Taking a brief glimpse at the booming entrepreneurship industry inside Sweden
When we hear the name ‘Sweden’, most of us think of a European land of beauty, with its amazing coastal islands, gorgeous lakes, lush valleys and stunning mountain ranges. However, not many of us are aware of the immense potential of the people of this Scandinavian nation.
Only the 89th most popular country with a population of around 10 million, Sweden has a GDP of $511 Billion and is one of the 30 richest countries around the globe. A lot of the credit for this goes to the business-driven mentality of the Swedish people and the amazing work done to promote a culture of startups.
Sweden’s Love for Startups
According to a recent study, 5 percent of all adults in Sweden are involved in setting up a startup. Nearly 6 percent is invested in a business started by someone else. Not only that, the number of Swedes involved in starting a business is much higher than the number of people from some other European giants, like Germany and France.
“Sweden is one of the countries with the largest share of informal investors; in fact, it has a higher share than any of the other innovation-driven countries or country groups, together with the US,” reads the report.
The country also managed to snag the third spot in the number of nascent entrepreneurs. The earliest stage of actually getting involved in entrepreneurial activities, which is an important factor to analyze the country’s commitment to market experiments that aid new and growing firms. That has also led to an influx of investments, which nearly doubled in 2017 to $1.2 billion.
Some of the biggest startups to come out of Europe, including video-calling service, Skype; the world-building game, Minecraft; and even Spotify, the world’s leading music streaming service, were founded by Swedes.
So what is the real reason behind this startup boom? What are they doing differently? Well, there are a number of factors that have contributed to such a thriving economy capable of nurturing and building sustainable startups.
High Taxation, Social Benefits
Sweden has a high-tax economy but instead of it having a damper effect on entrepreneurship. Research has shown, it has encouraged technology businesses with complete social and physical infrastructure. Some of the benefits include a connected population — over 60% of the country has access to internet speeds of 100 megabits per second, thanks to a network of fast, fiber-optic, broadband.
The government of Sweden is committed to taking that number to 90% and is also experimenting with 5G with plans to bring it into action soon. This boost in speed is similar to the country’s plan to put a PC in every home through subsidies back in the 1990s, which was extraordinarily successful in promoting technology around the country. The high tax factor also allows the country to provide free healthcare as well as free higher education, providing a social safety net. It allows people to take a leap of faith and start a company from scratch, a luxury not many other countries can give to their people.
There are some cons, however, in doing business in this country apart from the tax rate. Due to the small size of the domestic market, most startups need to think globally to be sustainable. Needless to say, this small Nordic nation has proven its mettle in the world of entrepreneurship and will no doubt continue to churn out new and innovative startups at the rate at its going.