Experts say Sweden’s efforts to attract international talent are severely lacking

Sweden is home to a robust and established entrepreneurial ecosystem. However, many experts and business leaders say more investment needs to be made to attract international talent, and pathways must be improved to keep them here.

Matija Milenovic was finishing his studies in mechanical engineering at University College Dublin in early 2018 when he saw SpaceX land two of its Falcon Heavy booster rockets for the first time.

“My jaw dropped,” Milenovic said. “I immediately knew this is what I needed to do.”

Immediately after that SpaceX mission, the Irish student started searching for aerospace masters programs in Europe. He said KTH Royal Institute of Technology in Stockholm was one of the first, and best, choices that popped up.

“I applied, got in, started my masters, and within six months we had started Porkchop,” Milenovic said.

Teamed up with Elon Musk project

Porkchop is a Stockholm-based space logistics startup, focusing on servicing satellites. The team wants to help deliver and inspect satellites, and launch mega-constellation satellites into orbit faster and cheaper.

The company has already put hardware into space. In January, Porkchop teamed up with SpaceX to launch a scaled-down version of their proprietary thrusters into orbit on a Falcon 9 mission.

“Things moved pretty fast,” Milenovic said as he chuckled.

It wasn’t always smooth sailing for the company though. Milenovic’s journey immigrating to Sweden and launching Porkchop via his EU connection was “like a walk in the park,” he told me. The path of his co-founder, Victor Gonzalez, has been “like walking over hot coals in your bare feet.”

Gonzalez is originally from Mexico, and received a scholarship to study at KTH in Stockholm as well. Milenovic and Gonzalez met through their masters program.

“He doesn’t have EU citizenship. I would say it’s probably easier to swim away from a shark, while juggling a hundred million things, and going through a ring of fire, than it is to go through all of the paperwork necessary to get a work permit in Sweden,” Milenovic said.

Milenovic said the permit process consumed a ton of extra company time, money and energy when compared to hiring people who hold EU residency or already have work permits.

“Frankly it’s a miracle that we’re still alive despite all of those things,” Milenovic said. “The whole system is fundamentally flawed, and it really hinders a lot of people.”

“Don’t see any enthusiasm to attract more immigrant entrepreneurs”

The Swedish government overhauled its labor migration policy more than a decade ago, and began allowing immigrants to move to Sweden for entrepreneurship. However, research shows that even after the changes in 2008, most immigrant entrepreneurs obtain residence permits in Sweden for other reasons – like family unification – and not to start their own business.

“There are many other factors, laws and trends that happened [since 2008], like the refugee crisis of 2015,” Aliaksei Kazlou, a professor at Linköping University, said.

Kazlou researches immigrant entrepreneurship in Sweden, establishment of immigrants on the Swedish labor market, and policy changes.

“For now, I don’t see any enthusiasm from the government to attract more immigrant entrepreneurs, maybe they just want to integrate the entrepreneurs who already came to Sweden,” Kazlou said. “But I’m not sure it’s so attractive for others who might be coming from abroad.”

No national plan to attract international talent

Sweden has no strategy to attract international talent, and there is no official coordination structure to tackle the problem, according to a government commissioned report this year.

The report outlines how Sweden’s national efforts to attract labor are severely lacking when compared to neighboring countries. Many European countries are investing significantly more resources than Sweden to attract skilled labor.

In neighboring Finland, a country with a little more than half of Sweden’s population, the government is investing SEK 150 million this year for international skills attraction under its national Talent Boost program. The Swedish government currently invests about SEK 10 million annually to attract international labor, with a majority of the financing being temporary.

Some of that funding goes to Vinnova, the Swedish Innovation Agency and Business Sweden —the national trade and investment promotion agency. It’s a semi-state owned group between the government and business community.

“A lot of international talent, scale-ups, entrepreneurs and investors want to be in Sweden or in the Nordics,” Business Sweden’s Head of Talent Attraction Initiative Marie Claire Maxwell said. “For many reasons, whether it be work-life balance, or impact related. The entire tech and startup system here has become way more international.”

The business leaders interviewed for the government commissioned report indicate Business Sweden could be one of the organizations to take a leading role in the coordination and development of international talent attraction.

In 2020, the government commissioned Vinnova and Business Sweden to help attract foreign talent and entrepreneurs to Sweden in a pilot project. The organization was also asked to address investment barriers in the country.

Challenges with attracting the right skills

“A sluggishness in the work permit and relocation process entails challenges in attracting the right skills and talent within Sweden and abroad,” Business Sweden’s management said in the report. “The difficulty of obtaining a Swedish personal identity number and BankID with long processing times is an investment obstacle.”

Porkchop CEO Matija Milevonic said he’s spoken with people who’ve asked him for advice on moving to Sweden, setting up a company, and getting those work permits.

“It is actually a deal-breaker for some people,” Milenovic said. “There are a lot of smart people out there who could bring so much value to Sweden, and they’re being kept out for stupid reasons.”

Marie Claire Maxwell with Business Sweden said despite current administrative challenges, there have been major improvements over the last couple of decades to make it easier for immigrants wanting to launch their own startup.

Swedish companies also remain in need of large amounts of skilled labor in order to properly scale up.

“I think the talent issue, or competence, is on top of everyone’s mind,” Maxwell said. “When we have the election year, it will be even more important to discuss.”

Last year, Business Sweden helped launch Sweden Tech Ecosystem, a platform for information about startups and scale-ups. The database is free and open to everyone, and aims to help connect job-seeking talent with entrepreneurs and founders in addition to matching investors with startups. More than 5,800 startups are listed on the site.

Lack of long-term perspective

Good initiatives like Sweden Tech Ecosystem are available, but the report states many are often time-limited assignments or projects. The study concludes there is “no holistic approach” and a “lack of long-term perspective and continuity in the work with talent attract and reception of labor from abroad.”

“The fact that we have realized we need a national strategy, mapped out who the actors are, and who could be responsible will hopefully put light on the situation,” Maxwell said. “Otherwise, the talent may go elsewhere in Europe. I think the need for a Swedish and Nordic voice is very important.”

Milenovic said he hopes the issue is addressed and improved sooner rather than later.

“I don’t want to paint a bad picture of Sweden, because it is a good place, and I could not have achieved what I have achieved if I hadn’t come to Sweden,” Milenovic said, mentioning Sweden’s established entrepreneurial ecosystem. “But Sweden is really shooting themselves in the foot with some of the basics.”

This article was written by Techarenan as a collaboration with The Local Sweden, which covers Swedish news in English.