Recovery in uncertain times requires investment in innovation and growth
When Finance Minister Elisabeth Svantesson presented the government’s Spring Fiscal Policy Bill and Spring Supplementary Budget for 2026, the message was clear: the Swedish economy is recovering—but this is taking place against a backdrop of significant global uncertainty. It is also the final budget of this legislative term, which underscores the need to lay a stable foundation for long-term growth.
Sweden is in a stable position with strong public finances, which gives it some room to maneuver. The Swedish economy is slowly recovering after hitting bottom during the recession, while household finances are gradually improving. Public investment, particularly in defense and security, is helping to sustain economic activity.
At the same time, growth remains subdued, both in Sweden and internationally. Low global demand, geopolitical tensions, and rapid changes in trade policy are contributing to a more unpredictable outlook and risk weighing on the recovery going forward.
The labor market also remains weak. Unemployment is expected to remain high, but is expected to decline gradually.
In this situation, the need to strengthen Sweden’s long-term growth potential is becoming increasingly critical.
The Minister of Finance notes that rapid developments in artificial intelligence (AI) present both significant opportunities and new challenges for the economy and the labor market. AI can contribute to increased productivity, new business models, and enhanced competitiveness, but at the same time requires investment, the right skills, and a regulatory framework that fosters innovation.
Developments in the tech industry demonstrate just how central digitalization and technology are to Sweden’s economy. The industry continues to grow and is cementing its role as one of the country’s most important engines of growth. Today, the tech industry accounts for a significant portion of GDP and exports and serves as a catalyst for productivity and innovation throughout the economy.
For the recovery to take hold and become sustainable, therefore, we need not only sound public finances, but also reforms that strengthen innovation, improve the supply of skilled labor, and create attractive conditions for investment and entrepreneurship. In an increasingly technology-driven economy, these factors will determine Sweden’s future competitiveness.
It is therefore important for the Minister of Finance to clearly emphasize that growth must come from increased productivity and more hours worked, and that measures that reduce the labor supply should be avoided. In light of the ongoing debate on reducing working hours, such proposals risk undermining productivity, the supply of skilled labor, and Sweden’s competitiveness.
Areas covered in the Spring Budget Proposal
Some areas where the government’s spring budget bill has an impact on digitalization policy that deserves to be highlighted—and where TechSverige has been a driving force—are as follows:
A clearer direction for digitalization—but now it’s all about implementation
This term has largely been marked by anticipation of strategies and a clearer direction in several areas of digitalization that affect the tech industry. Last year was largely spent waiting for a new digitalization strategy, which is now in place.
Toward the end of the term, the government’s strategic direction on digitalization issues has become clearer, and Sweden now has a broader and more cohesive policy that includes strategies for cybersecurity, AI, and defense innovation. A cloud policy has also been announced. This is fundamentally positive and indicates a higher level of ambition. At the same time, it means that the focus now needs to shift from strategy to implementation.
With a number of strategies in place, TechSverige had hoped that this year’s budget would focus more on implementation and concrete measures based on those strategies. Instead, it remains unclear how these ambitions will be put into practice. Some initiatives have been taken, and the government still has a chance to make a final push in the months leading up to the election.
At the same time, the government has set ambitious goals, particularly in the field of AI, with the aim of making Sweden one of the top ten countries globally and ensuring that the public sector becomes a world leader in the use of AI.
This requires the ability to get things done. It is through the widespread use of AI across the economy that value is created. With little time left in the current term, it will be crucial to translate ambitions into concrete results. This will also be a decisive issue in the upcoming election and for the next term, when the focus needs to shift from strategy to delivery.
Initiatives to improve the knowledge base, education, and professional development
TechSverige welcomes the government’s increased focus on statistics and analysis, particularly regarding the impact of AI on recent graduates’ entry into the labor market. We have highlighted a clear need for a better knowledge base. In the report “Recent Graduates, AI, and the Path to the Labor Market,” we propose, together with Akavia, that Statistics Sweden be tasked with producing more up-to-date and accurate statistics on recent graduates’ entry into the labor market and AI—a need that the government has now heeded. The transition from education to work is an early indicator of changes in the demand for skills, and it is therefore important to monitor these developments, both nationally and internationally.
TechSverige welcomes the government’sallocation of resourcesto civil engineering programs. At the same time, a long-term and comprehensive expansion of engineering education is needed in practice to meet future needs. Educational capacity is limited by a funding and reimbursement system that does not work, and the government can no longer simply patch things up. A significant increase in resources is needed, along with a reformed resource allocation system that allows more people to be educated while maintaining quality. The shortage of engineers and tech specialists is already slowing Swedish growth, and for the tech industry, access to qualified talent is crucial for keeping investments and jobs in Sweden.
At the same time, TechSverige welcomes the government’s intention to increase completion rates in engineering programs by enabling new approaches for students who are close to graduation and by improving opportunities to accelerate their studies. TechSverige hasrepeatedly proposedthat the Swedish Higher Education Authority be tasked with identifying the reasons for dropouts—not only their extent and timing—but also that the agency be given a mandate to work with higher education institutions to share best practices where completion rates are high.
TechSverige also welcomes the initiative todevelop teachers’ skills in STEM subjects,but would like to see a clearer focus on digital literacy. We therefore propose anational digital skills initiativefor teachers, featuring ongoing professional development in digital tools and AI in the classroom. This is necessary to equip teachers with the right tools for the classroom and ensure that Swedish students develop the digital skills required in an increasingly technology-driven society.
TechSverige is calling for more initiatives with a clearer focus on measures that strengthen the supply of skilled workers and labor market turnover, particularly regarding the transition from education to the workforce. We therefore propose that the government extend the reduced employer contribution for young people aged 19–23 to also include recent graduates during the first year after graduation.
The threats posed by cybercrime require more than just coordination among government agencies
The government is continuing its efforts to transfer cybersecurity responsibilities to the National Cybersecurity Center at the Swedish Defence Radio Establishment. The Police Authority is receiving funding to improve its digital intelligence capabilities, particularly in response to organized crime. The government explicitly highlights the need to better store, process, analyze, and share digital information in law enforcement. This must be complemented by efforts to combat cybercrime such as ransomware and fraud. These are crimes that are difficult to tackle and require international cooperation and technical expertise.
In summary,the Spring Fiscal Policy Bill indicates that Sweden is emerging from the recession, but the global economic outlook remains uncertain. At the same time, there is a significant lack of the concrete reforms needed to strengthen Sweden’s long-term growth and competitiveness. Steps are being taken in the tech sector, including in AI, cybersecurity, and the supply of skilled labor, where TechSverige has been a driving force. However, for Sweden to fully capitalize on the opportunities presented by technological development, there is now a need for increased focus on implementation, clear priorities, and reforms that strengthen productivity, skills, and investment.