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Swedish state should focus on venture capital: report

Published: 04 Apr 2010 09:34 GMT+02:00
Updated: 04 Apr 2010 09:34 GMT+02:00

A lack of capital is the biggest hindrance to economic growth and a surplus of venture capital is necessary if innovative companies are to be able to grow and provide jobs, Wallenberg and Löfven write in an article published in Dagens Nyheter newspaper, referring to a Sifo survey.

They estimate that if the Swedish state invested 5 billion kronor ($688 million) in venture capital funds it would lead to additional investment of at least double that amount.

The background for the proposal is that the many venture capital funds associated with the IT boom are no longer active, according to Wallenberg and Löfven.

There are several conditions for how the state should run such a fund - the fund's investment team should focus on Sweden to ensure that it invests in “innovative companies in Sweden” and that there is a possibility for “the possibility of high returns and a level of risk that distinguishes high-quality venture capital funds.”

The co-authors of the editorial are general director of Vinnova innovation agency Charlotte Brogren; chairman of Provider Venture Johan Hernmarck; general director of the Swedish Agency for Economic and Regional Growth (Tillväxtverket) Christina Lugnet; and the managing director of engineering academy Björn O Nilsson.

TT/The Local (news@thelocal.se)

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Your comments about this article

18:14 April 4, 2010 by SWOT
After Swedes wasted all the local wealth in their social welfair system, they finnally need to beg to foreign investors.
22:26 April 4, 2010 by wxman
Doesn't sound very socialist to me. Sweden may want to rethink this!
03:25 April 5, 2010 by here for the summer
Strangely Sweden is both socialist and capitalist. So this fits .. @Swot . If I read this correctly Sweden wants to invest part of it's own money, This would be a good idea. Norway already does this as do many states in the US.
09:28 April 5, 2010 by Nemesis
This is a very good idea.

I would suggest more reform to help small business's in Sweden and to allow them to grow.

Sweden has a very good technological base, which is not properly capitalised upon at present.

Also R&D needs to have 100% tax relief in Sweden. Sweden is a small economy so can not compete on scale, so must out innovatate which Sweden does very well at present.

More integration between small to medium sized business's and university research departments would really boast this economy in the long term and help to establish growth and maintain it in the long term.
14:00 April 5, 2010 by SWOT
The question is if the Swedish state have this budget to invest in R&D, and if the budget is enough. R&D is pure labour intensive. Then 50% of labour cost from the capital would go back to the social welfare system by tax. The statement of this artical is the state should invest in venture capital, but the question is if they would do it. Swedish companies and institutes always have a big machine to feed, they call it administration. You never know how much the administration will cost if you do not manage it by yourself. When the venture capital are settled in a project, maybe only about 30-40% of the money can be really used for R&D. This is a bad cycle run for many years.
13:29 April 6, 2010 by 1000penguins
The Swedish government has already committed 3bn SEK to invest in innovative Swedish companies within the transport sector (fordon). The capital is administered in private equity fashion, but mainly taking minority stakes.
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