Sweden has a highly developed innovation system focused on research and development. It invests heavily in education and research through public universities and agencies like VINNOVA and the Swedish Research Council. While the corporate sector performs much of the R&D, the government provides stable framework conditions and funds public sector innovation. Sweden ranks highly in measures of innovation capacity but could improve support for small and medium enterprises and address skills shortages. Overall, Sweden's national innovation strategy has enabled it to become a global leader in areas like healthcare, ICT and sustainable technologies.

1. Sweden
BUS 750 - National System of Innovation Summary

2. Facts and Figures
Size: <½ the size of BC (4% the size of Canada)
Population: 9.6 Million (2x BC)
1. 85% in urban centers
2. 89% speak English
3. Average salary approx. 40,818 USD
GDP: 570b USD (~ 32% of Canada’s)
● Agriculture: 2%
● Industry: 31.3%
● Services: 66.8%
Exports: 164b USD (2014)

3. Swedish Inventions

4. Influential Businesses

5. Quality of Life
● 1% of employees work long hours - 4% in Canada
● Disposable income - similar to Canada
● Housing - similar to Canada
● 82 years life expectancy - similar to Canada
● Have an extra hour per day to themselves
● 86% voter turnout - 69% 2015 Canadian Federal Election
● Tax revenues 40.6% of GDP - 32.6% in Canada
OECD Better Life Index. Sweden. Retrieved from http://www.oecdbetterlifeindex.org/countries/sweden/
OECD Better Life Index. Canada. Retrieved from http://www.oecdbetterlifeindex.org/countries/canada/
OECD. Revenue Statistics Comparative Table, 2015. Retrieved from https://stats.oecd.org/Index.aspx?DataSetCode=REV
The Huffington Post Canada, 2015, Canada Voter Turnout In This Election Was The Highest In 2 Decades. Retrieved from
http://www.huffingtonpost.ca/2015/10/20/canada-voter-turnout_n_8335662.html

6. Education Statistics
● 88% of 24 to 65 year olds are high school grads - same as Canada
● 44% of 25 to 34 year olds are post-secondary grads - 57% in Canada
● 87% of post-secondary grads are employed
● Higher Education ranking: Sweden - #5, Canada - #6
● Average reading/math/science proficiency
○ Ranked 27th of 34 OECD countries
○ Canada ranked ~10% higher in basic proficiency
U21 Ranking of National Higher Education Systems 2015. Retreived from http://www.universitas21.
com/RelatedFile/Download/664
Education at a Glance 2014. OECD 2014. Retreived from http://dx.doi.org/10.1787/888933114989
Improving Schools in Sweden:An OECD Perspective. Retreived from http://www.oecd.org/sweden/sweden-should-urgently-
reform-its-school-system-to-improve-quality-and-equity.htm
OECD Better Life Index. Sweden. Retrieved from http://www.oecdbetterlifeindex.org/countries/sweden/

7. Capacity for Innovation
● 2nd
in # of scientists/engineers per capita (US - 6th, Canada - 12th)
● 8th
in innovation capacity (US- 1st, Canada-10th)
● 21st
in innovation policy (US - 1st, Canada - 5th)
○ IP protection, tax incentives, competition, accepting economy
National Innovative Capacity. Retrieved from http://www.hbs.edu/faculty/Publication%20Files/Innov_9211_610334c1-4b37-
497d-a51a-ce18bbcfd435.pdf

8. Wage Gap
Statistics Sweden, 2013. Average monthly salary and salary dispersion by occupation (SSYK) and sex. Retrieved from
http://www.scb.se
CEO to Worker Pay Ratios Around the World, 2013. Retreived from http://www.aflcio.org/Corporate-Watch/Paywatch-
Archive/CEO-Pay-and-You/CEO-to-Worker-Pay-Gap-in-the-United-States/Pay-Gaps-in-the-World
354x
206x
89x
CEO/Av. Employee Wage

9. Insanely Fast Internet
● #4 in world ranking of internet speed
● 100/100 Mbps in most households (30/8 Mbps in Canada)
○ Only available to businesses in the US
○ Base level connectivity is higher - infrastructure implemented after US
● Free Wi-Fi almost everywhere
PC.net, 2013. High Speed Scandinavia. Retrieved from http://pc.net/news/2013-12-12/high_speed_scandinavia
Cybera, 2015. What is Canada's average internet speed?. Retrieved from http://www.cybera.ca/news-and-events/tech-
radar/canada-average-internet-speed/

10. Swedish Innovation Strategy
1. Well functioning framework conditions
○ Stable environment conducive to innovation (state finances, labour market, IP protection,
laws and tax structures)
○ Education and research systems and infrastructure
2. Innovation in public services and the public sector
○ Public sector must be innovative to contribute to the demand for innovation in society at
large
○ e.g. transportation procurement, 6h workweek
3. Direct measures targeting innovation processes
○ Financing of innovation activities
○ Entrepreneurship and advocacy
○ Incubators & clusters
The Swedish Innovation Strategy, 2012. Retreived from: http://www.government.
se/contentassets/cbc9485d5a344672963225858118273b/the-swedish-innovation-strategy

11. VINNOVA Strategically Important Knowledge Areas, Retreived from: http://www.vinnova.se/en/Our-
acitivities/Strategically-important-knowledge-areas/
ERAWATCH Sweden Research Policy Focus. Retreived from: http://erawatch.jrc.ec.europa.
eu/erawatch/opencms/information/country_pages/se/
Innovation Priorities
● Health and Healthcare
● Transportation and Environment
● Service and Information and
Communications Technology (ICT)
● Manufacturing and Working Life

12. Swedish Science and Innovation System
Country Profile - Sweden, European Commission. Retreived from: http://ec.europa.eu/invest-in-
research/pdf/download_en/psi_countryprofile_sweden.pdf
PUBLIC PRIVATE

13. R&D Funding by Sector
Government Business Abroad Higher Education Private NFP
Source: ERAWATCH, Overview, Funding Flow. Retreived from: http://erawatch.jrc.ec.europa.
eu/erawatch/opencms/information/country_pages/se/

14. Corporate Sector
● Dominated by large multinationals
● Not incentivized by the government through tax breaks
● Only 4% of corporate R&D is government funded (mostly defence research)
● Corporate tax scheme seems to favour reinvestment
● Corporate tax rate is low and has been falling since the 80’s (60% to 22%)
● The largest sectors of R&D expenditure are ICT (products), transport, drugs,
ICT (services).
Research and Innovation in Sweden - An International Comparison, The Royal Academy of Engineering Sciences, 2008
http://www.skane.se/Public/Naringsliv/Dokument/Vinnova_rapport.pdf
OECD Reviews of Innovation Policy - Sweden 2012. Retreived from: http://www.keepeek.com/Digital-Asset-
Management/oecd/science-and-technology/oecd-reviews-of-innovation-policy-sweden-2012
Source: ERAWATCH, Research Performers, Business Enterprise Sector. Retreived from: http://erawatch.jrc.ec.europa.
eu/erawatch/opencms/information/country_pages/se/

15. ● Heavily funded with an emphasis on fundamental research
● 60% of higher education R&D funding goes to just 5 universities
Swedish Research Council
● Funds fundamental research - exclusively
● 50% of 6.4 billion SEK in funding goes towards public colleges and universities
VINNOVA - Swedish Innovation Agency
● Funds fundamental and applied research
● At least one party in a funded project must be a university, college or research
institute
Universities and Colleges
Research and Innovation in Sweden - An International Comparison, The Royal Academy of Engineering Sciences, 2008
http://www.skane.se/Public/Naringsliv/Dokument/Vinnova_rapport.pdf
Swedish Research Council, Research Funding, Retrieved from: http://www.vr.se/inenglish/researchfunding.4.12
fff4451215cbd83e4800021418.html

16. Minor Institutions
Other minor institutions
● e.g. Swedish Energy Agency - loans, expertise, and networking, National
Road and Transport Research Institute (VTI)
● ...and others
Public institutes and authorities
● Public research institutes only 3% of total R&D spending
Research and Innovation in Sweden - An International Comparison, The Royal Academy of Engineering Sciences, 2008
http://www.skane.se/Public/Naringsliv/Dokument/Vinnova_rapport.pdf

17. Opportunities for Improvement (from OECD Library)
1) Global challenges:
a) Increasing trend of foreign ownership among multinationals presents a risk
of offshoring
b) Difficult for SME’s to scale up: Sweden is a small market - this means
Swedish companies must think about exports at an early stage of
development
2) Monitor reported mismatches between supply & demand in the labour market
for engineers and other skilled personnel required for innovation.
3) Enhance the strategic direction of innovation policy across government.
4) Provide a world class innovation environment in order to attract and retain
innovative firms
OECD Reviews of Innovation Policy - Sweden 2012. Retreived from: http://www.keepeek.com/Digital-Asset-
Management/oecd/science-and-technology/oecd-reviews-of-innovation-policy-sweden-2012

18. Conclusion
● Sweden – a small nation with great ideas.
● The country has been investing heavily in R&D & will continue to do so as
per it’s global innovation plans.
● Swedish economy is resilient but needs to focus on productivity and human
capital to keep its edge
● 6 Hours work-day, how does it get better than that ???
The Swedish Innovation Strategy, 2012. Retreived from: http://www.government.
se/contentassets/cbc9485d5a344672963225858118273b/the-swedish-innovation-strategy

19. References
The Swedish Innovation Strategy, Swedish Ministry of Enterprise, Energy and Communications, 2012
http://www.government.se/contentassets/cbc9485d5a344672963225858118273b/the-swedish-innovation-strategy
OECD Reviews of Innovation Policy: Sweden 2012, OECD, 2012
http://www.keepeek.com/Digital-Asset-Management/oecd/science-and-technology/oecd-reviews-of-
innovation-policy-sweden-2012_9789264184893-en
Cornell University, INSEAD, and WIPO (2015): The Global Innovation Index 2015: Effective Innovation Policies for
Development, Fontainebleau, Ithaca, and Geneva.
https://www.globalinnovationindex.org/userfiles/file/reportpdf/gii-full-report-2015-v6.pdf