'If Sweden really wants startups, drop the red tape'

James Savage
James Savage - [email protected]
'If Sweden really wants startups, drop the red tape'
Tech star Tayyab Shabab, who is being threatened with deportation. Photo: Claudio Bresciani/TT

Swedish politicians are keen to talk up the country's startups – but their migration rules threaten to strangle them, argues The Local's managing editor James Savage.


Programmer Tayyab Shabab is the sort of person Sweden should be going out of its way to recruit. 
At a time when Sweden’s old industries are laying off workers, the app developer is one of thousands of creative foreigners making Stockholm’s startup scene one of the most talked-about in Europe. 
Last week we reported that this well-paid, unusually talented man was told by the Swedish migration authorities to book a ticket back to Pakistan. His error? A previous employer in Sweden had forgotten to buy him a pension. 
It didn’t matter that Tayyab and the company had tried to make it right by paying in retrospect – the Swedish Migration Agency wouldn’t budge. Computer said no, Tayyab would have to leave.
Tayyab was caught by Byzantine rules meant to protect low-skilled workers from undercutting Swedes. But he wasn’t a foreign farmworker being shipped in to do back-breaking work at rates the locals would spurn. Nor is he unusual  about one in three people who move to Sweden for work are IT specialists.
And there was nothing in Tayyab’s pay and conditions that would have been illegal if he was Swedish. He was paid a market rate and he was happy with his work. If Tayyab had been French, German or Polish, the Swedish authorities would have had no objections to his employment.
But migrants from outside the EU have to fulfil a string of conditions that Swedes, Poles or Brits do not. So while there’s no obligation for Swedish companies to provide pensions to their employees, they have to do so for any foreigners coming as labour migrants. 
Sweden has rightly been praised for its startup scene  articles in the Telegraph and the Wall Street Journal are wafted around by officials, who point out that the country regularly tops global rankings. Spotify, Klarna, King and iZettle have led the way, and many more have followed in their wake. 
The government and local authorities have been keen to associate themselves with these thrusting entrepreneurs. Government ministers have cast off their ties and rolled up their sleeves at jamborees for the country’s young companies.
But there's no law of nature that says that Sweden will continue as a hub for startups. Political inaction on the housing shortage is already making recruitment harder, and stories like Tayyab's show the sclerotic state putting further obstacles in the way of growing companies.
Just as when Bangladeshi Syed Latif was thrown out because his job in a currency exchange office was advertised on LinkedIn, and not the state jobs website, the authorities seem more interested in box ticking than in finding solutions.
As Stockholm Chamber of Commerce CEO Maria Rankka put it, “there’s no ban on government agencies and the courts challenging precedent”.
And the government’s ongoing inquiry into the issue of labour migration could well make things worse. In response to concern that workers in the low-skilled jobs – in the restaurant trade for instance – are being exploited, the government has instructed the inquiry to tighten the rules.
The risk is that new rules will simply make bureaucracy worse, with unintended effects on high-skilled migrants and their employers. They could also end up further clogging up Sweden's overburdened migration authorities, where the waiting time for a work permit is already several months long.
Last week we learned that Swedish industrial giant Ericsson, founded in 1846, could lay off 3,000 people. This underlines the importance of creating new jobs in new companies. But if state bureaucracy is allowed to stop these companies recruiting talent to grow, the next Ericsson may never arrive.


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