MARCH 18 2021
The number of knowledge intensive jobs in Sweden is declining for the first time. The slowdown is an effect of the COVID-19 pandemic and follows the same pattern as the rest of Europe. Despite the decline, Sweden maintains its head start in the European Union – and Stockholm still stands strong amongst other large cities. This finding comes from a new report The Geography of Europe's Brain Business Jobs: 2021 Index from the European Institute for Policy Reform and Entrepreneurship (ECEPR), which is produced with the support of Nordic Capital.
The study is about the concept and existence of “brain businesses” – companies that compete with businesses that require employees with exceptional knowledge and brain capabilities. The editor of the report, Dr. Nima Sanandaji, director of the European Center for Entrepreneurship and Policy Reforms (ECEPR), has in an extensive comparison mapped between 31 countries and 278 regions throughout Europe according to how many knowledge intensive jobs there are per 1,000 persons.
The report, which is published for the fourth consecutive year, shows a clear COVID-19 effect, between 2013 and 2019 over half a million knowledge jobs per year were created in Europe – but during 2020 the number of brain business jobs fell by 167,000. This is the first time the curve has taken a turn downwards.
The pandemic also affected Sweden, which has shown a clear upward trend since 2012 with a total of 75,000 new brain business jobs. During 2020 there were 7,100 fewer. This equates to 9.6 per cent of Swedes working in knowledge intensive businesses, which is a marginal decline from 9.7 per cent in 2019.
At the same time there are countries on an opposite route. Finland being the clearest example in the Nordics with a significant increase from 7.3 to 7.9 per cent. Further, Norway shows a small increase, and in aggregate the Nordic region stand out with a total 8,600 new brain business jobs, despite the global crisis.
Even if there are somewhat fewer jobs in knowledge intensive businesses, Sweden still remains at the top position in the Index in Europe. No other country in Europe has such a high share of brain business services and jobs. Looking at the entirety of Europe only Switzerland scores higher with 10.4 per cent. Stockholm is also the leading city in the Nordics and is ranked fourth in all of Europe.
”Knowledge is the foundation for attracting investments and creating value in a long term sustainable way. As a leading investor in Europe it is natural for Nordic Capital to support research on how knowledge strengthens good investment conditions”, says Klas Tikkanen, Chief Operating Officer at Nordic Capital Advisors.
”The study confirms that high knowledge intensity gives resilience in a time of crisis. Sweden and the Nordic countries still stand strong despite the pandemic. But now is the time for reforms and developing the regulatory frameworks in order to get back to the levels seen before Covid-19. That will lead to increased investments, and the increase of brain business jobs again”, Klas Tikkanen adds.
Another trend over time is that Central and Eastern European nations are closing in. One example is Estonia, which despite only having 1,3 million inhabitants has the tenth highest concentration of brain business jobs per capita in Europe. In fact, several Central and Eastern European countries are at the top of the list having the highest concentration of brain business jobs. Bratislava, Prague and Budapest being Europe´s top three cities ahead of Stockholm’s fourth position placing.
”All regions strive to be the hotbed for innovation and creativity but only a few succeed”, states Dr. Nima Sanandaji. ”Sweden, for example, with its high living costs and taxes faces the competition from Central and Eastern European countries, and also from Southern European countries such as Cyprus, Portugal and Malta, with their lower labour costs. Brain business jobs are created where there is a high supply of talent and wages are low”, says Dr. Sanandaji.
National ranking – Europe’s Brain Business Jobs Index
% change 2014-2020
Regional ranking – Europe’s Brain Business Jobs Index
Berkshire, Buckinghamshire and Oxfordshire
To access the entire list and the full study, see: Geography_of_Brain_Business_Jobs_March_2021.pdf (ecepr.org)
Katarina Janerud, Communications Manager
Nordic Capital Advisors
Tel: + 46 8 440 50 50
About Nordic Capital
Nordic Capital is a leading private equity investor 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 long history. Focus sectors are Healthcare, Technology & Payments, Financial Services, and selectively, Industrial & Business Services. Key regions are Europe and globally for Healthcare and Technology & Payments investments. Since inception in 1989, Nordic Capital has invested more than EUR 16 billion in over 110 investments. The most recent fund is Nordic Capital Fund X with EUR 6.1 billion in committed capital, principally provided by international institutional investors such as pension funds. Nordic Capital Advisors have local offices in Sweden, Denmark, Finland, Norway, Germany, the UK and the US. For further information about Nordic Capital, please visit www.nordiccapital.com
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