Security, competitiveness, transitionSweden follows up on Czech EU Presidency

Despite his busy schedule due to the ongoing EU Council Presidency, the Swedish Ambassador to the Czech Republic Fredrik Jörgensen has found time for an interview with TRADE NEWS. We‘ve talked to him about the priorities of the Swedish presidency, the importance of innovation in the European economy, Czech-Swedish business relations and the close relation of our two nations.

Sweden’s EU Council Presidency priorities can be divided into four areas, namely, security, competitiveness, coping with the green and energy transition and protecting democratic values and the rule of law as the foundations of the European community. In which areas does your country have the most work to do?

The most important and most difficult task will be to maintain what the Czech presidency has done so well: namely, a unified approach and a continued strong support for Ukraine – humanitarian, economic and military. The outcome of the war in Ukraine decides whether Europeans can live a life in freedom.

Our economic prosperity depends on our competitiveness. In a globalised world, European businesses must be able to compete. The internal market and the four freedoms are the cornerstones of growth and prosperity, with free movement of goods, services, capital and people. We have an ambitious free trade programme with clear rules and other reforms that will strengthen the EU in international competition.

As for green transformation, in the face of the energy crisis, Sweden plans to finalise agreements on the remaining parts of the EU's Fit for 55 climate package, on which the Czech Presidency has also done a tremendous amount of work. We will also continue to push for further efforts to reduce the EU's dependence on Russian gas and other fossil energy sources. We also need to prepare for the possibility that we may need to negotiate other necessary measures to deal with the energy crisis.

Under rule of law, we have grouped the tasks aiming at strengthening Europe’s democratic resilience. Here we find the common values and foundations on which the EU stands, such as democratic institutions, independent judiciary and freedom of expression.

Sweden's long-term goal is to become one of the first 'fossil free' countries in the world. How are the war in Ukraine and the energy crisis affecting the path to achieving it?

Given the country's natural conditions, Sweden has long been successful in making the transition to sustainable energy sources. The war in Ukraine and the reassessment of resources for the whole of Europe should not affect the transition to green energy; on the contrary, it is already clear that dependence on Russian gas and oil was not a good move, while the bet on green solutions is paying off. We see this in the Czech Republic as well: renewable energy sources have seen an unprecedented boom in recent years.

European competitiveness depends on innovation

You’ve mentioned the EU’s competitiveness as one of the main priorities of the Swedish Presidency. How could closer cooperation between economic and business entities of the Czech Republic and Sweden contribute to this?

Innovation is a fundamental prerequisite for European competitiveness. We need to create an environment that encourages new solutions, stimulates creativity and makes companies think one step ahead. Only then will we be able to offer the rest of the world what it needs.

As an embassy, we have long tried to stress the importance of an innovative environment, and above all the fact that you cannot be innovative without working together. We connect experts from both countries, we try to bring Swedish and Czech companies together at our embassy to exchange experience, share their innovative solutions and cooperate. There is no need to reinvent the wheel, but at the same time more heads know more.

There are such examples in the construction or furniture industry, but also in the energy and defence sectors. Here, too, the close cooperation between Czech and Swedish economic entities brings us new, unexpected solutions. In addition to green and digital transformation, we see great opportunities in cooperation in the areas of hydrogen supply chain, in building 5G networks enabling and strengthening Industry 4.0 (IoT or automation), or in the electrification of the automotive industry.

Triple Helix is working

It is true that Sweden is synonymous with an innovative environment and start-up culture. Does the initiative come more from the corporate environment or from the government? What sectors are involved?

In Sweden we have a close cooperation between industry, academia and the state structures. We call this triple helix. I would say that the initiative comes from the very need for such cooperation.

Companies need universities and their brains to develop and move forward, to strengthen their competitiveness. In the same way, universities do not want their research to go to waste, while graduates want the best possible employment. Moreover, the market is changing, and start-ups often foster a highly creative environment where competition for the best ideas is fierce - this too is beneficial for both universities and companies. And of course, this is all extremely beneficial for the state, which is why the state has the greatest interest in fostering such an environment and networking.

Fortunately, Sweden has been successful in this field, which is why we have Spotify or Skype, various innovative solutions in automotive, digital health and other sectors.

We need creative companies that think one step ahead.

Swedish companies in Czechia cover the entire industrial spectrum

In which sectors are Swedish companies most successful in the Czech Republic?

In 2020, Czech exports to Sweden amounted to SEK 22.7 billion, while Swedish exports to the Czech Republic amounted to only SEK 11.3 billion, a significant deficit for Sweden. This can be partly explained by the strong Swedish manufacturing footprint in the Czech Republic. There are approximately 20-30 major manufacturing plants, such as ABB, Mölnlycke, Trelleborg and others. In addition, the Czech Republic has one of Europe's key automotive clusters, which is widely used by Swedish manufacturers.

Swedish companies have established approximately 190 subsidiaries in the Czech Republic, employing more than 30,000 people. They cover the entire industrial spectrum - automotive, retail, construction, real estate, MedTech, manufacturing and engineering, shared services, ICT and so on. To give just a few examples, Skanska, Sandvik, ABB, Getinge, Arla Plast, ITAB, Lindex, IKEA, H&M, Loomis, Securitas, Trelleborg, SKF, SAAB, Scania, Volvo, SOBI, Mölnlycke, Hilding Anders Beds, Lindab, Nibe, AssaAbloy, Gunnebo, Thule...

Swedes and Czechs can be considered inventors and engineers

What makes Czechia so attractive for Swedish companies?

Swedish-Czech business relations have historically strong ties, which are based primarily on similar basic industries. Simply put, Swedes and Czechs can often be considered inventors and engineers, not maybe natural traders like Danes or the Dutch - they were driven primarily by the need to survive without direct access to certain natural resources.

Czechia is an ideal cost country for them. Which simply means that it is possible to both produce under favourable conditions (high return on investment) and at the same time sell on the growing local market and strategically export or distribute. The very location of the Czech Republic in Europe brings many advantages. On the other hand, the Czech footprint in Sweden is almost non-existent. And this is something that we want to encourage in the future. We have seen a clear change in the behaviour of some Czech companies looking at Sweden as a potential investment destination; whether in the form of green field, partnership or acquisition market entry.

You've been here since September 2020. What has grown most close to your heart during that time in our country?  

I like that we have so much in common. Czechs and Swedes have a lot more in common than it might seem at first glance, and even though we come from different parts of the continent and have different experiences, we usually share a very similar outlook on life.

Our nations share a very similar outlook on life.

The love of nature is important to both Czechs and Swedes, and we share a passion for ice hockey, tennis, and mushroom picking. An interesting finding for me was how much Czechs - just like Swedes - love their cottages and chalets. I like how you appreciate ordinary things, how modest Czechs are. Neither we nor you are particularly extroverted, rather a bit reserved and cautious. But then in making relationships we are all looking for long term and solid friendships.

What I like most about Czechs is how open, honest, and inquisitive they usually are. Here certainly lays a good foundation for a really great cooperation.

Mr. Jörgensen was interviewed by Daniel Libertin