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Challenges and Priorities for Europe. European Best Performers in Times of Crisis

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TEH-A has produced a study of economic trends in OECD-member European countries over the last ten years to evaluate their performance, with special focus on the crisis period (2008-2012). The study …

TEH-A has produced a study of economic trends in OECD-member European countries over the last ten years to evaluate their performance, with special focus on the crisis period (2008-2012). The study takes into consideration a number of key indicators including GDP, employment level, public debt, productivity, international openness and innovation. The four best performers are Austria, Poland, Slovakia and Sweden. These are economies of varying size and characteristics that have adopted different strategies and policies, but which share enhanced resilience to the crisis. The study was presented during our 39th annual workshop, "Intelligence on the World, Europe and Italy". Villa d'Este, Cernobbio (Como), September 7, 2013.

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  • 1. CHALLENGES AND PRIORITIES FOR EUROPE European Best Performers in Times of Crisis This document has been prepared for The European House - Ambrosetti Forum “Intelligence on the World, Europe, and Italy”, Villa d'Este - Cernobbio - September 6, 7 and 8, 2013. Il presente documento è stato preparato da The European House - Ambrosetti per il Forum di “Lo Scenario di oggi e di domani per le strategie competitive”, Villa d’Este - Cernobbio - 6, 7 e 8 settembre 2013.
  • 2. Inserire titolo del documento Challenges and Priorities for Europe Index Introduction Methodological approach Performance analysis of the 20 European OECD Countries: Gross Domestic Product (GDP) Employment and labour market Government debt Export and external openness Attractiveness Manufacturing Innovation Entrepreneurship Closing remarks 1 Inserire titolo del documento Challenges and Priorities for Europe Introduction In the context of the current financial and economic crisis, The European House – Ambrosetti decided to analyse the economic performance of European countries in the last 10 years in order to comprehend the most resilient countries during the crisis (2008-2012) The study outlines common features, strategies and political choices that have contributed to achieve positive performances in order to learn from the best cases. This document captures the trends of the last 10 years with a focus on the financial and economic crisis, outlining possible reasons that explain Countries performances. 2
  • 3. Inserire titolo del documento Challenges and Priorities for Europe Methodological approach  Out of all the 28 EU Member States the analysis takes into consideration only the 20 European OECD countries in accordance with data availability and comparability.*  The study considers as economic and financial indicators: GDP, employment rate, labour cost, labour productivity, general government gross debt, exports, external openness, foreign direct investments, value added of manufacturing, R&D expenditure, venture capital investments, cost to start a business and tax rates. * The analysis excludes: Bulgaria, Croatia, Cyprus, Latvia, Lithuania, Luxembourg, Malta and Romania. Luxembourg was not included in the study due to its specific economic structure and dimension. 3 Inserire titolo del documento Challenges and Priorities for Europe The sample: 20 European OECD Countries Country Austria Belgium Czech Republic Denmark Estonia Finland France Germany Greece Hungary Ireland Italy Netherlands Poland Portugal Slovakia Slovenia Spain Sweden United Kingdom Code AT BE CZ DK EE FI FR DE GR HU IE IT NL PL PT SK SI ES SE UK 4
  • 4. Inserire titolo del documento Challenges and Priorities for Europe The GDP - Highlights  With the exception of Greece, Italy and Portugal, all countries reported positive performances in terms of GDP growth between 2002 and 2012; only 7 countries (Austria, Belgium, France, Germany, Poland, Slovakia and Sweden) maintained the same trend during the crisis period (2008-2012). [Figure 1]  Moreover, the worst performers in the 2002-2012 decade were also the least resilient over the crisis period. [Figure 1]  During the decade, 7 countries had a GDP Compound Annual Growth Rate (CAGR) in line or higher than the US; only 3 countries, Poland, Slovakia and Sweden, outperformed the US during the crisis. [Figure 1]  The countries with the best performances in two periods (with a GDP CAGR higher than the sample’s average) were Austria, Poland, Slovakia and Sweden. [Figure 1] 5 Inserire titolo del documento Challenges and Priorities for Europe The GDP – Figure 1 Resilience GDP (2012): $13.518,000 mln. CAGR 2002-2012: 1.64% CAGR 2008-2012: 0.79% The long term Source: The European House – Ambrosetti re-elaboration on OECD data, 2013 6
  • 5. Inserire titolo del documento Challenges and Priorities for Europe GDP and entry into the EU and EZ- Highlights  Entry into the EU or the Eurozone* (EZ) appears to produce positive effects on new member states. While Austria’s performance has improved following entry into the Eurozone, Poland and Slovakia have significantly improved their performance in conjunction with entry into the European Union. [Figure 2] 800 700 GDP, Billion $ 600 500 400 300 Austria Poland Slovakia Sweden 200 100 0 Figure 2. Data from 2013 to 2018 are IMF projections * Sweden and Poland did not adopt the Euro 7 Inserire titolo del documento Challenges and Priorities for Europe GDP - Highlights  Poland (9.88 out of 10) and Slovakia (8.34 out of 10) show the highest scores under the GDP Index* which combines the country’s performance in the short- and longterm. Sweden and Austria followed closely. [Figure 3]  Portugal, Italy and Greece report the lowest scores. Spain and Ireland – both included in the PIIGS group along with Greece, Italy and Portugal – achieved better scores due to stronger GDP growth during the 2002-2012 decade. [Figure 3] *The GDP Index is a weighted average of the GDP CAGR during the 2002-2012 and 2008-2012 periods; assigned weights are respectively 25% and 75%. The scores of the index range from 0 to 10 8
  • 6. Inserire titolo del documento Challenges and Priorities for Europe The GDP Index – Figure 3 COUNTRY GDP INDEX GDP - CAGR 2002-2012 GDP - CAGR 2008-2012 9.88 8.34 7.40 6.61 6.15 6.12 6.11 5.90 5.59 5.42 5.07 5.06 5.01 4.47 4.40 4.24 3.97 3.58 3.55 0.00 4.27% 4.50% 2.23% 3.45% 1.62% 2.91% 1.19% 1.35% 1.04% 1.36% 1.15% 1.57% 1.84% 1.30% 0.56% 1.14% 1.83% -0.06% -0.07% -0.13% 2.96% 1.11% 1.43% -0.19% 0.41% -0.40% 0.62% 0.29% 0.13% -0.25% -0.52% -0.78% -1.00% -1.28% -0.91% -1.44% -2.15% -1.44% -1.48% -5.40% Poland Slovakia Sweden Estonia Austria Czech Republic Germany Belgium France United Kingdom Netherlands Finland Ireland Spain Denmark Hungary Slovenia Portugal Italy Greece *The GDP Index is a an overall indicator that combines the GDP CAGR of the 2002-2012 period with the 2008-2012 period. 9 Inserire titolo del documento Challenges and Priorities for Europe Employment - Highlights  Among EU best performers Austria and Sweden showed higher than average employment rates. During the decade (2002-2012), Poland and Slovakia presented a lower than average employment rate. However, Poland’s employment rate is rapidly improving and the gap with the other countries is being reduced. [Figure 4]  Between 2002 and 2012 only 8 countries have shown a reduction in the employment rate. During the crisis only Germany, Poland, Hungary and Austria have shown an increase of this index. [Figure 5] 10
  • 7. Inserire titolo del documento Challenges and Priorities for Europe Employment – Figure 4 EMPLOYMENT RATE 2012 COUNTRY 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 75.1 73.8 72.8 72.6 72.5 70.1 69.4 67.1 66.5 64.1 63.9 61.8 61.8 59.7 59.7 58.8 57.2 56.8 55.4 51.3 Netherlands Sweden Germany Denmark Austria United Kingdom Finland Estonia Czech Republic Slovenia France Belgium Portugal Poland Slovakia Ireland Hungary Italy Spain Greece EMPLOYMENT RATE 80% 75% 70% 65% 60% 55% 50% 2002 Austria 2003 2004 2005 Poland 2006 2007 Slovakia 2008 2009 Sweden 2010 2011 2012 Sample average (20 countries) 11 Source: The European House – Ambrosetti re-elaboration on Eurostat data, 2013 Inserire titolo del documento Challenges and Priorities for Europe Employment – Figure 5 COUNTRY 8 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Poland Germany Estonia Austria Slovakia Belgium Italy France Hungary Czech Republic Netherlands Finland Sweden Slovenia United Kingdom Spain Denmark Ireland Greece Portugal VARIATION 2002-2012 8.0 7.4 5.4 4.4 3.2 2.1 1.4 1.0 1.0 1.0 0.6 0.3 -0.2 -0.2 -1.1 -3.2 -3.8 -6.3 -6.4 -7.4 * Employment rate refers to population aged 15 to 64 Source: The European House – Ambrosetti re-elaboration on Eurostat data, 2013 COUNTRY 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Germany Poland Hungary Austria Czech Republic Sweden Belgium France United Kingdom Finland Italy Netherlands Slovakia Estonia Slovenia Denmark Portugal Ireland Spain Greece VARIATION 2008-2012 2.7 0.5 0.5 0.4 -0.1 -0.5 -0.6 -0.9 -1.4 -1.7 -1.9 -2.1 -2.6 -2.7 -4.5 -5.3 -6.4 -8.8 -8.9 -10.6 16 12
  • 8. Inserire titolo del documento Challenges and Priorities for Europe Employment - Highlights  Among the best performers in terms of GDP Index, only Poland and Austria have shown a positive variation of the employment rate also during the crisis. [Figures 5, 6, 7, 8]  Considering new job creation per thousand inhabitants the best performing countries in 2012 were Germany, Austria and Belgium. [Figure 9]  New job creation and GDP growth have shown a positive relation. Greece, Ireland, Portugal and Spain report negative performances under all accounts; Poland, Austria and Sweden are the best performers along with Belgium and Germany. [Figure 9] 13 Inserire titolo del documento Challenges and Priorities for Europe GDP and employment – Figure 6 Source: The European House – Ambrosetti re-elaboration on Eurostat and OECD data, 2013 14
  • 9. Inserire titolo del documento Challenges and Priorities for Europe GDP and employment – Figure 7 Source: The European House – Ambrosetti re-elaboration on Eurostat and OECD data, 2013 15 Inserire titolo del documento Challenges and Priorities for Europe GDP Index and Employment Index – Figure 8 *The Employment Index is a weighted average of the variation in employment rate during the 2002-2012 and 2008-2012 periods; assigned weights are respectively 25% and 75%. The scores of the index range from 0 to 10 Source: The European House – Ambrosetti re-elaboration on Eurostat and OECD data, 2013 16
  • 10. Inserire titolo del documento Challenges and Priorities for Europe GDP and new job creation – Figure 9 Source: The European House – Ambrosetti re-elaboration on Eurostat and OECD data, 2013 17 Inserire titolo del documento Challenges and Priorities for Europe The labour market - Highlights  In all countries during the 2001-2011 period, the labour cost has increased. Germany and Sweden registered the lowest increase. [Figure10]  Sweden and Poland have registered an increase of labour productivity and a slight increase in labour cost. [Figure10]  Slovakia has registered the biggest increase in labour productivity: it should be noted that the initial level of this indicator was particularly low. [Figure10] 18
  • 11. Inserire titolo del documento Challenges and Priorities for Europe The labour market – Figure 10 COUNTRY LABOUR COST PER HOUR IN EURO (2011) Denmark Sweden Belgium France Netherlands Germany Finland Austria Ireland Italy Spain United Kingdom Greece Slovenia Portugal Czech Republic Slovakia Estonia Poland Hungary 37.5 36.4 36.3 33.6 31.7 29.6 29.5 29.0 28.7 27.1 21.2 20.1 16.2 14.9 12.4 10.4 8.1 7.9 7.3 7.3 * Latest available data ** Labour productivity is measured as labour productivity per hour Source: The European House – Ambrosetti re-elaboration on Eurostat and OECD data, 2013 19 Inserire titolo del documento Challenges and Priorities for Europe Government debt - Highlights  The countries with the highest government debt growth rate during the 2002-2012 decade are also the ones with a government debt-to-GDP ratio lower than 60% (average ratio of the observed period). [Figure 11]  Despite having one of the highest government debt growth rates, Sweden and Slovakia have maintained a moderate government debt-to-GDP ratio. [Figure 11]  During the decade, Italy and Greece have reported shrinking GDPs and the highest government debt-to-GDP ratios (more than 100%). [Figure 11]  Relating the GDP Index to the government debt-to-GDP ratio it emerges that countries with higher GDP growth rates (Austria, Poland, Slovakia, Sweden) also have a government debt-to-GDP ratio below 80%. [Figure 12] 20
  • 12. Inserire titolo del documento Challenges and Priorities for Europe Government debt – Figure 11 Source: The European House – Ambrosetti re-elaboration on IMF data, 2013 21 Inserire titolo del documento Challenges and Priorities for Europe Government debt – Figure 12 Source: The European House – Ambrosetti re-elaboration on IMF data, 2013 22
  • 13. Inserire titolo del documento Challenges and Priorities for Europe Exports and external openness - Highlights  The performance of EU countries is quite diversified in terms of exports. 12 countries out of 20 reported in 2012 an export-to-GDP ratio lower than 60%. Ireland leads the ranking with a ratio set at 106.6%, followed by Hungary, Estonia and Slovakia. [Figure 13]  Poland has significantly improved its performance, reporting a positive variation of 8% in the 2001-2012 period. A similar trend is observed in Austria. Germany is the main trade partner of Austria and Poland (31% and 25% of total exports in 2012 towards Germany).  On the other hand, Sweden has presented an export-to-GDP ratio of 40% and an increase in exports that is slightly higher than 3%. [Figure 13]  Poland and Slovakia have also reported an impressive performance in terms of external openness:* the results achieved are by far superior to the EU average. Austria has been in line with the EU average. [Figure 14] *External Openness is defined as (Export + Import )/GDP. It serves as a proxy for measuring the integration of the economy into the global economy 23 Inserire titolo del documento Challenges and Priorities for Europe Exports – Figure 13 EXPORTS OF GOOD AND SERVICES (% OF GDP, 2012) Source: The European House – Ambrosetti re-elaboration on World Bank data, 2013 24
  • 14. Inserire titolo del documento Challenges and Priorities for Europe External openness – Figura 14 EXTERNAL OPENNESS (2002=100) 255 235 Austria 215 Poland 195 Slovakia Sweden 175 Sample average (20 countries) 155 135 115 95 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Source: The European House – Ambrosetti re-elaboration on World Bank data, 2013 25 Inserire titolo del documento Challenges and Priorities for Europe Attractiveness - Highlights  In 2011, Belgium attracted the lion’s share of Foreign Direct Investment (FDI) flows (€103 billion); the United Kingdom, Germany and France followed at some distance. [Figure 15]  Belgium (17.7%), Slovakia (17.1%), Poland (17.0%) and Estonia (16.5%) registered the highest growth rates. Austria and Sweden also report an annual growth rate higher than 12%. [Figure 15]  In terms of stock of FDIs on GDP Belgium and Ireland have registered the best performances. The largest European economies - Germany, United Kingdom, France, Italy and Spain - reported a value of this indicator lower than 55%. [Figure 16] 26
  • 15. Inserire titolo del documento Challenges and Priorities for Europe Attractiveness – Figure 15 20% 100,000 18% 16% $ millions 80,000 14% 12% 60,000 10% 8% 40,000 6% 4% 20,000 2% 0% 0 FDI - FLOW, 2011 ($ millions) * * FDI - STOCK, CAGR 2001-2011 (%) * Latest available data Source: The European House – Ambrosetti re-elaboration on UNCTAD data, 2013 27 Inserire titolo del documento Challenges and Priorities for Europe Attractiveness – Figure 16 FDI STOCK (% OF GDP), 2012 Source: The European House – Ambrosetti re-elaboration on UNCTAD data, 2013 28
  • 16. Inserire titolo del documento Challenges and Priorities for Europe Manufacturing and Europe In late 2012 the European Commission launched a strategy aimed at bringing the value added of manufacturing to 20% of GDP in the 27 member countries by 2020 (today this figure is equal to 15.6%). This means that manufacturing value added should reach 2.550 billion euros, starting from a level of 1.758 billion in 2011: this is approximately the value added created by companies in the manufacturing sector of Germany and Italy. To reach this objective, assuming that productivity levels remain constant over the next 8 years, the volume of those employed in manufacturing should rise from 32.3 to 46.8 million. Valerio De Molli (2013), “The 20% rule in manufacturing”, Il Sole 24 Ore 29 Inserire titolo del documento Challenges and Priorities for Europe Manufacturing - Highlights  The manufacturing sector of the 4 best-performing economies represents a high portion of GDP (from 16% in Sweden to 24% in Slovakia). [Figure 17]  During the 2000-2010 period, the weight of manufacturing decreased in all countries. Poland showed the smallest reduction while Ireland suffered the greatest decrease. [Figure 17]  Between 2001 and 2011, employment in the manufacturing sector decreased in all countries except in Poland where the annual growth rate has been 0.6%. [Figure 18] 30
  • 17. Inserire titolo del documento Challenges and Priorities for Europe Manufacturing – Figure 17 * * * Latest available data 31 Source: The European House – Ambrosetti, Observatory on Europe, Eurostat data 2013 Inserire titolo del documento Challenges and Priorities for Europe Manufacturing – Figure 18 30% 1% 25% 0% 20% -1% 15% -2% 10% -3% 5% -4% 0% -5% * Employment in manufacturing/Total employment (2011) Employment in manufacturing, CAGR 2000-2010 * * Latest available data Source: The European House – Ambrosetti, Observatory on Europe and Eurostat data, 2013 32
  • 18. Inserire titolo del documento Challenges and Priorities for Europe Innovation - Highlights  In 2012, Finland, Sweden and Denmark registered an R&D expenditure on GDP higher than 3%; the sample average instead is equal to 2%. [Figure 19]  The ranking could be split in two: in the upper part are central and northern countries; in the lower southern and eastern countries. [Figure 19] 33 Inserire titolo del documento Challenges and Priorities for Europe Innovation – Figure 19 R&D EXPENDITURE (% OF GDP), 2012 Source: The European House – Ambrosetti on Eurostat data, 2013 34
  • 19. Inserire titolo del documento Challenges and Priorities for Europe Entrepreneurship - Highlights  In 2012, Sweden was the best performer country for venture capital investments on GDP (0.64%) and it also reported a low level of cost to start a business (0.5%). [Figures 20, 21]  In 2012, Poland reported a total tax rate lower than the average of analysed countries (43.8% vs. 46.7%). [Figure 22] 35 Inserire titolo del documento Challenges and Priorities for Europe Entrepreneurship – Figure 20 TOTAL VENTURE CAPITAL INVESTMENT (% OF GDP), 2012 Source: The European House – Ambrosetti re-elaboration on European Commission data, 2013 36
  • 20. Inserire titolo del documento Challenges and Priorities for Europe Entrepreneurship – Figure 21 COST TO START A BUSINESS (% OF GROSS NATIONAL INCOME PER CAPITA), 2012 Source: The European House – Ambrosetti re-elaboration on World Bank data, 2013 37 Inserire titolo del documento Challenges and Priorities for Europe Entrepreneurship – Figure 22 TOTAL TAX RATE (% OF COMMERCIAL PROFITS), 2012 Source: The European House – Ambrosetti re-elaboration on World Bank data, 2013 38
  • 21. Inserire titolo del documento Challenges and Priorities for Europe EU Best Performers – Key common issues  The good economic performances of the best performing countries (Austria, Poland, Slovakia and Sweden) have been achieved in different ways.  Austria and Sweden perform very well in terms of employment rate: from 2002 their employment rate is higher than average.  The 4 best performing economies also present a government debt-to-GDP ratio lower than 80%.  Poland and Slovakia show a high level of external openness; Slovakia’s exports account for almost 90% of its GDP.  Germany is the main trade partner of Austria, Poland and Slovakia: these countries have benefited from the stability of the German economy.  The manufacturing sector of Austria, Poland and Slovakia accounts for a high portion of GDP and employment (≈ 20%).  Austria and Sweden have focused their efforts on labour markets and innovation. 39 Inserire titolo del documento Challenges and Priorities for Europe EU Best Performers - An overview Germany Austria Poland Slovakia Sweden 14 15 19 15 11 17 14 17 Employment rate (2012) 3 4 12 11 5 7 2 5 9 6 6 General Government Debt (% GDP, 2012) 13 11 Old Age Dependency ratio (2012) 20 13 9 3 5 1 17 Inflation rate (%, 2012) 4 8 17 18 1 Manufacturing (% GDP, 2010) 5 8 7 11 9 5 4 6 12 Employment in manifacturing (2011) Foreign Direct Investment (FDI stock/GDP, 2012) 18 14 13 12 10 14 External openess (as (Export+Import)/GDP, 2012) 11 9 12 8 4 2 Venture Capital (% GDP, 2011) MANUFACTURING Unemployment rate (2012) 5 3 1 3 Labour cost (2012) PUBLIC FINANCE 11 Youth participation (2011) LABOUR MARKET 4 Labour productivity (per person employed, EU-27=100, 2011) 10 20 4 4 8 7 2 14 Patents registered (2011) 20 19 19 19 1 3 5 INTERNATIONALIZATION Export (% GDP, 2011) INNOVATION R&D expenditure (% GDP, 2011) ENTREPRENEURSHIP 2 12 5 13 13 Total tax rate (2012) 11 16 9 12 15 Cost to Start a Business (% of GNI per capita, 2012) 13 12 18 9 4 *The table offers a ranking of Germany and the top 4 economies from six different aspects Source: The European House – Ambrosetti, Observatory on Europe, OECD and Eurostat data, 2013 40
  • 22. Inserire titolo del documento Challenges and Priorities for Europe Austria - Highlights  The country benefits from excellent infrastructure and has improved innovation capacity thanks to sustained R&D spending.  Thanks to robust domestic demand, low unemployment and wealth of its main partner, which is Germany, the Austrian economy is stable. Favourable business environment allowed FDIs to recover quickly to precrisis levels.  Manufacturing is focused on specialised high-quality products and accounts for a significant portion of the GDP.  Austria’s competitiveness would be further enhanced by greater flexibility in the labour market and fine-tuning of its already excellent educational system. 41 Inserire titolo del documento Challenges and Priorities for Europe Poland - Highlights (1/2)  Poland is definitely the most interesting case: indeed the country has been reporting economic growth for over 20 years now.  The reasons of the success may be attributed to:  rigorous monetary policy aimed at containing inflation, which reached a yearly rate of 649% in the ’80s; such discipline allowed it to avoid credit bubbles;  taxation – even though not particularly low – it has never gone out of control; thus, a fiscal bubble has been prevented;  manufacturing which represented one-fifth of GDP by the mid-1990s;  external openness and reduction of external debt. 42
  • 23. Inserire titolo del documento Challenges and Priorities for Europe Poland - Highlights (2/2)  The financial sector is well developed and confidence has been increasing. Banks are assessed as more sound than in the past, although additional consolidation would be necessary.  Government efficiency and regulation remain the most critical aspects in the opinion of the corporate sector.  A significant upgrade of the transport infrastructure is required to boost competitiveness further. Although some progress was made in this area during the European Football Championship in 2012, further efforts are nevertheless required to better connect the various parts of the country.  Innovation is considered a key component for future growth in Poland and the country is utilising €10 billion in Structural Funds from the European Union to stimulate commercially-oriented research, particularly in the private sector. 43 Inserire titolo del documento Challenges and Priorities for Europe Slovakia - Highlights  Several years ago, the relatively young Slovak economy exhibited the fastest economic growth in Europe. However, this trend has gradually waned in international comparisons and economic growth has slowed.  The most significant competitive advantages of Slovakia are:  exports and external openness towards EU countries;  foreign investment stimulated by tax incentives;  manufacturing that produces a substantial proportion of GDP and employs a significant portion of the labour force.  Corruption, bureaucracy, restrictive labour regulations and insufficient infrastructure were identified as the most problematic business factors and the greatest long-standing hurdles in the Slovak business environment. 44
  • 24. Inserire titolo del documento Challenges and Priorities for Europe Sweden - Highlights  The country has been placing significant emphasis on creating the conditions for innovation-led growth.  The Swedish government introduced tax reductions to tackle employment reduction: in fact, employment rate went from 74.2% in 2007 to 73.8% in 2012.  Efficiency and transparency of public institutions are particularly high and they constitute attractive factors of the Swedish economy.  Combined with a strong focus on education over the years and a forwardlooking attitude towards technological change, Sweden has developed an advanced business culture and is one of the world’s leading innovators.  The country shows a stable macroeconomic environment, with a balanced budget and manageable public debt levels. These characteristics actively combine to make Sweden one of the most productive and competitive economies in the world. 45