page_title: Sweden
section_title: Economy
hierarchical_section_title: Sweden / Economy
context_page_description: Sweden, officially the Kingdom of Sweden, is a Nordic country in Northern Europe. It borders Norway to the west and north, Finland to the east, and is connected to Denmark in the southwest by a bridge-tunnel across the Öresund Strait. At 450,295 square kilometres, Sweden is the largest country in Northern Europe, the third-largest country in the European Union and the fifth largest country in Europe by area. The capital city is Stockholm. Sweden has a total population of 10.3 million of which 2.6 million have a foreign background. Persons with foreign backgrounds are defined as persons who are foreign born, or born in Sweden with foreign born parents. It has a low population density of 25 inhabitants per square kilometre, with 1 437 persons per km² in localities. 87% of Swedes live in urban areas, which cover 1.5% of the entire land area. The highest concentration is in the central and southern half of the country.
  Sweden is part of the geographical area of Fennoscandia. The climate is in general mild for its northerly latitude due to significant maritime influence.
context_section_description: Sweden is the sixteenth-richest country in the world in terms of GDP (gross domestic product) per capita and a high standard of living is experienced by its citizens. Sweden is an export-oriented mixed economy. Timber, hydropower and iron ore constitute the resource base of an economy with a heavy emphasis on foreign trade. Sweden's engineering sector accounts for 50% of output and exports, while telecommunications, the automotive industry and the pharmaceutical industries are also of great importance. Sweden is the ninth-largest arms exporter in the world. Agriculture accounts for 2% of GDP and employment. The country ranks among the highest for telephone and Internet access penetration.
  Trade unions, employers' associations and collective agreements cover a large share of the employees in Sweden. The high coverage of collective agreements is achieved despite the absence of state mechanisms extending collective agreements to whole industries or sectors. Both the prominent role of collective bargaining and the way in which the high rate of coverage is achieved reflect the dominance of self-regulation (regulation by the labour market parties themselves) over state regulation in Swedish industrial relations. When the Swedish Ghent system was changed in 2007, resulting in considerably raised fees to unemployment funds, a substantial decline in union density and density of unemployment funds occurred.
  In 2010 Sweden's income Gini coefficient was the third lowest among developed countries, at 0.25—slightly higher than Japan and Denmark—suggesting Sweden had low income inequality. However, Sweden's wealth Gini coefficient at 0.853 was the second highest in developed countries, and above European and North American averages, suggesting high wealth inequality. Even on a disposable income basis, the geographical distribution of Gini coefficient of income inequality varies within different regions and municipalities of Sweden. Danderyd, outside Stockholm, has Sweden's highest Gini coefficient of income inequality, at 0.55, while Hofors near Gävle has the lowest at 0.25. In and around Stockholm and Scania, two of the more densely populated regions of Sweden, the income Gini coefficient is between 0.35 and 0.55.
  In terms of structure, the Swedish economy is characterised by a large, knowledge-intensive and export-oriented manufacturing sector; an increasing, but comparatively small, business service sector; and by international standards, a large public service sector. Large organisations, both in manufacturing and services, dominate the Swedish economy. High and medium-high technology manufacturing accounts for 9.9% of GDP.
  The 20 largest (by turnover) registered Swedish companies in 2007 were Volvo, Ericsson, Vattenfall, Skanska, Sony Ericsson Mobile Communications AB, Svenska Cellulosa Aktiebolaget, Electrolux, Volvo Personvagnar, TeliaSonera, Sandvik, Scania, ICA, Hennes & Mauritz, IKEA, Nordea, Preem, Atlas Copco, Securitas, Nordstjernan and SKF. The vast majority of Sweden's industry is privately controlled, unlike many other industrialised Western countries, and, in accordance with a historical standard, publicly owned enterprises are of minor importance.
  An estimated 4.5 million Swedish residents are employed and around a third of the workforce completed tertiary education. In terms of GDP per-hour-worked, Sweden was the world's ninth highest in 2006 at US$31, compared to US$22 in Spain and US$35 in the United States. GDP per-hour-worked is growing 2.5% per year for the economy as a whole and the trade-terms-balanced productivity growth is 2%. According to the OECD, deregulation, globalisation, and technology sector growth have been key productivity drivers. Sweden is a world leader in privatised pensions and pension funding problems are relatively small compared to many other Western European countries. A pilot program to test the feasibility of a six-hour workday, without loss of pay, will commence in 2014, involving the participation of Gothenburg municipal staff. The Swedish government is seeking to reduce its costs thro
caption: Real GDP growth in Sweden, 1996–2006