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A restart requires willingness to take risks

Pontus Braunerhjelm hoppas på en ekonomisk politik som stimulerar och stärker drivkrafter för ökat företagande. (Foto: Simon Rehnström/SvD/TT)
Published Aug 31, 2020

How can Sweden best emerge from the corona crisis? Pontus Braunerhjelm, professor of economics at INDEK, wants to see a policy that improves the conditions for starting and running companies.

Pontus Braunerhjelm has been one of the experts in the ”Restart Commission”, with the task of proposing how politics can contribute to kick-start the Swedish economy after the corona crisis. Pontus field is entrepreneurship, innovation and business issues, and in the commission’s final report he proposes both immediate efforts and long-term changes to stimulate and strengthen incentives for increased entrepreneurship.

” These include the design of taxes at an individual and company level, employee stock options, venture capital - and opportunities for a second chance.”

” The emphasis in the proposals is on the willingness to take risks, start companies, dare to grow and invest in innovation”, says Pontus Braunerhjelm. He wants to see support initiatives that will strengthen competence in areas such as digitization, sustainability, supplier systems and business development as soon as possible.

What significance does stronger entrepreneurship have in order to speed up Sweden's economy again?

” I would say that it’s absolutely crucial in a longer term. Societal values ​​and growth are not created through negative interest rates, nor through large-scale infrastructure investments unless there is an entrepreneurial business community. The individual still plays a central role.”

For Sweden's economy as a whole, the future prospects look better at the moment, compared to what it looked like in the beginning of the crisis, he says.

” Right now it looks a bit brighter but it is too early to say. Sweden did better than the EU average during the difficult second quarter, but worse than our Nordic neighbors. The recovery within the EU now seems to be leveling out, the trend may turn downwards again. What happens in both the EU and the US will be of great importance to the Swedish economy”.

Braunerhjelm thinks it’s positive that the support measures presented by the government during the spring have only been used to a lesser extent by the companies, this means there’s still resources left if the economy should go down again. At the same time, the under-utilization may be due to overly bureaucratic processes, he points out, and that the support has not met the real needs to a sufficient extent - this applies, for example, to the loan guarantee and the conversion support.

” Other types of support mean that you just push the cost in front of you, which many are hesitant about. In addition, around 500,000 self-employed business traders are not eligible for support”.

The idea of ​​the Restart Commission's final report, which was recently submitted to the government and the parliament, is to present a broad range of proposals where politicians can decide what they find interesting, and consider to be politically feasible to implement. The Restart Commission is initiated by the Stockholm Chamber of Commerce.

Text: Christer Gummeson

Belongs to: Industrial Economics and Management
Last changed: Aug 31, 2020