99372 COUNTRY HIGHLIGHTS SWEDEN 2014 The World Bank interviewed a representative sample of the private sector in 4 of the most active economic regions in Sweden. The sample consisted of 600 business establishments surveyed from January 2014 through November 2014. The Enterprise Survey (ES) covers several topics of the business environment as well as performance measures for each firm. Below are the main highlights from the survey. Between 2011 and 2013, real annual sales grew at a higher rate in manufacturing than in services sectors Real annual sales grew at very different annual Real annual sales growth (%) 3 3 rates in manufacturing and services sectors between 2011 and 2013. In manufacturing, real sales grew at an annual average rate of 2.5%, while the same rate 2 was only 0.3% in services. Interestingly, medium- 2 sized firms (with between 20 and 99 employees), 1 Percentage Percentage exhibit stronger sales growth compared to small or large firms (5-19 employees and 100 or more 0 1 employees, respectively). In particular, small and 2014 SWEDEN ENTERPRISE SURVEY large firms had negative sales growth rates (-1.3% -1 and -0.5%, respectively), while real sales of medium- sized firms grew at 2.9% per year between 2011 and 0 -2 2013. Manufacturing Services Small(5-19) Medium(20-99) Large(100+) Large firms engage in international trade much more than small or medium firms Large firms in Sweden import and export more 70 35 than small and medium firms. However, the 60 30 difference is much more remarkable for exports than for imports. While the proportion of total inputs that 50 25 are of foreign origin is 46% among small firms, 41% Percentage Percentage 40 20 among medium firms, and 59% among large firms, the proportion of total sales that are exported directly 30 15 is much higher among large firms (33%) than among 20 10 small or medium firms (5% and 6%, respectively). Similarly, while 100% of large firms use material 10 5 inputs or supplies of foreign origin, the proportion is 0 0 only 81% and 83% among small and medium firms. Proportion of total inputs that are Proportion of total sales that are Among large firms, 72% export either directly or of foreign origin (%) exported directly (%) indirectly, while only 30% of small firms and 27% of Small(5-19) Medium(20-99) Large(100+) medium firms export directly or indirectly. Women constitute more than one-third of a firm’s workforce, but only 1 in 8 firms has a female top manager In 2013, women comprised 34% of the total number Percent of firms with a female top manager 35 of permanent, full-time employees in a typical 30 Swedish firm. However, compared to a group of 25 high-income countries where Enterprise Surveys Percentage 20 have been conducted, Sweden has a much smaller 15 proportion of firms whose top manager is a 10 woman. Women lead only 12% of firms in Sweden 5 compared to 19% in Croatia and Slovenia, 20% in 0 the Russian Federation, and 31% in Latvia. These data suggest that the “glass ceiling” is still an issue despite the high level of women’s participation in the labor market. Obtaining an operating license or a construction permit takes much longer for large firms Large firms in Sweden require more days to obtain 140 400 an operating license compared to smaller firms: 350 120 126 days as opposed to 24 and 9 days for medium- 300 sized and small firms, respectively. The time required 100 to get a construction-related permit also varies greatly 250 80 Days Days depending on the size of the firm. For small firms, 200 the average number of days required to get a permit 60 150 is 78. A much longer time, on average 103 days, is 40 100 required for medium-sized firms. An even longer 20 50 time is required for large firms. Perhaps due to the different size of the planned constructions, obtaining 0 0 a construction permit takes on average 395 days for Days to obtain an operating license Days to obtain a construction-related permit this type of firm: more than 5 times the amount of Small(5-19) Medium(20-99) Large(100+) time required for small firms. Services firms are more likely to provide training than manufacturing firms, and complain less about lack of skills 2014 SWEDEN ENTERPRISE SURVEY Swedish firms tend to invest in the skills of their 80 80 workforce. In particular, in the services sector, the 70 70 percentage of firms who offer formal training 60 60 programs to their employees is 72%, although the 50 Percentage Percentage 50 percentage is much smaller among manufacturing 40 40 firms (58%). In terms of the educational training of 30 30 workers, services firms are less likely to identify an 20 20 “inadequately educated workforce” as a major 10 10 constraint for the firm’s operations (34%) compared 0 0 to manufacturers (14%), suggesting that services Percent of firms offering formal Percent of firms identifying an training inadequately educated workforce as a firms are able to gather the required skills through a major constraint combination of hiring and training. Manufacturing Services Labor market issues such as labor regulations and inadequate education are ranked as top obstacles The survey asked business owners and top managers Inadequately educated workforce to name the biggest obstacle that the establishment Labor regulations faces in its everyday operations. An inadequately Access to land educated workforce was the most frequently Political instability mentioned top obstacle, ranking first for 28% of Crime, theft and disorder firms, which perhaps explains why the large majority Informal competitors of firms provide formal training to their employees. Access to finance Tax rates The second most frequently cited obstacle was labor Transport regulations (18%). Interestingly, the third-most-cited Business licensing and permits top obstacle was access to land (10%). Coupled with Corruption the very long time required to obtain a construction Customs & trade regulations permit, this obstacle is most likely to limit the Tax administration operations of large firms, or the expansion of small Courts Electricity and medium firms. 0 5 10 15 20 25 30 Percentage of firms The Enterprise Analysis Unit is a joint World Bank and IFC team of economists, survey experts specialized in private sector development. Surveys implemented by the team reveal what businesses and firms experience across the world by interviewing representative samples of the formal, non-agricultural, non-extractive, private sector with 5 employees or more. The resulting globally comparable firm-level data is used to construct business environment indicators and measure firm performance. The findings and recommendations help policy makers identify, prioritize, and implement policy reforms that support efficient private economic activity. For more information on the survey visit http://www.enterprisesurveys.org Generated using Enterprise Survey data as of May 4, 2015