What are investors that come to Sweden normally looking for?
Traditionally, Sweden is seen as a collaborative space where investors come not only to make a profit but also because they want to be a part of something bigger - an environment of innovation, digitalization and sustainability. The private sector offers a great deal of opportunities and the state creates a fertile business field through the triple helix concept which creates bridges between the enterprise side, the administrative side and the educational side. Also, foreign investors can expect a quick return on investment here.
What role does innovation play in the larger picture of sustainability and the green transition?
One year ago, in a McKinsey survey, 85% of world industry leaders mentioned that innovation is important for the future success of the company, but, at the same time, only 6% of them answered they are good enough on this side. This 79% gap creates a serious level of anxiety and probably all the CEOs went into their R&D departments asking how they can improve on this. The short answer would be that they need to have a target to strive towards and nowadays climate change is the top priority that brings the industry together.
Sustainability is now a part of companies' ethos and it is not driven by policy anymore but by the growing needs of consumers and investors. There is an important structural change in the business world and big companies are starting to focus more on collaborating with small suppliers, allowing for more generous profit margins.
This shift in perspective was caused by the urgency of the green transition - which can be only achieved if all players accept the idea that everyone is equally important for developing the business model of the future.
What are the circumstances that helped Sweden secure a leading position in the green transition race?
Sometime between 1999 and 2001 Sweden sparked a discussion about climate change and sustainability, proposing that technological advancement will be driven by environmental needs. The "oil free society" was a core idea that turned a lot of heads in the international business space, being seen as more of an eccentric proposal than an actual action plan. Since nowadays this is the main point on the green agenda, it seems that we were not so out of place, after all.
In 2017, the Swedish parliament agreed on a broad strategy for sustainability and the country was amongst the first in the world to instate a tax on carbon. Although back then all these projects were not met with enthusiasm, today industry leaders are so grateful for them that they actually think a global CO2 tax would be a good idea. Sweden ended up in the forefront of climate change solutions thanks to all these visionary measures.
Are there any sectors that are particularly attractive for investors?
Industry automatization is Sweden's trademark since it works very well in the automotive sector which is held in high regard here, Volvo and Scania being staple names of the industry. In addition to these, there is also a rich collection of innovative companies such as Veio - which is making electric scooters, Einride - which is famous for their autonomous electric trucks or Heart Aerospace - which is patenting electric passenger airplanes. We are lucky enough to work within a collaborative manufacturing ecosystem where Finland pitches in their mines and Norway their battery technologies and recycling expertise.
What are the main geographies that Sweden looks to invest in?
California - and more specifically Silicon Valley - features a huge economy that is complemented by many innovative solutions, so I think that we would feel at home over there; and, all in all, the US is highly attractive thanks to the new Inflation Reduction Act. Japan is also interesting thanks to its huge investment needs and dynamic society, but they are running behind in digitalization and have not yet cracked the innovation code, even though they employ efficient production methods. India is yet another fascinating space, especially now with their Gati Shakti program through which they are building smarter infrastructure across the country. Swedish technology can play a vital role in all these niches, not only by investing to get out of the economic crisis but also by investing in order to solve the climate crisis.
What challenges should a foreign investor expect to bump into when coming to Sweden?
The cost per labor is fairly high because efficiency and innovation have their price but we are counteracting this with a high level of proactivity, so the right mindset when thinking about investing in Sweden is to automate as much as possible. Although there is a lot of high-level competence, the workforce might seem sparse since our overall population is not that big. The incentive programs might look restrictive since they support mainly climate investments, but we balance them by helping companies connect with universities and research areas. Bottom-line, high-end investors which have a taste for sustainability and innovation should have all the necessary tools to thrive on the Swedish market.
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