According to recent newspaper reports, Sweden’s largest exporter, Ericsson, is about to – in the worst case – shed all manufacturing in Sweden, sack half its employees and be broken up and sold. This is bad news for sustainable Sweden; with its internet of things and wide R&D capabilities Ericsson has the competence and potential to be a major contributor to the Swedish Government’s ambition to be fossil-emission free by 2045. With this latest news it is looking more and more like Sweden will fail to “cross the chasm” keeping its high material standard. It seems, though, that very few really care to do what is necessary. They would rather let small local initiatives pick up the pieces.
The chasm, as Geoffrey A. Moore explains in his book, is where many promising products fail to go from early adopters to mainstream. Sweden as a country faces falling into such a chasm: despite showing early willingness to go green it will fail to transform from its high standard, high energy, high ecological footprint to high standard, low footprint. At the bottom of this chasm global corporations (including Ericsson’s present owners) have had the last pickings of what industrial capitalism can offer and left high unemployment, failed infrastructure and a cold country with not enough soil to feed its inhabitants or wood to keep them warm.
The challenge is huge not least because to become emission-free Sweden has to kill its favourite darlings. A good proportion of Sweden’s top ten employers are in fossil fuel-dependent industries. Darlings of Swedish industry – Volvo, Scania, Autoliv – are the ones that are going to see their Business As Usual killed during the next two decades.
The Swedish Government stands powerless
Can government actually do anything to help? At least a crisis group was convened by the Swedish minister of enterprise, Mikael Damberg . Under EU rules, global trade agreements and the general consensus that business should let the globalised markets decide, I don’t see he has any room – unless he changes paradigm- to do anything other than find a few cushions like research grants, subsidies and tax breaks to soften the fall. Experts in economic policy are quiet on this topic too.
The main owners will cash out while they can
What can Ericsson’s main owners do? Ericsson’s ability to invent new solutions and bring them to market in a timely fashion – where profits can be made before competition slashes profit margins – was not world-leading. Apple, for example, came into to mobile market from nowhere and quickly made more on their IPHONE than Ericsson did on its whole mobile range. Instead of pushing for Ericsson to be a successful high-tech high-risk innovator, the major owners opted for more of a second player strategy. Or they were unable to move Ericsson in that direction. They have made their money and their losses and they are now going to get out. That makes perfect business sense and I don’t blame them.
The problem is structural and one of paradigms
The problem in my opinion, illustrated nicely by Ericsson’s demise, is not of business strategy but one of structure and paradigms. Sweden has long nurtured the paradigm that global industrial capitalism is good for people: creating jobs, driving equality where enough jobs (and day care) means both partners can work, and driving innovation that makes products greener and safer.
Globalisation is not your friend
It might have been true for a while, before globalisation hit. In reality, Sweden’s industries are stuck in the rut of fossil-fuel dependency. Sweden’s political parties are stuck in the rut of economic growth through industrial development. Without a paradigm and rules shift, that rut will lead Sweden and its pet industries into the chasm.
The choices are hard
Set the ambitions for 2045 and let it go where it will, where the government does the best with what it has given itself, or change the rules.
Other rules and paradigms have been offered. Can we discuss them sensibly?
It is not as if options to change rules haven’t been tabled. Just to take a few examples: a sufficiently hefty climate tax on fossil fuels, raised regularly, with proceeds paid back to citizens was offered by Climate Scientist James Hansen and the object of a report from the Nordic Council. A basic income to provide the basics for everyone through the transition has been voted on in Switzerland. A grass-root Transition movement of local initiatives is spreading fast in Sweden.
Following a strategy of South Korea, the government could just order and pay for a solution from its industrial companies the way it ordered the shift from driving on the left to driving on the right, or the way it de-fossilised electricity production. One example: large users of diesel are the emergency services and municipal services like road maintenance and snow clearance. Just place an order for a green solution.
I understand if you don’t want to show leadership
It takes guts and rare ability to develop world-leading high-tech companies. It takes even more guts and political dexterity to change the rules. I can understand if industry and political leaders give up. The alternative is to cash out of your shares in what was once profitable technology industries, set up committees and hand out small research grants, and watch the country crash into the chasm.
If you are going to opt out, see to it to fund local action groups
However, if you are going to let that happen – and it might be the only thing that COULD happen – it might be a good idea to take some of that money that taxpayers are giving the government for the privilege of burning fossil fuels (my last count was about 1,7 billion Euro) back to local initiatives like the Eco-village movement or Transition movement that are making Sweden fossil-free from the ground up. Your local Transition Initiative will welcome you along to learn how to grow food by hand, build from natural materials, form community and produce energy from small-sale solutions.