The government recently announced it is working on an export strategy, which is supposed to help reach the goal that Sweden until the year 2020 should have the lowest unemployment rate in the EU.
Sweden’s economy is highly oriented towards foreign trade. Swedish companies have long thrived in the international marketplace. This has allowed us to finance universal health care and free access to higher education, and many other things. Our position as one of the most prosperous countries in the world cannot be taken for granted. Increasing all aspects of internationalization is a must if Sweden is to remain at the forefront of economic performance.
In other words, a strategy for exports to spur jobs and growth is good. Nevertheless, it would have been better if the government had decided to develop a more comprehensive strategy for internationalization. The export strategy in its current focus seems too narrow and is therefore associated with considerable risks.
The pressing issue is how Sweden best can increase its competiveness and reap the benefits of globalization. To succeed in this regard requires facilitating all aspects of internationalization, such as import, export, offshoring and foreign investment. Another crucial strategic aim is to attract foreign talent.
Global competition has made access to talent a key factor of success for knowledge-intensive firms. Human capital and brain power is an essential ingredient for innovation and growth in the new economic landscape. In specific, the twelve big multinationals with headquarters in Sweden must be able to attract international talent. That is also true for smaller innovation-driven companies, not least the successful Swedish tech start-ups.
Policy makers who want to strengthen Sweden’s competitiveness can start by identifying solutions to a number of concrete problems that would be relatively easy to resolve. Below I discuss a few examples.
Sweden has to be more open and welcoming. Our country is beautiful and admired around the world, and tourism is on the rise. This does not mean, however, that talents are lining up to emigrate to Sweden. Global talents that consider leaving their country of birth are rational actors. They weigh their options carefully before making the choice where to move. Every aspect of the process of settling in the new country matters.
Sweden’s geographic location in the outskirts of Europe in combination with a climate that does not – to put it mildly – appeal to everyone, are factors beyond our control. But they force us to excel with respect to the things that we can change. For instance, there are still problems associated with obtaining a personal identification number. Without it employers are not allowed to pay their employees. This can be challenging, especially for young people with limited finances. Further, English should become an “official” language as to make it easier for everybody to get around. Public signs ought to be in both Swedish and English.
The supply of high quality international education is insufficient. Experience tells us that high-educated parents put great value on providing their children with the best education and learning environment possible.
It is unlikely that people would move their families across the world if their children are not able to continue their education in the new country, or at a minimum obtain a high-quality education on par with schooling in the home country. We need to fill the need for such education. A favorable climate for authorized international schools is an essential ingredient for attracting the best and the brightest to our country.
There are challenges on the demand side, too. Hiring expats is associated with significant costs for Swedish companies. Thus, even if politicians are able to reduce the cost for global talents to move to Sweden, this will be insufficient if companies cannot afford to take them on board. The barriers to hire foreign experts need to be lowered in tandem with making Sweden more open and welcoming.
One important step in the right direction would be to extend the period during which an “expert tax” can be paid to a foreign expert, from three to five years. Many companies are not able to offer competitive compensation packages without this option. Nevertheless, three years is a relatively short period of time and it is fair to assume that both employers and employees would gain from more continuity. The burden on public finances would be limited, yet provide a substantial positive impact for business and the Swedish economy.
Our search for talents must not be limited to certain countries or regions. It must be universal. This means we also have to utilize the global talents already residing here in Sweden. In this group lies an untapped potential. The fact that they have already overcome the hurdle of moving to Sweden makes it even more pressing to find ways to unlock this potential.
In part this could be done by allowing foreign students to stay longer than six months in Sweden to find a job. The corresponding period in Germany is 18 months and one year in the Netherlands. It would also be beneficial to give other talents in Sweden, such as foreign researchers, better opportunities to start a business or look for a job here.
Sweden may also consider introducing a special “talent visa”. The labor migration bill from 2008 has been important, but a prerequisite is that people have a job to move to. Sweden should offer talents the opportunity to come here to look for jobs, innovate and start new companies.
The modern economy is globalized and complex. Exports continue to be a backbone of the Swedish economy. In order to succeed in paving the road to success in the 21st century, however, Sweden must facilitate all important dimensions of internationalization, not the least when it comes to attracting global talents. We need to go from an export strategy to an expat strategy.
Maria Rankka is CEO of Stockholm Chamber of Commerce
Enjoy our Tuesday debate articles? Make sure you never miss your favourite features on The Local – here's how.