Managing Director
American Chamber of Commerce in Sweden
Stockholm, Sweden
Eleventh in GDP within the EU and ninth in population, Sweden, a free trade champion and an open economy is a compelling trading partner. In an era characterized by global political and economic unrest, it has become crucial for nations to forge alliances with like-minded states committed to navigating the great transformations of our age. The relationship between the U.S. and Sweden dates back to 1783 when Sweden became the first power in Europe to offer its friendship to the United States. Over the course of the ensuing centuries, this bilateral spirit of amity and commerce has not only endured but thrived, with the countries being closely aligned on the issues steering our world into the future - digitalization, the green transition, and life science innovation. The relationship is a stand-out example of global cooperation and progress in an interconnected world.
The increase in Foreign Direct Investments between the United States and Sweden underscores this dynamic economic collaboration. Recent data shows substantial growth of U.S. FDI to Sweden — a nearly threefold increase between 2021 and 2022, jumping from $16 billion to $47 billion. Cumulatively, the FDI flows between the two countries amount to $118 billion. This flourishing investment climate shows financial backing of the shared values that underpin the relationship. Moreover, the United States and Sweden are number two and three respectively in the Global Innovation Index, leading to robust commitments in sustainability, digitalization and life science development.
Sweden placed second in the UN Sustainable Development Report, and is at the forefront of green development. The Sweden - U.S. Green Transition Initiative, a joint effort of several Swedish state agencies and the Embassy of Sweden in Washington D.C. aims to foster Swedish-American partnership on sustainability. By strengthening research and development, promoting innovation, and enhancing trade, the project seeks to establish Sweden as a pivotal partner in the U.S. green transition and to cultivate an innovative environment that shares new green technologies and climate solutions worldwide. Business collaboration between American and Swedish enterprises is crucial for the initiative, facilitating knowledge sharing and increased access to novel technologies in industries such as renewable energy, green buildings, and electromobility.
Notably, the American Chamber of Commerce in Sweden’s Bright Green Summit, which kicks off in November, highlights opportunities and serves as a platform to collaborate across industries, governments, academia, and society to provide the education, policies, products, and services necessary to combat climate change on a global scale.
Digitalization offers enormous potential as well, with Sweden having one of the most advanced digital economies in the EU. Sweden is committed to leveraging the opportunities offered by technological innovation and fostering a digital-friendly environment, enabling new and groundbreaking solutions across many industries. To realize these ambitions, fostering an innovation-friendly environment must be a top priority for policymakers in Sweden and at the EU level. Currently, some cutting-edge digitization initiatives are hindered by a lack of regulatory clarity in Sweden. What is more, the introduction of non-tariff barriers to trade on certain aspects of digitization harms EU competitiveness and unfairly disadvantages foreign investors. Ultimately this slows digitalization and denies access to cutting-edge solutions and life-saving treatments to consumers and patients alike.
The potential economic and innovative gains that could be achieved through the liberalization of digital policy on the EU level would have a meaningful impact on the technology and life science sectors. These industries are characterized by their pioneering research and development efforts in areas such as pharmaceuticals, medical devices, and biotechnology. Streamlined and freer access to data could significantly improve real-world outcomes for patients while removing regulatory red tape to facilitate the timely development of cutting-edge treatments. This, in turn, would further ensure the leading position of Sweden as a life science nation.
Sweden’s strong economic partnership with the U.S. stands as a testament to the development of broader political and technological cooperation between the two nations. By going from strength to strength, the trade relationship between the U.S. and Sweden has proven to be a model for the future of bilateral trade partnerships - innovative, green, and collaborative. However, navigating the policy landscape of these issues can be challenging. American businesses present in the Swedish market should seize this moment and make their voices heard, including by engaging with a trade association such as the American Chamber of Commerce in Sweden.
Ada Komorniczak contributed to this article