PESTEL analysis of Sweden (Sweden country profile)

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PESTEL analysis of Sweden  

This article ‘PESTEL analysis of Sweden’ aims to identify and evaluate some of the key factors that affect Sweden today and may continue to do so in the future. Sweden is a highly developed, beautiful, and wonderful country to live. It is officially known as the Kingdom of Sweden.

Political forces that affect Sweden

Sweden is a constitutional monarchy. It is indeed one of the oldest monarchies in the world. The monarch is the head of state; however, performs mostly ceremonial duties. The head of government is the prime minister. The Social Democrats, Green Party, Moderate Party, Centre Party, New Democracy, Liberal People’s Party, Christian Democrats and Left Party are some of the key political parties in the country.

Sweden is a member of the European Union and the WTO. It is well-known for its peacetime non-alignment and wartime neutrality foreign policies. It is indeed one of the most pacifist countries in the world. Its political stability is very good and conducive to smooth running of business operations. However, many people are concerned about crime and law and order issues. According to Statista (2020) law and order is a key concern, while immigration is the top socio-political concern in the country.

Economic forces that affect Sweden

Sweden is one of the richest countries in the world in terms of GDP per capita. It has an export-oriented mixed economy and its GDP in 2019 was worth $530.83 billion (Trading Economics, 2020). The year 2020 was tough; however, the GDP is expected to reach $575.00 billion by the end of 2022.

Sweden has low public debt compared to many advanced countries in the world. Its key industries are agriculture, manufacturing, telecommunications, pharmaceuticals, tourism, and finance. Assa Abloy, Electrolux, Ericsson, Essity, H&M, IKEA, Skanska, Spotify, Vattenfall, and Volvo are some of the top Swedish companies that have greatly influenced consumer behaviour around the world (Åkerström, 2020).

Sweden offers a competitive market environment and a skilled labour-force. However, unemployment, particularly youth unemployment is a problem for the country. Likewise, falling tax revenues may cause large deficits in public finances in many years to come.

Social forces that affect Sweden

The third element to discuss in the PESTEL analysis of Sweden is the country’s social environment. Sweden is a very rich country, and its people enjoy an advanced welfare, and good quality health care system. The standard of living is high and life expectancy of both men and women are among the highest in the world (BBC, 2018). Swedes drink coffee heavily and observe a number of special days every year to celebrate foods! It is worth mentioning that many shops, and restaurants are closed in July when their employees take annual holiday (Åkerström, 2020).

However, there are a number of challenges facing Sweden today. According to Statista (2020) some of the key social concerns for the people in Sweden are immigration, health care, school/education, welfare, elderly care, and equality. Compared to many countries in the EU, Sweden has taken in far more migrants. However, public services have come under added pressures and because of this, hostility towards migrants has increased as well.

Technological forces that affect Sweden

Sweden is a country with many ambitious entrepreneurs. Particularly, Stockholm is the birthplace for many world-renowned unicorns. A unicorn is a start-up company which is worth more than $1 billion. Like Stockholm, Gothenburg, Luleå, and Malmö are also attracting a huge number of digital entrepreneurs. Needless to state that new technologies and biotechnology sectors contribute significantly to the Swedish economy.

Sweden invests 3% of its GDP in research and development which is impressive. Many of its companies and researchers are well-versed in green technology and life sciences (Swedish Institute, 2021). The government is particularly focused on artificial intelligence. However, the country’s IT sector faces skills shortage. There are growing demands for people with specialist tech knowledge and skills such as software development and systems engineering.

Environmental forces that affect Sweden

Breath taking Northern lights, stunning palaces, museums, national parks, winter sports, green spaces, coffee and food culture, ice hotels, distinctive seasons, and many more make Sweden a great place to visit. It is certainly one of the most sustainable countries in the world; however, over consumption of natural resources, goods, and hazardous substances has negative impacts on the environment.

Legal forces that affect Sweden

The Swedish judiciary is independent and is not influenced by political pressures. The country has a written constitution and has walked a long way in the field of equality. While it encourages foreign investment, it takes serios actions when it comes to its security. For instance, it banned Chinese telecoms groups Huawei and ZTE from its 5G mobile networks (Milne, 2020).

We hope the article ‘PESTEL analysis of Sweden’ has been useful. You may also like reading PESTEL analysis of Ireland and PESTEL analysis of France. Other relevant articles for you are:

PESTEL analysis of the Netherlands

PESTL analysis of Norway

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Last update: 02 January 2021

Further reading/references

Åkerström, L. (2020) 10 world shaping Swedish companies, available at: https://sweden.se/business/10-world-shaping-swedish-companies/ (accessed 20 December 2020)

BBC (2018) Sweden country profile, available at: https://www.bbc.co.uk/news/world-europe-17955808 (accessed 22 December 2020)

Milne, R. (2020) Sweden bans Huawei and ZTE from 5G telecoms networks, available at: https://www.ft.com/content/3933d9f9-b466-4d1e-8067-ef3c7a8b01f4 (accessed 21 December 2020)

Statista (2020) Which political or social issue is most important to you in the Swedish election 2018?, available at: https://www.statista.com/statistics/910940/swedes-most-important-political-issues-in-the-election/ (accessed 23 December 2020)

Swedish Institute (2021) Innovation in Sweden, available at: https://sweden.se/business/innovation-in-sweden/ (accessed 01 January 2021)

Trading Economics (2020) Sweden GDP, available at: https://tradingeconomics.com/sweden/gdp (accessed 23 December 2020)

Author: Joe David

Joe David has years of teaching experience both in the UK and abroad. He writes regularly online on a variety of topics. He has a keen interest in business, hospitality, and tourism management. He holds a Postgraduate Diploma in Management Studies and a Post Graduate Diploma in Marketing Management.