Sweden Economy International Business: Sweden the World

¶ … Sweden Economy

International business: Sweden

The world economic powers have controlled the world economies for the longest time. Sweden is a remarkably small nation, yet it has developed to become among the best and wealth endowed nations in the world. It is a historically established nation that has been existence as early as the 7th century. From these early centuries, Sweden has been known for the level of involvement and development in trade.

Geographic, demographic and natural resources information of Sweden

The geography of Sweden makes it a nation of envy by many others. Sweden has a small area of total coverage of about 449,964 sq km. The area that is dry land is about 410, 934 sq km, and the rest is water. This in comparison to the United States is just slightly larger than the state of California by about land total 2,233 km. Sweden has a coastline of 3,218 km and borders the nations of Finland and Norway. The terrain of the country is mainly flat with a few regions of gently sloping lowlands. Sweden has some few mountains in the western region of the state. The lowest summit is in the reclaimed bay of the lake Hammarsjon, located near Kristianstad and is about 2.41 m below the sea level (Phillips & National Geographic Society, 2009). The highest point is Kebnekaise with height of 2,111 m. The climate is largely cold with the north region being subarctic. The south experiences low temperatures, with cold and cloudy winters and partly cold, cloudy summers.

The demographic data released recently in the year 2010 shows that the population of the country is about 9,074,055 people. The age composition shows that the bulk of the population is between ages 15 to 64 years, this group making about 65.5% of the total population. The below 15 years age group is only 17.1% while that over 64 years is 17.4% of the population (Phillips & National Geographic Society, 2009). The median age of the whole inhabitants is 40.6 years, with the females living longer with a median age of 41.75 years compared to that of the males which stands at 39.49 Years. The population growth rate is about o.17%. The majority of the population above the 15 years can read and write, therefore, the population is highly educated.

The country is richly endowed in resources. Sweden has lots of wealth in terms of the natural resources. These natural resources include large deposits of iron core, lead, zinc, copper, silver, uranium, gold, tungsten, feldspar, timber, arsenic and hydropower (Phillips & National Geographic Society, 2009). This makes her a country of envy for many other nations. The transport systems include well developed and established road and railway systems. The water transport and air are her main contacts with the foreign nations other than the contact she has with Finland and Norway. Sweden is strategically located allowing her to have links with the outside world. The biggest challenge to all these transport systems is the ice flows. These significantly affect the rail, road, water and air transport systems when they start flowing, posing a lot of danger on these channels of transportation.

Political systems

Sweden has been a monarchy for the longest time. Over the past few years, specifically since the beginning of the 20th and 21st centuries, the political systems have gone through several reforms (Kent, 2008). These have seen the introduction of democracy and the institution of parliament in the country. Thus, the government is currently a parliamentary system, with division of power between the executive, judiciary and legislature. The people are democratically elected, but the leader of the majority in the parliament forms the government. Other free institutions such as churches, movements like the labor, temperance and women movements also were allowed.

In the early years, the 12th, 13th to 17th centuries, the political power weld was directly linked to the trade patterns of the nation (Kent, 2008). To have peace, the nation had joined in power unions with the surrounding nations to establish military powerhouse that allowed them to trade securely as there was adequate security. For instance, in the world wars period, Sweden did not have any affiliations; she remained neutral allowing her to maintain her relations with all nations even if they were both at war. She established several trade relations with most of the European countries, exporting her rich wealth of natural resources to those nations. Currently, she is a chief member of many trade unions including the European Union which she has produced the president of the union.

The economy of Sweden owes its success in the wise decision not to take part in the world wars. It also has roots in the rich natural resources that she is endowed. Traditionally, Sweden relied on the trade of her natural resources and products from her natural resources. The main industries were manufacturing industries, in which they used the raw materials from the rich natural resources to manufacture (Kent, 2008). However, in the recent years, she has developed more lucrative industries such as tourism and service providing industries. These have grown over the years to totally overtake the manufacturing industries by far. The country has an incredibly long history of entrepreneurship, as from the 13th century; all her economy was driven by trade and business ventures.

Current and recent economic and trade statistics

Today, Sweden is among the top ranking nations in terms of development and economic growth. The country is ranked at position 18 in being the freest economies to trade. The currency of the country is the Swedish Krona (SEK). The trade and economic indicators put her gross domestic product at 406072 million dollars in the year 2009; as compared to 370580 and 247259 million dollars in the year 2005 and 2000 respectively (Pyrko & Darby, 2011). The growth rate constant annual percentage was at -5.1 in 2009, as compared to 3.2 and 4.5 in 2005 and 2000 respectively. The exchange rates stand at 7.12 in 2009, 7.96 in 2005 and 9.54 in 2000 against the U.S. dollar. The consumer price index was at 115 in 2009, 108 in 2005 and 100 in 2000 whereas the industrial production index was at 85 in 2009, 100 in 2005 and 91 in 2002. All these trends in the trade sector of the nation show the strong rate at which Sweden trades. Sweden has invested in several industries and production units and is ripping the benefits. Her economy continues to stabilize and grow tremendously.

The main competitors of Sweden in the region are Denmark, Norway and Iceland. Some of the EU members also pose stiff competition against Sweden. Nonetheless, Sweden has continued to hold onto her competitive position in both the regional and the global economy (Pyrko & Darby, 2011). Several nations have tried to beat her economically, but her small seize allows her to efficiently manage her structures hence remaining in the forefront. Some of the factors that give her added advantage over her competitors include the adoption of new technological advancements, investing in innovativeness and competence. This has been the point that she has always used to beat her competitors, some of whom are much larger and endowed in resources than Sweden.

Existing trade relations and associations

The trade advisors of Sweden realize that the economy performs best in a free atmosphere for completion and cooperation with others. This has seen Sweden signing numerous trade deals with many nations, establishing especially significant trade relations (Pyrko & Darby, 2011). For instance, Sweden enjoys a strong bilateral relation with Canada. The two countries have depicted a lot of similarities in the interests of the nations' success. This has enabled them engage in trade deals that have seen them mutually benefit from each other. The two nations have even joined in mobilizing the polar region and the nations around to establish stronger trade relations.

Another significant trade partnership that Sweden has signed is that with her closest competitors and neighbors. Sweden established a deal to regulate the competition between her and Norway, Denmark and Iceland in the year 2001. This deal has seen Sweden thrive in the world markets as the policies that bind the competitive environment are effective. The nation of Sweden also has established other multilateral relations such as joining the European Union, and the World Trade Union among others (Pyrko & Darby, 2011). In addition to these trade relations, Sweden has also established general relations with scores of other countries within the world. This has seen her trade in these nations despite there being any formal trade agreements between the nations. The trade relationships have seen the country grow in trade to an extremely large extent. The returns are simply enormous; the nation is enjoying great benefits from these trade relations.

Leading companies

The leading industries in the economy of Sweden are the service industry, manufacturing industry, textile and assembly industries. The companies that have taken the forefront in the nation include, IKEA, H&M, Indiska, SCANIA, SKANSKA, ICA, Nordea bank, ABB and Electrolux among others (Pyrko & Darby, 2011).

The extensive protection of environment, active measures of improving the working environments and investing in clean technology are among the leading factors that have significantly encouraged the vast growth of industries in Sweden. The successful industries have taken corporate responsibility to a different level, and this has given them competitive advantage in the home environment as well as the world over. In the last accountability index statistics, Sweden industries topped the list of responsible competitiveness (Pyrko & Darby, 2011).

Another factor that has given these leading industries advantage is the investment on clean technology. This has given the industries' market as the cases of pollution continue to rise in the competing countries. The social responsibility to ensure gender equality has also boosted the industries in the society nation (A-gren, 2009). Policies from the government are also key contributors to the industries' success.

The relations with associated industries are also noteworthy. These leading industries have heavily invested in the risk to support the companies associated with them. Most of the related industries are within Sweden with a few in the foreign countries and the neighboring nations. This is to ensure that they have a ready market for their products (Development, 2013). The industries take a keen interest in their consumers hence giving them advantage over their competitors. The demand for the products of the companies is not only at a skyrocketing level in Sweden, but also in the foreign nations. The foreign markets form the larger base of demand for the products of the industries in Sweden. Moreover, the strategies involved in the industries of the country are simply top class. The companies have strongly invested in their management teams. They realize the weight that a good leadership adds on the quality of any organization.

The large population of educated people in Sweden additionally provides quality and effective skills to most of these companies, hence enabling them to achieve efficiency in their operations. Competitiveness is healthy. The environment is wholly dominated by the only successful ventures, but other middle sized countries and industries are equally competitive. This keeps the large companies on watch as they know the market is highly competitive.

The nation has remarkably strong and inviting advantages that have led to the establishment of many industries; both local and foreign industries. Such have seen her gain the competitiveness that she has created today. Among these factors that have largely contributed in the development of these industries include the following. Sweden is among the most globalized nations and exceptionally competitive (Development, 2013). This ensures that the companies are exposed to a vast market. Secondly, the tradition that she has adopted to allow free flow of trade, investments and people. This enables allows identification and exploration of opportunities. Another factor is that has allowed the companies to grow is the fact that Sweden is centrally located to allow meeting point for the northern Europe and Scandinavian region. The way in which the country has allowed and adopted technology and technological innovations has also given these countries opportunity to grow.

Sweden monetary system

Like many other countries, before the invention of the currency system, Sweden used to trade by means of barter trade. However, in the early 17th century, the riksdaler was introduced. This was a regionally accepted currency that was used by several European countries at the time. This first from of currency was quite complex with several sub-divisions, but it did not have a decimal. Sweden adopted a currency with a decimal system which they named riksdaler riksmynt (Kent, 2008).

The current monetary system was established later following the enjoining of the country in the Scandinavian Monetary Union. This union allowed the member nations to base the value of their currency against gold. This allowed them to have a stable currency. The krona was adopted in 1873 as the currency that replaced the riksdaler riksmynt. The krona is not only used in Sweden but also in Iceland and Faroe islands. The Swedish krona is also called Swedish crown. Its symbol is 'kr'. It boasts of being among the few still surviving currencies of the ancient era (Kent, 2008). Most European countries have replaced their initial currencies with the euro. It is also the strongest of all the other kronas. Sweden, being a regular exporter, has continued to enjoy stable growth over time. This growth has been associated to the strength the krona. The strong exchange rate of the currency is also determined by the country's monetary policies.

Some of the factors that affect the rate of the krona are such as the flow between the imports and exports in Sweden, the inflation rate and the flow finances in the economy. The main supplier and distributer of the currency is Sveriges Riksbank, which is the central bank of Sweden. The notes are printed by a printing company of the bank, called Tumba Bruk. The coin is released in 5 denominations, the 1kr, 2kr, 5kr and 10kr. The other is the 50 ore coin which is the smallest of all coins. The exchange rate of the Swedish krona is enjoying prodigious stability compared to many other currencies in the World Bank. For instance, the exchange rate of the currency against the U.S. dollar is relatively stable, ranging between 7.5 and 9.2 over the past few years (Development, 2013).

Legal and physical infrastructure

For any institution or country to prosper in its engagements, rules and regulations form the basic start point. Rules and regulations determine the performance of these institutions. Sweden as a country, she has ensured that laws are implemented such laws that Sweden has drafted are those that prohibit certain activities that may bring fall of the economy (Kumar, Espling & Kumar, 2008). For instance, Sweden being a fully pledged member of the European Union, she is bound by the laws that are set at this level. Such laws as concerning the clearance of imports are remarkably helpful.

The main regulations include ensuring that all imported goods have commercial invoices and bill for lading. The addresses, names and other personal details of buyers and sellers must be included in the invoice. The dates and description as well as quantity of packages are also indicated in the invoice. Other factors such as price of product, delivery condition and the discounts allowed on the product are also included.

The laws in Sweden are extremely strict on licenses of operation and thus every trader must have a license. Wavers and reductions on selected items are good for the products that are socially significant. Value added tax is also majored in these laws of trade (Kumar et al., 2008). Sweden as a country has put in place factors that ensure these laws and many others are enforced fully. There are non-governmental and other legislative bodies that have been established to ensure that these laws are followed accordingly.

The courts are the top point of the regulation of trade activities. The courts of Sweden work together with the established and efficient police institution to ensure that those who break the law are vindicated accordingly. The police have quality, top class officers who do their work to investigate any shoddy deals and other activities that are illegal according to the law. The courts are independent and, as a result, can work independently and efficiently, ensuring that those who break the law pay for their actions. This has continually and efficiently ensured safety of investors and business people, growing the economy significantly.

The other factor that has seen the economy of the country take the next level is the physical infrastructure in place. The government of Sweden, from the beginning, realized that the driving factor of the economy is infrastructure. Consequently, the country has invested hugely in the modernization and the development of these institutions. Sweden boasts of exceptionally well developed and quality working railroads. The tracks of rail are not only constructed by the government, but they are also privately owned by some private investors. The rail network is widely distributed over the country, linking all the main towns and the industrial areas. The transport of the exceedingly heavy goods requires that there be effective and efficient systems for transport that do not affect the other infrastructures. The rail links are exceptionally fast and efficient as Sweden has quality modernized train systems.

The nation only has two neighbors directly bordering with her. The coast of the country is quite extensive. Moreover, through this coast, the country has direct links with many other nations across the world. Sweden has thus taken the initiative to invest in the water transport means. There are major developments of the ports and harbors. She has constructed quality terminals that have facilities that can handle remarkably large containers. Some of the best developed ports include Gaevle, Gotborg, Malmo, Sundsvall, Helsingborg, Kalmar and Stockholm among others. The government of Sweden has also invested in the freight industry and as a result it has given support to the Swedish Merchant Fleet.

The air transport of the nation is simply top class. The airlines of Sweden serve both the local and international markets accordingly (Kumar et al., 2008). The airports, loading and off loading facilities are well established, ensuring that the nation's transport is effective. Roads are the basic transport systems in all countries. Sweden is thus not an exception as she has developed high quality road networks. These link every part of the nation form the remotest places to the capital city. The express roads are well tarmacked and spaced ensuring safety on the roads. The country has even developed road infrastructure policies to ensure that the roads are used well.

Other infrastructure facilities also include the buildings facilities that house the investments and traders as they conduct their business. Sweden has well developed and planned building infrastructure. The use of technology and information technology in this case is diversely employed the nation. Sweden has some of the best developed communications structures, favoring the business world to an exceptionally large extend. Sweden, as a nation endowed with resources, she is blessed to have access to plenty of hydro-power (Kumar et al., 2008). The country, from the beginning has relied on hydro power to run her industries. As a result, she has invested in developing the power industries. All these physical infrastructural developments are significant to ensuring the success of any country or industry. The people of Sweden and even the foreigners who trade in the country have enjoyed the quality of the infrastructure and developments, hence investing more, contributing a humongous part in the trade and economy sectors of the country.

Learning and research development in Sweden

About the last two centuries, the country of Sweden had truly poorly developed learning procedures. Sweden has evolved from these times to the current system where education is a basic factor in the lives of all young people (Deak & Bucht, 2011). Sweden has invested in the education sector, having some of the best quality learning institutions. Right from childhood, the country has developed schools that cater for the needs of the young population of that country. As the children grow, the learning institutions to cater for their needs are available for them. At the higher learning level, the universities are also well developed and with several governmental institutions with others being private.

There are facilities that have significantly influenced the innovation and creativity from these learning champs. The government has set some areas of study and prioritized them to ensure that they develop accordingly. The main areas that the country is encouraging people to study include medicine, bioscience, climate and technology (Deak & Bucht, 2011). In the nation, research is not only left to the large and established firms but it is decentralized mostly to the learning institutions. This allows for quality and fresh new ideas as the pure young people are full of energy to innovate extraordinary things. Therefore, the innovation and research infrastructures have significantly influenced the country's trade systems and business industry.

Rankings of Sweden in the world

The international bodies that rank the countries depending on the various aspects of engagements have had their share of fun; while examining these nations so as to establish their position in the globe. Sweden has been a considerable focus point from many of these bodies. This is related to the fact that Sweden is a country worth emulating. Economically, over the past one decade, Sweden has been ranking among the top five nations economically. In the last ranking in 2012, the country was third in relation to the wealth accumulation and economic development. She only came runners up to Norway, the leader and second runner up was Denmark (Organization for Economic Co-operation and Development, 2012). However, it is essential to note that Sweden received the best points in terms of entrepreneurship, low costs of business start up and percentage of success from hard work. The productivity of the nation is especially high.