Sweden has been a trade-based country since before it even became Sweden (think Vikings). And we spend more on R&D per capita than most others. So why aren't there more Swedish companies on the global Fortune 500 list?
Sweden has been a trade-based country since before it even became Sweden (think Vikings). And we spend more on R&D per capita than most others. So why aren't there more Swedish companies on the global Fortune 500 list?
Sweden consistently ranks in the top two countries on the Global Innovation Index. Walk the corridors of any major research university in Stockholm, Gothenburg or Lund and you'll find world-leading science being developed, with neuroscientists mapping the brain, engineers designing really cool batteries and climate researchers developing models that inform global policy.
One question keeps coming back to me, where are the Fortune 500 companies that should be the fruits of all that hard work and investment?
Switzerland, the number one on the Global Innovation Index, has 11 companies on the Fortune Global 500. Sweden has three to four depending on the year. So, all that R&D spending isn’t translating into exports or commercial output the way it should. One could make the comparison that Sweden is a brilliant student, who aces every exam, but somehow never gets the top job.
In Sweden we invest heavily, train smart people, and build strong institutions. Yet the correlation between that investment and large-scale commercial results has consistently proven bleaker than what benchmarks with other countries would suggest. There are some areas where we deviate compared to others. Our R&D spending is heavily concentrated in a small number of large multinationals. Our small and medium-sized enterprises, that should be the engine of job creation and commercial scaling, underperform on innovation metrics compared to our neighbours in the Nordics and Europe. Interestingly, we have the largest gap between large-firm and SME innovation spending, for example three times bigger than Finland's.
Of course, it’s not all doom and gloom. Sweden is a remarkable place to start a technology company and we produce more unicorns per capita than most others. We have a venture capital ecosystem that punches well above its weight, and Stockholm consistently ranks among the world's top startup ecosystems.
So, the problem isn't that Sweden fails. It's the gap between what we put in and what we get out that is off. Imagine if we could have the same input-output conversion rate as Switzerland, then we would have 13 Fortune Global 500 companies. Now, wouldn’t that be something…