In Sweden

Image: Valeria Podes
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By FELIPE MARUF QUINTAS*

Swedish social democracy was not only distributive, it was also nationalist and developmental.

Sweden is well known in Brazilian political debates as a reference in social equality, progressivism in customs and culture pop. It is quite unusual, however, for the country to be associated with one of its main characteristics, the high degree of industrial and technological development.

Indeed, the country, despite having a smaller population than the city of São Paulo, has an extremely diversified domestic industrial structure, controlled by large companies and national brands, almost all private. Many of them are internationally known, such as Volvo and Scania (vehicles), Electrolux (domestic appliances), Ericsson (telecommunications), SAAB (aerospace and defense), Atlas Copco and Sandvik (industrial equipment), Bofors (war material), Husqvarna (equipment gardening and forest management), IKEA (furniture), Tetra Pak (packaging), among many others.

In an estimate for 2017, 33% of Swedish GDP corresponds to the industrial sector, above other traditional European industrial countries, such as Germany (30%), Austria (28,4%), Switzerland (25,6%), Belgium (22,7. 20,2%), United Kingdom (19,5%) and France (XNUMX%)[1]. In 2018, Sweden was the European country that invested the most in R&D in proportion to GDP, and the 4th in the world, behind Israel, South Korea and Taiwan[2].

They are produced in Sweden by companies and national brands: airplanes, cars, trucks, tractors, cranes, excavators, warships and yachts (including their respective parts and systems), railway equipment, steel, paper, packaging, drugs, weapons, electronics, semiconductors, robots, satellites, home appliances, watches, telephone devices and devices, agricultural machinery, gardening and forest management equipment, hand tools, industrial compressors and bearings, hydroelectric turbines, hydraulic presses, rock drilling instruments, derivatives of petroleum, highly complex medical equipment such as radiosurgery machines and resonance tubes, furniture, musical instruments, fishing instruments, etc.

However, many industrial sectors ceased to exist at the end of the 1970th century, in a process of productive restructuring that marked the end of the social democratic period and the advance of neoliberal practices. In the XNUMXs, when Sweden was experiencing the last moments of the social-democratic regime, the country, through joint-venture ASEA-ATOM (between the national private company of electrical material ASEA and the state-owned Atomenergi, both extinct today), was the only European to dominate all branches of the civil atomic industry and build nuclear power plants without any technological licensing from the USA. Between 1972 and 1985, ASEA-ATOM built nine nuclear power plants, of which only four remain active, operated by the state-owned Vattenfall. Sweden was also responsible, from the beginning of the 1975th century until 10, for about 1980% of world ship production. A major crisis in the 90s/XNUMXs devastated the sector, one of the most vigorous that Sweden has ever had, and today the country specializes in the production of belonaves (military ships) by the naval division of SAAB[3].

Another interesting aspect, too, is the fact that no foreign mining company operates in Sweden, despite the country being one of the richest in minerals in Europe.[4]. This is explained by a 1990th century law that prohibited foreign participation in mining. Despite being abolished at the beginning of the XNUMXs, the consolidation of national companies kept away possible interested parties from abroad. LKAB and the national private company Boliden control most of the Swedish mining sector, which ensures full internal control over natural resources and high capacity for industrial exploitation within the country.

Far from being merely a “regulator”, as advocated by the heralds of neoliberal “governance”, the Swedish State has a large business and service provision structure, which allows it a high capacity for economic coordination and strategic mobilization of resources, positively impacting in the productive performance of the country. The State, through its companies, agencies and institutes, acts as a partner of the private sector, creating the conditions for it to develop. In total, the Swedish state has 49 “multinational” state-owned companies, ahead of France (45), South Korea (32) and far ahead of Brazil (12).[5].

Sweden has 100% state-owned companies such as SEK (development bank focusing on large export companies), LKAB (mining and mining equipment, largest iron producer in Europe), Vattenfall (electricity, 6th largest electricity company in Europe for sale power[6]), SJ (railways), Rymdbolaget (space), Svevia (construction) and Sveaskog (forest industry). The country has strong physical integration with its Scandinavian neighbors through shared state-owned companies such as the PostNord postal company and the SAS airlines. Even the privatization program of the center-right government of Carl Bildt (1991-1993), which transferred some 35 state-owned companies to the private sector, did not completely liquidate state control in strategic companies. The Swedish state remained the largest shareholder in the telecommunications company Telia (formerly state-owned Televerket), with 39,5% of the shares currently, and the second largest shareholder in the steelmaker SSAB, with 7,88% of the shares today.

One of the biggest ongoing projects with the participation of state-owned companies is HYBRIT, a joint effort between SSAB, LKAB and Vattenfall to develop the world's first fossil fuel-free steel manufacturing process. The goal is to start building a model plant in 2023, with completion expected in 2025[7].

State agencies also play an important role in the development of national industry. Particularly noteworthy is Vinnova, created in 2001 to finance technological innovations in order to increase the country's leadership in cutting-edge sectors, such as biotechnology, aerospace, internet of things (IoT), electronic systems, industrialization of graphene and application of metallic materials. It is also worth mentioning the Geological Survey Agency (SGU), created in 1858, which provides important research services, technical assistance and financing to Swedish mining companies.

The Swedish state also has internationally renowned technology centers, such as the Royal Institute of Technology (KTH) and the Karolinska Institute, and exercises control over the Chalmers Institute of Technology. These institutes were created in the early 1997th century and, since then, have served as an incubator for various technicians, scientists, inventors and entrepreneurs, including many Nobel Prize winners. In XNUMX, the state-owned company RISE – Research Institutes of Sweden was created, with the aim of collaborating with companies and universities in the scientific and technological advancement of the country.

It should also be mentioned that the public hospital network, built throughout the 2013th century, in addition to its obvious social function, served and still serves as a collaborator of the pharmaceutical and medical industry, having contributed to the formation and development of large companies such as Astra (currently AstraZeneca) and Gambro (incorporated in 1960 into the North American Baxter), one of the first world manufacturers of hemodialysis machines, still in the XNUMXs.

The developmental structure of the Swedish State is not recent nor did it emerge with social democracy, which ruled the country uninterruptedly from 1932 to 1976. It dates back to the Swedish Empire (1611-1718), one of the greatest military powers of the time, and permeated the following centuries , including the XNUMXth century. Public investments in infrastructure and education, the abolition of restrictions on internal trade, subsidies and incentives for the creation of new industries, protectionist tariffs and restrictions on foreign capital were combined, prohibiting it in certain sectors such as finance, mining and real estate. The developmental State thus ensured the conditions for the flourishing of national capital, following the classic formulation of Ragnar Nurkse, made famous in Brazil by Barbosa Lima Sobrinho, that “capital is made at home”.

Therefore, contrary to current mythologies, the Swedish industrial revolution, between the end of the XNUMXth century and the beginning of the XNUMXth century, did not take place in a context of laissez-faire, just as social democracy, far from being merely distributive, was also quite developmental, within a nationalist conception. The successful history of Swedish developmentalism led, in the XNUMXth century, to the creation of a welfare state with full employment and a very sophisticated industrial structure, in a context of almost non-existence of foreign investment in the country. This trajectory will be explained in the next article.

*Felipe Maruf Quintas it's dPhD student in political science at the Fluminense Federal University (UFF).

Originally published on the website The Brazilian Industrial Revolution.

 

Notes


[1] https://www.cia.gov/library/publications/the-world-factbook/fields/214.html

[2] https://data.oecd.org/rd/gross-domestic-spending-on-r-d.htm

[3] The story of the rise and fall of Sweden's nuclear and shipbuilding industries is well told in books. The Age of Social Democracy (2011), by Francis Sejersted, and An Economic History of Modern Sweden (2012), by Lennart Schön.

[4] https://www.sgu.se/en/mining-inspectorate/mines/mines-in-sweden/

[5] https://unctad.org/system/files/official-document/wir2017_en.pdf

[6] https://www.statista.com/statistics/267066/largest-european-electric-utilities-based-on-power-sales/

[7] https://im-mining.com/2020/06/02/ssab-lkab-vattenfall-plot-hybrit-pilot-production-pathway/

 

 

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