This paper presents a discussion that touches on several issues about Sweden. It first looks at an overview of the country and proceeds to discuss various issues broadly categorized under the context environment, major economic activities, a survey of the market environment, and relations and interactions between firms and markets.
We will write a custom Essay on Economics of Sweden: Environment and Activities specifically for you
301 certified writers online
Introduction and Overview
Sweden is a Nordic country situated in the northern part of Europe (Stobaugh, 246). The country borders Norway to the West and Finland to the northeast. Also, Sweden has water borders with Denmark, Germany, and Poland to the south and Estonia, Latvia, Lithuania, and Russia to the east.
Among other things, this section looks at political, legal, and economic systems in Sweden.
Sweden is governed by a constitutional monarchy as well as parliament. The constitution helps to control the interaction between decision-makers and the executive. The government of Sweden is made up of four important laws.
Sweden’s political power is concentrated in the executive branch. However, no separation of powers between the legislative branch and the executive branch is. As noted by Hieda (52), the political system is based on proportional representation. Centralized political parties are the key players in the Swedish political system.
The judicial system in Sweden is founded on general and administrative courts, which are the two important pillars (Kirchberger 25). There are also other specialized courts with specific jurisdiction. Historically, the Swedish legal system was influenced by German law and is split into private and public law.
The economy of Sweden is comparatively smaller than other economies in the developed world (Bosworth and Alice 3). Allegedly, Sweden has an open economy that mainly depends on foreign trade. To survive in a competitive market environment, Swedish exporters are compelled to lower prices for their exports.
Dominant Social-Cultural Custom and Tradition
Sweden is generally a Christian nation based on the Lutheran doctrine. With a population of close to 7 million people, the Swedish church is the largest across the world. This notwithstanding, it is only a small fraction of the membership that attends church services regularly. Naturally, Swedes are humble people and speak calmly. It is unacceptable for anyone to demonstrate anger in public.
Dominant Value, Identity, and Belief System
The Swedish government does everything to ensure that parents can take good care of their children as they grow. Most Swedes are members of the Church of Sweden, and children become automatic members immediately they are born. According to Lödén, the identity of Swedes is determined by the ability to speak the Swedish language (259).
The Swedish monetary system was originally similar to that of other nations. The process of minting coins in Sweden started somewhere around the 11th century, and different metals were used at different times (Högman 1). Examples of coins used in Sweden are mark and penning.
Initially, Swedish coins were minted under Olof Skotkonung during the Viking Age. Even though their quantity was insignificant, they served as a good exchange and made it possible for the Swedes to transact. As noted by Heckscher, bills of exchange did not appear in Sweden until much later (56). Monetary reforms that took place in 1873 led to the introduction of the Kronor as the official currency. Figure 1 on the appendices page shows the various Swedish currencies.
National Output Per Capita
Gross Domestic Product (GDP) is an important measure used to determine the health of a nation’s economy. It is the total sum of a country’s gross value plus any taxes on products fewer subsidies that are not part of the value of the product (World Bank 1). As noted by Davis and Magnus (2), the growth of the Swedish GDP declined heavily in the 1960s.
Major Economic Activities
Among others, the main economic activities in Sweden are varied and include agriculture, mining, manufacturing, and construction activities (Davis and Magnus 4). The country is generally active economically and can export several products to other countries.
Natural Resources Available
Natural resources in Sweden include iron ore, lead, copper, arsenic, and hydropower. The country values its natural resources and has formulated policies to control how they are used.
Get your first paper with 15% OFF
Vital Industries of National Importance
Ironmaking is one of the critical industries in Sweden (Nisser, 14). The industry has led to the creation of an appealing technical and social setup. Other industries of national importance are charcoal making, engineering, mining, chemical, and agricultural industries.
Characteristics of Agriculture
Through well-formulated policies, the Swedish government has been able to strengthen its agricultural sector. To a large extent, the sector is driven by consumer demands. Generally, agricultural principles outlined by the government are meant to ensure that agriculture can effectively meet the domestic needs of the Swedish people.
Characteristics of Manufacturing Industries
Swedish manufacturing industries are mainly export-oriented and constitute 30 percent of the country’s exports. Manufacturing industries employ more than 600,000 individuals in Sweden (Sidén, 15). Raw materials consume almost 50 percent of the total manufacturing costs. Besides being capital intensive, Swedish manufacturing industries are energy-intensive.
Characteristics of Service Industries
Ostensibly, the service industry is very central to the economy of Sweden. The service industry is mostly controlled by private individuals and offers financial, medical, and educational services. As pointed out by Nylander (1), the service sector is likely to make a very significant contribution to the Swedish economy.
Foreign Direct Investment (FDI)
Foreign Direct Investments in Sweden have been fluctuating over the years for various reasons. This is due to the uncertainty across the international market. Figure 2 on the appendices page, shows that the country’s foreign direct investments amounted to US$ 310 billion in 2010. Total investments reduced by 57580 in 2012.
Major Import and Export
Major exports from Sweden include broadcasting equipment, computers, insulated wire, gas turbines, spark ignition engines, engine parts, low voltage protection equipment, electric motors, electric heaters, industrial printers, video displays, electric control boards, air conditioners, refined petroleum, and electric batteries among others. Imports include metals, scrap copper, raw nickel, iron structures, raw aluminum, crude petroleum, and chemical products, among others.
Major Sources of Revenue
The major sources of revenue for the Swedish government include income from oil refineries and exports. As noted earlier, Sweden exports several products to foreign countries. The government has also been able to generate revenue by taxing individuals and businesses.
The Market Environment
In general, Sweden presents a healthy market for investors. However, the market is non-homogeneous, and business enterprises must be creative to provide goods and services that meet the specific needs of the Swedish people.
Sweden has a population of approximately 9 million people. Although the nation was originally homogeneous, this has changed over the years as a result of immigration. Allegedly, close to one-tenth of the people of Sweden are foreigners.
Socio-Economic Characteristics of Consumers
Swedes value relationships and enjoy spending time with one another. They are very polite and hate pride and arrogance. They like sharing meals with friends and relatives and take invitations very seriously.
Psycho-Behavioral Characteristics of Consumers
Swedish consumers do not like to be involved in most marketing activities. Consequently, they pay little attention to advertisements. Marketers must, therefore, devise innovative strategies to market their products effectively. Marketers must also make deliberate efforts to target those who would like to be involved (Wang 43).
There have been concerns about changing the consumption pattern of the Swedish people (Ågren 14). This is because of an increase in activities that are not friendly to the environment. Although the government has made numerous efforts to safeguard the environment and natural resources, there is a need to do more. It is also important to know that Swedes are generally not flashy, and this affects their consumption pattern.
According to Berg (1), saving habits among the Swedish people are affected by an individual’s age. Consequently, demographic characteristics thus affect the country’s economy. Arguably, older people are more concerned about saving than younger people. Saving habits also vary from one family to another.
Major Population Trends
Apart from the increased birth rate, Sweden’s population has been swelling due to immigration. The country’s population has increased by about 0.85 percent since 2012 (World Population Review 1). Figure 3 on the appendices page shows the Swedish population chart.
Relationships and Interactions between Firms and Markets
Generally, the relationship between firms and the market is very strong. Despite efforts to get closer to consumers, there still exists a big separation, and firms do not seem to comprehend the needs of the market. As a result, firms must devise innovative strategies to reach consumers.
Shortages and Surpluses
Imports are due to shortage while exports are as a result of excess produce. Among others, the country has a short supply of crude oil and critical raw materials. Surpluses include manufactured products such as machinery and electric equipment.
Sweden’s comparative advantage arises in different ways. First, the country is technologically superior to other countries. The country is also endowed with resources for domestic production. The country has a skilled workforce and is thus able to produce what it needs. Economies of scale also give Sweden a comparative advantage. Also, comparative advantage is boosted by existing national and international trade policies.
According to Gupta, competitive advantage refers to absolute advantage (9). Sweden has distinguished itself from other countries in several ways. First, most of its products are unique and valuable. The country’s products are also very rare and cannot be substituted easily.
Control and Constraint by Government, Economic, and Cultural Systems
The Swedish government has put in place several national and international policies to safeguard the local market (Gupta 6). Individuals are thus motivated always to give their best. The existing cultural and economic systems also compel stakeholders in various sectors to work professionally.
Arguably, the Swedish currency policy considers how interest rates by banks take into account economic growth and how this is affected by daily operations by individuals and business enterprises.
Potentials and Opportunities in Sweden for Saudi Arabians
Sweden presents investors with great investment opportunities. Various organizations exist to ensure that foreign investors have a smooth entry into the local market.
Import and Export
Generally, Saudi Arabia presents a very good market for Swedish products (Chah 1). Saudi Arabia is the greatest exporter of petroleum, and Sweden is one of its markets. On the other hand, Saudi Arabians have an opportunity to import machinery, paper products, and motor vehicles from Sweden (Dadfar et al. 3).
Drawing from a study by Chah, Swedish firms have invested in Saudi Arabia for several reasons (1). Saudi Arabia presents an ideal business environment for Sweden, while Sweden presents a healthy political and economic environment for Saudi Arabian investors.
Manufacturing and Services
While Sweden can strengthen its manufacturing industry through exports to Saudi Arabia, it gets raw materials from Saudi Arabia. Sweden also benefits from the ability of Saudi Arabians to formulate successful global marketing strategies.
Information Technology (IT) Landscaping
Among other products manufactured in Sweden are computers and other electronic equipment. Consequently, the rate of computer usage in Sweden is quite high among individuals and businesses. Saudi Arabians are thus able to benefit from the technological expertise provided by the Swedish people.
Besides its cooperation with Saudi Arabia, Sweden also has healthy relations with other countries that help to facilitate economic growth. For example, the collaboration between Sweden and Saudi Arabia has made it possible for Sweden to access a market for its war artilleries.
This paper has looked at several important issues about Sweden, including demographics, the market environment, the culture of the people, and business opportunities, among others. Undoubtedly, Sweden is a warm nation with many opportunities.
Ågren, Maria and Nina Cromnier. 2010. Swedish Consumption and the Global Environment. Web.
Berg, Lennart. 1996. Age Distribution, Saving and Consumption in Sweden. Web.
Bosworth, Barry and Rivlin, Alice. The Swedish Economy. Brookings Institution Press, 1987. Print.
Chah, Emmanuel. 2012. Foreign Direct Investment in Saudi Arabia, A Case Study of Two Swedish Firms. Web.
Dadfar, Anna, Reine Norberg Eva Helander, Sabina Schuster and Arnaud Zuﬀerey. 2003. Intercultural Aspects of Doing Business with Saudi Arabia. Web.
Davis, Steven and Magnus Henrekson. 2007. Economic Performance and Work Activity in Sweden after the Crisis of the Early 1990s. Web.
Gupta, Satya. 2009. Comparative Advantage and Competitive Advantage: An Economics Perspective and a Synthesis. Web.
Heckscher, Eli. An Economic History of Sweden. London: Harvard University Press, 1954. Print.
Hieda, Takeshi. Political Institutions and Elderly Care Policy: Comparative Politics of Long-Term Care in Advanced Democracies. New York, NY: Palgrave Macmillan, 2012. Print.
Högman, Hans. The History of the Swedish Monetary System. 2013. Web.
Kirchberger, Christine. Cyber Law in Sweden. Frederick, MD: Kluwer Law International, 2011. Print.
Lödén, Hans. “Swedish: Being or Becoming? Immigration, National Identity and the Democratic State.” International Journal of Social Sciences 3.4 (2008): 257-264.
Nisser, Marie. Swedish Industry and its Monuments. Web.
Nylander, Johan. Service Sector to Boost Swedish Economy. 2010. Web.
Sidén, Lena-Kajsa. 2006. Swedish Process Industry Competitiveness Revisited. Web.
Stobaugh, James. World History: Observations and Assessments from Creation to Today: High School Level. Green Forest, AR: New Leaf Publishing Group, 2012. Print.
Wang, Tina. 2010. Consumer Behavior Characteristics in Fast Fashion. Web.
World Bank. GDP Per Capita (Current US$). 2014. Web.
World Population Review. Sweden Population 2014. 2014. Web.