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"Unleashing society's innovation capacity"

Portrait Pontus Braunerhjelm
“Sweden's economy is characterized by successful entrepreneurship and innovation. This is thanks to a reform agenda that has been gradually rolled out since the mid-1980s. The Swedish experience provides useful lessons for other nations, but now we need political measures to attract more talent,” says economics professor Pontus Braunerhjelm.
Published Dec 11, 2023

Keeping the entrepreneurial spirit in society requires new thinking in politics and business. So says KTH professor Pontus Braunerhjelm, who, with co-author Magnus Henrekson, has published a new book entitled Unleashing society’s innovative capacity.

Pontus Braunerhjelm  describes Sweden as a pioneering country internationally when it comes to harnessing innovation and innovative entrepreneurship.
"But going forward, clear policies are needed to make it easier for entrepreneurs to transform innovations into fast-growing companies in order to create growth," he says.

"We are now facing acute societal challenges, including the climate crisis and an ageing population with increasing health care requirements. In addition, many companies are limited by the fact that some high-tech products cannot be sold abroad to avoid falling into the wrong hands. Markets are shrinking for many companies."

New book: Unleashing society's innovation capacity

Braunerhjelm, Pontus and Magnus Henrekson (2023). Unleashing society's innovative capacity
Cham, CH: Springer. doi.org/10.1007/978-3-031-42756-5
 

How can the vital force of innovation be preserved in the face of increasing constraints on business activities?
“One of our messages in the book is that a broad approach to innovation policy is now required to safeguard the strong capacity to innovate. In the book, we criticize growth models that claim that ‘if we invest in knowledge, we will automatically reach growth and prosperity’. Now much more than that is needed, in terms of structural change.”

Can you give examples of measures you are calling for?
“We need a policy that enables the power of innovation to be applied and used as simply and effectively as possible. This can be done by creating easily accessible creative environments, strong networks and clear incentives linked to taxes, for example. In addition, we must ensure that we create more housing if we are to succeed in attracting international talent, so that we get a return on Swedish research and innovation investments.”

How would you say Sweden leads by example when it comes to harnessing the entrepreneurial spirit internationally?
“The basic conditions are that it should not cost much to start a business, and that society should have a transparent and simple tax system.”
“In addition, Sweden's overall labor market regulations work relatively well. Studies show that mobility among well-educated people in the labor market has a positive effect on both the rate of innovation and networks," says Pontus Braunerhjelm.

Katarina Ahlfort
Photo: Mats Edman
 

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