"Anyone who wants to influence politics should read up on economic growth."

“Such a broad reform effort has not been undertaken since the 1990s, guided by the Lindbeck Commission.”

In the run-up to last year's European elections, the European political conversation increasingly turned to growth. This was followed by the Draghi report in September 2024, the Swedish debate in recent weeks on the need for growth to finance increased Swedish defense investments and today's proposal from the Confederation of Swedish Enterprise for a growth target.

What would provide more public resources for rearmament in the short term is if more people get into work, as this directly increases tax revenues and reduces government expenditure. In the longer term, increased productivity is more important, i.e. how much we get done with given resources. The government has appointed a Productivity Commission, which submitted an interim report in April last year with a long list of proposals. Two other ambitious initiatives in this area are the Productivity Commission of the Swedish Trade Unions in Industry and the more business-oriented Entrepreneurship Forum's Taskforce for Swedish Competitiveness.

Productivity is a diverse policy area. This is reflected in the fact that the three investigations above concern education, research, housing, infrastructure, environmental assessments, corporate taxation, state aid to companies, the regulatory burden on companies, the organization of the public sector and more. Such broad reform work has not been carried out since the 1990s, guided by the Lindbeck Commission. Can the government manage this while dealing with pressing issues of security and crime?

Economics professor Klas Eklund and his colleague Hans Sterte at Dahlgren Capital stand out in the debate by pointing out that higher growth does not solve the financing of defense, because it does not increase the defense share of GDP. Against that, of course, it can be argued that we are unlikely to stick so strictly to a certain share of GDP, but may be more interested in achieving certain capabilities. And if we were to stick to a certain share, growth would make more money available - not a bad thing either.

To summarize, anyone who wants to influence policy should read up on the breadth of growth issues. To the extent that it is possible to link a concrete measure to growth, the chances of getting both the government and the opposition to listen are likely to increase significantly.

Andreas Bergström

Partner, New Republic