The Draghi and Letta reports brought European competitiveness to the forefront of the EU strategic agenda. Among the gaps identified: slow economic growth, persistent underinvestment, and limited business value creation. Consider, for instance, that over the past 30 years, US output per worker has nearly doubled, while Europe’s has risen by only around 20%. But performance varies sharply at both country and sector levels, revealing how much success can be achieved through national reforms—rather than by waiting for the worthwhile yet unrealized ambition of deeper, EU-wide economic integration to occur.

Sweden is a standout example. We analyzed a decade of total shareholder return (TSR) among Swedish public companies and found that over the past ten years, Swedish listed companies delivered close to 9% median annualized TSR, placing Sweden at the top—along with the Netherlands—among EU nations. While TSR is an imperfect proxy for national competitiveness, it is a useful metric for gauging how effectively an economy helps its firms scale, invest, and create value. Moreover, the outperformance that we tracked is broad based. Swedish champions show up not only in technology, but also in industrials and health care—sectors that matter for European productivity, exports, and strategic capabilities.

To understand what Sweden has done differently from its European peers, we explored some core factors that underpin its successful business environment. The key takeaway of our study is that Sweden has made practical policy and market design choices that systematically improve its odds of producing corporate champions. Those lessons can inform a potent agenda for national reforms addressing labor, innovation, and capital throughout Europe and beyond.