Sweden has long been at the global forefront of environmentally friendly policies aimed at reducing climate-changing emissions and pollution. It was the first country to establish a national environmental protection agency in 1967. It became the first European country to meet renewable energy targets in 2012 — eight years ahead of schedule.
Even more remarkable: Sweden has reduced total energy consumption from fossil fuels from 66% in 1980 to 26% in 2012 without sacrificing economic growth. (Sweden ranks consistently among the fastest-growing high-income countries.)
What has been missing from the country’s environmental achievements are globally successful companies in the Cleantech, or clean technology, sector. But there is now a notable buzz in Sweden about Cleantech, which includes high-growth industries that apply new technology to energy-saving processes, including solar, wind, water purification, and biofuels.
Strong collaboration between the public sector and private companies means that the government and local authorities support Cleantech not just by integrating green solutions into urban planning and energy planning, but also by stringent environmental regulations and targets. The government also offers financial assistance for innovation.
Public authorities, research centers and universities, entrepreneurs, and venture capitalists have reached a broad consensus that Cleantech is necessary for sustainable economic growth and to enable the sector to expand rapidly in the future. The shift in priorities is visible across the economy.
Sweden’s Cleantech sector now numbers several thousand companies and has annual revenue of over $24 billion. Stockholm’s investment promotion agency puts Cleantech at the forefront of its strategy. It even published an annual hotlist of the most interesting companies in the region.
As a consequence of rapid development and large private and public investment, Sweden now has a rich support network for new entrepreneurs in the Cleantech sector. This includes platforms that connect investors interested in Cleantech with companies that have passed the development stage and are looking to commercialize their products. One such example is Connect Green, a private initiative that is supported by the national energy authorities.
Sweden is also home to a myriad of other programs that support Cleantech, including:
- Financial assistance for Cleantech companies of up to 49 employees through the Swedish Agency for Economical and Regional Growth, known as Tillväxtverket
- A Tillväxtverket program in partnership with Sweden’s international aid agency that finances environmental demo-projects in developing countries
- Test Site Sweden, a program for creating a demonstration and testing environment for products and services in environmental engineering and sustainable transport
- Vinnova, a government agency that focuses on sustainable growth, which annually invests around $300 million in various research projects
- SymbioCity, a Swedish government initiative that promotes national exports while focusing on clean energy for cities
- The Association of Swedish Environmental Technology Industries (ASSET), a trade organization for the sector
The sector is further supported by the country’s strong education system, especially in the field of engineering. Sweden also has among the highest per-capita R&D spending rates in the world. Local research in the fields of biofuels, green materials, fuel cells, batteries, and charging infrastructure is considered among the best in the world.
The Swedish Cleantech investment push could not be timelier. Recent events suggest that climate-friendly economic policies are becoming more acceptable. The negative effects of pollution and global warming have become so blatant that the public has started to push for change. In China, for instance, nearly 500 million people are suffering from extremely difficult smog conditions, and an estimated 1 million people are dying annually from related causes.
When considering Sweden’s Cleantech efforts, it is important to note that the country has a very strong industry presence, with several world players in the automotive, machinery, and defense sectors. Within the information and communications technology (ICT) fields, it has large global holdings in wireless infrastructure. More recently, Sweden has been the birthplace of some of the world’s most successful tech startups, including Spotify and Skype. In fact, the city of Stockholm has been the launching pad for more “unicorns” per capita than any other city in the world except for San Francisco.
Sweden has also committed to relying 100% on clean energy by 2040. If successful, it would be the first country in the world to achieve this. Given the impressive track record that Sweden has already established as an innovator, the country is well-placed to benefit from Cleantech.
Oana Aristide is a Senior Economist on D&B’s Global Data, Insight and Analytics team. Based in the UK, she covers three Scandinavian countries as well as Romania, Japan, Malaysia, and the Philippines as a contributor to D&B’s Macro Market/Country Insight Products. She has a background in central banking.