To what extent can a country “achieve great things with small resources,” that is to say, to what extent can it be considered “small but mighty”? For decades, I’ve heard Sweden described as “small in size” or “very hardworking,” and these descriptions are often mentioned alongside its many impressive economic achievements. Now, it’s time to place Sweden in a more prestigious category.
Our success also serves as a boost to the pessimistic rhetoric that currently pervades Europe. The typical analyses of Europe—low growth, insufficient liquidity, and endless bureaucracy—do not apply to Sweden. Our economic growth forecast for 2026 is more than twice that of Germany and France, two “heavyweight countries,” yet our level of public debt is only a fraction of theirs. Sweden also attracts the second-largest amount of foreign direct investment in the EU. Last year, NASDAQ Stockholm drew in more IPO funds than any other European exchange. Swedish startups are expected to raise $5 billion in 2026, up from $3.2 billion in 2025, with leaders including vibe-coders (valued at $13.3 billion), the body scanning company Neko Health (valued at $7 billion), and the law firm AI (valued at $5.55 billion).
This is not a new era of Swedish exceptionalism, nor is it a fleeting moment of glory (although the long Nordic winters are about to arrive). These new founders stand on the shoulders of giants from the 2000s, such as Spotify, Klarna, and Skype; and these companies in turn draw inspiration from the design empires that emerged after the war, such as IKEA, H&M, and Tetra Pak (the modernizer of milk cartons). This legacy can even be traced further back: we even have a Swedish term specifically describing companies founded by inventors at the end of the 19th century – snillef ö retag, which means “genius company.” This includes telecommunications giant Ericsson; ASEA, which has now been merged into ABB with a market value of 180 billion dollars; and Atlas Copco, a company that, more than 150 years after its establishment, remains one of Sweden’s most valuable listed companies to this day.
Some might see this as nothing more than a history lesson. But in reality, it is a blueprint for corporate success that has a history of 150 years and can be replicated repeatedly. When a once-in-a-generation entrepreneur emerges somewhere in the world, it might just be a coincidence; however, when a country with a population of only 10 million is able to produce such entrepreneurs generation after generation, it indicates the existence of conditions that nurture excellence.
The first key element is an environment that is friendly to innovation. As top talents are more sought after than ever before and have greater mobility, Sweden has created conditions to attract and retain the best inventors. We are one of the last major countries in Europe to still implement the "professorial privilege" system, which ensures that researchers, rather than universities, hold the intellectual property rights to their inventions. A laboratory at Uppsala University has given rise to about 20 companies, including Olink; this company was sold to a US life sciences giant for $3.1 billion in 2023. Sweden has nearly more patent applications per capita than any other European country, is home to 4 of the world's top 130 universities, and has been rated by the United Nations World Intellectual Property Organization as the second most innovative economy in the world.
Another element is patience. Although our latest technological darlings frequently make headlines due to the use of AI, Sweden also boasts a thriving deep tech, industrial, and life sciences industry. The success of these industries is often built over decades rather than just a few years. For this reason, Sweden allocates about 3.6% of its GDP to research and development (R&D), which is a higher proportion than any other country in the European Union.
This contributes to all stages of the ecosystem, from a spin-off company in Uppsala – backed by Leqembi, one of the earliest drugs capable of slowing down the progression of Alzheimer’s disease – to AstraZeneca, a British-Swedish pharmaceutical company whose largest factory is located in Sö dert ä lje. All of this reflects how Swedes enjoy solving difficult problems. As AI gradually becomes more commercialized, solving such thorny real-world issues will gain even more value.
The third key element is a culture of dignity. Sweden is known for its generous social security system, which is sometimes mistakenly associated with “socialism.” This kind of support from the state makes failure more acceptable. A Swedish engineer who leaves a stable job to start a company is indeed risking their own career, but not the medical coverage for their family.
A collective sense of dignity can also create a positive cycle. Successful Swedes feel a responsibility to reinvest their capital back into the ecosystem to support the next generation of companies. For example, Nicklas Adalbert, co-founder of Klarna, used his wealth to establish the influential investment firm Norrsken; Karl-John Persson, chairman of H&M and grandson of the founder, also frequently supports Swedish startups.
Sweden is undoubtedly the most investment-worthy innovative economy in Europe. We have a legacy of inventors that spans 150 years to emulate, a society that favors good ideas, and a willingness to address major contemporary challenges no matter how long it takes. There is also a country that will support those who fall. It's time to re-assess our standing once again, because after more than a century of setbacks, our country is now worthy of joining the ranks of the elite.
The views expressed in the articles commented on by Fortune.com represent only the author's own opinions and do not necessarily reflect the views and positions of Fortune.
