Sweden has long been recognised as a country of innovation. With AI, we face a challenge that threatens both this position — and, in the long run, Sweden’s growth. Swedish companies must move beyond viewing AI as a tool for streamlining and start treating it as the powerful driver of innovation it can be.
The advent of AI, which will go down in history as a monumental change on par with the industrial revolution, electrification, and the internet revolution, is affecting every aspect of society and economy. AI is the most significant technological change of the modern era.
Thanks to companies such as Spotify, Klarna, and Ericsson, Sweden still has a reputation as an innovative nation. In the EU’s latest European Innovation Scoreboard, Sweden ranks second among EU countries, having only recently been edged out by Denmark for the top spot.
But while technology continues to develop, Sweden’s position as an innovation country is in jeopardy.
The AI Commission recently published its “Roadmap for Sweden”, a strategy that will increase the public sector’s involvement in driving the development and application of artificial intelligence. The plan includes the implementation of national strategies and the establishment of standards and incentives to stimulate research and development. Clearly, we have the ambition to maximise the use of AI - but ambition alone isn’t enough.
Swedish business leaders must change their approach to this transformative technology. Today, AI is often seen as a streamlining tool. This is because it’s easy to measure efficiency improvements such as faster processes, reduced costs, and increased productivity. Innovation, on the other hand, isn’t a numbers game. It requires long-term development, experimentation and risk-taking, which makes it difficult to quantify results in the short term.
Yet it’s precisely innovation that drives Sweden’s growth, and as a small country, we must remain competitive to secure our prosperity.
Innovation also creates new jobs at a time when AI and automation are replacing traditional professions. It’s also key to tackling challenges such as climate change, energy transition, and healthcare. Compared to countries like the US and China, Sweden’s GDP growth is weak.
Although many European economies are struggling, Sweden’s is scarcely forecast to grow at all in 2024. In fact, recent figures show that the country’s GDP fell by 0.1 percent in the third quarter.
According to a report from Implement Consulting Group commissioned by Google, Generative AI can increase Sweden’s GDP by up to SEK 550 billion over the course of a decade, mainly through productivity increases and automation. Yet the report also shows that Sweden is lagging behind in AI-driven innovation. Without a stronger push, the country’s GDP growth could become significantly weaker.
AI adoption often happens “bottom-up”, with employees spontaneously using it to increase productivity. Companies must support grassroots innovation by creating agile organisations that can adapt quickly as AI evolves.
With AI at our doorstep, corporate boards have an obligation to both shareholders and the entire company to drive change in the right direction. What’s our policy? How do we use AI to promote innovation? Every board must have clear answers to these questions. The AI Index Report 2024 is clear. Not only do companies that integrate AI into their strategic decisions achieve higher efficiency, but also driver greater innovation than their competitors.
If Sweden wants to maintain its reputation as an innovation nation, AI must become more than an IT and efficiency-focused project. Here’s how businesses can make that shift:
- Establish an AI policy with guidelines for ethics and information security: balance the risks of AI against the risks of not using the technology. Take security measures that protect sensitive information without hampering innovation.
- Introduce an AI platform: invest in platforms from leading vendors that can be integrated and adapted to work with existing systems. The investment may seem pricey, but it’ll pay off in the end.
- Enhance skills: invest in training employees in AI, especially as a tool for innovation. Arrange workshops, seminars, and AI mentoring through which experienced users can guide beginners.
- Promote decentralised innovation: allow your business areas to integrate AI into their processes. Give them the freedom to experiment with AI solutions. This promotes a company culture in which innovation is driven at all levels and employees have a sense of ownership over their efforts. Establish relevant metrics for each business area.
- Set new, quantitative targets to measure innovation: look for new ways for your business to measure success, beyond existing ones like new product revenue, R&D investments, and time to market.
Swedish business leaders must be willing to challenge conventional thinking and see AI as a catalyst for innovation, rather than merely a streamlining tool. Otherwise, we risk being left behind - losing the competitive edge and economic growth we rely on so heavily.
