Immigrants fuel upswing in company start ups

Foreign-born residents of Sweden are helping to boost booming figures of new business start ups across the country in recent years, a new report indicates.

• Upward swing for Swedish entrepreneurs (2 Oct 09)
• 'We are all immigrants': Swedish researchers (25 Sep 09)
• Sweden to reward quick learning immigrants (13 Mar 09)

Foreign-born small business owners account for 11 percent of all businesses with fewer than 50 staff and a turnover in excess of 200,000 kronor ($28,591) currently in operation in Sweden.

Of the 54,000 small businesses run by foreign-born residents, 38,000 were owned by men.

In 2008 the group classified as "foreign-born residents of Sweden" accounted for 13 percent of new start ups. In many counties across Sweden, they are over-represented in relation to population demographics, according to the report compiled by The Swedish Agency for Economic and Regional Growth (Tillväxtverket).

While the agency underlines that the similarities between owners of small businesses born outside of Sweden and those born in the country were greater than the differences, the report details some divergence in the respective groups.

Foreign-born business owners are often more highly educated than their Swedish counterparts.

They are also more often engaged in the retail, hotel and restaurant sectors while Sweden-born business owners are more commonly found within manufacture and construction.

Almost two-thirds of foreign-born business owners are based in the larger city areas and in the counties that surround them.

The county of Västmanland has the highest proportion of foreign-owned small businesses, with 16 percent, while constituting only 12 percent of the population.

Foreign-born business people are over-represented in relation to population demographics in the counties of Örebro, Dalarna, Gävleborg, Västernorrland and Värmland.

While most small company start ups by Swedish-born and foreign-born owners are backed by personal savings, the report concludes that foreigners run a slightly greater risk of being refused loans.

The report is based on statistics presented in a survey called "Företagens villkor och verklighet" ('The realities and conditions of business'), compiled by the agency together with Statistics Sweden.

The survey asked business owners about the extent of challenges they faced, divided into ten criteria, when setting up a business.

Swedish-born and foreign-born business people had similar views on eight of the criteria but differed when it came to "loans" and "external capital", with the latter experiencing a greater obstacle to growth.

To work independently is the most common factor cited by foreign-born residents for starting their own businesses. They also cite the risk of unemployment more commonly than their Swedish-born counterparts as a reason for going it alone.

Among the younger generations in Sweden the entrepreneurial spirit of foreign-born residents is most strongly illustrated. 5.6 percent of those aged 18-30-years-old and born outside of Sweden run their own businesses, while only 3.7 percent of the Sweden-born in the same age group do so.

The Swedish Agency for Economic and Regional Growth, which replaced Nutek in March 2009, has been commissioned by the government to work for an improvement in the conditions faced by foreign-born residents of Sweden seeking to start up a business.

The programme will run from 2008-2010 and will, among other things, address financing, business development networks, guidance and the compilation of statistics and knowledge about the situation on an annual basis.