How long can a country punch above its weight before someone needs to check the scales? For decades I’ve heard Sweden be called “small” or “scrappy”, usually in the same breath as describing one of our many economic knockouts. It’s time we moved up a weight class.
Our success is a tonic for all the European doomerism we’re reading at the moment. The typical analysis of our continent — low growth, little liquidity, endless bureaucracy — doesn’t apply to Sweden. Our 2026 growth forecast is more than double that of heavyweight countries Germany and France, at a fraction of their public debt level. Our inflow of FDI investments is the second largest in the EU. Nasdaq Stockholm attracted more IPO capital last year than any other European exchange. Swedish startups are on track to raise $5 billion in 2026, up from $3.2 billion in 2025, led by the vibe-coders at Lovable ($13.3 billion valuation), body scanners at Neko Health ($7 billion) and AI lawyers at Legora ($5.55 billion).
This isn’t a new era of Swedish exceptionalism, nor a fleeting moment in the sun (despite the dark Nordic winter around the corner). This latest group of founders stands on the shoulders of giants from the noughties like Spotify, Klarna, and Skype, who themselves took inspiration from the postwar design empires of IKEA, H&M and Tetra Pak (modernizer of the milk carton). The precedents run so far back that we even have a Swedish word for the inventor-founded firms of the late 19th century: snilleföretag or “genius companies”. These include the telecoms leader Ericsson; ASEA, now part of the $180 billion ABB; and Atlas Copco, still one of Sweden’s most valuable listed companies more than 150 years after its founding.
Some might read this as no more than a history lesson. In reality, though, it’s a 150-year-old blueprint for repeatable corporate success. When a once-in-a-generation entrepreneur pops up somewhere in the world, it can be coincidence. When a country of 10 million people produces them generation after generation, it implies a set of conditions that foster brilliance.
The first key ingredient is inventor-friendliness. With top talent more sought-after and mobile than ever before, Sweden creates conditions that attract and retain the best inventors. We are one of the last major European countries to still operate under “professor’s privilege”, which ensures researchers, rather than universities, own the IP of their inventions. A single professor’s lab at Uppsala University has forged some 20 companies, including Olink, which sold to a US life sciences giant for $3.1 billion in 2023. Sweden files more patents per person than almost every other European country, hosts four of the world’s top 130 universities, and is ranked by the UN’s World Intellectual Property Organization as the second most innovative economy on earth.
Another ingredient is patience. Though our latest tech darlings have grabbed headlines in applied AI, we have thriving deeptech, industrial and life science industries. These are sectors where successes are built over decades rather than years. To facilitate this, Sweden spends around 3.6% of its GDP on research and development (R&D), higher than anywhere else in the EU.
This helps all stages of the ecosystem, from the Uppsala spinout behind Leqembi, one of the first drugs to slow Alzheimer’s, through to Anglo-Swedish drugmaker AstraZeneca whose largest factory is in Södertälje. These are examples of how Swedes like to tackle hard problems. As AI becomes commoditized, greater value is going to be attached to solving these kinds of thorny, real-world issues.
And the third crucial ingredient is a culture of decency. Sweden is known for its generous social safety net, which people sometimes incorrectly conflate with “socialism”. This support from the state makes it OK to fail. A Swedish engineer who leaves a secure job to found a company is betting their career, sure, but not their family’s healthcare.
A sense of collective decency also creates a flywheel. Successful Swedes feel a duty to reinvest capital back into the ecosystem, to support the next generation of companies. Take Niklas Adalberth, who used his wealth from co-founding Klarna to set up the impact investor Norrsken, or Karl-Johan Persson, H&M chairman and grandson of its founder, who regularly backs Swedish startups.
Sweden is, quite simply, the most investable innovation economy in Europe. We have a 150-year lineage of inventors to emulate, a society that favors those with bright ideas, a desire to solve the important challenges of our time no matter how long it takes, and a state that catches people who fall. It’s worth checking the scales again because, after more than a century of knockouts, our country has earned its place in the heavyweight division.
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