Job market still slow; Pagrotsky backs small companies

Göran Persson was in bullish mood at a meeting of Scandinavian prime ministers in Iceland on Monday.

“We’re in the pleasant position of seeing the economy going in the right direction,” he said. “That’s of course good news for our finances.”

Svenska Dagbladet reported that the economy had performed better than forecast and that this would be reflected in the Autumn budget.

However, there’s no prospect of a turn in the job market until well into 2005, according to Wednesday’s Göteborgs Posten. General director of the Swedish National Labour Market Administration (AMS), Anders L Johansson, said in his latest forecast: “Despite steady growth and a strong performance by exporters, the job market is still very tough with low demand for labour and continued high unemployment.”

Although redundancies in the private sector have decreased, this is offset by increased lay-offs in the public sector. In July, the unemployment figure was 367,000 or 8.1%. 14,000 vacancies were reported to the country’s employment service, down 4,000 on July last year. No county has attained the government’s target of 4% unemployment.

One possible solution is to get more people to start their own companies. Tuesday’s DN reported that business minister, Leif Pagrotsky, was looking at ways of encouraging entrepreneurs.

One of the biggest problems faced by small businesses is finance in the start-up phase. Risks are high and it’s difficult to get investment from the private sector. The government wants to concentrate its efforts in this area. “We’re putting a proposal forward to parliament in the autumn for improved start-up support,” said Pagrotsky.

Another priority is to improve the service businesses receive from local government and other authorities. Pagrotsky wants to reduce the time small businesses spend on red tape and streamline information collection and other areas where business and the public sector meet.

Such initiatives will come as no surprise to the country’s medium-sized businesses – Swedish industry’s neglected ‘middle child’, according to Sunday’s GP. Although medium-sized companies employ almost as many people as large companies and are far more likely to expand than small companies, they are least likely to get help from employers’ organisations or the government.

“It’s as if we don’t exist,” said Ann-Christin Edlind of engineering company Gesab i Göteborg, which employs 180. “The political debate always focuses on small companies.”

“All it takes is for a bout of ‘flu to go round and the effects are appreciable… After 30 years in business I’ve never seen any tangible help from our politicians,” said her colleague Janos Rakai.

Henrik Olsson of employers’ organisation Företagarna rather sheepishly agreed that more could be done.

“We could undoubtedly be better at supporting medium-sized businesses, particularly when they’re expanding,” he said. “They’re the only people hiring at the moment. It’s easy for them to slip between the gaps because there are relatively few of them – but they’re significant in terms of the numbers they employ.”