NOVEMBER 28 2018
Sweden is on the brink of becoming the strongest country in Europe when it comes to knowledge-intensive jobs, according to a new study from the research institute European Centre for Policy Reform and Entrepreneurship (ECEPR).
The report identifies the presence of “brain businesses” – companies that compete through their brain power and specialist expertise. Author Nima Sanandaji, CEO of ECEPR and PhD from the Royal Institute of Technology in Stockholm, conducted an extensive study, mapping 31 countries and 283 regions in Europe to assess how many brain business jobs exist per 1,000 working-age persons.
Knowledge-intensive jobs are significant contributors to both income and productivity growth. As such, the report provides a snapshot of where businesses and investors are most likely to commit resources in the future, with high numbers of brain business jobs in countries such as the Sweden likely to represent an important attraction to such groups.
The annual study, which is now in its second year, notes that Sweden is increasing its share of advanced jobs to 89.6/1000 – just a small step behind top ranked Switzerland with 90.6/1000. Indeed several factors indicate that Sweden may soon be number one; Sweden is on an upward trend, increasing its share of knowledge-intensive jobs, while Switzerland is experiencing the opposite with a decline in advanced jobs. If this trend continues, Sweden will soon be the country with the highest share of persons with knowledge-intensive jobs in Europe.
According the ECEPR study, Sweden benefits from having a strong foundation across all the relevant business areas, and, compared to other countries, is strong within the four key business areas studied: high tech, IT, advanced services and creative professions. Switzerland relies primarily on high tech-production which makes it more vulnerable to single sector cyclicality.
Notably Sweden is also gaining ground on its Nordic neighbours, with Denmark, Finland and Iceland clearly seeing declines in their levels of brain business jobs. Only Norway is experiencing an increase, but at a much lower rate than Sweden.
Variations can be found even within the same country. Of the 283 regions studied, Stockholm ranks in third place behind Bratislava (Slovakia) and Oxford (UK) Central and Eastern Europe have several cities and regions that enjoy a high share of brain business jobs relative to the performance of the country overall.
“All regions aspire to become hotbeds for innovation and creativity but only a few succeed. Significant concerns are high prices for housing and high taxes which push up the cost of hiring programmers, engineers and other skilled workers in Sweden. The competition is fierce from the Central and Eastern European countries where many young people are educated with skills that are high in demand and where the wages are considerably lower. These countries are much more competitive in comparison to Sweden”, says Nima Sanandaji.
The level of highly qualified jobs increases in those regions and countries where knowledge-intensive companies see the greatest possibility for development and growth. It is in these places where engineers, programmers, designers and other innovative specialists congregate. This in turn leads to better chances for start-ups to succeed – and where technological advancement is greatest. The cost of skilled labour combined with expert knowledge provides an important competitive advantage.
The report is produced by ECEPR with the support of Nordic Capital.
“As an active investor in Europe, particularly in the Nordic region, we believe it is important to have a thorough understanding of the business environment, its underlying conditions and how it can be improved. This is key to fostering business growth and attracting investment in our region and is the reason we have chosen to support research in this field”, says Kristoffer Melinder, Managing Partner of the advisor to the Nordic Capital Funds.
“The report confirms Nordic Capital’s own view of the Nordic markets, particularly the Swedish market. These markets stand out on the international stage as highly successful and stable incubators of growth businesses and this is in turn what makes them a highly attractive environment for private equity investment. We have been investing in the region for over twenty five years and continue to see great potential for building high value businesses in the region that will offer increasing numbers of knowledge intensive job opportunities.” says Melinder.
The report proves the strengths of Sweden and Stockholm. But what more can be done? These and other questions will be discussed at a seminar on Wednesday, November 28 hosted by Stockholm Chamber of Commerce. The author of the report, Nima Sanandaji, will participate, as will the Minister of Employment Ylva Johansson (S), former Minister for Finance Anders Borg, and the Chairman of TCO, The Swedish Confederation of Professional Employees, Eva Nordmark, and Klas Tikkanen, CFO of Nordic Capital.
Country ranking - The Europe’s Brain Business Jobs 2018 Index
Change per capita 2014-2016
To access the whole list of 31 countries and the full study see: www.ecepr.org.
Katarina Janerud, Communications Manager
Advisor to the Nordic Capital Funds
Tel: +46 8 440 50 50
About Nordic Capital
Nordic Capital is a leading private equity investor in the Nordic region with a resolute commitment to creating stronger, sustainable businesses through operational improvement and transformative growth. Nordic Capital focuses on selected regions and sectors where it has deep experience and a proven track record. Core sectors are Healthcare, Technology & Payments, Financial Services, Industrial Goods & Services and Consumer & Retail, and key regions are the Nordics, Northern Europe, and globally for Healthcare. Since inception in 1989, Nordic Capital has invested EUR 13 billion in over 100 investments. The most recent fund is Nordic Capital Fund IX with EUR 4.3 billion in committed capital, principally provided by international institutional investors such as pension funds. The Nordic Capital Funds are based in Jersey and are advised by advisory entities, which are based in Sweden, Denmark, Finland, Norway, Germany and the UK. For further information about Nordic Capital, please visit www.nordiccapital.com