Sweden is one of the most developed countries on the planet with one of the lowest poverty rates and one of the highest GDP per capita’s. Today, Sweden is a constitutional monarchy with a parliamentary democracy of government and a highly developed economy. According to the IMF, the estimated 2010 nominal GDP of Sweden, was $443.718 billion, In 2010, it ranked fourth in the world in The Economist’s Democracy Index and ninth in the United Nations’ Human Development Index. In 2010, the World Economic Forum ranked Sweden as the second most competitive country in the world, after Switzerland. Sweden has been a member of the European Union since 1 January 1995 and is a member of the OECD.
Sweden is an export-oriented mixed economy featuring a modern distribution system, excellent internal and external communications, and a skilled labor force. Timber, Hydropower and iron ore constitute the resource base of an economy heavily oriented toward foreign trade. Sweden’s engineering sector accounts for 50% of output and exports. Telecommunications, the automotive industry and the pharmaceutical industries are also of great importance. Agriculture accounts for 2% of GDP and employment. Income is relatively flatly distributed, as a result, Sweden has the lowest Gini coefficient (0.23) of any country. The low Gini coefficient means that Sweden has relatively little inequality between the richest and the poorest parts of society. This is due to Sweden’s high tax environment, which funds one of the most extensive welfare system on the planet. The Swedish government provides such a high degree of welfare to its citizens, that it is considered a cradle-to-grave welfare state. While the tax environment is quite cumbersome, the welfare state model insures that everyone has a decent standard of living. According to an OECD economic survey, the typical Swedish worker receives 40% of his income after taxes. The slowly declining overall taxation, 51.1% of GDP in 2007, is still nearly double of that in the United States or Ireland. The share of employment financed via tax income amounts to a third of Swedish workforce, a substantially higher proportion than in most other countries. Overall, GDP growth has been fast since reforms in the early 1990s, especially in manufacturing.
In terms of structure, the Swedish economy is characterized by a large, knowledge-intensive and export-oriented manufacturing sector, an increasing, but comparatively small, business service sector, and by international standards, a large public service sector. Large organisations both in manufacturing and services dominate the Swedish economy, according to Infoexport.gc.ca. The World Economic Forum 2010–2011 competitiveness index ranks Sweden the 2nd most competitive economy in the world. Sweden is ranked 6th in the IMD Competitiveness Yearbook 2009, scoring high in private sector efficiency. According to the book, The Flight of the Creative Class, by the U.S. economist, Professor Richard Florida of the University of Toronto, Sweden is ranked as having the best creativity in Europe for business and is predicted to become a talent magnet for the world’s most purposeful workers. The book compiled an index to measure the kind of creativity it claims is most useful to business—talent, technology and tolerance.
The Swedish market overall is small in comparison to other major international markets. For example, Sweden’s population was measured at 9,415,295 by a 2011 Swedish Census. The GDP per capita was $47,934, as measured by the IMF. So while the market is small, it is quite rich. It also seems that Sweden has managed to partially overcome the aging problem that most other European nations face, with a high immigration rate to Sweden. As a result, the Swedish population has managed to slightly grow in the last decade. As of 2010, 1.33 million people or 14.3% of the inhabitants in Sweden were foreign-born. Of these, 859,000 (9.2%) were born outside the European Union and 477,000 (5.1%) were born in another EU member state. The overall economic growth rate was also quite high, with an estimated growth rate of 5.5% in 2010. While most of Sweden’s trade partners are European countries, who are suffering from the Eurozone crises. It is likely that the Swedish economy will be able to weather the crises, since Sweden is not part of the Eurozone. As a result, it is unlikely to fall prey to the crises. Overall, Sweden is definitely a great country to do trade in, and it promises to be a great place for businesses well into the future.