Regional Dimensions of Venture Capital in Sweden

Sammanfattning: Sweden consistently ranks among the most innovative economies in the world. Further, Sweden displays the highest venture capital per capita investments in Europe. From the literature, it can be derived that venture capital is regionally clustered, and that innovation in Sweden occurs in regional innovation systems. However, previous research provides no evidence concerning the relation between regional innovation and venture capital in Sweden. Thus, this study explores the regional dimensions of venture capital and its relation to regional development in Scania, West-Sweden, and Stockholm. By creating a theoretical framework, this thesis follows a mixed method approach to explore the regional dynamics of venture capital. The first approach explores the characteristics of venture capital flows in Sweden. The results indicate that more than half of all venture capital flows towards the regions this study is concerned with. Most venture capital deals are observed in innovative business sectors. The second approach qualitatively investigates salient development paths concerning regions and sectors that secure most venture capital funding. Path upgrading and path diversification were found to be salient development paths in all regions, which relates to findings from step one where venture capital was identified to flow towards pre-existing innovation systems. This study concludes that venture capital is highly regional and supports regional development. However, the field requires further attention from scholars to investigate the relation between venture capital and regional innovation systems and its developments empirically.