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Why Does Sweden Have So Many Startups?

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Re: Why Does Sweden Have So Many Startups?

#141
post #22

Earlier quoted context omitted.

If you take the total spend on welfare, and divide it by the number of people who claim benefits, you get $24 per day. https://www.forbes.com/sites/timworstall/2015/05/04/the-aver... > The reality, expressed mathematically, is: Total Spending On “Welfare”/Those who receive benefits = $24.77 per day. That's a lot less than $168. I'd be interested to know where your numbers come from.

We spend close to a trillion dollars on all means-tested welfare programs in the US, counting all levels of government. Just SNAP for example, as of 2015, was at $75 billion per year; each state then has their own various additional food programs, and typically cities do as well. Medicaid, by far the largest single program, was $545 billion for 2015. There are approximately 16 million households that qualify as poor…

I am not convinced by this sort of top-down analysis. To start, by looking at total funding it hides several problems with the entire system.

As I learned from the US healthcare debate, an astonishingly high percentage of the money goes into overhead. For example, you pointed out SNAP.

https://en.wikipedia.org/wiki/Supplemental_Nutrition_Assista... says: "SNAP benefits cost $70.9 billion in fiscal year 2016 and supplied roughly 44.2 million Americans with an average of $125.51 for each person per month in food assistance."

So, $55.5 billion goes to Americans, meaning %15.4 billion or 20% is overhead.

How much of the other money is also overhead? Consider a charity which takes in $100M to "build homes for the poor", and ends up building 100 such homes. Your analysis suggests the poor are receiving $1M homes. On the other hand, if 95% of the money is spent on overhead, they are only getting $50K homes.

We know there's overhead elsewhere, though not 95% - that was used to make a point. For example, your Medicaid example is directly connected to the absurd health care costs in the US. As Wikipedia tells me: "In 2011, there were 7.6 million hospital stays billed to Medicaid, representing 15.6 percent (approximately $60.2 billion) of total aggregate inpatient hospital costs in the United States.[74] At $8,000, the mean cost per stay billed to Medicaid was $2,000 less than the average cost for all stays."

So part of that Medicaid spending is on an overpriced medical system. Another part of that spending is simply wasted in carrying out means testing and administrative overhead. These are costs which don't exist in the healthcare system of most other rich countries, and in neither case should it be viewed as money going towards poor Americans.

Furthermore, means tests requires that applicants do extra work to file the right forms, stand in the right lines, and in general deal with the bureaucracy. This can include taking time off of work (so getting paid less), trying to find a baby sitter, etc. These are monetary costs which are hidden in your analysis, which only looks at the government costs, and there are human costs of extra stress and hassle - and issues related to loss of respect and humanity aren't easy to quantify monetarily.

To get back to your text, you use numbers like "There are approximately 16 million households that qualify as poor in the US" and "you instead distribute that figure among the bottom quarter of adults". However, as DanBC pointed out from the Forbes article, the denominator "the number of people who claim benefits", gives $24.77 per day.

That suggests that there are many more people who claim benefits than your estimates suggest. I can see one place already. You limited the denominator to the "bottom quarter of adults .. under the age of ~65 [because] over 65 most are drawing on Medicare." However, https://www.ssa.gov/history/pdf/RowlandandLyons.pdf points out that 9% of the elderly draw on both Medicare and Medicaid.

About 185M people are between 18-65 years old. (Adding up https://en.wikipedia.org/wiki/Demography_of_the_United_State... ). 1/4th of that gives about 46M, which close to your estimate of 50M ($1T/50M people=>$20K/person)

About 46.3M people are enrolled in Medicare due to age. 9% of that is 4M, so that's 8% missing from your earlier numbers.

In addition, children in "[a]ll states - except Tennessee - have additional disability-specific eligibility criteria, which allow some children with disabilities to qualify for Medicaid even if their parents’ income exceeds the state-established threshold." https://www.americanprogress.org/issues/early-childhood/repo...

I think this would also affect your numbers by increasing the denominator and so lowering the overall per-person payments.

To go back to DanBC's point, why aren't you using "the number of people who claim benefits" as your denominator?

Re: Why Does Sweden Have So Many Startups?

#142

I've considered launching a start-up of my own here in Sweden so I've given the pros and cons some thought, and it is virtually risk free. To summarise, compared with other countries, we may have even more of the upside but the downside is capped at a very anxiety free level. These are a few of the reasons: - highly skilled labour is cheap in absolute terms and the cost to performance ratio for such workers is probab…

- if you fail you are pretty much guaranteed a new job in no-time thanks to the job market for skilled workers

Re: Why Does Sweden Have So Many Startups?

#143

Earlier quoted context omitted.

Fun fact: most Swedes are covered by unemployment insurance, which gives you 70-80% of the income from your last job for a year.[1] I imagine this helps, as it's not only a safety net if your startup tanks, but also a runway for starting risky ventures. [1] https://www.justlanded.se/english/Sweden/Sweden-Guide/Jobs/U...

If you own the company that tanks it is harder to get the unemployment insurance [1] (in Swedish) but it is possible. The 80% maxes out at 18 700 SEK / month ($2300) before tax. [1] https://www.foretagande.se/a-kassa-for-foretagare-sa-fungera...

> The 80% maxes out at 18 700 SEK / month ($2300) before tax.

Many unions will offer you cheap insurances covering up to 3 times that amount. And you can actually be in the union and get many benefits even as an entrepreneur.

Re: Why Does Sweden Have So Many Startups?

#144
post #69

The most important quote: "Sweden’s impressive start-up record can also be attributed to some broader aspects of how the country is set up. Its social safety net, for instance, helps entrepreneurs feel safe to take risks. In Sweden, university is free, and students can get loans for living expenses, which allows anyone to pursue higher education. Health care is free too, and childcare is heavily subsidized. None of t…

The article's point is not very strong, from personal experience (Finland, experience in Nordic startup "ecosystem").

Like you said, working at a Startup in the Nordics is considered risky, which doesn't make sense at all. Like the article underlines, Nordics countries have a insane social safety net, that even if your company fails, you're no where near as fucked as if the same thing happened in the US for example.

Yet, comparatively a very small amount of startups come out from the Nordics. Yes, Sweden has some, but if welfare = more startups were true, Denmark, Norway, Finland should all be top startup countries.

What I actually believe happens, and this is backed by personal experience, is that this safety net actual promotes doing nothing. Nearly all the gains/positives outsiders see of the system are wasted on the actual habitants. Nobody here thinks for a second longer about healthcare being free. It's taken for granted. So no, I don't think this is the reason for Sweden's success.

(Sorry for going on a tangent! Just wanted to write some of my thoughts)

Re: Why Does Sweden Have So Many Startups?

#145

Nobody's really mentioning it, but taxes are a huge consideration. For US companies, acquiring an overseas company provides an easy way to repatriate cash without having to pay the higher levels of tax on it. Note that a number of successful Swedish startups were acquired either by US companies or by international conglomerates with a strong US presence. That's not a coincidence.

This is a good point. Especially with Sweden being pretty easy on the taxes on acquisitions, compared to other Nordic countries.

Re: Why Does Sweden Have So Many Startups?

#147

Earlier quoted context omitted.

Lived here all my life. https://www.quora.com/How-are-Danes-Norwegians-Swedes-and-Fi...

Your post is very indicative of distinctly non-Scandinavian politics and philosophy.

Yes, my political views aligned with some 0.2% of this year's turnout (parliamentary election).

Re: Why Does Sweden Have So Many Startups?

#148
post #129

Earlier quoted context omitted.

> Norwegians keep their head down; most seem content with what little they have. Are you aware that Norway is one of the richest countries in the wold?

They are rich as a society, not as individuals. They don't have a neighbour who has created a multi-million dollar company.

Exactly. Median income in Norway is scary low, especially for single-person households.

https://www.ssb.no/en/inntekt-og-forbruk/nokkeltall

Re: Why Does Sweden Have So Many Startups?

#149

Earlier quoted context omitted.

Your post is very indicative of distinctly non-Scandinavian politics and philosophy.

Yes, my political views aligned with some 0.2% of this year's turnout (parliamentary election).

Which makes your descriptions of the Scandinavian countries extremely biased at best, and not indicative of what's actually going on.

Re: Why Does Sweden Have So Many Startups?

#150

Earlier quoted context omitted.

And it shouldn't all be characterized as success. I wonder who in this thread has actually worked in Sweden before... I've had clients there and worked from co-working spaces, and I saw more fucking around and play time and work not getting done than I've ever seen admitted.

It sounds so dismal. I'll stick to my cubicle and continue staring at my screen for 12 hours a day. Thanks but no thanks amirigt?

Sarcasm noted. It is quite a dismal place. Sure, it has great nature and the infrastructure is quite nice. However, the culture is such that most young people you'll meet are trying to escape - still while pumping out lots of overly positive marketing material via news media.
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