and iron ore. In the 1890s, universal schooling and industrialization enabled the country to develop a successful manufacturing industry and by the twentieth century, Sweden emerged as a welfare state, consistently achieving a high position among the top-ranking countries in the UN Human Development Index (HDI). Sweden has a rich supply of water power, but lacks significant oil and coal deposits.
Aided by peace and neutrality for the whole of the 20th century, Sweden has achieved an enviable standard of living under a mixed system of high-tech capitalism and extensive welfare benefits. It has a modern distribution system, excellent internal and external communications, and a skilled labor force. Timber, hydropower, and iron ore constitute the resource base of an economy heavily oriented toward foreign trade. Privately owned firms account for about 90% of industrial output, of which the engineering sector accounts for 50% of output and exports. Agriculture accounts for only 1% of GDP and 2% of employment. The government's commitment to fiscal discipline resulted in a substantial budgetary surplus in 2001, which was cut by more than half in 2002 due to the global economic slowdown, declining revenue, and increased spending. The Swedish central bank (the Riksbank) focuses on price stability with its inflation target of 2%. Growth remained sluggish in 2003 but picked up during 2004-06. Presumably because of generous sick-leave benefits, Swedish workers report in sick more often than other Europeans. In September 2003, Swedish voters turned down entry into the euro system concerned about the impact on the economy and sovereignty.
Market Overview
align="justify">Sweden is one of the world’s leading free-trading nations, with more than half the economy dependent on trade and business operating largely free of political influences. A new government elected in September 2006 styles itself as pro-business and trade oriented. Sweden exports more than three times as much as it imports from the U.S. There are signs that this imbalance may have peaked, with the lower value of the dollar attracting increased interest in U.S. products. The U.S. is the number one purchaser of Swedish products whereas imports from the U.S. to Sweden rank number 8. The U.S. Embassy, under the leadership of the Ambassador, has focused on redressing this imbalance and is working with the Swedish Government to promote U.S. products in key areas such as energy, auto parts and consumer products.
Growth rates in Sweden (4.6 %) still lead Europe’s average. Compared to most major economies, Sweden’s economic house is in good order with low deficits and well-funded pension programs. Sweden’s main economic challenges are creating jobs, especially for youth and new entrants to the market, maintaining a high-cost social welfare system without increasing taxes, and managing military restructuring costs. Sweden declined to adopt the Euro in a national referendum in 2003, which will leave them outside the Eurozone until at least 2012.
The most exciting sector in Swedish American trade and investment is in alternative Energy. Given the US and Swedish leadership in developing technological solutions to the threat posed by Global Warming, the US Embassy, under the leadership of Ambassador Wood, has focused on the opportunities in this sector as priority number one, making it the “One Big Thing” of our activities. Opportunities exist in Solar, wind, battery technology and bio energy. For more details on prospects in Renewables please see the Renewable energies description under Best Prospects. The Embassy One Big Thing program is described in detail in the White Paper Document. As a key part of the Embassy action plan, the Commercial Section is involved in identifying good partnership opportunities for startups and Venture Capital. We are also actively involved in “The Power Gen Renewable Energy and Fuels” and plan to recruit a Renewables mission to Sweden in 2008.
Market Challenges
Prices are high in Sweden, with Stockholm listed as the number 16th most expensive city according to the Economist Intelligence Unit. This offers both an opportunity in terms of the potential to price products higher, and challenges in terms of the cost of doing business. About 80% of working Swedes belong to a union. Swedish law requires that union members be represented on the board of any company with over 25 employees. Generally speaking, labor laws create an expensive market for low cost labor, making operations like franchising a challenge. On the other hand, Sweden is one of the most cost-efficient countries in the world for design, research and development because of the relatively low cost of scientists and engineers and top-notch research facilities. Individual tax rates are among the highest in the world (the highest by some calculations), but corporate taxes are medium for Europe at about 28 %. VAT taxes of 25% apply for the import or sale of products anytime products change hands.
Market Opportunities
A world leader in telecom, computers, electronics, robotics, pharmaceutical and medical products and biotech, Sweden is regularly listed as top in the world in terms of high-tech readiness and receptivity. Swedes are leaders in implementing Egovernment, and high-tech sectors like security ID systems, fossil free alternative energy and nano-technology are flourishing fields in Sweden. Sweden has one of the most open and competitive markets in the world, ranking only behind the U.S. and Finland in the International Competitiveness Ranking. The U.S. has few substantial trade issues with Sweden and there is virtually no corruption.
Sweden is sometimes described as the most Americanized of countries. By one count, there are 12 million foreign Americans of Swedish ancestry living in the U.S., with only 9 million Swedes living in Sweden. Many Swedes have lived in or visited the U.S. and colloquial English is widely spoken, they are receptive to U.S. products. Sweden boasts both a domestic auto and aviation industry with substantial foreign investment and partnering – primarily with the U.S. Sweden is considered an ideal test market, though an expensive one, because of the high regard for U.S. products coupled with fact that Swedes are “early adaptors”; being quick to start or follow trends. A frequent strategy is to “waterfall” products through Sweden to the rest of Europe.
Sweden is home to more multinational corporations per capita than any other country in the world. Selling to Sweden is selling to the world. They have a high per capita income and the combined Nordic market of 24 million is the 8th largest economy in the world. It is at the economic center of the Nordic and Baltic world, a market of over 27 million consumers. Most U.S. corporations in the region choose Stockholm as their Nordic headquarters. Sweden has high environmental standards, high renewable energy utilization, and a preference for “clean” solutions, which fit well with U.S. capabilities.
