The many reasons for investing in Sweden

Why Sweden?

There are several good reasons to consider investments in Sweden. The macro-economic outlook is promising, the knowledge base is solid, costs competitive and foreign investment soaring. In addition, Sweden offers excellent access to three distinct market areas: Scandinavia, the Baltic Sea Region and the European Union.

Attractive location for foreign investors
During the 1990s, foreign companies have scaled up their investments in Sweden. In fact, the stock of inward foreign direct investment (FDI) has increased more in Sweden than in any other European country.

Source of international success

Few countries can match the international success that Sweden and Swedish companies have attained in the global economy. The fact that many of these companies are technology leaders in their industries signifies industrial tradition, know-how and an infrastructure that has been adapted to the needs of international business operations.

Global leader in research and innovations

Sweden's commitment to exploiting new technology and knowledge is clearly demonstrated by the private and public sectors' investing more in R&D than in any other country relative to GDP. Foreign companies investing in Sweden benefit from the country's strong technological base in education and industry as well as from the constructive relationships between industry and academia.

Competence of high value

Human capital represents the key to success in the knowledge-based economy. Few countries offer a more qualified workforce than Sweden. The presence of a number of large multinational corporations has resulted in detailed knowledge of international business and management. Thanks to a compressed wage structure, the cost of skilled workers is highly competitive.

Leading ICT nation

Few countries can match Sweden in terms of the impact that information and communications technology, ICT, telecommunications and new media have in personal, corporate and financial life. Sweden is a thriving ICT nation with considerable scope of opportunities for both industrial and financial investors. The competitive strength in the ICT field ranges over all areas and Swedish companies have been recognised world leaders in telecommunications, specialised software, the Internet and new media.

Sophisticated marketplace

Sweden offers a wealth of market opportunities for the foreign investor. As a member of the European Union (EU), Sweden is part of the world's largest free trade area, with 370 million consumers. Including the emerging economies of Eastern Europe, the European market comprises almost 700 million potential consumers. Sweden is further strategically located at the centre of one of Europe's most dynamic geographic areas, the Baltic Sea Region, with some 100 million inhabitants.

A fair, open and productive society

Sweden works! It is easy to do business in Sweden and in Scandinavia. Foreign investors meet an open and honest society characterised by trust and cooperation. According to annual surveys by Transparency International, Sweden is the world's third least corrupt nation, after its neighbours Denmark and Finland.

Competitive cost framework

Sweden's cost structure has undergone great changes in recent years. Sweden's old image – as an expensive country in which to do business - is no longer valid. Thanks to strong productivity growth and currency adjustments, Sweden today offers some of the most competitive costs in the European Union for foreign investors.

Stable macro-economic environment

Sweden's fiscal consolidation program has been among the most substantial undertaken by any OECD country. As a result, the budget deficit has been turned into a surplus and the macro-economic outlook has generally stabilised. Stronger public finances have contributed to reducing inflationary pressure and to lower interest rates. Sweden is keeping the door open for future participation in the Economic and Monetary Union (EMU).

Fact:     Key economic indicators SEK billion Annual change, %   1997 1997 1998 1999* 2000* National account           Real GDP 1,738.9 1.8 2.9 2.2 2.9 Real gross fixed investment 237.9 -4.8 9.6 5.0 6.6 Real exports of goods and services 981.4 12.8 7.3 4.0 5.4 Real imports of goods and services 639.5 11.7 11.0 4.0 6.4             Production and employment           Industrial production - 5.4 4.3 2.0 4.0 Unemployment rate (% of workforce) - 8.0 6.5 5.9 5.7 Labor market programs (% of workforce) - 4.3 3.9 3.6 3.3             Prices           Consumer prices - 0.9 0.4 0.1 0.5             Interest rates           Bond rates (5-year) (%) - 5.8 4.7 4.0 4.3 Short interest rates (3-months) (%) - 4.1 4.2 3.2 3.2             Public finance           Expenditure (% of GDP) - 63.9 61.4 62.0 60.3 Budget deficit/surplus (% of GDP) - -1.1 3.2 1.7 2.9 Central government debt (% of GDP) - 82.4 80.3 73.6 68.3             Balance of payments           Balance of trade (% of GDP) - 9.1 8.2 8.4 8.4 Current account (% of GDP) - 2.9 2.1 1.6 1.7             Exchange rates           US dollar (SEK/USD) - 7.64 7.95 7.98 7.71 German mark (SEK/DEM) - 4.41 4.52 4.56 4.48             * Forecast           Source: National Institute of Economic Research, March 1999   Source: ISA (Invest in Sweden Agency)