All across Europe, countries are scrambling to woo workers from abroad to ward off the adverse effects on the economy of aging populations and chronic skills shortages.

Sweden’s government too has acknowledged that the country wants and needs highly skilled international workers.

But experts worry that Sweden’s tougher immigration policies and high barriers to entry are pushing candidates in the direction of the countries Sweden is competing with in the global race for talent.

“It’s very concerning, because it’s about the long-term health of the Swedish economy and our industry. We rely on foreign talent and ideally the companies could hire the right person regardless of where they are from,” says Per Strömbäck, head of Dataspelsbranschen, an organisation that represents companies in Sweden’s highly successful games industry.

Games companies are in fierce competition for workers who can fill very specialised roles, he explains.

“Let’s say that you are the best in the world at making smoke for games,” says Strömbäck. “Connect the dots, right? If the government is making immigration more difficult, that’s not going to help that person choose Sweden over California or Spain or some island in the Pacific or wherever they want to work.”

READ ALSO: How to switch to a career in Sweden’s booming gaming industry

Strömbäck’s concerns are reflected in new Migration Agency statistics showing that Sweden approved 20 percent fewer work permits for highly qualified workers in the first five months of 2024 compared to the same period last year.

Specialists in the games industry are very well paid and would not be affected by Sweden’s new salary threshold for work permit holders. But high-profile “talent deportations” in the past decade and now the government’s harder line on immigration have combined to make applicants think twice about moving to Sweden, says Strömbäck.

“We have many cases where people had to leave Sweden against their own will. And I also know people who have to stay in Sweden and couldn’t leave even if they had very important family things such as a parent passing away. So there are some very severe consequences for individuals and I think it’s an obligation for any modern country that wants to be proud of the way it treats its people to make more progress on this.”

Whereas most games industry professionals have high salaries, the new salary threshold is a real cause of concern for Stina Lantz, the CEO of Swedish Incubators and Science Parks (SISP).

“If you’re founding a startup yourself you’re just taking as much salary as you can afford to buy, like, noodles. It’s kind of the same thing to start a company as being a student: you don’t have any money,” she says.

READ ALSO: Business leaders: Work permit threshold ‘has no place in Swedish labour model’

At the same time as other European countries are introducing tax relief schemes and special visas targeted at startup founders, she says Sweden’s government won’t take into account the fact that startups are not like other companies and cannot pay competitive salaries at the outset.

“There’s actually kind of a war on talent ongoing in all of Europe,” says Lantz.

“It’s not at all good for Sweden, it’s not at all good for our growth, that we are going in the opposite direction, making it much harder and much more expensive.”

Lena Rekdal, the founder of immigration and relocation company Nimmersion, says she’s convinced that Sweden will regret making life more difficult for labour migrants – but not before sustaining damage to its reputation among international job seekers.

“You can roll it back quickly but the damage is still there.”

Rekdal remembers how she, like many others, stopped buying French wines and mustard while the country was conducting its highly controversial nuclear testing in the Pacific.

“What happened instead was that people looked for the same thing but a little bit different. So we started importing much more wine from Australia, South Africa, the US. Other mustards were tried out.”

The boycott led to lifelong changes in her own habits. In the same way, she worries that Sweden will disappear from the radar of many skilled migrants even if immigration rules are relaxed at a later time.

READ ALSO: Swedish work permits granted to top international talent drop 20 percent

All three experts are also at pains to highlight many of the positive aspects of moving to Sweden, such as work-life balance, generous parental leave, flat hierarchies and the benefits of four clear seasons. But Lena Rekdal fears that companies and Sweden’s economy will suffer when not enough people make the move.

“I think across the board, in many sectors, companies are nervous about not finding the talent.”

You can listen to the full interviews with Lena Rekdal (July 20th), Stina Lantz (July 27th) and Per Strömback (August 3rd) in a summer interview series on The Local’s Sweden in Focus podcast.