What do Spotify, Klarna, Skype, and Mojang (creator of Minecraft) have in common? They all hail from Sweden.

Second only to Silicon Valley, Stockholm is home to the most unicorns (privately held tech companies valued at more than $1 billion) per capita in the world. Sweden has far more entrepreneurs than the U.S. on a per capita basis with 20 startups per 1,000 employees compared to just five in the U.S., according to OECD data. And all this despite significant headwinds – it’s hard for startups to scale with a population of just under 11 million, and expanding into the 27 neighboring European Union countries, each with its own complex regulations and tax systems, is costly and prohibitive.

To some Americans, Sweden and its Scandinavian neighbors may still carry the stereotype of high-tax European welfare states. Last month, pundits at Davos lamented the over-regulated, anti-growth state of Europe’s economy. But Sweden is an exception. During my years working in international economic development for the City of New York, the delegations of Swedish tech companies I met surprised me with descriptions of the supportive, pro-business infrastructure that helps early-stage startups thrive.

President Donald Trump has made technological innovation central to his second-term agenda, rolling out executive orders focused on supporting businesses and reducing onerous regulations. As Trump, Elon Musk, and their high-profile tech allies search for ways to sharpen our country’s competitive edge in tech, they should look to Sweden for valuable lessons on how to spark the next generation of startups. Even though the U.S. offers a stronger ecosystem for startups in their growth phase, the country can learn from Sweden’s approach to nurturing early-stage ventures.

Sweden’s thriving startup ecosystem didn’t happen by accident. Rather, it’s a result of three main factors: infrastructure and education, public-private partnerships, and low corporate taxes and business-friendly practices.

In the 1990s, the Swedish government rolled out a widely developed broadband network that almost all Swedish businesses and households still use today. Early access to high-speed internet, along with subsidizedcomputer-lending programs, helped foster a society of early adopters. In addition, the country’s tuition-free universities like the KTH Royal Institute of Technology and Lund University are a game-changer for aspiring tech entrepreneurs. Numerous incubators linked to these universities provide funding, mentoring, and networking opportunities for students and entrepreneurs.

“Sweden has developed a human, social, educational and corporate infrastructure that supports startup-ups,” Wharton management professor Exequiel Hernandez writes. “The notion of the entrepreneur in the garage or the small warehouse is romantic and true in many ways, but that doesn’t happen without a lot of other infrastructure.”

The second factor is government support of, and partnership with, the private sector. Sweden’s government also offers generous incentives for startups, from tax breaks to funding opportunities. Vinnova, a Swedish government agency dedicated to innovation, provides funding for innovation projects while Almi Företagspartner - a state-owned company - provides financial services like venture capital and loans to small and medium sized enterprises.

Barbara Wennerholm, President of the Swedish-American Chamber of Commerce New York, highlighted the strong partnership between Swedish government and industry at an event this month. “The key to Sweden’s leadership in innovation is rooted in the 'Triple Helix’ model, where government, academia, and industry work hand-in-hand,” Wennerholm said in a talk with Ericsson CEO Borje Ekholm last week. “This collaborative approach, which is built on shared risks and R&D costs, has been integral to Sweden’s success."

Finally, Sweden has made itself one of the most business-friendly countries in the world. Its corporate tax rate is 20.6%, compared to the U.S.’s 21%, and one of the lowest in the E.U. And in terms of regulation, “Sweden offers several efficient processes that make business formation and operations easier, including online filing platforms for incorporation, taxes, property transfer, permitting and more,” according to Wolster Kluwer. Entrepreneurs can quickly and easily set up a company through the Swedish Companies Registration Office, or Bolagsverket.

Sweden was not always so business friendly. Corporate taxes were a whopping 60.10% in 1989, which led to a severe economic crisis and an exodus of talent and capital for more tax-friendly countries. IKEA’s founder, Ingvar Kamprad, said high taxes were the main reason he left the country. Since then, however, reforms have gradually removed red tape and other obstacles. In fact, the Economist has repeatedly called on Europe to imitate the Nordics’ economic model to kickstart new businesses.

So perhaps DOGE and Trump’s team can look to Sweden’s embrace of early-stage startups to learn how to kindle more technological innovation in the U.S. What exactly can the Trump administration learn from the Swedish model?

First, for tech startups, government support can be a good thing. Just as Swedish programs like Vinnova help fund startups, the U.S. should do more, not less, when it comes to public private partnerships to encourage new ventures. Similarly, public investment to make high quality tech education more accessible will more than pay off in the long run.

Second, Sweden has a business-friendly regulatory environment with relatively low corporate taxes and quick, low-cost startup registration. In addition to cutting taxes, the U.S. could streamline processes for new tech companies, especially in high-tax states with complex bureaucracies, like California and New York.

Third, Sweden offers a model on how to help universities integrate with the startup ecosystem. For instance, “Professors Privilege”– meaning “professors and students at universities can own and commercially exploit the intellectual property of their research,” is a catalyst for Swedish startups, according to Professor Thomas Metzler, as opposed to the U.S. where most universities own such IP.

Next week, over 12,000 entrepreneurs, investors, and politicians will arrive in Sweden for the annual Techarena conference. For American business or political leaders looking to help the new administration follow through on its commitment to innovation and competition in the tech sector, Stockholm could be a good place to start.