Mid-term of the mandate
Time has passed quickly, and we are now facing the second half of the parliamentary term. The government has traditionally gathered at Harpsund to eat crayfish and discuss the budget. When the Minister of Finance presents the economic situation and the conditions for the coming budget, she has shifted the focus from fighting inflation to building a richer and more secure Sweden.
As we move into the fall, unemployment is expected to remain high and household consumption and housing investment will decline. The international situation also continues to affect the economy in various ways. At the same time, we are seeing positive signs that inflation has clearly fallen back. In Europe, several central banks have begun to cut their key interest rates and the Riksbank will probably continue with several interest rate cuts during the year. The recession will be somewhat more protracted, but the recovery in the Swedish economy will begin at the end of the year, providing some stability at home. For the tech industry, we see that growth slowed down last year, but after the turn of the year a recovery has taken place and expectations for the future are optimistic.
Recently, TechSverige had the opportunity to be featured in The New York Times, which highlighted Sweden's tech successes as a model for the rest of Europe to follow. The article points to the combination of high productivity in the tech sector, social security and work-life balance as success factors that make Sweden a model for how Europe can strengthen its competitiveness in tech. The article does not address all success factors. The tech miracle has many roots, perhaps starting with Sweden's history as a country of engineers, and continuing with reforms in the 1990s and companies that have dared to challenge and invest.
A good investment and business climate that promotes entrepreneurship, secures increased investment in technology and venture capital has been crucial to maintaining Sweden's global competitiveness and strengthening its leadership in digital innovation. This has involved, for example, breaking up several monopolies and changing taxes that have favored the investment climate. Today's technology has also required extensive IT investments in the business sector over the years. Individual entrepreneurs from the early days of the IT boom have provided capital, knowledge and contacts to new generations.
We have much to be proud of and to cherish going forward. The tech industry has rapidly evolved into an important piece of the Swedish economy, with solutions and services generating growth and productivity across all sectors, and much of the digitalization, its contribution to society and value to the economy is still ahead of us. But given the fluidity of the tech industry - and above all its global nature - it is impossible to sit back. Like all countries, we must ensure strong competitiveness in the future.In many international rankings, Sweden has lost positions. For example, in the Global AI Index, which compares 62 countries' investment, innovation and adoption of AI, Sweden is ranked 17th.
The government has now announced that it will invest SEK 60 billion in the state budget for next year. The level of the scope for reform is positive news in itself. It is also welcome that the focus is on reforms for increased growth, productivity and education.
Sweden needs the best skills, a tech regulation that strengthens new companies, strong networks combined with technologies such as AI and a policy that creates the conditions for innovation and world-class growth, while meeting high security requirements. With this approach, we can continue to keep up with the rapid developments in other countries and Sweden can continue to be a model for strengthening competitiveness in tech.
On September 19, the government will present the autumn budget in its entirety.
Christina Ramm-Ericson
Chief Economist