Sweden has been at the forefront of the technology wave for at least a decade. The first country to deregulate the telecommunications market in 1993, Sweden has continued to demonstrate its ability to visualize the future of the IT market and invest the resources necessary to compete on a global level. The Swedish IT Sector is made up of approximately 22,000 companies, and is the second largest sector behind engineering. (17)

IT Strengths

Sweden has a large number of factors that help give it a competitive advantage as a leader in technology. The high levels of education and literacy are major facilitators to allow for high interest and adoption rates of new technology. The government also plays a huge role the success of the IT Market in Sweden with its combination of goals and initiatives. The government is very active in passing legislation to promote the infiltration of IT throughout every facet of the country. The bill "An Information Society for All", along with initiatives such as developing the 24/7 Agency, are perfect examples of the focus that exists to keep Sweden a leader in Information Technology.

Sweden is ranked 1st in e-readiness: According to the Economist Intelligence Unit (EIU) in their April 2003 article, Sweden has overtaken the United States to become the leading nation for e-readiness. The article (21), defines e-readiness as "the extent to which a country's business environment is ready for Internet-based commercial opportunities".

IT Clusters: In terms of IT Clusters, Sweden is one of the most saturated countries, with six large and productive clusters that span from the northern region to the southern-most tip. These clusters are made up of science and technology parks, research institutions, and educational facilities. The strongest areas of technology that are being developed include telecommunications, wireless applications, cognitive research, systems development and bioinformatics. Mobile Valley, which includes Stockholm, is the largest center for research, ICT companies and universities. (13)

IT Weaknesses

Sweden did not escape the effects of the technology bubble collapsing over the last 4 years. This is evident when examining the financial market and number of IPOs that have been emerging recently. In the late 1990s, the telecommunications stocks, mainly driven by Ericsson and Nokia, raised the domestic firms SX All-Share Index by 44%. (25) The SX All-Share Index is a measure of the performance of domestic firms. During the technology crash of 2000, this Index sank by 12% in 2000, 17% in 2001, and 37% in 2002. The number of IPOs decreased dramatically as well, falling from 65 in 2000, 27 in 2001, and finally only 10 companies in 2002. However, in 2002, Ericsson was still the most widely traded stock on the exchange, with approximately 2.3 million trades, followed by Nokia. (25)

Domestic production in the IT industry is primarily dominated by the software market. However, although there are a number of firms that are leading in market share as producers of business systems, regardless if these systems are small, medium to large, they are simply not very profitable. Although Swedish business software is a large and growing segment, it still doesn't compare with its foreign competitors. There have also been problems with Swedish companies that produce consumer software, simply because the Swedes have a reputation for business software and are not known in the consumer marketplace. However, there is still demand for niche software, "Swedish companies have built up a world leading position in the segments of entertainment, e.g. games and gambling software; aerospace industry software support; production critical software; and not least IT security software with biometrics. (16)