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 (2022) 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. The GDP in 2022 was worth $585.94 billion which is expected to go well over $600 billion by the end of 2025 (Trading Economics, 2023).
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 (Swedish Institute, 2023).
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, 2023).
Swedish culture is a unique blend of traditions, customs, and modern influences. The culture is deeply rooted in the ancient Viking traditions, which are still evident in the country’s folklore, music, and festivals. The Swedes are known for their love of nature, simplicity, and sustainability, which is reflected in their lifestyle and traditions.
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 (Swedish Institute, 2023).
Swedish cuisine is a delightful mix of traditional dishes and modern culinary innovations. At the heart of Swedish cuisine is the concept of ‘husmanskost,’ or home-cooked food. This typically involves simple, hearty dishes made with local ingredients, such as potatoes, fish, and dairy products.
However, there are a number of challenges facing Sweden today. According to Statista (2023) some of the key social concerns for the people in Sweden are immigration, health care, school/education, welfare, elderly care, and equality.
Sweden has also been dealing with issues related to income inequality and social exclusion. Despite its robust welfare system and high levels of social security, disparities in income and living standards persist, especially among the immigrant population and other marginalised groups.
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.
Intolerance towards religions in general has also risen recently. Despite these challenges, Sweden continues to be a progressive society, constantly working towards finding solutions to these issues. Its commitment to social justice, equality, and human rights remains unwavering, making it a global model for social progress and inclusivity.
Technological forces that affect Sweden
Technology is another important part in this PESTEL analysis of 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, 2023). 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
Legal environment is the final component of this PESTEL analysis of 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 Sweden encourages foreign investment, it takes serious actions when it comes to its security. For instance, it banned Chinese telecoms groups Huawei and ZTE from its 5G mobile networks (Milne, 2020).
The Swedish legal system is based on the principle of ‘jämlikhet,’ or equality before the law. This means that everyone, regardless of their background or status, has the same rights and obligations under Swedish law.
Sweden has stringent environmental laws and is a global leader in sustainability. However, balancing economic development with environmental protection remains a legal and policy challenge.
Conclusion: PESTEL analysis of Sweden
To conclude, Sweden is a country that stands tall on the pillars of equality, freedom, and mutual respect. These values that have shaped its unique and progressive culture. The country is known for its high living standards and strong emphasis on human rights, making it one of the most desirable places to live in the world. However, as discussed above, it is not without certain challenges.
Last update: 02 September 2023
BBC (2023) Sweden country profile, available at: https://www.bbc.co.uk/news/world-europe-17955808 (accessed 01 September 2023)
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 02 September 2023)
Statista (2022) 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 02 September 2023)
Swedish Institute (2023) 10 world shaping Swedish companies, available at: https://sweden.se/business/10-world-shaping-swedish-companies/ (accessed 02 September 2023)
Trading Economics (2023) Sweden GDP, available at: https://tradingeconomics.com/sweden/gdp (accessed 02 September 2023)
Author: M Rahman
M Rahman writes extensively online and offline with an emphasis on business management, marketing, and tourism. He is a lecturer in Management and Marketing. He holds an MSc in Tourism & Hospitality from the University of Sunderland. Also, graduated from Leeds Metropolitan University with a BA in Business & Management Studies and completed a DTLLS (Diploma in Teaching in the Life-Long Learning Sector) from London South Bank University.