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Beyond the Crisis. How Sweden Can Succeed in the New Global Economy, 2009:21 Beyond the Crisis – How Sweden Can Succeed in New Global Economy DS 2009:21 Final report of the Globalisation Council Ds 2009:21 Beyond the Crisis How Sweden Can Succeed in the New Global Economy 106 47 Stockholm Tel 08-690 91 90 Fax 08-690 91 91 [email protected] www.fritzes.se ISBN 978-91-38-23262-0 ISSN 0284-6012 gglob_slutrapport_eng_omslag_11mm.inddlob_slutrapport_eng_omslag_11mm.indd 1 009-08-119-08-11 112.22.412.22.41 Ds 2009:21 BEYOND THE CRISIS How Sweden Can Succeed in the New Global Economy Final report of the Globalisation Council FINAL REPORT • THE GLOBALISATION COUNCIL © THE GLOBALISATION COUNCIL 2009 GRAFISK DESIGN Nina Gergi COVER PHOTO Scanpix PRINTED BY Edita, August 2009 ISBN 978-91-38-23262-0 ISSN 0284-6012 This report is on sale in Stockholm at Fritzes Bookshop, which sells reports inthe series Swedish Government Offi cial Reports (SOU) and in the Ministry Publications Series (Ds). ORDER ADDRESS Fritzes, Customer Service SE–106 47 Stockholm Sweden FAX 08 598 191 61 (national) +46 8 598 191 61 (international) TELEPHONE 08 598 191 90 (national) +46 8 598 191 90 (international) E-MAIL [email protected] INTERNET www.fritzes.se E-MAIL [email protected] www.regeringen.se/globaliseringsradet Preface The Globalisation Council was appointed by the Govern- ment in December 2006 to examine the question of how Sweden can best assert itself in an era of continuing glo- balisation, and to make appropriate recommendations. The report is entitled Beyond the Crisis. We have not considered it part of our brief to offer views on how the severe crisis now gripping economies around the world might be solved. We are aware, however, that the crisis has made our work more urgent. In part, it shows how rapidly a situation can change, which illustrates the importance of adaptability. Partly, too, the crisis may mean that market growth, once it returns, will be lower than we were accus- tomed to in the pre-crisis years. This in turn underlines the importance of measures that strengthen both Sweden’s competitiveness and its ability to attract investments and skilled workers. Our report constitutes an urgent appeal to the political system and to society as a whole to give issues concerning Sweden’s competitiveness, adaptability and attractiveness greater priority. Sweden is fundamentally strong, but our own economic history shows that we are vulnerable, too. We are highly dependent on a handful of successful export companies. We must produce more companies that dare to grow. We must place greater emphasis on knowledge and expertise, since these are the most crucial produc- tion factors of all in the modern era. We must ensure that new knowledge and insights are translated more often into production in Sweden. We must have a labour market that combines security and fl exibility more than at present. We must strengthen the structures that enable Sweden to hold its own even when under pressure and strain. We must make Sweden better known in faraway countries. We must ensure that in an age of transition, those who govern Ds 2009:21 have the best possible material on which to base their de- cisions. If we fail to tackle the problems facing us, the next crisis may have an even greater impact than the present one. We must acknowledge the fact that competition in world markets is often extremely tough, as is competition in the investment and recruitment sectors. Sweden has a good chance of holding its own, however, if we play our cards right. Our mandate specifi cally concerned Sweden, but we are united in our belief that globalisation is basically good for the world as a whole. Only by joining forces can we meet the challenges that confront humanity. This applies not least to climate change. Originally, the term globalisa- tion mainly referred to the widening of markets. We are now coming to realise that it represents very much more besides. Properly handled, it can reduce poverty and hun- ger and counteract hopelessness. It enables ideas about human rights and democracy, unfettered by borders, to spread and take root in places where they have hitherto been prohibited. It can help people around the world to come together and pool their resources in pursuit of sus- tainable development on the planet we all share. An annex to this report describes the Council’s work- ing methods, activities and composition. An important part of the project consisted of some 30 expert reports com- missioned by the Council. In addition, the Council secre- tariat headed by Professor Pontus Braunerhjelm supplied a background report, based to some extent on the expert reports. As in the case of our initial report in the autumn of 2007, entitled Knowledge-Driven Growth, the fi ve ministers in the Council wish to point out that while endorsing the main tenor of this fi nal report they cannot for formal reasons commit themselves with regard to issues that will ultimate- ly be a matter for the Government to decide. Four other members of the Council have added separate statements Ds 2009:21 of opinion, and these are included at the end of the report. In the case of other members, too, there may of course be individual aspects that they have not had time to familiarise themselves with and opinions that they do not fully share. We hereby submit our fi nal report to the Government. Stockholm 25 May 2009 Lars Leijonborg (Chair) Kristina Alsér Hans Bergström Carl Bildt Urban Bäckström Lars Calmfors Per Carstedt Dilsa Demirbag-Sten Anna Ekström Sven Otto Littorin Wanja Lundby-Wedin Karin Markides Elisabeth Nilsson Aina Nilsson Ström Sture Nordh Mats Odell Maud Olofsson Carl-Henric Svanberg Lena Treschow Torell Harriet Wallberg-Henriksson Marcus Wallenberg Olle Wästberg Table of Contents Preface 3 1. Globalisation and Sweden 10 2. Sweden’s prospects and opportunities: strengths and weaknesses 23 2.1 Introduction 23 2.2 Strengths 25 2.3 Weaknesses 28 3. Sweden as a knowledge nation 33 3.1 Introduction 33 3.2 A new knowledge promotion policy for children and young people 34 3.2.1 Earlier school starts 34 3.2.2 Language skills at preschool level 35 3.2.3 Intensify language learning in school 36 3.2.4 Evaluate school performance more extensively and encourage diversity 37 3.2.5 The important role of teachers 38 3.2.6 Develop e-learning 39 3.3 A new knowledge promotion policy for adults 40 3.3.1 Enhance standards in higher education and expand the university system 40 3.3.2 Encourage earlier completion of studies – an economic advantage 41 3.3.3 Make study choices easier 43 3.3.4 Lifelong learning – skills development accounts 43 3.4 A new knowledge promotion policy for the research and development sector 45 Ds 2009:21 3.4.1 Increase research funding and improve conditions in this fi eld 45 3.4.2. Tax deductions for donations to research 47 3.4.3 Favourable treatment for research-intensive companies, both fi scally and under research policy 47 3.4.4 Give higher education institutions more independence 48 4. Economy, enterprise policy and taxes in a global perspective 50 4.1 Introduction 50 4.2 Distribution policy in an era of globalisation 51 4.3 A globalised tax system 53 4.4. Effects of the Council’s reform proposals on government fi nances and the economy 57 4.5 Reduce the regulatory burden and shorten processing times 59 4.6 Strengthen competition – set the service sector free! 61 4.7 Develop a Swedish ‘head offi ce strategy’ 64 4.8 Safeguard Swedish industry 65 4.9 Expand infrastructure 66 4.10 Safeguard free trade 69 4.11 Reform the global fi nancial system 71 4.12 Use climate change adaptation to Sweden’s advantage 72 5. Greater adaptability via a more fl exible labour market 74 5.1 Introduction 74 5.2 Retain the Swedish labour market model – make needed changes to labour law in agreements 75 5.3 Enhance security and adaptability by means of social insurance reforms centring on the work-fi rst principle 79 Ds 2009:21 5.4 The joint agreements on security and adjustment systems work well and should be extended more broadly across the labour market 81 5.5 In parallel to – and in support of – security and adjustments agreements, universal skills insurance should be introduced 82 5.6 Invest in lifelong learning in other ways as well 84 5.7 Systematic policies for reducing exclusion should be pursued 85 5.8 Broadening labour immigration to Sweden is a welcome development 87 5.9 Persuade people to carry on longer in working life 87 5.10 Increase gender equality 89 6. Adaptability through national unity 91 6.1 Sweden’s consensus culture is a strength 91 6.2 Equality – a policy of distribution perceived to be fair 93 6.3 A strong civil society is needed to supplement the public sector 95 6.4 Immigration yields development potential – vital that integration works 96 7. Globalisation, the nation-state and the role of foreign policy 98 7.1 Introduction 98 7.2 Pursue an active foreign policy 99 7.3 Reinforce Sweden’s image abroad 101 7.4 Strengthen cooperation with Swedish enterprise in making Sweden better known abroad 102 7.5 Reform the Swedish Foreign Service 103 7.6 Deeper and better coordination of Sweden’s public undertakings abroad 104 7.7 Promote trade in markets of interest to Sweden 104 7.8 Establish lasting relations through foreign aid 105 Ds 2009:21 8.
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