Sweden Current Developments - Case Study Example

EU 2020 Agenda: Comparing Outcomes al Affiliation) Contents Contents 2 Table of figures 3 Graph External and domesticdemand, contributions……………………………………...7 3 Executive Summary 4 Introduction 4 Discussion 5 Smart Growth 9 2020 Agenda 10 Conclusion 12 References 13 Table of figures Figure 1 GDP per head 5 Figure 2 Real GDP growth rate-volume 6 Figure 3 Unemployment rate 8 Graph 1 External and domestic demand, contributions……………………………………...7 Executive Summary Sweden current developments have been made possible by the GDP per capita, real GDP growth rate, low unemployment rate, labor productivity and its investments in the public and private sector. It is one of the most developed countries in the world and the first ranked country in the European Union region. It is really doing well individually to the point where its GDP is higher than that of EU countries. The education sector, entrepreneurship, enterprise environment, and digital technology have also enabled its current development. Sweden should however invest more on its industries, exports, and on its workforce so that more people can be employed. The Smart Growth could enable innovation and knowledge, which could subsequently increase the number of educated individuals to the workforce and shall lead to more business ventures. Finally, the 2020 agenda is a pointer showing the areas that Sweden needs to work on. It has achieved some of those objectives and is still working on achieving the rest through government policies. Introduction Sweden is situated in Northern Europe. It is the third-largest country in the European Union (EU). It became a member of EU in 1995. Sweden is one of the successful countries in Europe with a tremendous growth in its economy. It is a politically stable country since the last time it was directly in war was in 1814. It has been able to grow to one of the most developed countries in the world as a result (Paris, 2005). This report primarily focuses on the current development of Sweden and its Economic and Policy Implications. Some key performance indicators shall be used to show the progress of Sweden. Discussion The performance indicators of this report are GDP per head, Real GDP growth rate, unemployment rate, and labor productivity. These indicators are useful because they show a detailed analysis of Sweden’s current development, its performance, and output for all industries. Figure 1 GDP per head Data source: Eurostat Gross domestic product measures the economic carry-ons of a country. It is the worth of all products produced less the worth of any products used in their formation (Amacher & Pate2012). For comparison, the European Union average is set to equal 100. PPS is used for comparison to eliminate the variances in levels of price amid countries permitting meaningful comparisons of GDP between states. One can see from the figure above that the GDP per capita of Sweden has been constant at around 126 from 2005-2013. It is because of the political stability in the country and Sweden employing its factors of production evenly and in the same way for the past eight years (IMF, 2014). The GDP can grow if more people obtain employment and if the people in the country increase their productivity. One reason for the constant GDP is that the ratio of the people joining the workforce is equal to the people retiring from the workforce. To improve on its GDP per capita, the people joining the workforce should be more than the people leaving the workforce. Figure 2 Real GDP growth rate-volume Data source: Eurostat The yearly growth rate of GDP volume is calculated to allow comparisons of the changes of economic development both over time and between economies of different sizes. Figure 2 shows that Sweden’s GDP has been higher than that of EU countries for the past 4 years. Its engineering segment accounts for 50% of output and exports. Telecommunications, the automotive industry, and the pharmaceutical industries are also of great importance. Agriculture however accounts for 2% of GDP and employment (IMF, 2014). The GDP can rise even further if the government focuses more on agriculture and increases its output to be more than 2%. It should also invest more in engineering, telecommunication, pharmaceutical and automotive industry so that it can be higher than 50%. All factors of production in Sweden should be employed to maximum to increase the Output. In addition, Sweden should stop relying on engineering primarily and should maximize on its other resources. However, its export sector is struggling and it affects negatively on the GDP. The only solution is to invest in exports and ensure that there are more exports. The table below justifies this statement: Graph 2 External and domestic demand, contributions Data Source: European Commission In addition to the above, labor productivity has also increased the GDP of Sweden. It has risen from 30% in 2005 to 32% in 2013. Once people start working to their full potential, their productivity in their jobs shall increase. Which shall in turn increase the performance and profitability the individual organizations and of the country’s GDP simultaneously. Unemployment rates refer to unemployed individuals as a proportion of the labor force. The labor force is the overall number of people employed and unemployed. The unemployment rate shows the percentage of people not adding to a countries productivity. Figure 3 shows the unemployment rate of Sweden as compared to other EU countries. Figure 3 Unemployment rate Data Source: Eurostat In spite of a moderately modest economic activity, unemployment has been stuck around 8% for several years now. The current challenge for the Swedish labor market is to integrate the growing number of economically and socially vulnerable groups. They should be trained to acquire various skills that shall make them useful members of the society (Freedson, 2012). Training shall increase their chances of joining the workforce. The employment level shall reduce as a result. The total Sweden investment level is greater than in other EU countries such as Denmark, the Netherlands, or Germany. Investment performance in industries has however been weak, whereas those in public and service sector are rising. The Public sector investment is pushed by a major need for enhancements in both central and local government structure including housing. Investment in residential housing has been especially low for long despite increasing house prices. The country should make a point of investing in housing due to the increasing urbanization and housing scarcity, (International Trade and Finance, 2002). For example, it should invest in transport to enhance connectivity in and between urban regions. It could really help to ease some of the limitations instigated by housing shortages. The above therefore shows that Sweden is performing really well in terms of its GDP per capita and total Output volume. Both are above other EU union countries. These developments are proof that Sweden is doing really well economically. In addition, the unemployment rate of Sweden is lower than that of other EU union countries. It shall continue to develop if it invests more on its exports, unemployed citizens, and residential houses but so far, it is among the most developed countries in the world. Its policies are adding to its development as they are promoting business by improving tax conditions and more education in addition to innovation. Smart Growth Smart growth refers to developing the economy based on innovation and knowledge (Cooper, 2004). Sweden adopted this priority to enhance growth and employment. To accomplish more job growth in global competition, there is a continuous need to reinforce the environment for innovation and business. Swedish government has done this by increasing innovation offices in Sweden. Various policies have also been set up to improve business, innovation, and knowledge. One of them includes the corporate tax committee, which is a strategic part of the Government’s work of improving tax conditions for business. The policy for more knowledge is an aim by the government to increase the quality of education and the number of educated people, which has been deteriorating due to the worsening results in Swedish schools (Dacam, 2011). The Government has been directing extensive reforms from the year 2006 to encourage more knowledge in schools. The knowledge level is being raised by increasing teaching hours, assessing pupils’ results at an early stage and strengthening teachers role, skills, and status. It is crucial that this work continues. Innovation leads to development socially and competitively in business. Swedish government has founded its economy on a great level of knowledge in business and society, which has enabled its welfare to develop. 2020 Agenda European Union countries aims for 2020 include digital agenda, education and training, enterprise environment, environmental sustainability, labor market and employment, and finally social inclusion. The EU countries saw these six aims as a means to obtain competitiveness, which was lacking in most of their economies. Despite the 2020 agenda, Sweden is doing really well in some of these areas. These areas include its great emphasis on education and training to add to its workforce skills as well as an outstanding enterprise environment with strong competition in the nationwide marketplace, a robust culture of private enterprise, well-established clusters, and funding that is more readily accessible than other EU countries (Hart, 2013). Sweden is also making tremendous strides to encourage the embracing of the up-to-date digital technologies to improve innovation and productivity. Some of Sweden’s 2020 agenda includes building Europe’s conditions for development in E-Commerce and digital services. It has as a result prioritized efforts to launch a digital internal marketplace, mainly by recognizing and eliminating barriers to E-Trade in the internal market. A good example is ways to come up with more safe payments and package distribution. Access to high transmission broadband speed is important for the likelihood of working, living and directing business activities all over the country and for giving good public services. A well-built broadband set-up is also a prerequisite for attaining the digital internal marketplace goals. Sweden aims at investing in IT infrastructure and embracing higher mobile technology such as the 4G. To achieve environmental sustainability, Climate change seems to be the Swedish Government’s topmost environmental priority (OECD, 2014). Further particular significant areas of ecological policy comprise of the protection of biological diversity, aquatic and marine environments, and progress to a non-toxic environment. Alongside ecological sustainability, competitiveness and a safe energy source are important conditions for welfare and growth that are viable in the long term (Nature, 2009). A balanced growth of the energy structure is therefore mandatory, which fulfills the need for maintainable energy at globally competitive prices. The Swedish Government full employment policy contains measures to stimulate the supply and demand for labor. The vision 2020 aims to decrease the gap between employed men and women by increasing the number of women in the workplace. It wants to increase the number of the young persons and immigrants in the workplace. A higher quality of education and training individuals shall also increase the number of people in the workforce (Wichowski, 2008). As a result, more people shall be qualified to join various professions. The 2020 Agenda on the EU shall result into development not only in the economy of individual countries but also to the citizens who shall develop intellectually and professionally. Countries shall adopt new technologies thereby increasing productivity and efficiency of industries. The digital agenda shall enable more transactions to be performed online thus increase the market share of the countries to global consumers. Sustaining the environment shall ensure that the environment is secured with reduced instances of pollution, deforestation and killing of marine life. As a result, these countries shall grow and flourish with minimal cases of global warming. The 2020 agenda shall therefore develop the EU union countries and make that region the most developed region in the world. Sweden’s targets are very realistic. They can be achieved if the government and the individuals commit to them. So far, it has already accomplished some of those targets it will not therefore be challenging to achieve the rest. The proper mindset by everyone in the country and proper implementation by the government shall ensure achievement of the vision 2020 by Sweden (Karen, 2006). Conclusion In conclusion, Sweden has really developed over the years. Its GDP per capita and total output volume is way above that of other European Union countries. In addition, its unemployment rate is not that alarming and its labor productivity has increased from previous years. It should however invest in its industries and residential housing to add to its economy and solve some of the shortages of housing. Sweden should also embrace smart growth and enforce the policies and regulations that shall assist in increasing innovation and knowledge to its citizens and immigrants. Furthermore, the government should ensure that the 2020 agenda is met so that Sweden can increase its competitive advantage and that it can continue developing. These aims digital agenda, education and training, enterprise environment, environmental sustainability, labor market and employment, and social inclusion if properly adopted shall make Sweden the most developed country in the world. To continue developing economically, Sweden should employ all of its factors of production. It should give agriculture the same attention the engineering sector has. As a result, exports shall increase which shall in turn increase the GDP to be even higher than the other EU countries. The government should ensure that all the policies are implemented. It should also focus to achieve the 2020 agenda. It can only achieve this if it puts all the resources required to achieve that agenda. References Amacher, R., & Pate, J. 2012. Principles of macroeconomics. San Diego: Bridgepoint Education. Cooper, M. 2004. Smart growth. Washington, D.C.: CQ Press. Dacam, D. 2011. Education and jobs: Exploring the gaps. Journal of Education Policy, 313-315. Freedson, P. 2012. Training. Philadelphia: Saunders. Hart, K. 2013. Decentralized development in the European Union. Progress in Development Studies, 59-64 International Trade and Finance. (Chapter 8). 2002, December 1. The American Journal of Economics and Sociology. KAREN, A. 2006, February 7. Sweden Aims to End Oil Dependency by 2020. AP Online. Retrieved March 16, 2015 Oecd: Sweden a Leader in Environmental Policy. 2014, June 11. States News Service. Retrieved March 16, 2015 Sweden. 2005. Paris: Organisation for Economic Co-operation and Development Sweden: Environmentally Conscious Sweden. 2009. Nature, 830-832. Sweden. 2014. Washington: International Monetary Fund Wichowski, C. 2008, October 1. Pennsylvanias Career Support Tools: An Asset to Students, Parents, the Workplace and Economy: The Job Marketplace Can Be a Cruel Place for Those without the Right Skill and Knowledge for Quality Employment. Those without the Right Skills May Not Find Emp. Techniques. Read More