Opinion: How Sweden can become the world's best for startups

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Opinion: How Sweden can become the world's best for startups

Sweden is in a fantastic position to become the world’s leader for startups, but the slowness of Swedish authorities hampers progress, argues Emil Källström, the Center Party's economic policy spokesperson.


When it comes to entrepreneurship, innovation and startups there are a few cliches every politician likes to roll out. Every party’s leaders insist that the world is changing quicker than ever, that technological developments force us to change the way we think, and that Sweden should be the world’s best country for startups and the new services and jobs which digitilization entail. The problem is that so few seem to mean what they say.

In recent years the public sector in Sweden has time after time shown that it is unable to lead the way for technology-driven innovation. Time and time again the slowness of Swedish authorities has hampered development, expansion and value. Lawmakers have all too often also worked against the same things. The big words said about Sweden being a country of innovation are empty. The examples are far too many:

– Sweden’s young, fast-growing companies have been very clear that they want a reasonable and fair tax on employee shares. The opportunity to be paid with shares in the company you work for is fundamental for the startup world when recruiting talent. That work has taken far too long already. The inquiry proposals presented are limited and mean. The clear, well-defined problem not being solved, despite the solution being cheap for public finances, is a mark of failure against Sweden as a land of entrepreneurship.

– When the carpooling company Uber launched its service Uberpop it meant that even in the trial phase, thousands of people had an entirely new source of income. Uberpop is a service where people drive others in their own car for payment. Many young, the majority born abroad.

When Uberpop was deemed illegal and the service was shut down as a result, it not only meant that thousands of people lost out on their best opportunity of contributing value to and integrating in society. It also meant that on many occasions people were punished for illegal taxiing. It is hard to think of a more effective way of discouraging young, newly arrived people from trying to make their way into Sweden’s world of work than prosecuting them for doing exactly that.

– When the investigation, which worked with taxi and carpooling services presented something which could have been a positive solution, the abolishment of the requirement to have an obsolete taxi meter, it was suggested that it could not be put into action before 2020.

– The Swedish FinTech scene, the development of new financial services, is one of the world’s leaders. The startups following in Klarna’s wake have the potential to fundamentally change old traditional industries like banking and accounting, and will need the support of players like Bolagsverket (the Swedish Companies Registration Office) and Skatteverket (the Swedish Tax Agency). Work is ongoing here, but is too slow to keep up with the pace of modern app development.

These examples share a common pattern. Sweden will have a tough time keeping up. Our laws and our authorities are not leading to development, but stagnation. It is often not desire but pace which is lacking. That makes no difference however in a world where results are what matter.

For Sweden to take and secure the position as one of the world’s best countries for startups, many big and small changes are needed.

1. Enable beta versions of rules and regulations

Almost all development of new products, services and methods is done by trial and error. Through pilot projects or a few test runs something new can be tested and fine-tuned before it is launched on a broader scale. That way of working must be allowed in to the public sector.

2. Release relevant statistics freely

Thanks to our generations of strenuous authorities, Sweden has some of the best collection of statistics in the world in many areas. This information can be used in a number of innovations and applications. To best aid development, public sector players should release as much of the data as is possible for free use.

3. Open up for third party developers

Thanks to the new payment services directive PSD2, Europe’s banks must now make their systems available so that for example standalone apps can access customer information and make money transfers.

Authorities like Skatteverket, Bolagsverket, Försäkringskassan (the Swedish Social Insurance Agency) and Lantmäteriet (the Swedish National Land Survey) need to work in the same way. The Swedish public sector would be better if more actors are given access. It could for example mean that platforms like Uber and Airbnb or Sweden’s Hygglo and Taskrunner could make automatic tax deduction and payment something which is built into their system.

4. A swifter cabinet office

When new opportunities open up it doesn’t take long for questions caused to be buried by public inquiries which take years. More questions must be solved by quick investigations, quick operating working groups and the like, and more flexible ways of working. Of course, democratic accountability and transparency must be maintained. Sweden must start to prepare the framework for things which are still in the test phase, like autonomous vehicles, in the same manner.

5. Fair tax on value creation

It is well known that the Center Party wants to lower taxes on jobs and entrepreneurship. In a time where automatization and digitilization have already created new pressures on manual labour we find more powerful reasons to drive that policy. The long-term remedy is to reduce taxes on labour in both absolute terms and relative to other tax bases. In addition, a number of concrete problems must be solved.

Beside the already mentioned employee shares issue, microenterprise, which often builds on the sharing economy’s platform, must be allowed to enter the formal economy. The first hundred kronor earned should be able to simply and automatically take place within the framework of the law, Skatteverket and the welfare system.

Sweden is in a fantastic position to follow and lead development. Globalization, digitalization and automatization are forces many fear. With the right policies, Sweden can show that these changes bring the promise of a better life for us all.

This is a translation of an opinion piece written by the Center Party's Emil Källström and originally published in Swedish by Dagens Nyheter.


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