By the GEM Sweden National Team at the Swedish Entrepreneurship Forum
It might come as a surprise to you that there was a 30 percent fall in women’s entrepreneurship in Sweden between 2017 and 2018. Total early-stage entrepreneurial activity (the percentage of the 18-64 population who are either a nascent entrepreneur or owner-manager of a new business) for women fell from approximately six to four percent. Entrepreneurship among men increased, but not enough to counteract the total decline in Swedish entrepreneurship. This was among the findings from our just released GEM Sweden National Report.
The disturbing decline in female entrepreneurship coincided with a tense policy discussion prior to the 2018 general election on profit restrictions in private welfare sectors such as healthcare and school, industries in which women in Sweden tend to be well-represented, both as employees and as entrepreneurs. The political uncertainty that these sectors faced during the election most likely meant that a large number of women refrained from starting a business in 2018.
Not only does this inflict costs on Swedish society in the form of tax revenue loss, but it also brings negative effects for the individual as alternative means of livelihood are closed. Women’s entrepreneurship should never be unnecessarily discouraged. A policy to increase women's entrepreneurship must work on two levels: one is to strengthen female identification with the entrepreneur and secondly to improve the regulatory and economic framework in industries where women are most active.
Growth and Attitudes
On the positive side, our research showed that there was an increase in the number of entrepreneurs in Sweden who say they are planning to hire 20 or more people. In previous years, Sweden saw a decline in the number of companies with expansive growth plans. This year, however, the negative trend reversed as seven percent of all entrepreneurs claim that they will hire 20 or more people during the next five years. In comparison, only five percent said they were planning to expand significantly in 2017.
For several years, Sweden had a high number of people who say they can identify business opportunities. The positive trend has continued as in 2018 a staggering 80 percent of the Swedish population say that they can identify opportunities to start businesses. From 2011 to 2013, entrepreneurship also developed positively in Sweden. This period was characterized by significant changes in economic policy to facilitate entrepreneurship. At the same time, a number of very successful Swedish entrepreneur-driven companies were established.
After 2013, the level of entrepreneurship has fluctuated slightly over the years and is below average for high-income countries. This indicates that overall framework conditions for entrepreneurship need to be strengthened. A possible cause for the decline is that the risk of starting a business is outweighed by any benefits (financial and other) compared to being employed. However, another reason could be a lack of confidence in one's own ability to run a business. Here, too, the trend has been negative during almost the entire period measured - and although a cautious turn can be noted in 2018 - Sweden is almost 20 percentage points below the US. Sweden and the US represent two extremes: Swedes appear to be by far the best at identifying business opportunities, but lack the confidence to start and run businesses while the reverse applies to Americans.
The Swedish Gig Economy
Our report highlighted some interesting takeaways as it relates to the gig and sharing economy. Among men in the 18-64 age group, 11 percent have experience in the gig / sharing economy (six percentage points in this group are made up of the gig economy alone). Women follow the previously reported pattern with an overall lower percentage of entrepreneurs - about six percent - that have experience in the gig / sharing economy (of which about 3.5 percentage points are made up of the gig economy alone).
There is a remarkably large proportion of younger individuals who are in some way involved in the gig and sharing economy compared to older age groups. About 19 percent of the 18 to 24-year group has experience in the gig and sharing economy. In the next age group (25-34 years), the proportion is almost half this number at 10 percent. There is another reduction of about half for the next age group. The decrease then continues with each increasing age bracket, eventually reaching about four percent in the 55-64 age group.
The results also show that individuals who participate in the gig economy often have a significantly higher ambition to start a business within three years compared to those individuals who are not part of the gig economy. Gig workers constitute an interesting pool of potential future entrepreneurs and these individuals should be encouraged to use their initial gigs to flourish in the future.
Members of the Swedish Gem team 2019 are Pontus Braunerhjelm, research leader at the Swedish Entrepreneurship Forum and professor at the Royal Institute of Technology and Blekinge Institute of Technology; Martin Svensson, assistant professor at the Blekinge Institute of Technology; Marcus Larsson, Project Manager for the Swedish Entrepreneurship Forum; Dr. Per Thulin, Royal Institute of Technology and Swedish Entrepreneurship Forum; and Carin Holmquist, professor at the Stockholm School of Economics.
Learn more about the Swedish Entrepreneurship Forum.