Strolling along the quays of Gothenburg, footprints of the city’s long and influential history as one of Europe’s big shipbuilding centres and trade gateways are still clear to see.
Its port is the largest in Scandinavia and remains Sweden’s principal artery to the North Sea and the Atlantic. Its importance to the region stretches back to the 18th century when the city became home to the Swedish East India Company.
Inspired by the success of the Dutch East India Company and the British East India Company, it was set up to facilitate trade with India, China and the Far East, and its large wooden vessels sailing to the far side of the world generated enormous wealth for the region.
Gothenburg remained a shipbuilding town right up to the 1980s. Today, though, it is a much changed place. Dubbed Sweden’s “second city” – a moniker that is resented locally – it is playing a key role in the country’s efforts to dethrone Ireland as the Silicon Valley of Europe.
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The region has shown stronger economic growth than any other metropolitan area since the height of the financial crisis, particularly in manufacturing, life sciences and knowledge-intensive services. More than 36,000 new companies have been established there since 2009.
While Ireland enjoys a favourable corporate tax rate of 12.5 per cent, Sweden’s has been steadily declining for years and currently stands at 20.6 per cent with rumours abounding that it will be cut to 20 per cent in the next budget.
Gothenburg has welcomed about 170,000 new residents since 2009, some of whom came from Ireland. There are about 3,500 Irish people currently living in Sweden, and many of them moved there to set up businesses.
Warren O’Neill (40) from Limerick is one of them, living in the city for six years now. Having previously worked for Dublin-based energy trading company ElectroRoute, he came here because he believes it to be one of the best places to start a family – and a company.
He is founder and chief executive of Nabla Analytics, a start-up that – among other things – uses advanced algorithms and software to forecast energy prices. But sitting in a coffee shop in the centre of the city, O’Neill is downcast about his home country.
“What’s been hard is listening to Irish radio and reading the news in Ireland because it seems like all the problems that existed when I was in college are still being talked about, or even worse,” he says. “I thought at the time it was as bad as it was going to get.
“I’d love to move back. I love Ireland and the culture, but they are not giving us many reasons to at the moment. Housing is much more affordable here and the quality of property is much better too. The standard of childcare is far superior as well.”
All employers in Sweden pay social security contributions for their staff, covering pensions, healthcare and other social benefits, amounting to a total of 31.4 per cent.
Nabla Analytics is focused on the Irish energy market and counts many of the bigger energy companies operating in Ireland among its customers, as well as companies in Denmark, England and Germany.
“They use our product to get more value for their wind farm or if they are supplying energy to businesses and want to get the best price they can,” O’Neill says. “Our forecast helps them do that.”
Bootstrapped at the start, the company has since had some investment from an incubator in Stockholm, but is mostly funded through its customers. “We’re stable, we’re profitable and we’re growing every year,” O’Neill says.
“This year our revenue will be about €200,000. We’re only two people so we’re still a start-up, but it’s more than enough to cover our costs. We’re hoping for even bigger numbers next year.
“We have been considering fundraising so we can take on more people and grow even faster, but we haven’t decided yet. We need more tech people and data scientists. We want to give ourselves more time to develop our products.”
O’Neill insists Sweden is a far preferable location to set up a company than Ireland. “Sweden has been championed as the Silicon Valley of Europe,” he says. “It was Dublin for a while, but there are a lot of artificial intelligence [AI] companies here now and there is a lot of momentum here.
“Everything is digitised, so it was so easy to navigate, even as someone who had limited Swedish when I moved here. In other ways it would have been better for my business to be set up in Ireland because I would have closer connections with customers.”
O’Neill points to Swedish success stories such as Spotify and Ikea as examples of the country’s ability to take a simple idea and scale big.
“In Ireland, we have a bit of a little brother syndrome,” he says. “People here seem to be better at thinking big from the very start. Maybe that’s because they’ve had some international successes like Ikea and Spotify.
“I’ve also heard that because they have a really good welfare system here, people feel like they can fail and they will still be okay. They can quit their job to set up a start-up and there will be a safety net there.”
O’Neill also advocates that Ireland should be channelling funding to home-grown enterprise rather than giving tax breaks to big multinationals, particularly when faced with the threat of Donald Trump’s tariffs.
“I feel Sweden has done that a lot better than Ireland,” he says. “Take one of the big successes of Ireland in the Collison brothers [who founded payments giant Stripe]. They had to leave the country to grow big.
“I was really optimistic when Ireland kind of built back after the recession, but I feel like now we’ve made the same mistakes all over again. Ireland hasn’t capitalised on the success we’ve had.
“Things like housing are stopping international talent from wanting to move to Ireland. I know people who have been offered jobs in Ireland, then gone to look up where they were going to live and how much it cost, and had to reject the offer they had already accepted.”
With Dublin currently the subject of a de facto moratorium on new data centres, many Irish companies have established a strong presence building these facilities in the Nordics, with hundreds of Irish workers on Swedish sites at any given time.
O’Neill believes it is no surprise the Nordic countries have begun to overtake Ireland in the data centre space – seen as a key component in the harnessing of the AI boom. “We have the highest energy prices in western Europe,” he points out.
“We have loads of issues on our grid. So it makes sense a country like Sweden, which has a better grid, has nuclear, has hydro and has lots of interconnection with other countries, would be more of a centre for the data centre business.”
Iris Öhrn, investment adviser for life science with Business Region Gothenburg, travelled to Ireland late last year with a delegation of Swedish companies and met officials including Department of Health secretary general Robert Watt.
“Some of the things they wanted to know and learn from Sweden was the way we are working with digitalisation within the healthcare and life science sectors,” Öhrn says. “Sweden is ahead there. Everything is digitalised here. There is no paper at all.
“The difference in Ireland is the public health sector is huge and digitalisation is not that much. Here, that aspect is very strong. Even companies like AstraZeneca that are pharmaceuticals are using lot of digital solutions – AI, quantum, etc – for drug discovery and delivery.
“If you compare the sector here with Ireland, we don’t have so much manufacturing of life science because the market is small and we don’t have the incentives you have. But we have a lot of research and development here, and it’s a good country for testing and piloting things.”
US multinational Thermo Fisher Scientific, which has a significant presence in Cork and Dublin, is establishing a new bioanalytical services centre in Gothenburg’s GoCo Health Innovation City, a 200,000sq m life science facility designed to attract the best researchers and entrepreneurs around the world.
“I think they chose to have this service in Sweden because of the collaboration they have with AstraZeneca, and because the life sciences sector here is very concentrated in a small area,” Öhrn says. “You have private and public hospitals, big and small companies, all in a limited area.
“That makes it easy to scale, network and share knowledge. Something that is very common here is the way companies collaborate. People will always talk about what they are doing with other groups.”
But does that level of collaboration not have an impact on the bottom lines of companies which are ultimately in competition with one another?
“We have asked, and they say no, because, first, they choose what to share,” she says. “They don’t share everything. The collaboration is at a very early R&D stage. It’s a test bed. They stop when it becomes business critical. There is even inter-sector collaboration.”
Christian Borg, spokesman for Business Region Gothenburg, describes this as “different sectors working for the same thing”, and puts forward Volvo – which has set up an office in the GoCo facility – as an example of an intersection between the car and life science industries.
“They have technology where there are lots of sensors within the car that can monitor the driver’s health,” he says. “If your heart is not beating normally, the car won’t drive. It can also look at the driver’s eyes and ascertain if the driver has drugs or alcohol in their system.”
Anna-Lena Johansson, head of competence management at Business Region Gothenburg, says collaboration such as this has been the key factor in transforming the region from its shipbuilding roots to what it is today. “It has taken decades to do that,” she says.
“We create these ecosystems around large companies that set up here. Ericsson was one of the first. Political stability also helps, and we have had politicians with big visions who were in power for long enough to execute them.”
Bronwyn Brophy (51) from Malahide, Dublin, is chief executive of Vitrolife, which is also based in the GoCo facility. The company is listed on the Nasdaq Stockholm and is a global leader in in-vitro fertilisation (IVF) treatment.
It generates revenue in the region of €380 million per annum and employs just under 1,200 people. It has facilities in Gothenburg, Valencia, Denver, Miami and Tokyo.
Brophy has been living in Sweden for five years. She moved to Gothenburg in the summer of 2023 having been headhunted for the top job at Vitrolife, having previously worked for Thermo Fisher Scientific.
The reproductive health industry was one that was already close to her heart, having used some of Vitrolife’s IVF products to get pregnant herself in 2012.
“I did need help,” she says. “I had to go on my own fertility journey in Ireland in 2012. What I wouldn’t have known at the time was that some of the products and technologies in our portfolio are in clinics all over Ireland and around the world.
“We are one of the largest IVF companies in the world. We are the market leaders in Europe. We have a very strong position in Asia Pacific and we are now growing rapidly in North America, which is our biggest opportunity.”
She describes Sweden as “a really efficient, very well run country” with “excellent healthcare, free childcare” and a “very good quality” school system. “Transport runs on time and is free for the kids going to school,” she says. “It is a really easy country to live in.
“There is a lot of attention now on Scandinavia and why the Scandinavian countries consistently rank as the happiest people in the world. There is a good work-life balance and a really strong sense of community.
“The tax rate is in line with the Irish tax rate and you get so much more in terms of public services. I think in terms of value for money, Sweden is a much better country to live in. Your taxes are the same and your services are significantly higher.
“Historically, the cost of living in Scandinavia would have been considered a lot higher than Ireland. I can tell you, when we go home, we don’t find Dublin cheaper. Absolutely not.”
Another sector in which Sweden is leading the way is electrification. Volvo Group, which is the country’s biggest company, is one of the leading players in Europe for electric vehicles (EVs). Within Volvo Group is Volvo Trucks, which focuses exclusively on commercial vehicles.
Sitting in the conference room of the group’s headquarters, Jörgen Sjöstedt, senior vice-president for Europe south and west, laments the softening in EV demand that has hit the company over recent years.
“Our customers don’t like uncertainty, and there is a lot of uncertainty around us with the war in Ukraine and the Israel-Palestine conflict,” he says. “The orientation towards defence sucks up a lot of funds in the economy. Interest rates and inflation rates have been pretty sticky.
“We see a lot more GDP being spent on other sectors in the economy. The willingness to invest and to walk the talk [on green] is less nowadays. Consumers have less money. What is the price of carbon dioxide? So, we are hampered, and this is pulling down demand for our trucks.
“Demand is much less than what we estimated it would be. We thought this journey would go faster. We have invested and we will continue to invest but it is not being taken up at the pace that we want it to. The political side is of course a big part of this.”
Sjöstedt says the Irish market is one of the company’s strongest in terms of market share. “We closed on 17.9 per cent last year in Europe, which made us the market leader for the first time,” he says.
“In Ireland, we are at roughly 25 per cent market share. The total market is around 2,500 trucks a year in Ireland. In Europe we do around 300,000 trucks.
“The market has been a bit down this year, as in most markets. On the European side, we are down about 8-10 per cent, given the challenging times we are living in. I think Ireland is down about 5-10 per cent, which is fairly well off, and we hope to come back.”
Fifty client companies of Enterprise Ireland travelled to Sweden in a Government-led trade mission in September. The Nordics are Enterprise Ireland’s fastest-growing export region, with client exports reaching €2.1 billion in 2024, up 24 per cent on 2023.
Sweden is now Ireland’s sixth largest export market, with Irish exports surpassing €1 billion for the first time last year. Imports from Sweden were valued at about €780 million over the same period.
