I N V EST I N SW EDEN
Business and Investment Opportunities Report 2008/09
key facts sweden foreword
Kiruna
Europe Luleå
Umeå Östersund
1 Foreword by the Prime Minister investment opportunities
2 International business showcase
3 Fertile environment for business and innovation
4 Investment hotspot
5 Sweden for expansion in Northern Europe
6 Sweden for global R&D
7 Sweden as a test and launch market
8 Capitalize on Sweden through indirect investment
Sundsvall
business sectors
Sweden Gävle
Karlstad
Uppsala Västerås Örebro
Stockholm Eskilstuna
Linköping Norrköping Borås Göteborg Jönköping Halmstad Helsingborg
Växjö Karlskrona
Kristianstad Malmö Lund
Official name The Kingdom of Sweden Political system Constitutional Monarchy Head of State King Carl XVI Gustaf Central government Center-right majority govern ment, ruling since the election in 2006. General elections are held every four years. Prime Minister Fredrik Reinfeldt Population 9.1 million Population density 22 per sq. km
1) Greater metropolitan area
Area 450,000 sq. km (174,000 sq. mi) Time zone GMT + 1 hour (end October-end March) GMT + 2 hours (end March-end October) GDP per capita SEK 325,000 (€ 35,200/US$ 48,100)
10 Automotive
12 Cleantech
14 lnformation and communication technologies
16 Life sciences
18 Packaging
20 Real estate
22 Business processes
23 Financial services
24 Travel and hospitality
25 Retail
26 Examples of investments business framework
27 Introduction
28 International competitiveness
30 Costs and productivity
32 Infrastructure
34 Easy to do business
36 Foreign direct investment
37 Swedish economy
Exchange rates SEK 1 = € 0.11 SEK 1 = US$ 0.15 Currency 1 krona = 100 öre Largest cities (population1) Stockholm (1,890,000) Göteborg (880,000) Malmö (600,000)
9 Opportunities in numerous business sectors
isa – business facilitator
38 Invest in Sweden Agency
39 Guides to Sweden
40 ISA regional network
ISA international network
foreword
Dear investor, I would like to welcome you to Sweden. For Swedish companies abroad as well as for foreign investors in Sweden, globalization offers business and investment opportunities. Sweden has a long tradition of openness and free flows of trade, investment and people. Therefore, we are well equipped to offer you a competitive marketplace and dynamic business environment. Swedish society and industry is highly international – and technology-oriented. As a nation our mindset is to adapt to constant change. These assets, along with a strong supply of educated and trained people, present a solid platform for successful business in Sweden. When it comes to the issue of climate change, we can see that the world is facing dramatic challenges in making progress towards sustainable development. I am convinced that these challenges can be turned into profitable business opportunities through a steady flow of innovative environmental technologies and renewable energy solutions. Sweden is a leader in these areas – and we intend to remain so. In the last decade, Northern Europe and the Baltic Sea region has emerged as one of the most dynamic and fastest growing regions in the EU. The mature economies of Scandinavia and northern Germany have successfully linked up with the young market economies of the Baltic states and Poland. On the eastern border, St. Petersburg and western Russia provide a market that will grow considerably in importance in the near future. Dear executives, experts and researchers: I warmly welcome you, your businesses and your families to Sweden. Please take a closer look at what we offer. Welcome to Sweden!
Fredrik Reinfeldt Prime Minister of Sweden
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investment opportunities
International business showcase Sweden is one of the world’s most globalized and competitive nations. The logotypes below are examples of companies of Swedish origin. The fact that all these businesses have sprung from a base in Sweden to become global corporations, many of them technology leaders in their respective fields, is a testimony to industrial tradition, know-how and a production-oriented infrastructure. As a result of international restructuring, some of these companies have today merged with foreign counterparts.
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investment opportunities
Fertile environment for business and innovation Sweden is a constructive and rewarding environment in which to do business. As an international center for innovation, it combines a culture of openness to new ideas with a readiness to embrace change. No-nonsense attitude
Ease and efficiency
Swedes have an uncomplicated, no-nonsense approach to doing business. Organizations are founded on a strong commitment to teamwork and a common understanding that the best results are achieved by working together. Employers actively encourage staff at all levels to take individual responsibility. This not only ensures a high level of support for management decisions but also enables a quick transition from concept to implementation.
Rules and regulatory frameworks are clear, transparent and enjoy wide acceptance. Bureaucracy is minimal. Ethical standards in business are high, with personal integrity and honesty viewed as essential personal attributes. Sweden ranks consistently among the least corrupt countries in the world in Transparency International’s annual rankings.
Pragmatic approach
Organizational structures are flat and non-hierarchical. The emphasis is on pragmatism and modernity rather than adherence to tradition and convention. By harnessing personal initiative and flair, companies create and foster environments in which new ideas and innovations can emerge and flourish.
Clean environment and quality of life
Sweden has a unique position as an innovation leader while also being a caring, inclusive society with strong social cohesion. Ethical values such as equality between men and women, sustainable development and human rights are deeply engrained in the national mindset. Preserving a clean and healthy environment is a national imperative. Pro active stewardship is acknowledged as vital if we are to pass on a habitable environment to future generations.
Outward-looking Dynamic Flexible Transparent Progressive Sweden has long been recognized as an international leader in environmental protection and is currently engaged in an ambitious drive to become the world’s first oil-free economy by 2020. Lifelong learning
Businesses and government alike invest strongly in training and education for both children and adults, reflecting a national commitment to lifelong learning. Continuous upgrading of skills and knowledge represents an investment in the future. It drives technological progress and allows Sweden to retain its position at the cutting edge of applied research and development.
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investment opportunities
Investment hotspot Sweden has been one of Europe’s top destinations for foreign investment in the last decade. Strategically located in Northern Europe and the Baltic Sea region and endowed with a generous supply of technologies, know-how and natural resources, the country is strongly positioned to meet investor demand of the future.
Swedish overdrive
As competition between countries and regions for cross-border investment intensifies, Sweden remains one of the world’s most attractive locations for foreign investment. The ratio of foreign investment stock to GDP is surpassed by only a few other highly internationalized economies like the Netherlands and Ireland. From the mid-1990s, Sweden’s economy underwent a major shake-up, spearheaded by regulatory reform and accession to the European Union. The ensuing rise in foreign investment saw the flow of incoming funds reach nearparity with the volume of Swedish assets abroad. Convincing facts
Global investors choose Sweden for numerous reasons. To many, the country is an unexploited market with strong sales potential. Purchasing power per
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capita is higher than in Germany and France. The market is by far the largest in Scandinavia and is an integral part of the European Union marketplace. Sweden is an attractive choice for investors looking for a strategic location in Northern Europe and the Baltic Sea region, including nearby Russia. Other attractions include a strong supply of skills and technologies. Investors may seek to start operations in one of the world-class clusters and science parks, or explore the market through joint ventures, strategic alliances or acquisitions. They may identify a specific Swedish cost advantage or value for money in the high-productivity manufacturing sector. Opportunities in venture capital are attracting important flows of funds to the market. Returns generated by Swedish private equity funds are impressive. Whatever the case, the corporate
Top performer Technologies and skills Strategic markets community in Sweden is strongly multinational. US, UK, German, Dutch, French and Nordic companies predominate alongside firms from countries such as China, India, Japan and Saudi Arabia. Sale of state-owned companies
The Swedish government has decided to reduce the state holdings in four companies – Nordea, SBAB, Telia Sonera and Vasakronan – as part of an ongoing privatization program that has seen stock exchange operator OMX and spirits group Vin & Sprit recently sold to Nasdaq and Pernod Ricard, respectively. The companies for sale are all leaders in their geographic market.
investment opportunities
market development
Sweden for expansion in Northern Europe Sweden’s economic size, geographical position and outstanding business environment makes it the preferred base for business activities in Northern Europe and the Baltic Sea region. One of Europe’s most exciting growth regions
Norway
Swede n
Sweden and its neighbors Denmark, Finland and Norway are among Europe’s best-performing economies, with impressive industrial diversity, solid growth and strong public finances. Increasing economic integration with the emerging Baltic states of Estonia, Latvia and Lithuania has created one of Europe’s most dynamic regions.
Denmark
Finland
Estonia Latvia Lithuania
EUROPE
Sweden is the largest market
Preferred base for regional operations
Sweden has by far the largest population in the region and accounts for a significant share of economic activity. In many respects, Sweden serves as the region’s economic engine. It is also the largest recipient of foreign direct investment: foreign-owned companies employ nearly 25 percent of the Swedish workforce.
Sweden is the commonest choice for multi-country business activities in the region, in sectors such as banking, logistics and shared services. Almost 60 percent of the world’s largest multinationals that are present in the area have chosen Sweden for their regional headquarters. Sweden is also suitable as the gateway to the European Union (EU), with 27 countries and a total population of 550 million.
GDP growth in the Baltic Sea region
FDI to the Baltic Sea region
2003–2007, average annual change, percent
2002–2006, US$ billion and country share in percent
Latvia Estonia Lithuania Finland Sweden Norway Denmark
9.7 8.8 8.4 3.0 3.0 2.2 1.9
Sweden
66.0
47
Finland
22.6
16
Norway
19.1
14
Denmark
19.0
13
Baltic states Total
14.8
10
141.5
100
Source: National Institute of Economic Research; Eurostat; OECD; IMF, 2008
Source: Unctad, 2007
The countries of the Baltic Sea region all outperform the eurozone in terms of economic growth. Choosing Sweden as the regional base gives access to the largest market and the best business environment.
As one of the world’s largest recipients of FDI, Sweden also attracts the main capital flows in the region, hosting a large share of the region’s most prominent industrial clusters and innovative companies.
Sweden’s standing as the major economy and geographical centerpoint in Northern Europe makes it a natural springboard for doing business in this part of Europe.
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investment opportunities
r&d
Sweden for global R&D Drawing on a creative business culture, highly skilled engineers and scientists and a multinational industrial base, Sweden boasts an impressive track record of innovation for global markets. A leading innovation supplier
Global R&D centers in broad fields
Strong investment in higher edu cation and fundamental research, the presence of home-grown research-intensive multinationals and the existence of a solid scientific infrastructure have made Sweden a leading supplier of innovative solutions and products to international business. Sweden is the world’s second largest percapita investor in R&D. There is an open research climate, with frequent collaboration between academia and industry.
Swedish engineers and scientists are trusted to develop new technology and products for global markets in a wide range of industry sectors and for both Swedish and foreign companies. As an example, more than 20 foreign information and communication technologies (ICT) companies have global centers of excellence in Sweden, including several of the most prominent US and Chinese companies (see p. 15).
Advanced innovation is a complex exercise that is increasingly in the hands of multidisciplinary teams working in global projects. An ability to work across disciplines and bridge corporate and academic research environments makes Sweden eminently placed to deliver results in this environment. This capacity to develop and integrate complex systems is manifested in all of Sweden’s advanced industry sectors.
R&D expenditure
Capacity for innovation
University-industry research collaboration
2005, percent of GDP
2007, country rank
2007, country rank
Israel Sweden Finland Japan Korea Switzerland Iceland US UK Taiwan
1. Germany
1. US
2. Sweden
2. Switzerland
3. Japan
3. Sweden
4. Switzerland
4. Finland
2.9
5. Finland
5. Korea
2.8
6. Denmark
6. Germany
2.7
7. Korea
7. Singapore
2.6
8. France
8. Israel
2.5
9. US
9. Taiwan
10. Israel
10. Belgium
4.7 3.9 3.5 3.2 3.0
Source: IMD, 2007
High R&D expenditure is a frequently cited reason behind Sweden’s international competitiveness. Three quarters of all R&D investment comes from the private sector.
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Excellence in complex systems and multidisciplinary research
Source: Executive Opinion Survey; World Economic Forum, 2007
Source: Executive Opinion Survey; World Economic Forum, 2007
The world’s foremost innovators are countries where companies obtain technology by conducting formal research and pioneering their own new products and processes.
Sweden’s widely acknowledged innovative capacity reflects strong links between industry and public research bodies, forming a robust environment for privatepublic R&D interaction.
investment opportunities
test market
Sweden as a test and launch market Sweden is an excellent barometer of future trends, with sophisticated and demanding users throughout society. It is a first-rate testing ground for a wide range of products and services aimed at private, corporate and public users. Trendsetting nation
Sweden has been a pilot and test market for decades, with a range of attributes suited for early commercialization. These include demanding, widely traveled and technologically advanced consumers eager to explore and find uses for new products and technology. Sweden is recognized both for setting new trends and rapidly adopting them from abroad.
Sophisticated corporate and public users
Dedicated test labs and test environments
Multinational companies in Sweden invest heavily to improve their productivity and competitiveness. Many are global leaders in their fields, and thus highly desirable for testing of new technology and applications. These demanding corporate customers have proved to be valuable pilot users. Swedish public authorities are also at the forefront of new technology use.
Swedish R&D capacity is an advantage for companies that want to perform development work and testing in a single location. Dedicated test labs and test environments are in operation across the country, often closely integrated into university environments.
A country that sets trends
Buyer sophistication
Take-off times in different European markets
Test market for international companies
2007, country rank
In years from launch
3 Adobe 3 BBC
1. Iceland 2. Sweden 3. Japan
3 Calvin Klein
4. US
3 Coca-Cola
5. Israel
3 DHL
6. Switzerland
3 Ford
7. Finland
3 Microsoft 3 Samsung 3 Toyota 3 Vodafone Source: Invest in Sweden Agency, 2008
Companies in a wide range of different sectors test new products, applications and technologies in Sweden.
8. Taiwan, China 9. Singapore 10. Denmark
Sweden Norway Denmark Finland Italy Germany Spain France UK Greece
4.0 4.0 4.0 4.5 6.5 6.5 7.0 7.5 8.5 9.0
Source: Executive Opinion Survey; World Economic Forum, 2007
Source: Marketing Science, “The International Take-off of New Products”, Gerard J. Tellis, University of Southern California, 2003
Swedish companies are among the world’s most aggressive in adopting new technologies, partly because buyers are highly inclined to make purchasing decisions based on a sophisticated analysis.
Take-off times for new products and technologies are twice as fast in Scandinavia as in Mediterranean countries, indicating distinct advantages in a waterfall strategy for market introduction in Europe.
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investment opportunities
private equity
Capitalize on Sweden through indirect investment A highly developed private equity and venture capital industry offers opportunities to gain exposure to buyouts and emerging technology firms. Experienced management teams
The Swedish private equity and venture capital industry is one of the most highly developed in Europe, with 130 fund managers and a solid track record of generating returns. Assets under management have increased rapidly, with foreign investors accounting for a significant share of capital raised.
communication technologies (ICT) have historically attracted the largest number of investments and this is still the case – they received more than half of incoming capital in 2007. One area currently enjoying rapid growth is cleantech, where investments more than doubled in 2007. Proven exit capability
Investments targeted at technology sectors
Life sciences and information and
Many Swedish companies owned by private equity firms have attained market success and enabled
Financing sources
Venture capital and buy-out 1998–2007, US$ billion
Average 2005–2007, percent
Sweden was one of the first countries in Europe to develop a private equity industry. Today, it has among the largest proportions of private equity and venture capital compared to other European countries.
40 30 20 10 98 99 00 01 02 03 04 05 06 07
Note: Average SEK/US$ exchange rate for each year applied
Source: Swedish Private Equity & Venture Capital Association, 2008
Source: Swedish Private Equity & Venture Capital Association, 2008
Sweden’s private equity industry has seen assets under management more than triple since 2001.
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2007 All private equity investments
Rest of Europe 38% Sweden 31% US 18% Other Nordic countries 9% Rest of world 4%
50
0
A mature industry
Exit multiples
Assets under management
60
their owners to make successful exits. Exit volume hit a record peak in 2007, with buyout firms making an average return of 4.5 times their investment for an average holding period of 4.6 years.
Foreign investors accounted for 70 percent of the capital invested in Swedish private equity and venture capital funds between 2005 and 2007.
4.5
Buy-out
5.1
Venture
2.0
Source: Swedish Private Equity & Venture Capital Association, 2008
The success of portfolio companies is feeding through into successful exits. Exit multiples in 2007 produced excellent returns for a number of Swedish funds. Multiples are calculated on aggregate investments and divestments.
business sectors
Opportunities in numerous business sectors For a country of 9 million people, Sweden offers a competitive edge in a surprisingly wide range of industry and service sectors. The following pages present ten such sectors, each with its own set of attractive attributes. A country that delivers
From automotive to retail
Sweden has created global brand names in the automotive, engineering, retail, life sciences and telecom sectors, to name a few. In the process, it has become one of the world’s most internationalized and competitive economies, in part due to a business framework for which openness, trade and deregulation is second nature.
Invest in Sweden Agency (ISA) actively promotes ten Swedish industry and service sectors to foreign investors. These are presented briefly on the following pages. For further information, please consult ISA directly or visit www.isa.se. 10
Automotive
12
Cleantech
Base for successful multinationals
14
lnformation and communication technologies (ICT)
Many foreign companies have turned to Sweden as a source for innovation or for access to new, promising markets. Studies show that many of them are successful, growing their businesses, expanding their workforces and handing increased responsibilities to the Swedish organization.
16
Life sciences
18
Packaging
20
Real estate
22
Business processes
23
Financial services
24
Travel and hospitality
25
Retail
Finland Norway
Sweden Estonia Denmark
Latvia Lithuania
9
business sectors
automotive
One-stop shop for design, development and testing Choosing Sweden for automotive development means access to some of the world’s leading car and truck manufacturers, and some of the world’s largest automotive groups. It also means access to an R&D environment where suppliers and consultants frequently work together and where it is easy for a new company to integrate itself in the cluster. Global center for automotive R&D
Five large global automotive groups perform automotive research and development in Sweden; the car manufac turers Ford and GM as the owners of Volvo Cars and Saab Automobile, truck makers Volvo Trucks and Scania; and Autoliv, a leader in automotive safety. The cluster has established a leading position in several important growth areas. Sweden is Ford’s global R&D center for safety, electronics, telematics and hybrid car technologies, and GM’s global development hub for safety, telematics, hybrids, chassis systems and turbo engines. Volvo Trucks and Scania both have their principal R&D operations in Sweden.
dioxide emissions. Another result has been Ford’s decision to locate its European development center for hybrid systems in Göteborg. The center will produce new hybrid technology for all of Ford’s brands in Europe and for Volvo models worldwide.
Solid tradition of complex systems design
Strong test and demonstration environments
It is anticipated that the premium cars of tomorrow will be controlled and managed by more than 80 different embedded systems. The cars of the future will offer advanced infotainment and telematics features, intelligent vehicle safety systems and advanced chassis management. Sweden offers excellent capabilities in key technology areas for developing and integrating such systems. This is partly because of a strong industrial heritage in defense, aerospace and telecommunications – areas where systems integration know-how is fundamental for success.
Over 30 automotive manufacturers and component suppliers have chosen the Sweden Winter Test Region in northern Sweden for winter testing and long-term road tests. Sweden is also an increasingly popular venue for durability tests and verification of advanced embedded systems. A national test and demonstration arena for safety, environmental impact and intelligent transport systems (Test Site Sweden) offers manufacturers and suppliers an opportunity for testing in virtual, full scale and real environments.
Leadership in clean automotive technologies
ISA actively markets automotive opportunities in Sweden. Find out more at www.isa.se.
Sweden’s ‘Green Car’ research programs were launched in 2000 to promote the development of clean automotive technologies. They bring together manufacturers, suppliers, universities and research institutes in a wide range of projects. One direct outcome has been a powertrain concept that combines high performance with zero carbon
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business sectors
opportunities
Intelligent vehicle technology 3 3 3
Electronic vehicle systems Intelligent vehicle safety systems Vehicle telematics
Green car 3 3 3
Emissions control Hybrid systems/technology Materials technology
sweden leads the implementation of next-generation electronics
Test and validation est and demonstration arena for T safety, environmental impact and intelligent transport systems 3 Winter testing 3
Engineering salaries 2006, total annual base salary plus bonuses and incentives, US$
The Swedish automotive cluster is among the leaders in the field of embedded software and system integration. It includes more than 800 embedded software specialists with long experience from the mature telecom embedded software industry. For Tier 1 suppliers meeting new demands in the automotive software field (such as Autosar), the Swedish SWAP consortia offers attractive investment opportunities, partnerships and collaborations. SWAP, Software Automotive Platform, is a Swedish initiative 3 It will be developed and tested in the truly multinational Swedish automotive cluster, in collaboration between US OEMs, leading Japanese Tier 1 electronics suppliers and Swedish manufacturers and suppliers. 3 It is based on the latest development of the Autosar standard.
Switzerland
136,370
Germany
128,798
Denmark
120,353
Netherlands
118,332
Ireland
112,851
UK
110,156
US
107,024
Sweden
106,272
Canada
104,762
France
98,333
Source: IMD, 2007
3 It is supported by the Swedish government. 3 It will be used in Test Site Sweden’s open software laboratory for the latest applications within: • ITS, Intelligent transportation systems • IVSS, Intelligent vehicle safety systems • Vehicle information and communication systems • Hybrid vehicle applications and battery management systems for electrical vehicles 3 New applications will be introduced in leading commercial vehicle brands and premium car brands.
As a result of relatively narrow wage differentials between highly skilled and less skilled workers, costs for qualified Swedish labor are low by international standards. Swedish engineers are internationally recognized for their high expertise and performance, yet salary levels are more competitive than in many other countries.
Welcome to join a truly open R&D environment. Please contact ISA’s automotive team for further information.
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business sectors
cleantech
Green laboratory for energy and environmental solutions With its advanced infrastructure, progressive mindset and ambitious capacity expansion plans, Sweden offers major investment opportunities in combined heat and power plants that use different types of biofuels and waste combustion. There are also exciting opportunities in cellulose-based biofuels and scores of innovative cleantech companies. Swedish firms have been specifically targeted by the United States as sources of innovation in alternative fuel technology. Leader in renewable energy and sustainability
Forty percent of energy consumption is today sourced from renewable energy resources, placing Sweden first among its European peers. Some 15 percent of all gas filling stations offer bioethanol (E85). System expertise in bioenergy
Bioenergy accounts for more than 25 percent of national energy consumption. Municipalities, power utilities, district heating companies, the forest industry, wood fuel suppliers and the transport sector interact along a value chain which extends from raw materials to final use. Areas of Swedish excellence include bioenergy combinates, waste management and recycling, waste incineration and district heating. Template for Chinese bioenergy combinates
State Grid of China (SGC), one of the world’s largest energy companies, has decided to invest in a Swedish bioenergy complex combinate that will produce pellets, briquettes, ethanol, electricity and district heating from wood fuel and peat. The complex intends to serve as a knowledge resource and template as SGC makes large-scale investments in bioenergy plants in China. Second-generation cellulose based biofuels
Sweden leads the development of production technologies for second-generation renewable fuels. The country has the largest forested area in Europe, is the world’s largest
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manufacturer of heavy diesel engines and is home to a petrochemical industry that produces the world’s cleanest diesel. In combination with a strong forest chemical industry, few countries are better suited to develop biofuels. Innovative renewable energy companies
Swedish universities and R&D companies have developed cutting edge waste-to-fuel and engine technologies that may help industry to meet new standards and regulatory frameworks which emerge in response to concern over climate change. New technologies for black liquor gasification and biomass gasification are being pioneered to manufacture fuels such as dimethyl ether (DME), methanol, synthetic petrol, synthetic diesel and hydrogen gas. ISA actively markets cleantech opportunities in Sweden. Find out more at www.isa.se.
business sectors
opportunities
Renewable energy 3 3 3 3
Environmental technology
Biofuel and technology District heating and cooling Energy efficiency Wave, sun and wind power
European leader in climate-friendly energy use Share of renewables in the final energy demand by 2020 Sweden Latvia Finland Austria Portugal Denmark Estonia Slovenia Romania France
49 42 38 34 31 30 25
3 3 3 3
Sustainable building and transportation Sustainable forestry and mining Waste management and recycling Water and wastewater treatment
Combining economic growth and emissions reductions Development of GDP and emissions reductions in Sweden, 1990–2006 150 120 90 60 30 0
90
91
92
93
94
95
96
97
98
99
00
01
02
03
04
05
06
25 24 23
Source: European Commission “Energy for a changing world”, 2008
Sweden has committed itself to further reductions of non-renewable energy resources. By 2020, half of final energy consumption is to come from climate-friendly resources.
GDP CO2 emissions NOX emissions
VOC emissions SO2 emissions
Source: Swedish Energy Agency, based on data from Statistics Sweden and Swedish Environmental Protection Agency
Sweden has been working for several decades towards a more ecologically and economically sustainable energy system. Emissions of carbon dioxide, nitrogen oxides and sulfur dioxide have been cut by 10–60 percent since the 1990s. The economy has grown by more than 40 percent during the same period.
13
business sectors
information and communication technologies (ict)
Global center of excellence People, businesses and public authorities in Sweden are among the world’s most advanced users of new technology. Swedes are also among the quickest to adopt new applications and technology. Many leading ICT companies – including Google, Huawei, Oracle and Symantec – have established global R&D centers in Sweden. Here they develop, test and launch new products and services for a wide range of applications. Sweden is also a preferred platform for marketing and sales in Northern Europe. A leading ICT nation
Advanced industrial and public buyers have fed the growth of a sophisticated and highly skilled ICT industry that employed nearly 220,000 staff by year-end 2006. Among the major players are Ericsson, the world’s largest supplier of mobile systems, and TeliaSonera, a major provider of telecommunications services. The Stockholm-Kista cluster is one of the world’s strongest for mobile communication technologies. Strong R&D capabilities
Strong ICT research and innovation environments are found in a number of locations across the country. Foreign companies can tap into the academic research excellence through a range of industrial research institutes. Among these is the Swedish Institute for Computer Science (SICS), one of the world’s 15 most respected software research institutes and the only one outside the US. Others include Wireless@KTH in Stockholm, the Center for DistanceSpanning Technologies in Luleå and the Competence Center for Circuit Design in Lund. Advanced user of new technology
The Swedish economy has long been strongly global in outlook. Forced by a small home market to go international early on, Swedish corporations today hold globally leading positions in a wide range of industries. Globalization created a need for advanced communication services and
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productivity across all parts of the value chain. High investments in automation and IT systems have helped lift Sweden to its current position as a world leader in industrial productivity. Sweden for development and early commercialization
Highly skilled engineers, demanding multinational clients and strong technology adoption make Sweden well placed to perform development work and early commercialization of new products and services. Sweden is widely recognized as a suitable test market – if it works here, it will likely work elsewhere, too. Wealth of interesting technology and products
Sweden was ranked second in World Economic Forum’s Global Information Technology Report 2007–2008, which focused on the ability of individuals, businesses and governments to capitalize on information technology for innovation and societal development. Substantial numbers of high-tech ICT companies have been formed and startups like Joost and Rebtel have received funding from some of the world’s largest venture capital providers. ISA actively markets ICT opportunities in Sweden. Find out more at www.isa.se.
business sectors
opportunities
System components and terminals 3 3 3
Microelectronics Photonics Radio systems
Networks and operator systems Billing Broadband 3 Service platforms 3 Security & integrity 3 Wireless networks 3 3
Services and applications 3 3 3 3 3 3 3 3 3
E-health Industrial IT Intelligent transport systems IP telephony Logistics Navigation Telematics User generated content 24h public services
Centers of excellence in Sweden
Swedish technology in great demand
A selection
A selection from 2006 and 2007
3 Cambridge Silicon Radio, UK – Bluetooth and software GPS
3 Business intelligence
Jerusalem Ventures invests in QlikTech
3 Business software
IBM acquires Telelogic
3 Checkpoint, US/Israel – mobile security
3 Communication software
Hewlett-Packard acquires Pipebeach
3 Electronic Arts, US – gaming development
3 Data mining
Tibco acquires Spotfire
3 General Motors, US – vehicle infotainment
3 E-commerce
Valueclick acquires Pricerunner
3 Google, US – online video collaboration
3 Embedded security
WindRiver acquires Interpeak
3 Huawei, China – wireless R&D
3 ERP
Lawson acquires Intentia
3 Motorola, US – IP TV
3 Gambling
Betandwin acquires Ongame
3 Oracle, US – telecom service delivery platforms
3 Gaming
Electronic Arts finalizes its acquisition of Digital Illusions (DICE)
3 IMS/SIP
Oracle acquires Hotsip
3 IPTV
Motorola acquires Kreatel
3 Logistics IT
Boeing acquires Carmen Systems
3 Mobile gaming
End2end acquires Terraplay
3 Mobile OS
Motorola acquires 50% of UIQ
3 Mobile security
Checkpoint acquires Protect Data/Pointsec
3 Mobile social software
Yahoo acquires Kenet Works
3 Navigation/software GPS
Cambridge Silicon Radio acquires Nordnav
3 Online auction
eBay acquires Tradera
3 Operator software
BEA acquires Incomit
3 Statistics viewer
Google acquires Gapminder/Trendalyzer
3 Video conferencing
Google acquires Marratech
3 Sogeti, France – software testing 3 Symantec, US – wireless security 3 ZTE, China – wireless R&D
Source: Invest in Sweden Agency, 2008
Many global ICT companies have established development centers in Sweden, across a wide range of applications and technologies. The country is ideally suited for R&D and early commercialization.
Source: Invest in Sweden Agency, 2008
Foreign investors access Swedish business and technology assets in several ways, of which acquisitions is one route. Joint ventures and/or strategic alliances are other examples.
15
business sectors
life sciences
European leader in life sciences Sweden is the source of a number of groundbreaking inventions, including the implantable pacemaker, the artificial kidney and blockbuster drugs like Losec and Genotropin. It is also the home to two of Europe’s most distinguished biotech clusters and Europe’s fourth largest biotechnology industry. Many global pharmaceutical and biotech companies capitalize on Sweden for in-licensing, clinical research or partnerships with academic research institutions. Highly evolved infrastructure
Companies such as Astra, Elekta, Gambro and Pharmacia bear witness to Sweden’s century-long tradition of industrial success in life sciences. Today, the industry employs 42,000 people in more than 800 companies, with coverage throughout the value chain and with particular strengths in drug discovery and development as well as medical technology and medical engineering. Sweden is home to two of Europe’s most distinguished biotech clusters: the Stockholm Uppsala Bioregion and Medicon Valley in the Öresund region. Strength in broad fields of medicine
The pharmaceutical development pipeline is one of Europe’s strongest, with drug candidates in cancer-related conditions, metabolic and cardiovascular disorders and neurological disorders, among others. Medical technology and medical engineering firms have built internationally leading positions in areas such as biotech tools, diagnostics, medical devices, biomaterials and regenerative medicine. Globally recognized research institutes
Sweden has six medical universities, each with its distinct ive profile and specialist expertise. Karolinska Institutet in Stockholm is one of the world’s leading biomedical universities. A survey comparing biomedical research productivity in the US and the European Union placed Sweden first in four out of five categories measuring citations and publications in relation to population size and R&D ex-
16
penditure. Major disorders in which Swedish scientists possess outstanding expertise include diabetes, obesity, insulin resistance, atherosclerosis, Alzheimer’s and Parkinson’s. Preferred clinical trials location
All of the world’s best-selling drugs, both traditional chemical substances and biopharmaceutical drugs, have been tested on Swedish patients. Sweden is distinguished by high scientific quality, rapid access to well defined patient cohorts and an outstanding capacity to track patients. The ability to deliver highly accurate data on efficacy and safety over long periods of time makes Sweden an ideal location for post-marketing safety surveillance studies (phase IV). Great for epidemiological and genetic research
Studies of how genetic and environment factors influence health can likely be conducted with better accuracy in Sweden than anywhere else, thanks to use of personal identity numbers and the existence of official registers for population, health, specific diseases, drugs and national quality. Several large biobanks have also ben established. ISA actively markets Swedish life sciences. Find out more in ISA’s Pharmaceuticals & Biotechnology publication and at www.isa.se.
business sectors
opportunities
Medical technology 3 3 3 3
Biomaterials Imaging Point of care Sensors
Biopharmaceutical manufacturing
Biotech tools
Pharmaceutical development 3 3 3 3
Chronic inflammation Metabolic diseases Neuroscience Regenerative medicine
Clinical trials
Health care
Unique resources for research
Global licensing partners
A selection of Swedish registers and biobanks
A selection of companies that have in-licensed projects from Swedish firms
3 Causes of Death Register
3 Amgen (US)
3 Multi-Generation Register
3 Boehringer Ingelheim (Germany)
3 Karolinska Institutet Biobank
3 Bristol-Myers Squibb (US)
3 Medical Biobank 3 Swedish Hospital Discharge Register 3 Twin Gene Biobank 3 Twin Register Source: Invest in Sweden Agency, 2007
Sweden offers an attractive environment for epidemiological and register-based research. Infrastructure includes biobanks and registers that keep national data on health and economic and social conditions.
3 Eisai (Japan) 3 Genentech (US) 3 GlaxoSmithKline (UK) 3 Guangdong Lantai Viewland (China) 3 Jiangsu Hengrui Medicine (China) 3 Kyowa Hakko (Japan) 3 MediGene (Germany) 3 Merck (US) 3 Roche (Switzerland) 3 Teva Pharmaceutical Industries (Israel) 3 Tibotec (Belgium) 3 Wyeth (US)
Source: Invest in Sweden Agency, 2007
joint efforts in multidisciplinary research
wedish researchers, research instiS tutes, life science companies and public bodies, including ISA, have joined forces to advancing our time’s most complex and costly disorders. 3 The Swedish Brain Power program brings together 73 research groups at the country’s leading medical universities and university hospitals to improve early diagnosis, treatment and care of people suffering from neurodegenerative diseases. www.swedishbrainpower.se 3 The Chronical Inflammatory Disease program covers rheumatics, cardiovascular disease, MS (multiple scleroris), psoriasis and asthma. Two national consortia coordinated by Karolinska Institutet have received funding.
Sweden is a popular source of innovative drug discovery and development. Pharmaceutical and biotech companies from all over the world have entered licensing deals with domestic firms.
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business sectors
packaging
Advanced and sustainable packaging solutions Sweden provides many answers to industry demands for innovative, intelligent and transport-efficient packaging. Available know-how spans the entire value chain - from new materials to complete packaging systems. Foreign companies can benefit in numerous product and process development issues and, more specifically, can establish research partnerships and perform pilot manufacturing and printing performance tests of new materials. Inspiration in packaging innovation
A number of groundbreaking packaging inventions, including the Nefab, PLM, Tetra Pak and Åkerlund & Rausing ranges of products, have been developed in Sweden and achieved widespread success in global markets. New innovative companies continue to emerge, such as Cypak (electronics in packaging), OneCafé (packaging concept for fresh coffee) and MicVac (system technology for convenience food). OrganoClick has developed technologies for enhancing and creating new properties of cellulose fibers and Xylophane aims at producing barrier films from renewable raw materials. Excellence in materials and packaging technology
As one of the world’s largest paper and pulp producing nations, Sweden offers specialist skill in fiber-based packaging. Extensive research efforts are devoted to the development of new materials, particularly fiber composites and other renewables, such as starch, gluten and xylan. The EU-sponsored SustainPack project, a large industryacademic research initiative on sustainable packaging, is coordinated by Sweden’s STFI/Packforsk, the internationally renowned R&D institute.
electronics, regarded as a key technology for the development of intelligent packaging. Ideal base to gain consumer insight
Consumer research is carried out at industrial research institutes, universities and through collaborations between research and academic partners. Sweden’s trend-sensitive and demanding consumers offer high suitability for enduser tests at sophisticated consumer test labs and for new product launches. Holistic approach to packaging
Sweden has a strong focus on designing packages for optimized performance and function throughout the product life cycle, from production to recycling. This includes an ability to design packages that can be distributed efficiently and with a minimum use of resources, for instance the Tetra Pak system and Ikea’s flat packaging concept.
Thriving R&D and test environments
R&D and test environments allow foreign companies the opportunity to develop new packaging materials and test their performance in printing. Several locations offer pilot machine operation in process scale 1:1 and various centers of excellence are open to collaborative projects with foreign companies. An area of particular interest is printed
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ISA actively markets packaging opportunities in Sweden. Find out more in ISA’s Packaging publication and at www.isa.se.
business sectors
opportunities
Materials technology 3 3 3
Consumer understanding
Barriers Biopolymers Composites
3 3 3
Design and printing Functionality Perception
r&d network open to foreign companies
Intelligence in packaging 3 3 3
Brand protection Indicators Traceability
Examples of foreign investors 3 Cascades (France) 3 Combibloc (Germany)
Sweden offers a thriving and advanced R&D environment that is easy for foreign companies to tap. In packaging, the national R&D network encompasses regional competence centers, which each have a specific focus yet interact freely.
3 Dainippon Ink and Chemicals (Japan) 3 Lafarge Group (Ireland) 3 Mondi Packaging (Austria) 3 Nordic Paper (Norway) 3 Papier-Mettler (Germany) 3 Petersons (Norway)
Mid Sweden University Communicative packaging
3 Rexam (UK) 3 Skanem Industrier (Norway) 3 Smurfit Kappa (Ireland) 3 Stora Enso (Finland)
Sweden
The Packaging Arena Consumer-driven packaging innovation
iPack/STFI-Packforsk
3 Sealed Air (US)
Media and Electronics packaging systems
3 Voith (Austria)
Stockholm
Chalmers /SIK
Source: Invest in Sweden Agency, 2008
Printed Electronics Arena
Biomaterials and Active packaging
Göteborg
Printed electronics – Packaging – Logistics
Lund University/NGIL
Jönköping Business School
Innovative logistic systems – Food safety
Transport and distribution solutions
Lund
Source: Invest in Sweden Agency, 2008
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business sectors
real estate
One of Europe’s largest real estate markets Sweden is one of Europe’s most favored foreign investment markets for real estate. Offering outstanding transparency and high liquidity, the market is recognized for its professionalism, low transaction costs and investor-friendly business procedures. With nearly SEK 140 billion (€15.6 billion/$21 billion) in transactions, Sweden was Europe’s fourthlargest investment market in 2007. Foreign investment accounted for almost 50 percent of acquisitions. Foreign owners with a major presence
Foreign investors owned Swedish real estate assets amounting to more than SEK 210 billion (€23.1 billion/ $31.5 billion) by acquisition value at the end of 2007, a three-fold increase from five years earlier. Twelve of the 30 largest property owners are non-Swedish. All types of investors are present, including property companies, institutional investors and property funds from the US, Europe, Middle East and Asia. A nation that delivers
Sweden’s robust economy is one of the main investment drivers. The industrial sector boasts an impressive number of global brand names across a wide range of businesses. Multinational companies are strongly represented. The country has a solid track record of growth, a stable business environment and sound government finances. It is also noted for high levels of international trade and has on multiple occasions been named among the world’s most competitive economies. Doing business is easy
Skilled professionals, smooth business procedures and receptivity to international ownership make Sweden an easy country to operate in. Advisors have substantial experience in cross-border transactions and there is a large pool of talented portfolio managers and facility management firms. The legal system responds well to investor demands for security and cost-efficiency. A large
20
share of property assets are owned by institutional investors and real estate companies, many of which are active buyers and sellers. Most documentation is in English. High transparency and low costs for transfers
Sweden is among Europe’s top-four countries in terms of transparency. This refelcts a longstanding tradition of openness in public property records, a highly-evolved legal system and an abundance of readily available market information. Investment performance indices are also in place. Market transparency, the reliability of the legal system and common use of standardized documentation contribute to keeping transaction costs low. Appetite for all asset classes
Foreign investors are active all over Sweden, showing a preference for the major metropolitan areas of Stockholm, Göteborg and Malmö and some 20–30 regional anchor cities. Office real estate is the most favored investment category, accounting for one third of investments by area in 2007. Retail and industrial/logistics properties have also seen strong demand. Find out more in ISA’s Real Estate publication and at www.isa.se.
business sectors
opportunities
Industrial and logistics property
Office property
Retail property
Hotel property
International investor presence
Foreign ownership of Swedish real estate
A selection of foreign owners with property holdings in Sweden
By acquisition value, SEK billion1 250
3 Acta (Norway)
3 ING Real Estate (Netherlands)
200
3 AXA Real Estate Investment Managers (France)
3 Investea (Denmark)
3 Bank of Ireland Private Banking (Ireland)
3 MEAG (Germany)
3 Blackstone Group (US)
3 Northern European Properties (UK)
3 Boultbee (UK)
3 Northern Logistic Property (Norway)
3 CGI (Germany)
3 Oppenheim Immobilien (Germany)
3 CGS (Germany)
3 Orion Capital Managers (UK)
1) 1 SEK = € 0.11, $ 0.15
3 Citycon (Finland)
3 Orkla (Norway)
Source: DTZ, 2008
3 Credit Suisse Asset Mgmt (Germany)
3 ProLogis (US)
3 DnB Nor (Norway)
3 Unibail-Rodamco (France)
3 Ejendomsinvest (Denmark)
3 Valad Property Group (Australia)
3 GE Real Estate (US)
3 Vital (Norway)
150 100 50 0
2002
2003
2004
2005
2006
2007
Foreign investors have increased their holdings in Swedish real estate every year since the first investments took place in the late 1990s.
3 GIC Real Estate (Singapore)
Source: Invest in Sweden Agency, 2008
Foreign investors today have a significant presence in all real estate asset classes. Many have set up their own offices in Sweden to manage their holdings.
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business sectors
business processes
Natural hub for Northern Europe Sweden is the ideal location for business activities related to the Northern Europe and the Baltic Sea region as a marketplace, such as regional headquarters, logistics, contact centers, shared service centers and facility management. This is not surprising, given that Sweden has the largest economy, offers a large and diverse customer base and is at the heart of the region geographically.
Finland Norway
Sweden Estonia
Attracting regional headquarters
The majority of multinationals with a Nordic and Baltic presence have chosen Sweden for their regional headquarters. Sweden offers experienced managers, the best availability of Nordic and Baltic native speakers and a supportive business environment. Sweden is also the preferred choice for shared service functions. Centralized activities include finance and accounting, IT support, human resources and customer service. 24-hour distribution to all major destinations
Sweden is often chosen as the base for centralized logistics, offering advanced distribution and communication infrastructure. It is the only country to offer 24-hour distribution to all major destinations in the region.
Latvia
Denmark
Lithuania
Improved customer satisfaction from Swedish contact centers
Swedish customer support and sales centers perform work across Northern Europe for companies like American Express, DHL, Sykes, Teleperformance and Transcom. A workforce with strong language and computer skills, competitive operating costs and world-class telecommunications makes Sweden a choice location for tasks that require high levels of quality and service.
Preferred location for regionalized business activities
Hub for regional headquarters
Examples of companies that have chosen Sweden as the platform for activities in Northern Europe and the Baltic Sea region
2006, share in percent
3 Adidas
3 DHL
3 Ingram Micro
3 Akzo Nobel
3 Dixons Group
3 Michelin
3 Black & Decker
3 General Electric
3 Samsung
3 Bosch Automotive
3 Goodyear Dunlop
3 Sodexho
3 Canon
3 Henkel
3 Yamaha
3 Daimler
3 Honda
Sweden 56% Denmark 32% Norway 10% Finland 2%
Source: Øresundsinstituttet, 2006
Source: Invest in Sweden Agency, 2007
Sweden is a choice location for centralized business activities, including contact centers, distribution and logistics centers, regional headquarters and shared service centers.
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A majority of the world’s largest multinational companies that are present in Northern Europe and the Baltic Sea region chose Sweden as the location for their regional headquarters.
business sectors
financial services
Financial center of Scandinavia Stockholm, the Swedish capital, is a major financial center, hosting one the largest stock and derivatives exchanges in Europe and a diverse range of foreign banks and financial services companies. A major growth sector
The financial sector is a national growth sector. Much of the activity is concentrated to Stockholm, where four of Scandinavia’s largest banks have their headquarters and Nasdaq OMX also has major operations. (Nasdaq, the US stock exchange operator, acquired Sweden’s OMX, owner and operator of stock exchanges in six countries in the region, in 2007.) Opportunities in banking
Stockholm serves as a typical base for corporate banking activities in Northern Europe, which is natural given the significant presence of corporate headquarters nearby and the importance of Sweden’s financial services industry. There are opportunities in retail and private banking – growing market segments traditionally served by Sweden’s four largest banks. The fact that Swedes are the world’s most advanced users of online banking services facilitates market entry.
Growth in insurance
The insurance sector is also enjoying strong growth, particularly in private healthcare. This is a result of an aging population and longer life spans and affects both corporate and private insurance. As in banking, the insurance market is dominated by a handful of companies.
Financial center of Scandinavia Examples of financial services companies that have based regional activities in Stockholm 3 Bank of Scotland
3 Goldman Sachs
3 Calyon Bank
3 LB Kiel
3 Citigroup
3 Morgan Stanley
3 Deutsche Bank
3 Royal Bank of Scotland
3 Eurohypo
3 UBS Warburg
3 GE Capital
The largest stock exchanges in Northern Europe Share of stock trading 2007, percent Stockholm, Sweden 41% Oslo, Norway 23% Helsinki, Finland 23% Copenhagen, Denmark 10% Other1 3% 1) Iceland, Estonia, Latvia and Lithuania
Source: Invest in Sweden Agency, 2008
Sweden is the preferred base for financial services companies operating in Scandinavia.
Source: OMX Nordic Exchange, Oslo Stock Exchange, 2008
The Stockholm Stock Exchange has the highest trading volumes and largest market capitalization of the eight stock exchanges in the region.
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business sectors
travel and hospitality
Growth market for tourism industry The travel and hospitality industry offers a range of investment opportunities to hotel owners and operators, theme park operators, and service and infrastructure providers. Potential exists both in city-related hospitality and in tourism allied to Sweden’s ski, adventure/wilderness, golf and seaside offering. An industry in expansion mode
Between 2002 and 2006, Sweden’s international tourism revenues more than doubled. Visitor volumes increased faster than the European average, and almost all Swedish regions recorded increases. Large-scale investments in facilities have been completed and more are under way throughout the country, including in the larger cities and in attractive summer and winter destinations. The high quality of the natural environment (clean air, pure water) as well as a strong focus on sustainable development favor future tourism development in Sweden. Ample opportunities
Sweden’s attractions as a destination lie in its mix of activities and experiences available to business and leisure travelers alike, ranging from beautiful city destinations to vast areas of unspoilt nature. There are ample opportunities for
24
golf, skiing and adventure and wilderness holidays. The capital, Stockholm, ranks among the world’s most attractive international conference cities and is regarded as one of the most exciting contemporary urban scenes. A database of investment opportunities, including ski resorts, camping grounds and other amenities, has been built up by the national travel and tourist industry federation and partners.
Best potential for travel and tourism
Environmental sustainability
Cultural resources
2008, country rank
2008, country rank
2008, country rank
1. Switzerland
1. Sweden
1. Spain
2. Austria
2. Switzerland
2. Portugal
3. Germany
3. Denmark
3. Sweden
4. Australia
4. Germany
4. UK
5. Spain
5. France
5. Australia
6. UK
6. Norway
6. Germany
7. US
7. Finland
7. US
8. Sweden
8. Austria
8. Italy
9. Canada
9. Netherlands
9. Switzerland
10. France
10. UK
10. France
Source: World Economic Forum,“Travel & Tourism Competitiveness Report 2008”
Source: World Economic Forum,“Travel & Tourism Competitiveness Report 2008”
Source: World Economic Forum,“Travel & Tourism Competitiveness Report 2008”
When business and natural environments of 130 countries were evaluated, Sweden is among the top ten countries. It offers an attractive environment for travel and tourism industry development.
Conservation of the environment is increasingly important in tourism development. Sweden tops the ranking.
Sweden ranks highly in cultural resources, including the presence of cultural heritage sites and the frequency of international fairs and exhibitions.
business sectors
retail
Wealth of retail opportunities Sweden welcomes international store concepts and provides a firm platform for entry to Russia and the Baltic markets. The retail sector has experienced increased sales growth for over a decade as consumers allocate larger shares of their spending to retail products. Stable and growing economy
The Swedish retail market has enjoyed positive annual growth for more than a decade, fuelled by steady population growth and rising disposable incomes. Total retail sales account for one third of total private consumption. Retail sales growth has been particularly strong in outof-town shopping centers, and many such facilities are being upgraded, enlarged or under construction. Crossborder shopping along the national borders with Norway and Finland is booming. Demand and acceptance for new retail concepts
Trend-sensitive consumers have made Sweden a popular test market for global brands. Swedes travel extensively and are familiar with international store concepts. Sweden is also well suited to be a pilot market for other countries in Northern Europe, including Russia. Real estate owners, shopping center developers and consumers alike welcome
new retail concepts. Some 120 foreign retail chains are already present, the majority from neighboring Denmark and Norway, as well as Germany and the UK. Concepts include both large-store formats and flagship stores. More than 30 percent of the foreign retailers have at least 20 outlets in Sweden.
Retail sales growth
Household expenditure
Retail investments in Sweden
Total annual sales, SEK billion
2006, share of total private consumption
A selection of foreign retail brands in Sweden
600 500 400 300 200 100 0
98 99 00 01 02 03 04 05 06 07
Source: Statistics Sweden, 2008
Source: Statistics Sweden, 2008
Housing 27% Transports and vehicles 13% Food and beverage 12% Leisure and culture 12% Clothing and shoes 5% Furniture and household equipment 5% Restaurants and hotels 5% Other 21%
3 Esprit, Germany – Clothing 3 Jysk, Denmark – Home furnishings 3 K-rauta, Finland – Home improvement 3 Media Markt, Germany – Electronics 3 Specsavers, UK – Optics 3 The Body Shop, UK – Beauty products 3 The Phone House, UK – Electronics 3 Zara, Spain – Clothing
Source: Market Magasin, 2007
Sweden’s retail sector has enjoyed annual sales growth for more than a decade. 600
Retail sales account for one third of private consumption.
Over the past decade, numerous foreign retail chains have entered Sweden.
500
400
300
25
business sectors
examples of investments
Investments from a variety of countries These are some examples of investments in Sweden the last five years. They include a mix of small and large investments from various industry and service sectors, representing different countries and forms of foreign direct investment. Company Barclaycard Berthelsmann Bharat Forge Bilfinger Berger BioMérieux BMW Conceptor Eiendom D-Link Daewoo Precision Industries Dainippon Sumitomo Pharma (DSP) Economic Trading LLC Eisai Co, Ltd Fujitsu Ltd Genentech General Motors Huawei Technologies IAC Group Johnson Controls Lintec Maersk Logistics Media Saturn Verwaltung Nissan Motor Co NeSt Group Olav Thon Group Oracle Peterson Emballasje Pfizer Preem Petroleum REC Group Renault Rolls Royce Marine Royal Bank of Scotland Samsung Electronics State Grid Corp. of China Tanabe Seiyaku TechCity Solutions Tooltech Voith Paper ZTE Source: Invest in Sweden Agency, 2008
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Country of origin UK Germany India Germany France Germany Norway Taiwan South Korea Japan United Arab Emirates Japan Japan US US China US US Japan Denmark Germany Japan India/US Norway US Norway US Saudi Arabia Norway France UK UK South Korea China Japan France India Germany China
Sector Financial services Contact center Automotive Construction Life sciences Automotive Real Estate Electronics Automotive Life sciences Manufacturing Life science ICT Life sciences Automotive Telecom Automotive Automotive Packaging Logistics Retail Automotive ICT Retail ICT Packaging Pharmaceuticals Petrochemicals Environmental technologies Automotive Manufacturing Financial services ICT Bioenergy Life sciences Contact center ICT Packaging Telecom
Type of investment Joint venture New establishment Expansion New establishment Expansion New establishment New establishment New establishment New establishment Strategic alliance New establishment Strategic alliance Acquisition Strategic alliance Capital investment New establishment New establishment Expansion Strategic alliance New establishment New establishment Acquisition Acquisition New establishment Acquisition Acquisition New establishment Expansion New establishment New establishment Expansion New establishment Strategic alliance Joint venture Strategic alliance New establishment New establishment New establishment New establishment
business framework
Introduction – business framework Sweden offers first-class infrastructure and integration in a business community characterized by growth and innovation. Investing in Sweden means connecting with one of the best business environments in Europe. At ease with globalization
Sweden is one of the world’s most globalized countries. Whether judged by international trade and investment flows, the extensive presence of Swedish business abroad and foreign companies in Sweden, or the language skills and taste for travel of its citizens, Sweden ranks among the top ten countries in most internationalization and globalization studies. An attractive package
To be sure, Sweden possesses most of the attributes necessary for attracting foreign investors’ interest.
As a hotbed for many successful multinationals – home-grown and newcomers alike – the country is rich in innovation and cutting edge technologies. Cluster participants span the full spectrum, ranging from small, innovative enterprises to multinationals with experience and financial clout. A dynamic research community offers world-class institutions and know-how. Highly advanced capital markets ensure excellent access to venture capital, while the public sector is acknowledged for its efficiency and lack of red tape.
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business framework
international competitiveness
In the top ten A country’s ability to attract investment relies on its environment for business, people and innovations. Below are listed nine major indices for international competitiveness – and an overall ranking. Composed competitiveness index 2007, country rank Overall ranking Country
Global World Inward FDI Business Ease of Doing Global Summary Competitiveness Competitiveness Potential Competitiveness Business Innovation Index Scoreboard Index Index Index Index1
Knowledge Opacity Human Economy Index 2 Development Index Index
1.
US
1
1
1
1
3
7
10
13
2.
Sweden
4
9
8
4
14
2
1
4
6
3.
Singapore
7
2
2
9
1
5
n/a3
3
25
4.
Finland
6
15
14
3
13
1
4
1
11
5.
Denmark
3
6
19
5
5
9
2
6
14
6.
Switzerland
2
4
21
6
16
3
6
14
7
7.
Canada
13
8
4
14
7
11
7
12
4
8.
Norway
16
11
7
13
11
16
3
n/a3
2
9.
UK
9
21
3
11
6
12
9
9
16
10.
10
10
12
7
21
10
5
16
9
Netherlands
1) The European TrendChart on Innovation is an initiative of the European Commission
2) The index may give the same ranking to two or more countries
12
3) Not included in the ranking
Source: ISA compilation, 2008; World Economic Forum, 2007; Institute for Management Development (IMD), 2008; Unctad, 2007; World Bank, 2008; TrendChart, 2007; Milken Institute, 2008; United Nations Development Programme (UNDP), 2007.
ISA has compiled the results of nine authoritative and publicly available country performance indices to produce rankings that give an overview of national attractiveness for foreign investment. Apart from Europe, the indices also cover most developed and some developing countries. The sample is identical with the 48 countries included in the Global Innovation Scoreboard, a European Commission initiative. The rankings measure competitiveness across a variety of parameters that include both “hard”
28
and “soft” factors. The latter include quality of life, an increasingly important consideration for investors. Each index carries the same weight in the overall standings, which are measured using countries’ average rank in the nine indices. For example, the top-ranked US has an average rank of 5.4 followed by Sweden at 5.8, Singapore at 6.8, Finland at 7.6 and Denmark at 7.7. Accordingly, these nations are ranked 1-2-3-4-5 in the combined index.
Most competitive countries in the world
World’s most prosperityenhancing countries
Highest inward FDI potential
2007, country rank
2008, country rank
2007, country rank
1. US
1. US
1. US
2. Switzerland
2. Singapore
2. Singapore
3. Denmark
3. Hong Kong
3. UK
4. Sweden
4. Switzerland
4. Canada
5. Germany
5. Luxembourg
5. Luxembourg
6. Finland
6. Denmark
6. Germany
7. Singapore
7. Australia
7. Norway
8. Japan
8. Canada
8. Sweden
9. UK
9. Sweden
9. Qatar
10. Netherlands
10. Netherlands
10. Iceland
Source: Global Competitiveness Index; World Economic Forum, 2007
Source: World Competitiveness Scoreboard, Institute for Management Development (IMD), 2008
Source: Inward FDI Potential Index; Unctad, 2007
The index covers 131 economies and builds on a combination of official statistics and survey data. It is based on three pillars of competitiveness: basic requirements, efficiency enhancers and innovation and sophistication factors.
The index covers 55 economies. It builds on four areas of performance: economic performance, government efficiency, business efficiency and infrastructure.
The index covers 141 economies and is based on 12 economic and policy variables. Sweden is among a group of frontrunners that score highly in FDI potential.
business framework
Best practice business environments
Easiest countries for doing business
Innovation leaders
2007, country rank
2007, country rank
2007, country rank
1. US
1. Singapore
1. Finland
2. Germany
2. New Zealand
2. Sweden
3. Finland
3. US
3. Switzerland
4. Sweden
4. Hong Kong
4. Japan
5. Denmark
5. Denmark
5. Singapore
6. Switzerland
6. UK
6. Israel
7. Netherlands
7. Canada
7. US
8. Austria
8. Ireland
8. Germany
9. Singapore
9. Australia
9. Denmark
10. Japan
10. Iceland
10. Netherlands
Source: Business Competitiveness Index, World Economic Forum, 2007
14. Sweden Source: Ease of Doing Business Index; World Bank, 2008
Source: Global Summary Innovation Index; TrendChart, 2007
The index draws on official statistics and survey data. It ranks countries by their businesslevel competitiveness and identifies strengths and weaknesses in terms of conditions for business and company operations and strategies. The index covers 127 countries.
The Doing Business 2008 indicators are comparable across 178 economies. They measure the regulatory costs of business and highlight specific regulations that enhance or constrain investment, productivity and growth. Although not among the top ten in this review, Sweden scores particularly well in crossborder trading and property registration.
The index compares the innovation performance of the EU25 to other OECD and nonOECD countries that are strong in R&D. It uses the same methodology as the European Innovation Scoreboard, but the comparison is based on a more limited set of indicators. The innovation dimensions include innovation drivers, knowledge creation and diffusion, applications and intellectual property.
Forefront of the knowledge economy
Most transparent for business
Top spots for quality of life
2007, country rank
2008, country rank
2007, country rank
1. Sweden
1. Finland
1. Iceland
2. Denmark
2. Hong Kong
2. Norway
3. Norway
3. Singapore
3. Australia
4. Finland
4. Sweden
4. Canada
5. Netherlands
5. Australia
5. Ireland
6. Switzerland
6. Denmark
6. Sweden
7. Canada
7. Austria
7. Switzerland
8. Australia
8. Ireland
8. Japan
9. UK
9. UK
9. Netherlands
10. US
10. Germany
10. France
Source: Knowledge Economy Index; World Bank, 2008
The index, which encompasses 140 countries, evalutaes the conduciveness of the environment for effective application of knowledge for economic development. It is compiled using performance in four measures related to the knowledge economy: economic incentive and institutional regime, education and human resources, the innovation system and ICT.
Source: Opacity Index; Milken Institute, 2008
The index measures global business risks based on five factors: corruption, legal systems, enforcement policies, accounting and disclosure standards and regulatory quality.
Source: Human Development Index; UNDP, 2008
The index covers 177 countries and measures achievements in three basic dimensions of human development: a long and healthy life, knowledge and a good standard of living. The UNDP includes 70 countries on its list of “high human development”.
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business framework
costs and productivity
Good for business The benefits of investing in Sweden stem largely from the high productivity and efficiency of Sweden-based business operations. Sweden offers value for money. What is less known is that it is also one of Europe’s most competitive locations for corporate taxation. Comparative surveys of national business environments and analysis by international tax consultants confirm its advantage in this area. Competitive corporate taxes
At 28 percent in nominal terms, the tax rate on corporate profits is significantly below that of many OECD countries, including the US, France and Germany. The tax system is simple and straightforward. Sweden has no local corporate taxes or business license taxes, which are common in other jurisdictions. Generous corporate tax deferral rules reduce the effective tax rate to 25 percent or even lower. The low tax rate is not the only plus point. National tax law allows consolidation of income through group contributions, which are intra-group distributions that can be used to even out profits and losses between group companies. Recent legislation put Sweden on the map as an attractive location for holding companies, on a par with the Netherlands. Sales of business-related shares are exempt from capital gains tax. Dividends and royalties are tax-free and paid interest on loans is fully deductible. Tax treaties with more than 80 countries are in operation to avoid double taxation. Useful add-ons
The corporate tax system has other virtues, too. It is transparent and enables easy access to information. The national tax agency (Skatteverket) is efficient and service-oriented. A number of online services save the investor time and money. Key foreign personnel – executives, experts, researchers and others with sought-after skills that are difficult to find in Sweden – may qualify for a special tax regime that reduces their taxable income by 25 percent and lowers the basis on which employer’s social security contributions are
30
calculated by the same percentage. This tax exemption acts as an incentive for foreign-qualified professionals to try a career in Sweden, while assisting employers in attracting the brain power they need. Value for money
The cost of doing business in Sweden is generally comparable to most OECD countries, but there are some countryspecific cost advantages. For example, relatively modest salary increases over the last decade and a favorable exchange rate have made Sweden’s overall salary cost position increasingly competitive. This competitiveness is even more pronounced for salaries of highly qualified personnel and researchers. Sweden’s leverage in terms of high productivity and business skills is substantial and offers good value for money. Reliable profit-generator
Swedish manufacturing companies have achieved some of the highest productivity growth in the world in the last decade, while also maintaining their share of GDP, contrary to the trend in many other countries.
business framework
Holding company regimes within four selected European jurisdictions
Sweden
Netherlands
Belgium
28%
20/23.5/25.5%
25/34%
25%
Treatment of dividends
Exempt
Exempt
95% Exempt
Exempt
Treatment of capital gains
Exempt
Exempt
Exempt
Exempt
Yes
Yes
Yes
Yes, but limited Yes
Corporate tax rate
Interest deduction
Denmark
Group consolidation
Yes
Yes
No
Absence of thin capitalization rules
Yes
No
No
No
Absence of capital duty
Yes
Yes
No
Yes
No/low withholding taxes
Yes
Yes
Yes
Yes
Extensive tax treaty network
Yes
Yes
Yes
Yes
Source: Rödl & Partner, 2008
Sweden is among Europe’s most favorable jurisdictions for holding com panies, reflecting a combination of absence of thin capitalization rules, participation exemption rules and other tax rules and case law. Capital gains and dividends from business-related shares are in most cases tax
exempt. The definition of business-related shares is generous compared to other countries and applies to shares held in, or dividends received from, companies in Sweden and abroad.
Productivity growth in manufacturing
Effective personal income tax rate
Corporate tax rates
2000–2006, average annual growth in percent
2006, percentage of income equal to GDP per capita
2008, percent
Korea Sweden Taiwan Norway UK Japan Germany France Netherlands Denmark
7.4 6.4 6.0 4.5 4.4 3.9 3.6 3.4 3.1 2.8
Source: US Department of Labor, 2008
Netherlands Denmark Sweden Finland Norway Germany UK France US Ireland
36.4 31.6 28.6 28.3 26.8 25.1 23.7 22.3 13.6 11.0
Source: IMD, 2007
Japan
40.7
US
40.0
France
34.4
Germany
30.0
Sweden
28.0
UK
28.0
Finland Netherlands
26.0 20/23.5/25.51
Denmark
25.0
Ireland
12.5
1) Rate depending on level of profit
Output per hour is still lagging somewhat behind leading economies such as the US, but manufacturing productivity is growing faster in Sweden than in other countries. Particular productivity gains have been recorded in automotive and machinery manufacturing as well as the pharmaceutical industry. Explanations to the success include the Swedish industry’s international exposure and its high IT expenditures.
Although Sweden’s personal income taxes are relatively high, they are by no means exceptional by European standards. Social security costs are partly financed by employers’ contributions in the form of a 32.42 percent stautory employment payroll consisting of contributions for pension, health insurance and other social benefits. Personal income taxes were reduced in 2007 and again in 2008.
Source: Öhrlings PricewaterhouseCoopers; ISA updates, 2008
The effective tax rate is lower than the nominal rate due to the possibility of deferring taxation of profit. Numerous surveys have credited Sweden’s corporate taxation regime as being among the country’s main competitive strengths.
31
business framework
infrastructure
Bedrock for competitive business Physical infrastructure is of a high standard and includes excellent housing, transportation and communications. Major investment in higher education and basic research, the presence of homegrown research-intensive multinationals and a solid scientific infrastructure have made Sweden a world leading R&D supplier. High quality and reliability
Sweden’s physical infrastructure has been shaped by the demands of geography as well as the virtues of prosperity. The inherent challenges in the fact that Sweden stretches thousands of kilometers from south to north and offers a variation of climates from hot summers to arctic winters have contributed to high quality and reliability in building and construction, transportation and communications. Energy is tapped from natural supplies of hydroelectric power and several nuclear power plants. Sweden’s high quality physical infrastructure is a cornerstone for the country’s strong export performance. Long experience from meeting infrastructure challenges at home has contributed to the competitiveness of Swedish-based companies like NCC and Skanska (building and construction), Vattenfall (energy) and TeliaSonera (telecom) in the international market for infrastructure projects. Education and R&D champion
Swedish scientific infrastructure is world-class. High investment in higher education and basic research has propelled Sweden to a prime position among OECD economies in terms of university enrollment, workforce skills and R&D outcome (measured as the number of patents and scientific articles per capita). But the volume of Swedish publicly-financed R&D, though important, is overshadowed by the R&D activities of Swedish-origin multinationals. Synergies generated by the close connection between Swedish universities and research institutes and the private sector and government institutions further leverage the R&D output. Sweden is an OECD leader in terms of combined public and private R&D expenditure in relation to GDP. Even
32
when R&D outlays are expressed in nominal terms, Sweden – with a population of 9 million – is among the world’s top R&D spenders. Swedish ICT specifics
Sweden’s sophisticated information and communication technologies (ICT) infrastructure attracts particular attention abroad. It has developed in tune with – and supported – the rapid growth of the Swedish ICT sector. It has enabled widespread Internet use for personal banking and many other consumer services. The Swedish business sector has been at the forefront in transforming its operations and improving performance with the tools provided by the ICT revolution of recent years. In parallel, the Swedish public sector has improved its efficiency and services in a regulatory environment that supports development, absorption and use of ICT. Sweden’s capability also rests on its pro-technology stance, being a leader in terms of per capita access to personal computers and Internet use. Strength in education and training – including widespread proficiency in English – combines with cultural factors such as openness to new products, services and behavioral patterns to underpin a high level of connectivity.
business framework
Investment in knowledge
Higher education attainment
Business expenditure on R&D
2004, percentage of GDP
2005, percentage of population 25–64
2005, percentage of GDP
US Sweden Finland Japan Denmark Canada France Australia Germany Netherlands
6.6 6.4 5.9 5.3 5.1 4.4 4.3 3.9 3.9 3.8
Canada Japan US Finland Denmark Netherlands Sweden UK Germany France
46.1 39.9 39.0 34.6 33.5 30.1 29.6
3.6
Sweden
2.9
Finland
2.5
Japan
2.4
Korea
2.3
Switzerland
2.2
US
1.9
24.6
Germany
1.8
24.8
Taiwan
1.7
Denmark
1.7
29.6
Source: OECD, 2008
Source: OECD, 2007
Israel
Source: IMD, 2007
This indicator is designed to compare countries’ spending on their knowledge base aimed at generating future returns. Investment in knowledge is defined and calculated as the sum of expenditure on R&D, higher education (public and private) and computer software.
This is a key indicator of how well countries are placed to profit from technological and scientific progress. Although the measurement leaves out the qualitative aspect of education, it clearly illustrates that Sweden belongs to a group of countries whose workforce is highly educated in an international perspective.
Even in nominal terms, Swedish business sector spending on R&D is among the top ten in the world. This does not include R&D investment by Swedish multinationals in other OECD countries or in emerging markets like China and India. Top R&D spenders include AstraZeneca, Atlas Copco, Ericsson, Sandvik, Saab, Scania and Volvo.
Expenditure per student in tertiary education
Networked readiness
English skills1
2006, country rank
2005, percent of population (above 15 years old)
2004, US$ US Switzerland Sweden Denmark Norway Netherlands Finland Germany Japan France
22,476
1. Denmark 2. Sweden
Netherlands
87
3. Switzerland
Sweden
85
15,225
4. US
Denmark
83
14,997
5. Singapore
Finland
60 53 52
21,966 16,218
6. Finland
Austria
12,505
7. Netherlands
Belgium
12,255
8. Iceland
Germany
51
9. Rep. of Korea
France
34
10. Norway
Italy
29
Spain
20
13,846
12,193 10,668
Source: OECD, 2008
Source: Networked Readiness Index, 2007–2008
1) At least conversation level
Sweden has managed to meet the increase in tertiary education enrolment with high levels of educational investment. Though per capita spending has declined somewhat, the average level of expenditure per tertiary student in the OECD was € 8,940/US$ 11,100 in 2004.
Switzerland US Sweden Denmark Norway Netherlands UK
Sweden is the second most networked economy in the world. The index examines how prepared countries are to use ICT effectively. 127 economies are covered.
Source: Europeans and languages; European Commission 2005
The English language has had an enormous impact on Sweden’s post-war generation. The constant feed of English television subtitles has played an unexpected but major role in making Swedes proficient English speakers. The foreign investor will have no difficulties making himself or herself understood at any level of Swedish society.
23,700 20,500 15,700 15,200 13,700 13,100 11,800
33
business framework
easy to do business
Efficient business procedures Starting a company in Sweden is simple and straightforward. Information about the process and necessary forms are readily available online and in English. The legal system strikes a good balance between demands for security, reliability, transparency and costefficiency. Uncomplicated business framework
A transparent market and simple procedures make for an uncomplicated business framwork. Incorporating a lim ited liability company (the legal format chosen by the vast majority of foreign investors) is very straightforward. The application is filed at the Swedish Companies Registration Office (Bolagsverket) and usually drawn up with the help of a lawyer. It takes an average of one to two weeks following the office’s receipt of application for the company to be established. Another option is to buy an off-the-shelf company, already fully organized and registered, from a law firm or specialist consultancy. Choosing the best alternative
There are two categories of limited liability companies (aktiebolag) – private (privat) and public (publikt). The difference between the two is determined by the right to turn to the market for capital. A private limited liability company must have minimum share capital of SEK 100,000, (€11,000/US$15,000); a public limited liability company must have a minimum of SEK 500,000 (€55,000/ US$75,000). No restrictions apply to foreign owners of Swedish limited liability companies. Generally, no operating licenses are required to conduct business in Sweden. Exceptions exist in specific areas such as insurance, banking and financial services, though investors approved by other EU countries may benefit from mutual recognition of such licenses. Swedish law also allows limited liability companies with only one owner, such as wholly-owned subsidiaries.
34
Branch registration
A foreign company wishing to establish a business in Sweden without actually starting a Swedish company may instead conduct its operations through a Swedish branch (filial). Setting up a branch does not require permission from the Swedish authorities. The only requirement is that the branch is registered with the Register of Branches kept by the Companies Registration Office. The branch of a foreign company is taxed on its profits as if it were a Swedish limited liability company. Ease of access
Swedish public sector services are efficient, easily accessible and available online in English. Electronic public services are among the most advanced in the EU. Bureaucracy is kept to a minimum and officials are helpful and service-oriented. More information about establishing a business in Sweden is available in ISA’s Establishing a Business in Sweden brochure and in ISA fact sheets, which are available at www.isa.se (see page 39 for a complete list of fact sheets).
business framework
Strength of auditing and accounting standards
Ease of starting a business
Trading across borders
2007, country rank
2007, number of procedures
2007, country rank
1. Germany
Australia
2
1. Singapore
2. Sweden
Canada
2
2. Denmark
3. UK
Sweden
3
3. Hong Kong
4. Australia
Denmark
4
4. Norway
5. Austria
Ireland
4
5. Finland
6. South Africa
France
5
6. Sweden
7. Finland
Netherlands
6
7. Estonia
8. Ireland
UK
6
8. Israel
9. Hong Kong
US
6
9. Panama
10. Denmark
Germany
9
10. Germany
Source: Executive Opinion Survey; World Economic Forum, 2007
Source: Doing Business; World Bank, 2008
Source: Doing Business; World Bank, 2008
Though Sweden has not been untouched by the corporate financial scandals of recent years, transparency and high standards in financial auditing and reporting help to limit financial wrongdoing.
The World Bank rankings reflect the legal and bureaucratic barriers that an entrepreneur must overcome to incorporate and re gister a new firm with up to 50 employees. The cost of doing so in Sweden is 0.6 percent of gross national income (GNI) per capita, which is very low by international comparison. The OECD average is 5.1 percent.
The ranking reflects the costs related to countries’ procedural requirements for exporting and importing a standardized cargo of goods by ocean transport. Every official procedure for exporting and importing the goods is recorded from the contractual agreement between the two parties to the delivery of goods along with the time and cost necessary for completion.
useful addresses Almi Företagspartner AB www.almi.se Financing and business development consultation for SME’s. Central Bank of Sweden www.riksbank.com/swedishstat Economic and financial data for Sweden. National Board of Trade www.kommers.se Swedish governmental organization dealing with foreign trade and trade policy. Statistics Sweden www.scb.se Statistics from most economic sectors of Swedish society.
Swedish Agency for Innovation Systems www.vinnova.se Integrates R&D in technology, transport and working life.
Swedish Export Credit Corporation www.sek.se Financial partner for customers and investors in Sweden.
Swedish Agency for Economic and Regional Growth www.nutek.se Sweden’s central public authority for industrial policy issues.
Swedish Export Credits Guarantee Board www.ekn.se Provides financial solutions tailored for the public and private sectors, including foreign investors.
Swedish Companies Registration Office www.bolagsverket.se Registers new business enterprises.
Swedish Institute www.sweden.se Produces general information material about Sweden. The website is the official gateway to information about Sweden.
Swedish Migration Board www.migrationsverket.se National authority responsible for visas, work and residence permits and Swedish citizenship. Swedish Tax Agency www.skatteverket.se Tax administration, enforcement service and population registration. Swedish Trade Council www.swedishtrade.com Promotes Swedish exports. Swedish Trade Federation www.svenskhandel.se Promotes Swedish imports.
35
business framework
foreign direct investment
In the major league Sweden’s prominence as a North European melting pot for international business is attracting numerous foreign investors. Swedish companies are also large investors abroad. Employment in foreign-owned companies
Largest recipients of FDI worldwide
2006, employees in thousand
2002–2006, US$ billion
US UK Finland Netherlands Germany France Norway Denmark Switzerland Luxemburg Other
110 67 57 51 50 42 42 36 24 15 79
Source: Institute for Growth Policy Studies (ITPS), 2007
More than 11,000 foreign-owned companies employed a total of 573,000 Swedes in 2006 - 23 percent of all private sector employees. Ten years earlier, the corresponding figures were 3,000 or so foreign businesses and 280,000 employees.
US UK China1 France Belgium1 Germany Spain Hongkong Canada Italy Sweden (16)
FDI stock in selected countries 1990, 2000 and 2006, percentage of GDP Country
1990
2000
Ireland
79.4
131.9
81.2
Netherlands
22.4
63.1
68.2
Sweden
5.2
38.8
56.8
Czech Republic
n.a.
38.9
54.8
135
Denmark
6.8
46.0
50.3
134
UK
20.6
30.4
47.8
127
EU average
10.5
26.0
38.0
540 430 309 286 199 155
107 66
1) Figures for China are overstated due to round tripping of capital between mainland China and Hong Kong; figures for Belgium/Luxembourg are overstated as recorded capital flows to a large extent are channeled to other countries Source: Unctad, 2007
On a per capita basis, Sweden is in the largest recipient of foreign direct investment worldwide, and is also among the leaders in nominal terms.
2006
France
7.0
19.6
35.0
Finland
3.7
20.1
30.5
Canada
19.7
29.8
30.4
8.5
17.1
20.8
Russia
n.a.
12.4
20.2
Norway
10.7
15.1
19.8
Germany
6.5
14.3
17.4
US
6.8
12.8
13.5
China
5.4
17.9
11.1
India
0.5
3.8
5.7
Japan
0.3
1.1
2.5
Brazil
Source: Unctad, 2007
FDI stock in Sweden by country of origin
FDI stock in Sweden by business sector
Swedish inward and outward FDI stock
2006, US$ billion
2006, US$ billion
2006, US$ billion
Netherlands
34.4
Pharma and chemicals
50.3
UK
33.5
Machinery and equipment
24.0
Inward stock Outward stock
US
30.5
Pulp and paper
14.6
Source: Statistics Sweden, 2008
Finland
20.9
Food
Norway
16.8
Other manufacturing
10.0
Germany
15.6
Energy
22.2
Belgium
11.4
Trading
17.1
Luxembourg
10.6
Building and construction
Denmark Switzerland Other countries Total
36
9.4
Transportation and communications
14.0
6.4
Banking and finance
23.0
210.4
Other services Total
238.6
5.7
8.9 21.4
210.4
20.1 210.4
Source: Statistics Sweden, 2008
Source: Statistics Sweden, 2008
US FDI assets include some of Sweden’s most recognized automotive brands, such as Volvo and Saab. Pharmaceutical giant AstraZeneca dominates the UK port folio, while Finnish investors are strong in pulp and paper (Stora Enso).
US, German and Dutch investors acquired leading Swedish chemical and pharmaceutical companies in the 1990s. The service sector is growing in importance following wideranging deregulation and as increased tradability of services.
Ten years after FDI began to enter Sweden in earnest, the country has reached near equilibrium in its inward and outward FDI stock. With an inward stock amounting to 57 percent of GDP and an outward stock standing at 68 percent of GDP, Sweden is now well above the EU average (38 and 45 percent respectively) in terms of business internationalization. Few countries can match Sweden’s tenfold increase in the inward FDI stock as a percentage of GDP from 1990 to 2005.
business framework
swedish economy
Star performer in Europe The consensus among leading institutions and think-tanks is that Sweden is poised to remain one of the best performing economies in Europe. Key economic indicators
SEK bn
Annual change in percent
2006
2006
Supply and demand GDP at market prices 2,900 Household consumption 1,374 Public consumption 762 Gross investment 525 Exports of goods and services 1,491 Imports of goods and services 1,253 Prices Inflation (KPIX)
4.1 2.5 1.5 7.7 8.9 8.2 1.2
2006
Employment Unemployment rate (% of workforce) Labor market program (% of workforce) Public finance Government expenditure (% of GDP) Government net lending (% of GDP) Government debt (% of GDP) Balance of payments Current account (% of GDP)
2009 2
2.7 3.2 0.5 8.6 5.0 8.1
3.0 3.3 1.3 5.7 6.4 6.0
2.8 3.6 1.5 2.9 5.4 5.8
1.2
2.7
2.0
2007 1
2008 2
2009 2
7.1 3.0
6.1 2.0
5.6 1.9
5.6 1.9
51.6 2.2 45.9
50.0 3.2 41.0
49.3 3.3 34.1
49.2 2.5 29.3
6.5
6.8
6.9
7.1
Level in percent
Interest rates Policy interest rate 3 (end of year %) Bond rate (10-year, end of year %) Sovereign credit rating Standard & Poor’s AAA 2) Forecast
2008 2
Share in percent
1) Preliminary figures
2007 1
2006
2007 1
2008 2
2009 2
3.00 3.60
4.00 4.30
4.50 4.50
4.50 4.60
Source: National Institute of Economic Research; Central Bank of Sweden, March 2008
3) Set by the Central Bank of Sweden
GDP growth1 in selected countries
Inflation rate
Government net lending
2003–2007, average annual change, percent
2003–2007, annual average in percent
2002–2006, percentage of GDP
Finland Sweden US UK Norway Denmark Euro area France Netherlands Germany
US Euro area France UK Germany Netherlands Denmark Norway Sweden Finland
6 4 2 0 –2 –4 –6 –8 –10
3.0 3.0 2.9 2.5 2.2 1.9 1.5 1.5 1.3 0.9
1) GDP at constant prices Source: National Institute of Economic Research; Eurostat; OECD, 2008
Swedish GDP growth has since 1998 outpaced that ot the eurozone, while the gap in GDP per capita to the leading OECD nations is closing.
2.9 2.1 2.0 1.9 1.8 1.7 1.6 1.5 1.5 1.0
Japan US
Euro a
Swede
2002
2003
2004
2005
2006
Source: OECD, 2008
Source: National Institute of Economic Research; Eurostat; OECD, 2008
Sweden has had one of Europe’s lowest inflation rates since the mid 1990s.
Sweden’s strong public finances provide a platform for maintaining prosperity in the face of future demographic challenges.
37
isa – business facilitator
ISA – your investment facilitator ISA is the government agency responsible for promoting investment and business opportunities in Sweden to foreign investors.
ISA can provide you with tailor-made information on your business area of interest and assist you throughout the entire establishment process. Professional guidance is guaranteed since most ISA staff have corporate backgrounds and extensive expertise in the investment process. ISA advises on the best business location for your company. The network of regional partners across Sweden then provides you with comprehensive local assistance throughout the process – whether a startup investment or the expansion of your Swedish operations.
www .isa.
se
“Of all the international investment promotion agencies that we’ve met, ISA is by far the most professional and forthcoming.” A. Vishwanath, Manager – Intl Business, Tata Sons Ltd
38
Through a single point of contact you gain introductions to the necessary authorities, utilities and professional service companies that you need to get your business in Sweden started. Services are efficient, confidential and free of charge. With a staff of 70, ISA provides services to investors from its offices in Stockholm, China, India, Japan and the US. Throughout the world, ISA co operates with Swedish embassies and cons1ulates. www.isa.se
isa – business facilitator
Guides to Sweden ISA assembles and makes available valuable information on its website to give foreign investors an overall picture of what Sweden has to offer and to facilitate business entries. Publications, fact sheets and PowerPoint presentations in several languages are published. isa publications
isa fact sheets
General information:
Specific information:
Invest in Sweden Report Annual publication highlighting business and investment opportunities in Sweden.
Automotive: • Intelligent Vehicle Safety Systems
weden in Fact S Short version of Report, available in English, Chinese and Japanese. ooking North for New Business L A basic guide to business opportunities in Northern Europe and the Baltic Sea region. Establishing a Business in Sweden A guide to establishing procedures etc. Innovation Hotbeds Presentation of opportunities in biotechnology, fiber optics, food, healthcare, industrial IT, personal health, robotics and steel.
Information and Communication Technologies (ICT): • ICT in Fact • Swedish High Technology Law Life Sciences: • Biotech Tools • Clinical Trials • Metabolic Disease • Neuroscience • Pharmaceuticals & Biotechnology • Stem cells Oil and Petrochemicals: • Oil and Petrochemicals Sweden Packaging: • Packaging Real Estate: • Real Estate
• Costs for establishing a business • Contracts of employment in Sweden • Establishing a business in Sweden • Financial incentives • Foreign employers’ liability for social security charges • Guide to Swedish commercial rents • Guidelines for insurance operations • Guidelines for starting a branch office • Guidelines for starting a franchise business • Guidelines for starting a limited liability company • Living and working in Sweden • Occupational pension and insurance • Social security costs in Sweden • Tax relief for foreign key personnel • Taxes in Sweden • Visas, work and residence permits • Useful addresses when setting up a business • Visas, work and residence permits
ISA publications and fact sheets are available for order and download on the ISA website www.isa.se
39
isa – business facilitator
ISA regional network Sweden provides extensive local assistance for the duration of an establishment or expansion process. The ISA network of regional partners is presented here. More information about the regions is available on the ISA website www.isa.se
1 Business Region Skåne
Douglas Almquist +46 40 623 97 47
[email protected] www.skane.com/invest 2 Kronoberg County
Per Schöldberg +46 470 79 48 72
[email protected] www.iisa.se 3 Invest in Kalmar County
Magnus Gustafson +46 480 44 83 91 magnus.gustafson@ kalmar.regionforbund.se www.investinkalmarcounty.se 4 Location Scandinavia
Anne-Marie Hagström Hirschberg +46 36 10 20 20
[email protected] www.locationscandinavia.se 5 Sjuhärad District
Christine Bjärkby +46 33 435 79 57
[email protected] www.sjuharad.se 6 Business Region Göteborg (BRG)
Petra Sedelius +46 31 61 24 22
[email protected] www.businessregion.se 7 Invest in Skaraborg
Ingemar Fredriksson +46 500 49 72 02
[email protected] www.investinskaraborg.se
40
17
8 East Sweden Development Agency (ESDA)
16
Charlotte Magnusson +46 11 19 65 33
[email protected] www.eastsweden.com
15
14
9 Stockholm Business Region (SBR)
Tora Berg +46 8 508 280 27
[email protected] www.stockholmbusinessregion.se
13 12
10 Business Region Örebro (BRO)
11
Thord Andersson +46 19 602 63 71
[email protected] www.regionorebro.se 11 Invest in Värmland Agency (INVA)
Anna Blomquist +46 54 22 14 87
[email protected] www.investinvarmland.com
10
6
8
7 5
9
4
3
2 1
12 Invest in Dalarna Agency (IDA)
Chatarina Eriksson +46 243 48 88 60
[email protected] www.investindalarna.se 13 Invest in Gävleborg Agency (IGA)
15 Invest in MidSweden
Robert Nordin +46 70 379 40 19
[email protected] www.midsweden.eu
Carina Åkerberg 16 Västerbotten County +46 26 404 02 42 Anders Wangby
[email protected] +46 910 73 46 42 www.iga-sweden.com
[email protected]
14 Midscand
Sven-Erik Nildén +46 63 12 83 30
[email protected] www.jamtland.se
17 Invest in Norrbotten
Thomas Nilsson +46 920 455 364
[email protected]
ISA international network head office
isa operations
Sweden
President and Director-General (as of August 18, 2008)
Invest in Sweden Agency P O Box 90 101 21 Stockholm Tel: +46 8 402 78 00 Fax: +46 8 402 78 78
[email protected]
Establishment Services
International Sales
Maria Söderberg
Bengt-Åke Ljudén
Per-Erik Sandlund
Market Communications & Public Affairs
Automotive
Administration, Dep. Director-General
Annika Rembe
Viveca Rostén Business Development
Rolf Rising
Robert Karlsson ICT
Regional Services Börje Svanborg
Niklas Johnsson
Research Magnus Runnbeck
Carl Morath
Life Sciences Packaging
Anders Eliasson
international operations – isa offices china
IndiA
Japan
north america
Eddie Chen Tel: +86 21 6390 6598 Fax: +86 21 6390 6592
[email protected]
Bengt Johansson Tel: +91 80 4152 9100 Fax: +91 11 2410 5183
[email protected]
Hans G. Rhodiner Tel: +81 3 5562 5014 Fax: +81 3 5562 5130
[email protected]
Tony Svensson Tel: +1 212 702 8780 Fax: +1 212 702 8783
[email protected]
Throughout the world, ISA cooperates with Swedish embassies and consulates.
Responsible publisher: Invest in Sweden Agency Design and production: Intellecta Communication Printing: S-M Ewert
Editor: Susanne Roglar Content: ISA and BBD Corporate Communications
Photos: Cover, page 11, 23,30 and 38: Shutterstock. Page 1: Leif R Jansson/Scanpix. Page 3: Matton, www.imagebank.sweden.se © Lars Dahlin/Umeå University, www.imagebank.sweden.se © Hans Bjurling. Page 4: www.imagebank.sweden.se © Swedish Space Corporation/Magnus Borud, www.imagebank.sweden.se © Sandvik AB and www.imagebank.sweden.se © Ericsson Image Bank. Page 10: Volvo Car Corporation. Page 12: www.imagebank.sweden.se © Thomas Tolstrup/E.ON. Page 13: www.imagebank.sweden.se © Johan Ylitalo and www.imagebank.sweden.se © Malmberg Water AB. Page 14: Kevin Ravoli/AP/Scanpix. Page 15: John Madere/Corbis/Scanpix. Page 16 and 17: www.imagebank.sweden.se © Biovitrum. Page www.imagebank.sweden.se © Tomas Utsi. Page 19: OrganoClick, Gooh and Cypak. Page 20: Åke E:son Lindman. Page 21: Åke E:son Lindman and Clarion Sign Image Bank. Page 24: www.imagebank.aweden.se © Göran Assner/Swedish Travel and Tourism Council. Page 25: HM Image Bank. Page 27: HSB Turning Torso/ Pierre Mens. Page 32: Matton. Page 34: www.imagebank.sweden.se © Olof Holdar/Stockholm Visitors Board. Finalized in May 2008. Printed on environmentally approved, chlorine-free paper. ISBN 978-91-975892-9-1
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