Swedes of HN: is it true that Sweden is entrepreneurially successful?

[numbers_guy]

I am German and I am kinda pissed off at how bad Germany is at being innovative and especially at being entrepreneurial. Our culture is extremely risk averse; just the opposite mentality of what is needed. I have been hearing about Sweden since forever, but I often dismissed it because both Germans and Americans tend to fetishise the place as this Aryan land of heavenly perfection. However, I have recently read some statistics and it does seem that Sweden is indeed over performing when it comes to innovation and entrepreneurship.

And now my question is, why is this? I am fairly convinced it has to do with attitude and culture, more than the financial, economic or educational landscape, which is not that different from that of the rest of Europe. But what kind of attitude and what kind of cultural traits give rise to a successful entrepreneurial society? Another factor might be the Anglo/Americanisation of Swedish society; the willingness to use English and adopt American culture, maybe.

I would really love to hear some opinions from the Swedes of HN.

[apelapan]

It is easy and cheap starting up a limited liability business in Sweden. I haven't done it anywhere else, so I can't compare. But it certainly is not difficult or expensive in any absolute sense.

Filing taxes is also easy, you don't need an accountant to get it right (but it might still be a good idea).

Doing business with other small(ish) companies is casual and uncomplicated. Contracts are short and to the point. You don't need to consult with lawyers about anything. (But if you have no previous experience at all of "doing business", you should definitely find someone to mentor you on this topic. There are plenty of local business support organizations that provide this essentially for free).

Hiring and firing is easy, if you sign up with a national collective bargaining agreement. With the CBA you don't just get arbitration and well-understood rules, you also get pensions and various useful staff insurances set up in an excellent default manner. You can also do without CBA if you know what you are doing (especially if you are either going for an very senior and well-paid staff who don't care or are bent on taking advantage of second rate juniors).

It is not really hard to find competence of any kind in the "major" cities, if you are prepared to treat and pay them well. Getting X engineers with skill Y at salary Z will of course be difficult for some values of Z. But, salaries in IT are quite low compared to Germany. EUR 5k/month is probably around top 10% for software engineers on the west coast.

People still moan and complain, of course.

[apelapan]

A clarification: When I say that firing people is easy, I don't mean that you as a business owner can do whatever you want. You still need a reasonable cause and some record of trying to solve the problem, before you can force someone out.

If you have a large organization and are doing a large layoff, things are more complicated. But, by that time you are not really "entrepreneurs" any more. You are an enterprise with enterprise resources and enterprise problems. :-)

[nextos]

I would also add that the tech VC scene in Stockholm is really good considering the size of the country and its economy.

[muffa]

I agree with the other posts.

I would also like to add that our taxes are rather high on income but very low on dividends from business. If you own a business you take out a salary which is under a certain tax bracket and then pay yourself dividends using the company profits which is very lucrative. It adds incentive for you to start a business.

We also have a good startup ecosystem, if you are going to start a startup it helps if you have worked at a startup and can bring your experiences. Germany to me feels much more like a country of enterprises compared with Sweden.

For the Americans, we don't worry about healthcare, saving for our kids college fund etc. so we might have more risk tolerance due to this.

[muzani]

A bit of a tangent, but from the perspective of Malaysia, Germany is a major entrepreneurial power. A lot of it is backed by Rocket Internet. Many Rocket people come here, fail, and then start their own startups and raise money easily because they have experience. Inversely, several SE Asians end up moving to Germany after being promoted.

It feels a little like how the Portuguese/Dutch were a major colonial power but held little land of their own.

I'm also thinking there could be a selection bias in that the entrepreneurial Germans are all in foreign countries.

Estonia also seems to have a reputation for being entrepreneurial. I think there's not much natural resources there and the government have been very supportive of startups.

[Nurbek-F]

I assume culture wise, "Lagom" could play some role in it. Creative and peaceful mindset, simplicity. I've been to many European cities, but the Nordics, Finland, and now Estonia is catching up, they've got totally different attitudes to life and approaches. Governmental support, active youth, events... There is a Movement.

[drakonka]

I think it's true. Most of my time in Sweden has been in the games industry and there are constantly new studios popping up, both big and small. In Gothenburg there are lots of small companies serving the car manufacturing market, and it's really common to find people working on their own projects and initiatives in coffee shops, co-working spaces, etc.

As for why: One, starting a limited company in Sweden is quite straightforward.

Also, my opinion is that people just feel relatively safe taking a risk on trying something new in Sweden. It's not a huge expense to keep your limited company going with no activity or just to shut it down. Also, you don't have to worry about very basic life things so much, like getting sick and not being able to afford care.

Additionally, for full-time permanent employees there are rules that let them branch out and try new things without losing their job. You can request to take time off work to study, for example, and your employer is required to make reasonable accommodation to let you do that. So you have the opportunity to try things and learn. I also read about a rule that lets employees take six months off work to actually try starting their own business. If it fails, you can return to your regular job. I read about that in this article[0] and did not cross-check to confirm, so there may be caveats I'm not aware of.

[0] https://www.cnbc.com/2019/02/20/sweden-lets-employees-take-s...

[iExploder]

well I'm not German and don't have experience running a business other that sole-proprietorship, but I often think about this as well. From my point of view the taxation, bureaucracy and cost of everything including hiring new people, the employee rights, hiring an accountant or lawyer, etc prohibits small businesses to start easily.

mentality might play a role insofar as access to funding might be concerned. from the IT perspective unless you have a very good idea, specific market need, connections and lot of $$ the benefit of starting a company to do actual work in Germany vs Eastern Europe + branch office in Germany for "optics" is not obvious to me.