Headlines 2014

The World Bank on Swedish business climate


The World Bank on behalf of the Swedish Government has conducted a study of the business environment. On Monday the first part of the report was presented at a seminar in Stockholm. Augusto Lopez - Claros from the World Bank explained that Sweden is doing well, but there is room for improvement. Magnus Henrekson , IFN , commented on the report. He was content that the government now is looking into employee stock options – to facilitate start-ups. At the same time he considers the education system to be the most worrisome sector for continued growth.

In the picture from left Magnus Henrekson, Anders Borg , Annie Lööf and Augusto Lopez-Claros.


Augusto Lopez-Claros and the World Bank propose more deregulation to make it easier for Swedes to start their own businesses. The World Bank also believes that tax implications should be shifted from income and corporation tax to consumption, property and environmental taxes. The latter have less negative impact on the labor market and the economy at large. Augusto Lopez-Claros, said at the seminar that he was surprised that just over half of Swedish students who begin studying at universities are graduating. The reason for this, he said, could be that university graduates only earn 25 percent more than those who only have high school diploma.

Read the report from the World Bank

Magnus Henrekson commented on the report and defended that the Swedish government has lowered the restaurant VAT and introduced RUT and ROT (A person who hires you to do ROT=repairs, conversion, extension or  RUT= cleaning, maintenance and laundry, get a tax reduction). He explained that the same tax should apply to those who want to invest in their neighbor's business as when he or she invests in, for example mutual funds. Magnus Henrekson argued that stock options can help start-ups to attract qualified personnel. He acknowledged, on a positive note, that the government recently decided to look into this issue.

“Sweden has the fastest growing migration rate in Europe”, said Magnus Henrekson and explained that the employment rate for Swedish -born is 82 per cent and just below 50 percent for immigrants. "We have to do something about this. It is particularly important as we most probably, also in the future, will have generous immigration regulations. Maybe we need more deregulation to make the system consistent with immigration policy."Education is the area Magnus Henrekson is most concerned about. He argued among that students need to learn to work hard, persevere, keep times, and so on. "You have to give teachers back their authority to require these things of students. Otherwise the teaching profession will continue to be a job wanted by few."

Magnus Henrekson criticized that "we have introduced a system of for-profit schools that can rate students without outside observers. And the grades that these schools provide determine the future of young people." He finds it amiss that parents have to choose between sending their children to a good but demanding school where the chance of getting good grades is modest, or getting top grades in all subjects in an inferior school that provides higher grades in general.

See the seminar on the web

Research Institute of Industrial Economics, Grevgatan 34 - 2 fl, Box 55665, SE-102 15 Stockholm, Sweden | Phone: +46-(0)8-665 45 00 | info@ifn.se