"The global hunt for talent is happening here and now. Our Nordic neighbours are advancing their positions while competition for in-demand skills intensifies," warns the report by the Confederation of Swedish Enterprise (Svenskt näringsliv).
"AI and STEM expertise have become hard currency, and talent markets such as India and the US are central arenas in western nations' race for top talent. Sweden's ability to hold its ground in the future tech race is crucial," it continues.
The confederation urges the incoming government to produce a national strategy to attract international talent to Sweden, focusing primarily on three areas: making Sweden more visible and attractive internationally, simplifying rules and processes, and making it easier for international talent and their families to establish themselves in the country.
It notes that several changes have made life easier for foreign professionals in Sweden, including cutting work permit waiting times for highly qualified applicants, but argues that it's difficult to see any results from the outgoing government's ambition to attract international talent.
"While the overhaul of labour immigration has indeed reduced the number of work permits granted in lower-skilled occupations – which was an explicit goal of the reforms – the number of individuals with advanced specialist skills has simultaneously dropped sharply since 2021, contrary to the reform's intent," it writes about the government's decision to raise the work permit salary threshold to 90 percent of Sweden's national median salary.
The report highlights India as the world's largest exporter of international talent. In Sweden, around 30 percent of labour immigration comes from India.
The authors speak to Shwetank Verma, an Indian investment expert and partner at Leo Capital, who is in contact with a lot of Indian businesses which want to expand to Europe.
He warns that Sweden has gained a reputation in India as a country with unpredictable immigration rules which expels entrepreneurs and highly qualified professionals.
"As entrepreneurs moving to a new country, what we want is predictability. We are happy to pay a bit more, but we must have clarity on the rules. Unfortunately Sweden, which I have visited numerous times, has not stood the test. That is the impression spreading across the Indian talent pool," he tells the Confederation of Swedish Enterprise, adding that he now recommends his Indian contacts to head to non-Nordic markets, especially Germany.
Apart from creating a national strategy for talent attraction, the Confederation of Swedish Enterprise also urges the next government to set up a skills delegation within the government offices to strengthen coordination and momentum, and give a cabinet minister the overall responsibility of advancing the national strategy at home and abroad.
"The work needs to begin promptly before Sweden loses further ground in the competition for future talent," warns the report.
Sweden has been led by a centre-right government supported by the far-right Sweden Democrats for the past four years, with the stated goal of shifting the country's immigration focus from low-skilled and asylum immigration to high-skilled labour immigration.
The centre-left won a majority of parliamentary seats in the September 13th election, but has at the time of writing not yet managed to form a government.
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