Sweden has long sounded like a social- weal commercial dream come true, where companies and labor unions unite in harmony with government support. Swedish citizens are among the flush in the world, and they enjoy intimately handed health insurance and other generous benefits.
But recently, Sweden does n’t feel as traditionally Swedish. The far-right Sweden Democrat party finished second in September’s election, touting ananti-immigrant crusade. The party’s administrative votes will impact the nation’s programs in the new center-right coalition, calling into question whether the country is shifting down from the liberal Social Democratic Party that has been the standard of its system. Smaller youthful Swedes are joining unions, and American- style private seminaries and medical care have taken root.
“ AMERICANS, MYSELF INCLUDED, DO N’T HAVE A Completely dilate- OUT UNDERSTANDING OF WHAT SWEDISH CAPITALISM IS LIKE. ”
Could this lead to the end of the high- duty “ Swedish model ” that like- inclined nations have come to respect? Harvard Business School Professor Debora Spar, who has anatomized Sweden considerably, says no, the Swedish model is strong and is likely to continue. But the verity is Indeed Sweden is n’t quite the Sweden that numerous picture.
“ Americans, myself included, do n’t have a completely dilate - out understanding of what Swedish capitalism is like, ” Spar says. “ We suppose it’s more like illiberalism, and it’s not. It’s deeply commercial. It just works else. ”
Sweden grapples with immigration
Spar, the Jaime and Josefina Chua Tiampo Professor of Business Administration and elderly associate doyen for Business and Global Society at HBS, explores the development of Sweden’s model and its current challenges in the case study, “ The nearly Nearly Perfect People Sweden’s Utopia at a Crossroads. ” HBS exploration associate JuliaM. Comeau contributed to the study, along with the School’s Europe Research Center.
While the country’s well- paid, high- tech frugality is humming, and the country continues to induce an outsized number of entrepreneurial launch- ups, it's also scuffling with the longer- term counteraccusations of a particularly inclusive immigration policy.
“ SWEDEN IS AN index OF THE NEED TO scuffle WITH THE IMMIGRATION ISSUE, AND A SIGN OF HOW delicate IT ’S GOING TO BE. ”
With a population of only10.6 million, Sweden has taken in a larger chance of recent settlers than any other country in Europe. The Organization for Economic Cooperation and Development says the country is now home to1.3 million foreign- born residers, 14 percent of the country’s aggregate. Sweden has also opened its doors to further than,000 Ukrainian deportees. These figures allowed the far right to expand its political platform, linking the settlers to a rising crime rate and other ills.
“ It’s a problem that’s playing out not just in Europe, but in the US as well, ” Spar says of rising immigration figures. “ Sweden is an index of the need to scuffle with the immigration issue, and a sign of how delicate it’s going to be. ”
Spar says the Social Egalitarians “ tried to do the right thing, ” by drinking settlers. “ But there's a wordless agreement that they went briskly and further than the country could sustain, so they ’ve started to wheel that back. ”
There’s nothing relatively like Sweden
At the same time, she says the current problems are n’t likely to shroud the high regard other nations place on the Swedish model, in part because none of them have managed to replicate it.
While she sees strong echoes of the model in Taiwan, and lower influences in Singapore, Costa Rica, and Germany, she says all those countries have their own style. “ There’s nothing relatively like Sweden anywhere differently, ” she says. “ One reason models work is that they line up with the underpinning social environment( of each country). That’s why Sweden’s model works so well for Sweden. The US could n’t borrow the Swedish model. It would n’t work then. ”
Sweden’s distinctive business- weal model is embedded in the country’s long, stable history. First settled by Vikings and other settlers, a small southern area surfaced in the 11th century. The Riksdag, Sweden’s congress, first assembled in the 15th century. The country began dealing iron ore and coal to Germany and Great Britain in the early 1800s. When Sweden industrialized in themid-1800s, Spar says, “ it did so snappily and methodically, ” espousing the most successful practices from established manufacturing nations.
One practice is distinctively Swedish When the trade unions formed a confederation in 1898, so did manufacturers and other employers — not in opposition, but in cooperation. It was the first pillar of what came itspost-World War II model.
The cost of social services
The model bloomed after World War II, with the Social Egalitarians ’ three-rounded policy An active public government with a desire to achieve an indifferent distribution of income and wealth; a generous social weal system financed by levies; and a participated structure of commercial control by business, labor, and the state. Except for a harsh 1991 recession, the model has been successful for liberal and moderate governments — not in malignancy of one of the loftiest duty situations in western Europe and Scandinavia, but because of it, Spar says.( As a former high minister said, “ Entrepreneurs have the courage to jump ” because the safety net is there.)
Sweden has had a hefty wealth duty since 1948, and public health insurance since 1956. Workers presently pay 7 percent of social security levies, while companies pay 31 percent. Original deals levies top out at 25 percent, with lower rates for food and other particulars.
Americans may not abide similar duty loads, Spar says, but Swedes do n’t object “ because they feel they get a lot ” for it. As of 2022, for illustration, Swedish health insurance and other benefits regard for 30 percent of government spending, compared to 10 percent for Social Security and Medicare in the US.
The future of the Swedish model
Sweden is also contending with the same high affectation that’s anguishing other nations, performing incompletely from the COVID recovery and Russia’s Ukraine irruption.
“ IN A TIGHTLY KNIT SOCIETY, EDUCATION PLAYS A pivotal part IN CREATING A SENSE OF NATIONAL, COLLECTIVE IDENTITY, AND THAT ’S BEEN fractured. ”
Amid the immediate challenges, Spar says its citizens differ about whether to move to further privatized education and health care, shaking up a decades-long foundation in which people largely rallied around the government furnishing these services. “ In a tightly knit society, education plays a pivotal part in creating a sense of public, collaborative identity, and that’s been disintegrated, ” she says. “ The country feels that it has lost commodity impalpable. ”( As annalist Lars Trägårdh told Spar, “ There's no longer one Sweden ”)
For all the dubieties and stresses, Spar says the Sweden model remains strong because the government, business, and labor continue to manage the frugality together.
“ It’s not the government regulating the request, ” she notes. “ It’s the strong union of employers and strong unions of labor who manage it, and they've driven growth in the country. ”
So, she says, “ I remain a Sweden optimist. ”