130 billion – how much goes to the innovations of the future?

A new report from Growth Analysis shows that Sweden’s business promotion programme cost SEK 130 billion in 2025. But a closer look at how these funds are allocated raises important questions about future investments and long-term innovation.

Overwhelming majority in favour of consumption

Of the SEK 130 billion, 89 per cent is made up of tax expenditures such as RUT, ROT deductions and reduced restaurant VAT – measures that promote consumption in the present rather than innovation and growth in the long term. Only 11 per cent, or SEK 13.18 billion, is on the expenditure side, which includes investments in business development, education, research, agriculture and infrastructure.

Of this, 3 per cent – equivalent to SEK 3.73 billion – goes to business development. It is in this category that investments in innovation and growth are found. The distribution is clearly shown in the visualised diagram above.

Startups get 0.29 per cent – despite proven high impact

Of the SEK 3.73 billion, around SEK 350 million (0.29%) goes via Vinnova to startups and their ecosystems. One of the more targeted initiatives is the national incubator programme, which with an annual budget of SEK 115 million (0.1%) supports 32 selected incubators around Sweden. The programme has been in place for 20 years and is one of the more long-term initiatives in Sweden.

The funding from Vinnova is used to purchase expert services that help around 600 early-stage start-ups annually – focusing on technology validation, business model, IP protection and raising capital. This means that on average, each start-up is reached by 0.00015 per cent of the total government business support.

The results speak for themselves

Despite the small share, the incubator programme shows a very strong leverage:

• Each publicly invested krona attracts 4.4 kronor in private capital.
• The start-ups that participated in the programme over the last 10 years had created more than 41 000 new jobs by 2022.
• In 2022, these jobs generated 31 billion in tax revenue – equivalent to 2 500 times the public contribution.
• The programme is unique in an international perspective, both in terms of its national dissemination and the extensive impact monitoring carried out over time.

Time to adjust the compass

Vinnova’s start-up funding through the incubators is crucial for many start-ups to take the first steps from idea to company that is ready for customers and investment. If Sweden wants to strengthen its long-term competitiveness and ability to create sustainable growth companies, a review of how business support funds are distributed is required. Increasing the share of investments in innovation and startups is an investment in the future – with proven high returns.

Read more:

Growth Analysis: Survey of government-funded business promotion
SISP: Annual report for the national incubator programme