EU member state. Compliance scores reflect the regulatory advantages of EU single market membership and are not directly comparable to non-EU sourcing countries.
weighted score 7.3 · ten dimensions
Sourcing Attractiveness Index · ten dimensions
Sweden
Labour cost, supply base depth, logistics infrastructure, trade access, and innovation scores for Sweden as a sourcing destination.
Labour cost competitiveness
1
Eurostat hourly labour cost €43.10. One of the highest-cost markets in Europe. Not competitive for cost-sensitive manufacturing; suited to high-value, R&D-intensive production.
Supply base depth
6
World-class in automotive, engineering, pharma, and telecoms. Broader than Finland but still specialised rather than broad-based manufacturing.
Logistics & infrastructure
8
EU single market access. Gothenburg is Scandinavia’s largest port. Well-integrated road, rail, and maritime networks. Good connectivity to continental Europe.
Workforce skills
9
World-class education system. Strong engineering and technical tradition. Very high English proficiency. ITUC Rating 1 for worker rights.
Scalability
7
Medium-sized domestic market (10.5m population) with EU single market access. Strong in scaling innovation-driven manufacturing.
Ease of doing business
8
TI CPI 80. Transparent regulation, strong rule of law, independent judiciary. Low corruption risk. Strong institutional quality.
Trade access & tariffs
8
EU member with full access to all EU trade agreements. Not in eurozone — SEK currency introduces some FX risk. NATO member since March 2024.
Sustainability baseline
9
Strong environmental regulation and enforcement. SSAB developing fossil-free steel (HYBRIT). High corporate ESG standards. Advanced cleantech sector.
Innovation & IP
8
R&D spending ~3.4% GDP — among highest globally. Ericsson 5G patents. AstraZeneca pharma innovation. Excellent IP protection as EU member.
Quality standards
9
Swedish automotive and engineering sectors set global quality benchmarks. Full EU quality framework. Volvo, Scania, Atlas Copco supply chains are reference standards.
Labour & Cost Competitiveness
Labour & Cost Competitiveness
- Wage level
- Eurostat hourly labour cost 2025: €43.10. Sweden is one of the highest-cost labour markets in Europe, reflecting high productivity, strong worker protections, and comprehensive social insurance contributions.
- Labour market dynamics
- Population approximately 10.5 million. Strong worker protections and high union membership. Swedish model of collective bargaining between employer organisations and trade unions sets wages sector by sector.
- ITUC rating
- ITUC Global Rights Index: Rating 1 (irregular violations only). Sweden is among the highest-rated countries globally for worker rights protection.
- Cost-sensitive categories
- Labour cost makes Sweden uncompetitive for labour-intensive manufacturing. Competitive advantage is in high-value engineering, R&D-intensive production, and advanced manufacturing where innovation and quality offset cost.
Supply Base & Infrastructure
Supply Base & Infrastructure
- Manufacturing specialisation
- Automotive (Volvo, Scania), engineering (ABB, Atlas Copco), pharmaceuticals (AstraZeneca), telecommunications (Ericsson), technology (Spotify), and steel (SSAB). World-class supply base in precision engineering and advanced manufacturing.
- Port infrastructure
- Gothenburg is Scandinavia’s largest port. Stockholm, Malmö, and other ports provide Baltic and North Sea connectivity. Well-integrated road and rail freight networks.
- EU single market
- Full EU membership eliminates tariff and customs friction for intra-EU trade. Sweden retains its own currency (Swedish krona) which introduces currency risk but also policy flexibility.
- Digital infrastructure
- Among the most digitally advanced economies globally. Strong 5G infrastructure. Home to major tech companies (Ericsson, Spotify, Klarna). Supports advanced manufacturing and Industry 4.0.
Trade Access & Business Environment
Trade Access & Business Environment
- EU membership
- EU member since 1995. Full access to EU single market, customs union, and all EU trade agreements. Not in the eurozone — uses Swedish krona (SEK).
- NATO membership
- NATO member since March 2024, ending over 200 years of military non-alignment. Membership strengthens security environment and signals long-term Western alignment.
- Regulatory environment
- Transparent, predictable regulatory framework consistent with EU standards. TI CPI 2025: 80. Very low corruption risk. Strong institutional quality.
- Business climate
- Strong rule of law, independent judiciary, and efficient public administration. High ease of doing business. English proficiency among the highest globally. Strong innovation ecosystem.
Innovation, IP & Quality
Innovation, IP & Quality
- R&D investment
- R&D spending approximately 3.4% of GDP — among the highest globally. Strong in automotive engineering, telecommunications, pharmaceuticals, and cleantech. Ericsson’s 5G patent portfolio is globally significant.
- IP protection
- Excellent IP protection framework as an EU member. Strong enforcement through Swedish courts and EU-level mechanisms. No material IP risk for foreign holders.
- Quality standards
- Manufacturing operates to full EU and international quality management standards. Swedish automotive and engineering sectors set global benchmarks for quality. Volvo, Scania, and Atlas Copco supply chains are reference standards.
- Education & skills
- World-class education system. Strong engineering tradition. High proportion of tertiary-educated workforce. Particularly strong in engineering, life sciences, and ICT.