What Sweden’s Success Reveals About European Competitiveness

Read this article from BCG about Swedish companies and what they do for success.

Our TSR analysis revealed some important exceptions to the narrative of European underperformance.¹ Smaller IT companies in Europe, for example, have performed as well as or better than their US peers in shareholder value creation over the past decade. The median annualized ten‑year TSR for EU small‑cap IT firms was approximately 10%, versus about 6% for comparable US companies.

A disproportionate share of these winners are Swedish companies. And this degree of outperformance is not limited to the small-cap IT sector. Sweden’s public companies have delivered exceptional performance, making the country a core case study for EU competitiveness. Over the past ten years, Sweden has been a top value creator among EU economies, scoring only slightly below the Netherlands: Swedish firms achieved a median TSR of around 8.8% per year compared to around 8.9% for Dutch companies.

What distinguishes Sweden from the Netherlands, however, is the much higher rate of outperformance among Swedish business. Whereas only 16% of Dutch companies in our analysis ranked in the top quartile of performance for their sectors, this was true of 30% of Swedish firms.

In fact, despite having only around 2% of the EU’s population and approximately 3% of its GDP, Sweden accounts for almost one-fifth of the top-quartile value-creating firms in the EU across all sectors. In other words, roughly 18% of Europe’s best-performing companies are Swedish, an impressive level of overrepresentation.

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Source:BCG