At the beginning of the 20th century, Sweden had a largely agricultural economy. With abundant natural resources such as vast forests, water power and rich deposits of iron ore, the country became highly industrialized within a century. Today, most jobs are in the service sector. Nevertheless, the manufacturing sector remains important. Sweden produces cars, steel, armaments, chemicals, furniture, forest products and agricultural machinery for export.

The Swedish have invented many important industrial products and processes. Tetra-Pak, used to package and transport liquids, was invented in 1951 by Erik Wallenberg. High-voltage direct current (HVDC) transmission was developed by Swedes in the 1950s. The Swedes have also made important advances in the technology of computers, medical equipment and mobile telephones.

Agriculture is a comparatively small but important sector. Sweden produces most of its own agricultural products, including wheat, barley, potatoes, dairy products and poultry. About 16% of Sweden's population live on farms or in small villages. Farmers receive support from the government.

The Swedes pay high taxes, and the government provides extensive welfare benefits. A national occupational injury insurance system pays for costs incurred by work-related accidents. Extensive government programs of employment training and relocation grants help the unemployed find new work. Everyone from the age of 65 on receives a pension.

   Did you know?
Saab, the Swedish company that produces cars, was originally an aircraft manufacturer.
Sweden's unemployment rate is about 7%. Many Swedish workers belong to labour unions, which ensure that the standard of working conditions remains high. Most Swedes work 35 to 40 hours a week, and every employed person is guaranteed a five-week annual vacation with pay. Women represent about half of the workforce and are employed in all areas and professions.

Traditionally, the Saami people of the north lived by hunting and fishing. Some Saami bred reindeers. Today, their rights to breed reindeer are restricted by the law. Forestry, particularly the practice of clear-cutting, has made it even more difficult for the Saami to feed their animals in the winter. The number of Saami reindeer breeders is declining.

   Did you know?
IKEA, the furniture manufacturing and retail company, was founded in Sweden in 1943. The name IKEA comes from the initials of the founder, Ingvar Kamprad, and the first letters of Elmtaryd and Agunnaryd, the farm and village where he grew up.