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Newsletter — Issue 12 — May 18, 2026
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This newsletter has been published by Engage Colorado.
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Sweden's Course Correction: A Case Study Colorado Can Learn From
This Engage Colorado Newsletter was written by Dan Caruso with the support of the Caruso Ventures team. The Ensuring Colorado's Innovation Future Coalition did not review and has not endorsed this Engage Colorado Newsletter.
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"Sweden is a real land of opportunity. I want people and capital to stay here and grow."
— Elisabeth Svantesson, Finance Minister of Sweden, 2024
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On May 13, 2026, The Wall Street Journal published an article titled "The World's Most Surprising Capitalist Makeover Is Under Way in Sweden." Sweden is, in 2026, one of the most surprising economic stories in the developed world. A country long held up as the global standard of high-tax, high-regulation, high-public-spending governance is — quietly, methodically, across two decades and successive governments of different political coalitions — running one of the most ambitious capitalist course corrections of any rich nation alive today.
The Sweden of 2026 is different from the Sweden most Americans imagine. It is still social-democratic. It still has universal healthcare, free university education, and generous family supports. But the policy architecture underneath that social compact has been quietly transformed — by both center-left and center-right governments — into something that looks much more like the kind of competitive, pro-investment, pro-entrepreneur economy that the Ensuring Colorado's Innovation Future open letter has been advocating for an entire year.
Colorado can learn from Sweden's journey.
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1. What Sweden Did
Here is what Sweden has accomplished, across two decades and through successive governments of both political coalitions:
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Taxes
The top marginal income tax rate, once roughly 90 percent, now sits at roughly 50 percent. The wealth tax was eliminated entirely. The inheritance tax was eliminated entirely. Corporate tax rates were brought down to levels competitive with the United States and significantly below much of continental Europe.
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Healthcare
Universal coverage remains. But roughly half of primary care services are now delivered by privately-owned providers competing for patients under the public reimbursement framework. The state pays. Private operators provide. Patients choose.
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Education
About one in three Swedish high schools is now privately operated under public funding — friskolor, the Swedish equivalent of charter schools. Parents choose. Schools compete. The public system improved in response.
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Government Spending
Public spending as a share of GDP, once well above 60 percent at its peak, has been reduced to roughly 24 percent of GDP — a level competitive with the United States, and significantly below most European peers.
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Capital Markets
Sweden has produced more than 500 initial public offerings in the past decade — more than Germany, France, the Netherlands, and Spain combined. A country of 10 million people has built one of the deepest, most active capital markets in Europe, anchored by Stockholm exchanges that have become a destination for European tech IPOs.
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Outcomes
Sweden today has more billionaires per capita than the United States. It also has lower poverty rates than the United States, longer life expectancy, lower infant mortality, and higher measured social trust. The country did not have to choose between dynamism and decency. It built both, at once, on purpose.
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2. Why Sweden's Course Correction Worked
Three features of the Swedish transformation are worth pausing on.
Bipartisan endurance. Sweden did not transform itself in one election. It transformed itself across eight successive prime ministers, of both major political coalitions, across nearly thirty years. The center-right reformed taxes. The center-left preserved the reforms. The center-right liberalized education. The center-left preserved the choice. The center-right opened healthcare to private providers. The center-left kept the universal coverage. No reform survived because one party won. Every reform survived because both parties chose, repeatedly, not to undo what the other had done.
Sustained, not sudden. The 90-percent-to-50-percent top tax rate did not happen in one budget. The shift from 60-plus-percent-of-GDP public spending to 24 percent of GDP did not happen in one administration. The expansion of private providers in healthcare and education was incremental, evidence-based, and constantly recalibrated as data on outcomes came in.
Pro-business and pro-people, at the same time, on purpose. The most counterintuitive thing about the Swedish story is that the country did not abandon its commitment to broad social welfare in order to become economically dynamic. It abandoned the delivery model — the assumption that the state had to do everything itself — while keeping the commitment — that every Swede should have access to quality healthcare, quality education, and a decent standard of living. The state pays. Private operators compete. Citizens choose. Public services improved in the process.
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3. What This Means for Colorado
Colorado today is, in many ways, more similar to where Sweden is now than to where Sweden was twenty years ago. Over the past two decades and more, Colorado has built incredible infrastructure and a remarkable set of assets — leadership in many important sectors including quantum, space tech and aerospace, digital infrastructure, and others; a world-class outdoor recreation economy; and a strong base of research, higher education, and cultural institutions — that together have made our state a thriving ecosystem for tech and innovation, and the envy of much of the country.
The challenge we now face is that this ecosystem has begun to erode. As the Ensuring Colorado's Innovation Future open letter has documented, structural, regulatory, and legislative factors are driving capital, talent, and entrepreneurial energy out of the state.
The three features that made Sweden's course correction work are features Colorado can apply — both to defend what we have built and to extend it.
Bipartisan endurance. Sweden's transformation held because no reform was treated as the property of the party that passed it — every reform survived because the opposing coalition chose, in its turn, not to undo it. Colorado will need to build that same expectation among its own coalitions if the work of the next decade is going to outlast a single administration.
Sustained, not sudden. Ensuring Colorado's Innovation Future was deliberately framed as a bipartisan 20-year strategy, not a four-year campaign agenda. That framing matters. Colorado can — and should — make significant progress quickly by recommitting to the conditions that produced our success. But a twenty-year horizon is what allows the work to compound. It ensures the state is guided by a long-term vision and a durable commitment to the benefits that a strong tech and innovation ecosystem produces — benefits that accrue to every Coloradan, in every county, across every sector of the economy.
Pro-business and pro-people, at the same time, on purpose. The single most important lesson from Sweden is the one most likely to be lost in translation in American political discourse. The Swedes did not become more dynamic by becoming less generous. They became more dynamic by changing how they delivered on their commitments. Colorado has the opportunity to be the American state that demonstrates this is possible: a state with quality public education, accessible healthcare, durable affordability, and broadly shared prosperity, and — by committing itself to a 20-year vision — the most vibrant innovation economy in the world.
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4. A Closing Thought
Where this piece began with Finance Minister Svantesson's words about Sweden, it should end with a sentence Coloradans should be able to say about our own state:
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Colorado is one of the most extraordinary places on Earth — a state where people, capital, and ideas can come, remain, and build the future together, and do so in a way that benefits all Coloradans.
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Realizing that future will take a coalition across tech, business, civic life, and political life — both parties and the unaffiliated voters who increasingly define Colorado — committed to the kind of sustained, structural work that produced Sweden's results.
The next twenty years are ours to shape.
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Engage Colorado Stands For
Engage Colorado makes the case for pragmatic, balanced, and competent leadership — leadership that puts the long-term prosperity and well-being of every Coloradan ahead of the divisive extremes of either national party. That is the editorial standard of this publication, and it is the standard by which every endorsement is made.
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