Sweden’s tech businesses have benefitted from both the social and physical infrastructure that a high tax-and-spend approach can provide. Not only does the country have an above average internet speed but in addition, the government has funded a mass rollout of technology since the 1990s. Today nearly 95% of Sweden’s population use the internet (compared to just 84% in the United States).
Sebastian Siemiatkowski, founder, and CEO of $2.5 billion e-commerce startup Klarna, credits this policy as the reason he was able to begin coding age 10.
But also the healthcare and higher education system are the reason for Sweden’s booming start-up and entrepreneurial scene.
Another important aspect is deregulation: In 1993 a Competition Act was introduced to block big mergers and anti-competitive practices, which lead to the fact that tax rates began to come down e.g. corporation tax, which has fallen from 52% in 1990 to 22% today.
Nevertheless, the most vital ingredient for Sweden’s startup success may be a special quality endemic in Swedish society: trust.
In general, employees who trust (their employers and coworkers) tend to be more innovative and collaborative. The high level of trust also benefits entrepreneurism, with large established companies trusting small startups enough to collaborate and share knowledge with them.