Sweden is a constitutional monarchy and a parliamentary democracy, with legislative power vested in the 349-member unicameral Riksdag. It is a unitary state, currently divided into 21 counties and 290 municipalities.
The economy of Sweden is a highly developed export-oriented economy, aided by timber, hydropower, and iron ore. These constitute the resource base of an economy oriented toward foreign trade. The main industries include motor vehicles, telecommunications, pharmaceuticals, industrial machines, precision equipment, chemical goods, home goods and appliances, forestry, iron, and steel.
Traditionally, Sweden relied on a modern agricultural economy that employed over half the domestic workforce. However, today Sweden focuses on further developing its engineering, mine, steel, and pulp industries, which are competitive internationally, as evidenced by companies like Ericsson, ASEA/ABB, SKF, Alfa Laval, AGA, and Dyno Nobel.
The vast majority of Swedish enterprises are privately owned and market oriented. There is also a strong welfare state, with public sector accounting up to three-fifths of GDP. In 2014, the percent of national wealth owned by the government was 24%.
Sweden also has the second highest total tax revenue behind Denmark, as a share of the country’s income.
Sweden maintains a Nordic social welfare system that provides universal health care and tertiary education for its citizens. It has the world’s eleventh-highest per capita income and ranks very highly in quality of life, health, education, protection of civil liberties, economic competitiveness, income equality, gender equality, prosperity, and human development.
Sweden has achieved a high standard of living under a mixed system of high-tech capitalism and extensive welfare benefits.
Sweden also has significant international ties – it joined the European Union on 1 January 1995, but has rejected NATO membership, as well as Eurozone membership following a referendum. It is also a member of the United Nations, the Nordic Council, the Council of Europe, the World Trade Organization and the Organization for Economic Co-operation and Development (OECD).
SMEs play an important role in the Swedish ‘non-financial business economy’, as they generate 61.2% of value added and 65.2% of employment, against the EU averages of 56.4% and 66.6%, respectively. Micro firms (0-9 people employed) account for 23.8% of employment, approximately 6 percentage points lower than the EU average of 29.7%.
Swedish SME productivity, defined as value added per person employed, is approximately €65,000, far exceeding the EU average of €44,600.
On average, Swedish SMEs employ 3.0 people, which is below the EU average of 3.9.
Two of the most important SME sectors are wholesale and retail trade and manufacturing, together contributing 35.3% of SME value added and 35.4% of employment.