„Every Deficit Means Potential for Business…“
Sweden wants to take more of its originative designs to foreign markets. Germany Trade & Invest’s Sweden representative Michał Woźniak and Ralph-Georg Tischer, managing director of the German-Swedish Chamber of Commerce, discuss why Germany is its main focus.
Sweden struck out on its own in not instituting coronavirus lockdowns. Did that pay off economically?
Ralph-Georg Tischer: Sweden’s “novel approach” to the pandemic only seems novel to the outsider. Taking responsibility and having faith in common sense is the default way of handling difficult situations up north. As for the economic implications, compared to Germany the downturn was much less severe and recovery will be much faster. But smaller countries in general seemed to navigate the pandemic better. Of course, the highly globalized Swedish economy also suffers from the worldwide repercussions, be it supply chain issues or travel restrictions. Yet, local businesses and especially the service sector benefited from the lack of lockdowns.
Michał Woźniak: I’d argue this is also the only differentiator compared to our Scandinavian neighbors. Although Denmark and Norway implemented much tougher restrictions, their economies fared more or less equally well through the pandemic. Their GDPs recorded slightly smaller drops than Sweden but will most likely also recover at a somewhat slower pace. This isn’t, however, as much a testimony to the effects of different corona strategies as it is to the varying economic structures among the three countries.
Michal Wozniak (left) and Ralph-Georg Tischer © GTAI
What image do Swedes have of Germany as a business location and what motivates them to invest here?
Tischer: Size and potential – that’s what the majority of Swedish businesses associate with the German market and what attracts them. Due to the common market, the EU tends to be the first step in Swedish expansion. And after Brexit, Germany is more than ever the prime destination within it. Swedish investors often aim to scale up their businesses on the German market. They appreciate the abundance of potential partners with global activities they piggyback upon to reach the world market.
Which sectors invest in Germany the most?
Woźniak: In the past six years, the main drivers of Swedish FDIs in Germany were service activities and retail. They were largely focused around traditional industries, like fashion and other consumer goods, as well as machinery. But almost one-third of Swedish investment projects in Germany between 2015 and 2020 were initiated by the
What are their biggest concerns and hurdles when investing in Germany?
Tischer: The ICT sector is a good example. With regards to digitalization, Sweden is among the world leaders, whereas Germany has upward potential. And that’s exactly the Swedish approach – every deficit means potential for business. If digitalization is not at the highest level, there’s a big market for digital solutions. If there are slightly different rules and conditions between Germany’s 16 regional states, you can start with one instead of trying to take over the biggest European market all at once. Swedes know that success is only a matter of having the right people to navigate. That’s something we can help with.
Sergel’s Square in central Stockholm is a buzzing commercial and cultural forum. A number of new infrastructure projects are being built in the vicinity to support the capital city’s growth © glimpseofsweden – stock.adobe.com