sweden
  • Written by
  • July 30, 2024
  • Comments Off on Is the Swedish Start Up “Mecca” coming to an end?
Business sweden

Somebody recently approached me on LinkedIn asking for advice on starting a career in E-Commerce in Sweden. I was more than happy to provide advice, guidance, and support.

People often hear that the job market in Scandinavia is thriving and that it’s the “Start-Up Mecca.” I have to disagree.

The blunt truth is that Sweden is in a recession. It has been since 2023, and the forecast suggests it won’t begin to recover until Q4 2025. Sweden is not alone; Germany, France, Finland, and others are seeing reduced margin growth across key sectors.

I’ve worked with several companies over the past few years as a consultant, and 80% of them have gone out of business. With higher costs and huge increases in rent, production, and salaries, this is certainly the hardest time since I’ve moved here. The job market is becoming fierce; many former colleagues and friends are struggling to find jobs, leading to uncertainty in their personal lives.

Overall, unemployment is still low compared to other EU countries, standing at 6.6%, up 0.6% from this time last year.

Sweden recently increased the salary requirement for foreign work permit holders. There has been a huge influx of overseas workers in Sweden over the past five years, but the number of permits granted to non-EU workers has dropped in 2024.

This is causing issues, especially for Swedish start-ups. It’s common for any start-up to begin with a low salary and then increase it, along with other benefits, over time.

Migrationsverket states that from June 18, 2024, the median 80% salary requirement for a company to pay a worker is 28,480 SEK, with the median salary being 35,600 SEK. This is expected to increase next year. Plus, Sweden is still one of only three EU countries that do not have a start-up visa.

Swedish start-ups affected by this are saying that they are struggling to find talent within Sweden or the EU. The time it takes to approve a work visa is getting longer, with the average non-EU worker unable to begin work for one year.

Sweden is facing a seriously tough time for scale-ups and start-ups. Without a start-up visa, they are falling behind quickly.

Times are tough for everyone, both those seeking work and those starting a business. The current saying is, “Stay alive until 2025.”

Hang in there. Things will improve.