Swedish state should focus on venture capital: report

The Swedish state should focus on developing new investment funds for risk capital as well as seeking out international and national capital, according to a proposal from SEB bank chairman Marcus Wallenberg and IF Metall trade union chairman Stefan Löfven, among other economic experts.

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The background for the proposal is that the many venture capital funds associated with the IT boom are no longer active, according to Wallenberg and Löfven.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

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