Sweden is falling behind at attracting tech talent from abroad: experts

Sweden is home to a robust and established entrepreneurial ecosystem. However, experts and business leaders say more needs to be done to attract international talent and keep them here.

Matija Milenovic, founder of the Stockholm-based space logistics startup
Matija Milenovic, founder of the Stockholm-based space logistics startup porkchop. Photo: porkchop

Matija Milenovic was finishing his studies in mechanical engineering at University College Dublin in early 2018 when he saw SpaceX land two of its Falcon Heavy booster rockets for the first time.

“My jaw dropped,” Milenovic says. “I immediately knew this is what I needed to do.”

Immediately after that SpaceX mission, the Irish student started searching for aerospace masters programs in Europe. He said KTH Royal Institute of Technology in Stockholm was one of the first, and best, choices that popped up.

“I applied, got in, started my masters, and within six months we had started porkchop,” he says.

Porkchop is a Stockholm-based space logistics startup, focusing on servicing satellites. The team wants to help deliver and inspect satellites, and launch mega-constellation satellites into orbit faster and cheaper.

In January, porkchop teamed up with SpaceX to launch a scaled-down version of their proprietary thrusters into orbit on a Falcon 9 mission. “Things moved pretty fast,” Milenovic chuckles.

It wasn’t always smooth sailing though. While for Milenovic, with his EU connections, setting up in Sweden was “like a walk in the park”, for his Mexican co-founder, Victor Gonzalez, it has been more like “like walking over hot coals in your bare feet.”

Gonzalez and Milenovic had both won scholarships to study on the same Masters Programme at KTH.  

“He doesn’t have EU citizenship. I would say it’s probably easier to swim away from a shark, while juggling a hundred million things, and going through a ring of fire, than it is to go through all of the paperwork necessary to get a work permit in Sweden,” Milenovic jokes.

Milenovic said the permit process for hiring non-EU citizens consumes so much more company time, money, and energy than the company spent on recruiting people who have EU residency or already have work permits.

“Frankly it’s a miracle that we’re still alive despite all of those things,” he says. “The whole system is fundamentally flawed, and it really hinders a lot of people.”

Porkchop’s module was sent into orbit on a SpaceX mission. Photo: porchop

The Swedish government overhauled its labor migration policy more than a decade ago, and began allowing immigrants to move to Sweden for entrepreneurship. However, research shows that even after the changes in 2008, most immigrant entrepreneurs obtain residence permits in Sweden for other reasons – like family unification – and not to start their own business.

“There are many other factors, laws and trends that happened [since 2008], like the refugee crisis of 2015,” says Aliaksei Kazlou, a professor at Linköping University.

“For now, I don’t see any enthusiasm from the government to attract more immigrant entrepreneurs, maybe they just want to integrate the entrepreneurs who already came to Sweden. But I’m not sure it’s so attractive for others who might be coming from abroad.”

There is no national plan to attract international talent

Sweden has no strategy to attract international talent, and there is no official coordination structure to tackle the problem, according to a government-commissioned report this year.

The report outlines how Sweden’s national efforts to attract labor are severely lacking when compared to neighboring countries.

Many European countries are investing significantly more resources than Sweden to attract skilled labor.

In neighboring Finland, a country with a little more than half of Sweden’s population, the government is investing the equivalent of 150 million kronor this year in attracting skilled labour from abroad under its national Talent Boost program. The Swedish government currently invests about 10 million kronor annually to attract international labor, with a majority of this financing being temporary.

Some of that funding goes to Vinnova, the Swedish Innovation Agency, and Business Sweden, the national trade and investment promotion agency.

“A lot of international talent, scale-ups, entrepreneurs and investors want to be in Sweden or in the Nordics,” Business Sweden’s Head of Talent Attraction Initiative Marie Claire Maxwell said. “For many reasons, whether it be work-life balance, or impact related. The entire tech and startup system here has become way more international.”

The business leaders interviewed for the government-commissioned report point to Business Sweden as one of the organizations that could take a leading role in coordinating and developing of international talent attraction.

In 2020, the government commissioned Vinnova and Business Sweden to help attract foreign talent and entrepreneurs to Sweden in a pilot project. The organization was also asked to address investment barriers in the country.

Many challenges with attracting the right skills and talent to Sweden

“A sluggishness in the work permit and relocation process entails challenges in attracting the right skills and talent within Sweden and abroad,” Business Sweden’s management said in the report. “The difficulty of obtaining a Swedish personal identity number and BankID with long processing times is an investment obstacle.”

Porkchop CEO Matija Milevonic says he’s spoken with people who’ve asked him for advice on moving to Sweden, setting up a company, and getting those work permits.

“It is actually a deal-breaker for some people,” Milenovic said. “There are a lot of smart people out there who could bring so much value to Sweden, and they’re being kept out for stupid reasons.”

Marie Claire Maxwell, from Business Sweden, argues that despite the current administrative challenges, there have been major improvements over the last couple of decades to make it easier for immigrants wanting to launch their own startups. Swedish companies also remain in need of large amounts of skilled labor in order to properly scale up.

“I think the talent issue, or competence, is on top of everyone’s mind,” she says. “When we have the election year, it will be even more important to discuss.”

Last year, Business Sweden helped launch Sweden Tech Ecosystem, a platform for information about startups and scale-ups.

The database is free and open to everyone, and aims to help connect job-seeking talent with entrepreneurs and founders in addition to matching investors with startups. More than 5,800 startups are listed on the site.

Good initiatives like Sweden Tech Ecosystem are available, but the report states many are often time-limited assignments or projects. The study concludes there is “no holistic approach” and a “lack of long-term perspective and continuity in the work with talent attraction and reception of labor from abroad.”

“The fact that we have realized that we need a national strategy, mapped out who the actors are, and who could be responsible will hopefully put light on the situation,” Maxwell says. “Otherwise, the talent may go elsewhere in Europe. I think the need for a Swedish and Nordic voice is very important.”

Milenovic says he hopes the issue is addressed and improved sooner rather than later.

“I don’t want to paint a bad picture of Sweden, because it is a good place, and I could not have achieved what I have achieved if I hadn’t come to Sweden,” he says, pointing to Sweden’s established entrepreneurial ecosystem. “But Sweden is really shooting themselves in the foot with some of the basics.”

This article has been written by Techarenan, an entrepreneurship platform, which also covers startup news on Techarenan News.

Member comments

  1. Oh please stop.

    Sweden has outstanding tech universities. KTH in Stockholm. Chalmers in Gothenburg. Stockholm University. Lund. The Karolinska Institute. On and on it goes.

    And Sweden has demonstrated hundreds of years of technical leadership. Including developing dozens of top-tier industrial, manufacturing and technology companies ranging from Volvo truck, to SKF, to Ericsson, to Electrolux, to SAAB (Fighter jets, planes), to Astra Zenica to small digital start-ups such as Spotify and to global clothing brands such as H&M. It’s impressive. Sweden doesn’t need to flood it’s market with foreign “talent” as you call it. And if it did – can anyone define this “talent” that is so desired. How about the Austrian featured in a previous article because she is being deported over a “boring” administrative error. Is that “talent”? Perhaps you just mean someone with a “job” that happens to be remotely associated with some form of technology, no matter how pedestrian and ordinary that technology might be? Is that talent?

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OPINION: The far right now dominates the immigration debate in Sweden

A televised debate between the party leaders last weekend showed how Sweden’s third party, the far-right Sweden Democrats, has shaped Swedish politics since the last elections four years ago, argues David Crouch

OPINION: The far right now dominates the immigration debate in Sweden

In the build-up to the 2018 elections, the world’s media descended on Stockholm, expecting a breakthrough by the Sweden Democrats (SD) who had been polling as high as 25 percent. In the end, SD took third place with around 18 percent of the vote.

Four years later, SD are hovering at around the same level in the polls. However, Swedish politics has been utterly transformed, as the other main parties have moved onto political terrain previously occupied by SD.

This would have been unthinkable just a few short years ago. When they first entered parliament, SD were treated as political pariahs, a racist party, held at arm’s length by the other parties who refused to cooperate with them in any way.

Attempts to bring the SD into the mainstream of Swedish politics fell flat. The leader of the centre-right Moderates lost her job after suggesting it was “time to stop demonising” the SD. Her replacement, Ulf Kristersson, said he would neither negotiate nor govern with them. After the elections, two smaller centre-right parties – the Centre and the Liberals – agreed to prop up the coalition of Social Democrats and Greens to prevent the SD gaining any influence in parliament.

It was clear, however, that the only chance for the centre-right to govern would be with SD support. After all, in Finland and Norway right-wing populist parties had entered government with the centre right. And in Denmark, the centre-right had governed with populist support. If it worked there, why not in Sweden?

In early 2019, the SD leader Jimmie Åkesson famously had meatballs for lunch with Ebba Busch, the leader of the tiny Christian Democrats, who acted as a bridge-builder. A few months later, Kristersson met the SD leader for the first time in his Stockholm office. By early 2021 the cordon sanitaire dividing the parties had been truly dismantled, and in the autumn the three parties presented a joint budget.

Meanwhile, the Moderates stepped up their rhetoric against immigration and crime. But perhaps the influence has worked both ways? Maybe the far-right have toned down their policies, compromising with the centre so the parties can work together?

On the contrary, Åkesson and other leading SD figures have stoked up the fire and brimstone in their anti-immigrant message. For the SD, the problem is dark-skinned immigrants from Muslim countries whose values conflict with Sweden’s and who should therefore be deported.

The response among the Moderates – and also the governing Social Democrats – has been a deafening silence.

After the Easter riots in six Swedish cities, the Social Democrat government proposed a package of coercive measures to help the police and social services crackdown on criminals.

A televised debate between the party leaders last weekend brought this out very clearly. More than that, it showed how the Sweden Democrats have shaped Swedish politics since the country last voted four years ago.

In the debate on Sunday, prime minister Magdalena Andersson talked about being tough on crime and boasted that Sweden now has one of the strictest immigration regimes in Europe.

It was left to the Green Party (polling 4 percent) and the Centre Party (6 percent) to challenge the SD on immigration. They pointed out that the violent minority is tiny, and that tens of thousands of recent immigrants hold down jobs, obey the law and contribute to Swedish society.

Centre Party leader Annie Lööf listed some of the SD’s more extreme proposals, including demolition of high-immigration neighbourhoods, dawn raids on refugees, and collective punishment for crimes committed by a single family member. This was “pure racism”, Lööf said – where were the “red lines”, beyond which the centre-right would turn against the SD?

All the parties agree that segregation along ethnic lines has gone too far in Sweden, that integration efforts have failed and that something must be done. But there is a paucity of bold ideas that could really make a difference.

Immigration will once more be a battleground at the elections in September, with key politicians competing to be the toughest in dealing with unruly “foreigners”. Meanwhile, the underlying problems that have fuelled disaffection among people with immigrant backgrounds are unlikely to be addressed.

A few weeks ago, Swedish journalist Janne Josefsson spoke to Ahmed, one of the stone-throwing youngsters who shocked the country at Easter.

“We are second class citizens. You let us in, but then Sweden doesn’t care about us,” Ahmed told him. “We are trapped here. I have studied, but will never get a good job. At least once a week we are stopped by the police. In the end, you feel hunted, like a quarry. Do you understand?”

It seems that Swedish politicians don’t really want to.

David Crouch is the author of Almost Perfekt: How Sweden Works and What Can We Learn From It. He is a freelance journalist and a lecturer in journalism at Gothenburg University.


Listen to a discussion on Sweden and immigration on Sweden in Focus, The Local’s podcast. 

Click HERE to listen to Sweden in Focus on Apple Podcasts, Spotify or Google Podcasts.