Sweden risks losing its position as one of the world’s leading centres for start-ups and vibrant equity markets if the leftwing opposition wins the country’s elections on September 13, according to one of its most prominent industrialists.
Jacob Wallenberg, whose family foundations hold major stakes in companies including AstraZeneca, Ericsson, ABB and Saab, told the FT that decades of pro-business reforms supported by governments on both the left and right could be threatened by proposals from opposition parties.
“The opposition has pointed to more government engagement, higher taxes in a number of different areas . . . also a discussion about working less hours. I’m deeply concerned about these things,” Wallenberg said.
His intervention is significant because he also chairs the Confederation of Swedish Enterprise and comes as the election campaign enters its final days. The contest is increasingly tight, with the current centre-right government narrowing the gap with the leftwing opposition led by the Social Democrats, although the opposition continues to hold a small lead in the polls.
The centre-right coalition has received praise for its efforts to combat gang crime and reduce immigration to its lowest level in 40 years. At the same time, opposition parties have proposed new taxes on overall wealth, inheritance, banks and savings, as well as a tax targeting billionaires.
Wallenberg stressed that his criticism was not directed at individual political parties but at specific proposals that he believes could hinder the continued development of Swedish businesses.
“Our concerns are directed at specific suggestions that we feel could be impediments for the continuous development of businesses in this country. This is voiced by the opposition,” he said.
Sweden’s business success has given it an outsized role in Europe’s technology sector. On a per capita basis, Stockholm has more technology unicorns than any other region in the world outside Silicon Valley. The group includes companies such as Spotify and Klarna, both of which have produced prominent Swedish entrepreneurs.
The country’s stock exchange has also attracted more initial public offerings over the past decade than France, Germany, the Netherlands and Spain combined, reinforcing Sweden’s reputation as an important market for growing companies and investors.
Wallenberg acknowledged that the rapid growth of start-ups had contributed to rising inequality, particularly as new billionaires were created in Swedish krona terms. But he argued that successful entrepreneurs were also generating employment and tax revenues.
Entrepreneurs including Spotify founder Daniel Ek and Klarna founder Sebastian Siemiatkowski were “employing more people” and contributing more tax revenue, Wallenberg said, describing this as “quite fundamental for our economic development for the good of society”.
Social Democrat leader Magdalena Andersson, who is the frontrunner to become prime minister, has sought to reassure business leaders that her party remains supportive of companies. She recently told the FT that the Social Democrats had “good co-operation” with companies and wanted to make it “clear and loud in the world: Sweden is back and we’re open for business”.
But concerns remain among business leaders about the coalition partners Andersson would need to rely on to secure a parliamentary majority. Executives from Spotify, truckmaker Volvo and Atlas Copco have expressed worries about the leftwing parties that could form part of such an alliance.
For Wallenberg, the issue extends beyond the immediate election and concerns Sweden’s ability to compete with the United States and China at a time when Europe is experiencing weaker economic growth.
“It seems counterintuitive that you will become more competitive by working less and by making it more difficult for companies to develop,” he said.
A Swedish investor involved with several of the country’s most successful start-ups expressed a similar concern, arguing that technology companies simply wanted stability. “Don’t mess things up. But I’m afraid the left might,” the investor said.
Wallenberg warned that Sweden’s economic success should not be taken for granted. He attributed the country’s strong start-up sector to policies promoting entrepreneurship, early-stage financing and university programmes supporting research and development.
“They appear for a reason,” he said. “Because we have promoted entrepreneurship, we have created forms of financing for very early stage [companies], we have university programmes that support this research and development thinking.”
