Response to interpellation 2023/24:176 on conditions for high-innovation companies to grow and scale up
Translated from Swedish by AI; the translation may contain errors. The Swedish text is the original.
Summary AI, written in advance
The debate concerns the conditions for highly innovative companies to grow and scale up. KD argues that research and innovation are central to Sweden's competitiveness 1 and advocates for an offensive simplification agenda to reduce the regulatory burden 1. KD wants to strengthen the engineering nation through expanded education, increased compensation amounts 1 2 as well as an extended experts' tax and a review of the 3:12 rules 1. KD considers the change of Vinnova to be a purification of the agency's mandate 3. S argues that the government lacks a plan for startups in a global market 4 and that cuts to Vinnova harm innovative development 4 5 6. S wants a specific strategy for startups 4 5.
Written by AI in advance and may contain errors. The numbers lead to the speech a statement builds on; check against the text below.
Energi- och näringsministern Ebba Busch (KD)
Mr. Speaker! Daniel Vencu Velasquez Castro has asked me what measures the government and I are taking to strengthen the startup scene in Sweden, as well as what measures the government and I are taking so that more highly innovative companies can grow and scale up.
Research and innovation that lead to growth, in both established and startup companies, is central to Sweden's long-term competitiveness, for jobs, for our welfare and for the green transition, but also for Sweden's independence and self-sufficiency. The Government works both generally and specifically to promote this.
The Government is carrying out active work to improve general business and simplification policy for the competitiveness of all Swedish companies and to reduce companies' regulatory burden and administration. Companies' costs have increased over time. Tillväxtverket estimated the companies' total regulatory cost during 2021 to be 377.5 billion kronor. It is a problematic development. To break the trend and reduce costs, the Government is pursuing an offensive simplification agenda. In the budget bill for 2024, the Government has, among other things, proposed a reinforcement of the company portal verksamt.se as well as the establishment of a simplification council that complements the previously announced implementation council.
In the budget bill for 2024, the government also proposes several different initiatives for education and research that shall strengthen the engineering nation Sweden and meet the great competence needs - not least among highly innovative companies. This includes, among other things, an expansion of the civil engineering programs and an increase in the compensation amounts for education within natural sciences and technology, for without knowledge there is no innovation.
Highly innovative companies are also dependent on being able to attract and retain the international key expertise needed for them to be able to develop and grow in Sweden. The Government is therefore putting forward a proposal to extend the expert tax from five to seven years. The Government has also decided on a supplementary directive to the Committee on Simplified Taxation of Owners of Small Companies, which means that the so-called 3:12 rules shall be reviewed. The purpose is for the rules on so-called qualified employee options to become more effective and thereby facilitate for companies to attract key expertise. Furthermore, an investigation has been commissioned for the purpose of reviewing the reduction of the employer contributions and the general wage contribution for persons working with research or development, i.e., the R&D deduction. The investigation shall also consider further tax reliefs for foreign experts, researchers or other key persons, what is sometimes called the expert tax rules.
As part of the work to develop the conditions for innovative companies to grow in Europe, Vinnova is now joining as Sweden's representative in ESNA, Europe Startup Nations Alliance. Through ESNA, Sweden can contribute to strengthening the conditions for entrepreneurs at a European level.
Startups and scaleups are an important target group for the government's initiative on defense innovation, an innovation program that utilizes civil-military synergies. As a member of Nato, Sweden also intends to contribute to the NATO Innovation Fund, NIF, to strengthen investments in startup companies.
Already today, there is a well-functioning public ecosystem where innovation offices, incubators, growth funding from Vinnova, Almi and Saminvest's funds, together with collaborative initiatives for innovation and a number of private initiatives, contribute to a well-functioning whole in the support for highly innovative companies, from research to growth.
Through the EU SME Support service, which targets small and medium-sized enterprises and is funded by Tillväxtverket, Vinnova and Energimyndigheten, highly innovative companies across the country can also receive advice and assistance in applying for EU funding.
Daniel Vencu Velasquez Castro (S)
Mr. Speaker! I understand it as the government making the assessment that startups and scaleups are important companies for Sweden's competitiveness. Minister Busch describes in his response the investments the government is making to promote the establishment of more highly innovative companies in Sweden.
It may sound like the government is doing a lot to ensure that more startups establish themselves in Sweden, but the fact is that the government does not have any real plan for how to facilitate for these companies to operate on a global market from the Swedish market.
I would like to give a general picture of the situation, Mr. Speaker. Right now, Sweden is one of the world's leading countries when it comes to innovations that contribute to a greener future with better economic conditions. Startups and scaleups are participating and contributing to the green transition and have the potential to create thousands of jobs in Sweden.
Other countries have understood this. If we do not act, we risk falling behind, because behind all the words about investments that we just heard the Minister for Energy and Business provide an account of, we find almost no investments in money.
That the government chooses to devote much time to regulatory simplification shows that the government lumps startups and scaleups together with other companies. I am not saying that startups and scaleups do not want regulatory improvements. That is something that Swedish Incubators & Science Parks describe in their reports, but in a situation where the government is making cuts to Vinnova which in the highest degree directly affect these companies, a regulatory simplification council is a small consolation.
If one takes note of the reports that have come from, among others, Swedish Incubators & Science Parks regarding the situation for startups and scaleups, one sees that central parts such as knowledge, competence, contacts and capital do not function well in Sweden today, which in the long term creates a competitive disadvantage for Swedish startups and scaleups.
In Sweden, many incubators and science parks have been able to develop, provide support for startups and act as a catalyst for highly innovative companies. Many of these have been funded or co-funded by Vinnova. Through various state supports and capital, the state has, together with the business sector, worked for Swedish innovation.
Mr. Speaker! The national incubator program is a program that has existed since 2003 and is funded by Vinnova and regional actors. Companies that have been or currently are connected to excellence incubators employ around 20,000 people in Sweden today and have a turnover between 25 and 30 billion. It is a program that has delivered results.
In Spain, the social democratic Prime Minister introduced a startup law that addresses the situation for startups and scaleups in the country and thereby facilitates these companies and strengthens Spanish competitiveness.
In France, we have French Tech, which also provides active support to startups working in line with the French innovation strategy. It is a strategy that we in Sweden also need, Ebba Busch.
That the government, in that situation, reduces the appropriations to Vinnova and does not present concrete measures for how it intends to promote the establishment of startups and scaleups in Sweden and ensure that more companies can grow and scale up is worrying, Mr. Speaker.
I do not want to see Swedish competitiveness deteriorate, and I am sure that Ebba Busch does not either. She is aware of how much is at stake, especially regarding the green transition.
Then my question is how the Minister can be comfortable with the cuts to the agency Vinnova that have been presented in a situation where the agency's commitment was needed most of all. Will there be a strategy for how we are to work with startups and scaleups in Sweden? Is the Minister open to introducing a cooperation program based solely on the situation for startups and scaleups? And can the Minister imagine taking inspiration from other countries, France and Spain to name just a couple, to facilitate the establishment of precisely startups and ensure that more companies grow and scale up?
Energi- och näringsministern Ebba Busch (KD)
Mr. Speaker! Thank you, the member, for the follow-up questions! I appreciate this interpellation debate very much. It is important in substance; innovation is one of the most important things we have. The reason that Sweden has been able to stand so strong in an international context, despite that we are a relatively small country - we are not that many inhabitants - in the absolute northernmost part of Europe, is that we are a hard-working, curious people, who have pushed ourselves forward by inventing completely new solutions when we have encountered problems. We have not given up, and diligence has paid off in our country.
I believe that these are fundamental values that we need to safeguard, especially in a rather difficult, polarized time and after many years when it has been unclear whether we can speak of a "we" and of something that is clearly Swedish and associated with Sweden. But if one looks at our entrepreneurs and not least our innovative power, one sees that we can definitely do it.
We therefore fully share the ambition to take advantage of this. I also appreciate that the member sees that the general business policy and the general regulatory simplifications provide the basic ground for all companies, especially scaleups and fast-growing and highly innovative companies. I mean that the government points to several very concrete measures that are specifically aimed at this type of company. The member and I also share the view that a somewhat special ground is required here for us to be able to hold our own internationally.
When it comes to, for example, the issue of knowledge and competence, which Vencu Velasquez Castro raises, Sweden has just presented a strategy for foreign trade, investments, and global competitiveness. In BP24, the budget bill for next year, we are investing money so that the authorities shall coordinate and contribute to competent people coming to Sweden and also choosing to stay. Against this background, I foresee that there will be further measures and decisions.
When it comes to the engineering nation Sweden, the government is consolidating efforts to strengthen it. For 2024, 3 million kronor are allocated for reinforced and continued support for the initiative Tekniksprånget. The state grant for a fourth technical year in upper secondary school is also reinforced for 2024 and 2025. We are expanding the civil engineering programs and increasing the compensation amount for education within natural sciences and technology.
The expert tax, as I have already mentioned, enables those companies that are truly at the forefront to have the right competence on site. We have also heard many of these very companies testify about the problems with long processing times at the Swedish Migration Agency, something that my State Secretary colleague Malmer Stenergard is working very actively on.
In addition, we propose a targeted initiative to expand specifically the civil engineering programs during the coming years. It is an initiative of approximately 100 million kronor, including student grants, to permanently expand education at an advanced level at several universities.
As for Vinnova, that perhaps warrants its own discussion. I have answered questions about this several times in this chamber, Mr. Speaker. Vinnova needs to prioritize in tough times, just like everyone else. But we are making a clear prioritization by allocating several hundred million for activities corresponding to Vinnova's but directed towards defense and innovation that can be used both in the civil and the military sectors. We mean that we have a clear plan so that heavy cuts do not need to occur in Vinnova's core area.
Daniel Vencu Velasquez Castro (S)
Mr. Speaker! I want to first address this by saying that we are a curious people - I agree. We have always been a curious people looking for new innovations to stand strong in a global market. I would say that the reason we can stand strong is also that we have had a sound distribution policy in Sweden as well as a strong welfare state, which has ensured that every working youth can also become an academic.
When it comes to the concrete measures that the government and Ebba Busch describe, I can only state that a fairly large cut is being made to Vinnova. Just because one says that it is an investment does not mean that it is an investment. This government has given several examples of this.
Even though the government seems determined, reality speaks a different language. Sweden's startup scene is stagnating, and if the government does not act, Sweden will no longer be a pioneer country known for its green innovations and highly innovative companies that contribute to the climate transition that the whole world needs to carry out. Ebba Busch is aware of how important it is for Swedish competitiveness that these companies continue to grow in Sweden, and a clear direction is then needed that addresses the challenges these companies face.
Mr. Speaker! I do not think I need to inform the Minister of the situation Sweden finds itself in. We have a faltering economy and rising unemployment, and right now there is a global race for green innovations. The former problems can be solved with the green transition, but it is urgent for the government to act. This is also the reason why country after country is investing enormous amounts of money and resources so that these companies can compete on a global market so that the home country does not become import-dependent when it comes to the software and hardware of the future.
Reports show that up to 30,000 new jobs can be created in Sweden in the next ten years solely through these highly innovative companies. Many have the potential to grow significantly, and then even more jobs will come to Sweden. Sweden's GDP is predicted to increase by at least 145 billion just through continued development of the startup scene. These are staggering figures, Mr. Speaker. The Government should to the highest degree take them into account and try to create the conditions to realize them.
For this to happen, the state's active work and commitment is required; it is crucial, I would like to assert. State support is needed, Mr. Speaker - one simply cannot get around it. It is clear that one can be critical of state support. We in Sweden have generally been a bit more critical of state support than other EU countries. But right now, one risks losing everything.
In this situation, one chooses to cut back on agencies generally and particularly on Vinnova, which affects startups and scaleups. Strong competitiveness and transition do not happen by themselves; instead, it requires a government that understands the industry's needs and acts accordingly.
We have proposed an innovation strategy, a cooperation program for startups and scaleups, and a review of the possibilities for a national platform so that more highly innovative companies can grow and scale up. But what the government concretely proposes is nothing. It is cuts in area after area, and this affects innovative development. It is a bit like the government hopes that this with the green transition will solve itself. But it will not do that – that is not how it works. Therefore, the government now needs to develop measures so that we do not miss the chance to actually create the prosperity I believe we all want to create for Sweden.
Why is the government making these cuts? I don't quite understand it. Why does one not choose instead to invest in these companies, for example through more money so that more companies can join the excellence incubators that I spoke about in my previous post? When will the government come up with concrete investments to promote the establishment of startups and ensure that more can grow and scale up?
I do not feel that there are any answers to these questions. Ebba Busch is welcome to try to specify what she wants to do to ensure that it is Sweden that leads the green transition through the highly innovative companies and an active state. What does the Minister propose?
Energi- och näringsministern Ebba Busch (KD)
Mr. Speaker! Sweden thus has 7,792 tech startups and scaleups. They employ approximately 300,000 people. One can look at various rankings, for example, the Global Startup Ecosystem Ranking for 2023, which shows that Sweden is currently ranked at place 22 globally and place 5 in Europe. That is not bad, but it is not a ranking we should take for granted. Very many countries are now looking at what they should compete with and how they should ensure that these companies continue to invest, thrive, or be started in their countries.
If we look at the Startup Genome Scaleup Report, we see that Sweden, when it comes to scaleups, is ranked as number 16 in the world and number 6 in Europe. If we look at Stockholm specifically, we see that it is one of the most important hubs for deep tech in Europe, according to several internationally recognized reports. This is a position that is important to defend; it is an image we share. We do not, however, share the image that there should be cuts in area after area.
I mean that I have given a serious and well-founded explanation in several contexts regarding the change we have chosen to make to Vinnova. It is partly about purifying the agency's mandate but also about us making a major prioritization of several hundred million to FOI, which is responsible for much of that type of innovation that can be used both within the military and within the civil sector and which we think is more appropriate to have at home.
Mr. Speaker! I also recoil a bit from the sweeping description that we risk losing everything. I have quite recently returned home from COP 28 in Dubai and share the view that it is a tough situation. We must safeguard this, and Sweden risks being left behind on the platform when the green transition train departs if we do not have a clear competitive advantage.
We will discuss much more regarding energy policy here in the chamber later today, but it is one of our great competitive advantages. Innovation, curiosity, and the hard-working people in combination with a relatively fossil-free electricity system that can deliver enough electricity where it is needed when it is needed, i.e., enough power at sensible prices – that has been one of the great competitive advantages. Several of the real cutting-edge companies when it comes to scaleup and startup companies have benefited from this. It does not apply to all, because many of them are also dependent on us having good soil for the digital infrastructure, if I may put it a bit broadly.
The question was also raised whether we in the government are prepared to take inspiration from other countries. The answer to that question is yes. We will not roll out a massive state aid carpet. I have also not perceived that it is the Social Democrats' proposal in this situation. But when other countries do it, for example Germany, we need to look at what our competitive advantage will be.
I have given many concrete examples in this interpellation debate on what we actually do for competence, capital – I can return to this – and regulatory simplifications, but also for the possibility of landing correctly in the jungle of possible supports that can be obtained even here in Sweden, not least through our European cooperation.
Daniel Vencu Velasquez Castro (S)
Mr. Speaker! I would like to thank the Minister for the interpellation debate, but I am concerned about the answers I have received. I think they are too poor.
We have a world that literally has its foot on the gas pedal and is accelerating towards the green transition by, among other things, investing in the highly innovative companies. But why are countries investing in just these companies? Well, because that is where the future's prosperity lies. The countries that realize the importance of innovation and green industry will get the future's jobs and see their prosperity increase.
One cannot ignore the fact that, in practice, the necessary investments are not being made to facilitate these companies' establishment in Sweden. One also cannot ignore that large parts of the government base are strongly critical of state aid as a whole. This affects Swedish innovation. I believe this is exemplified most clearly in the cuts we are now seeing at Vinnova.
Mr. Speaker! If nothing is done, I fear that this government and Ebba Busch have begun Sweden's journey towards a technological and innovative third-world country. It is quick to destroy something that is good.
To Aftonbladet, Ebba Busch says that she wants to see massive investments in Sweden, and she opens up for loan financing. But in reality, it is cuts in sector after sector, and that is not investing. We have experience of what usually happens with Ebba Busch's election promises, Mr. Speaker.
Yesterday, the Minister was at the Nobel dinner, which must have been very pleasant. But in reality, Ebba Busch is reducing the investments in and the appropriations for precisely research and innovation. Then we move further away from a Swede being able to receive that prestigious prize.
Mr. Speaker! I believe that Ebba Busch can do better, and I know that Sweden can do better. It is time for Ebba Busch to answer how she intends to create new and correct conditions for highly innovative companies to establish themselves and grow in Sweden. It is a question of a Sweden that stands strong in a restless time and emerges as a winner from the many crises we see today.
Energi- och näringsministern Ebba Busch (KD)
Mr. Speaker! I too would like to begin my concluding remarks by thanking Daniel Vencu Velasquez Castro for this interpellation. We touched upon this subject in another interpellation together with several other issues and concluded then that this deserves its own interpellation. I am very pleased that we were given the opportunity to have this interpellation debate before Christmas.
It is true that Sweden yesterday celebrated the best that humanity has achieved within various sciences. It was truly a day of celebration to honor precisely the power of innovation. In difficult and restless times with many clouds of worry in the sky, I believe it is important for hope and for us to have the strength to work for a better tomorrow to see that we humans can solve incredibly difficult problems when we make up our minds and put our backs into it. Several of the major awards handed out yesterday were precisely a testament to this and to the possibility of creating a better future.
My perception is that Daniel Vencu Velasquez Castro and I will not share the view on whether we make cuts or not. We may perhaps have some kind of numerical table exercise at some point.
I support that we carry out a reprioritization of Vinnova's activities, and I have also justified that well. I am happy to take on more challenges regarding other countries that are better off than Sweden. But we are currently very high in the rankings. We want to defend that position with general regulatory simplifications, a substantial expansion of vocational training and civil engineering programs, more favorable taxes that hit exactly this type of company, and an electricity system that allows us to continue to compete on the global market and see more Swedish Nobel Prize winners in the future.
Source: The Swedish Parliament. The speeches come from the open data of the Riksdag, translated into English by AI, which may contain errors.