Daniella Sjoqvist was 28 when she decided to take her side gig full time.
She might have been nervous, except that there was one major factor in her favor — she had a job waiting for her if it all fell through.
Sjoqvist’s employer, the Swedish government, had given her six months off to pursue her business idea with the guarantee that her job would be waiting for her if she chose to return.
“I had already started my company, teaching languages on the side while I was working, but it felt more like a hobby than a job,” Sjoqvist told CNBC Make It. The break “allowed me to take the chance of working full time on my company,” she said.
Six months later, Sjoqvist’s burgeoning language academy had seen its customer numbers more than triple, giving her the confidence to quit her admin job permanently and become her own boss.
A country of entrepreneurs
It may sound like an improbable scenario, but Sjoqvist is not alone. She is one of thousands of workers who’ve taken advantage of a Swedish workplace initiative designed to encourage entrepreneurship.
Sweden’s so-called leave of absence for entrepreneurship program entitles all full-time, permanent employees to take six months out to focus on their business, safe in the knowledge that they can return to their job — or a similar one — once the period is up.
The leave — known locally as tjänstledighet — is typically unpaid, and may only be redeemed by employees once per employer. It allows recipients to retain job security while they get their idea off the ground — a rare luxury for most full-time entrepreneurs.
Employers are only entitled to reject the request if there are significant operational reasons or if the new business is considered a direct competitor.
“To my knowledge this is the only country (Sweden) that offers a legally-enshrined right to take a leave of absence for entrepreneurship,” Claire Ingram Bogusz, a post-doctoral researcher in entrepreneurship and information systems at Stockholm School of Economics, told the BBC in a recent article on the scheme.
Disrupting the workplace
The program was introduced in 1998 and is one of the country’s various leave of absence schemes — including 18-month parental leave — intended to improve Swedish employee freedoms.
In a so-called welfare state like Sweden, where taxes are high, such social benefits are the norm. But the entrepreneurship scheme is different in that it was conceived to boost the country’s business scene.
Traditional economics suggests that countries’ with higher taxes discourage entrepreneurship because individuals view the risks as greater. That could have been the case for 31-year-old Max Friberg, who “really enjoyed (his) job” in corporate finance at a global consulting firm and might have stayed there if it weren’t for the leave of absence scheme.
“I would have been hesitant to start my business if I didn’t have the opportunity to return,” Friberg told CNBC Make It, noting that the six months gave him the time and security to give his software platform “an honest try.”
Measuring start-up success
Sweden does not keep official records of the number of people who take advantage of its leave of absence for entrepreneurship scheme. However, over the past decade, the Scandinavian country has seen a general uptick in the number of 25- to 54-year-olds who were registered on leave, according to the BBC article which cited Statistics Sweden. Meanwhile, the number of registered businesses has nearly doubled.
The shift is reflective of Sweden’s now booming start-up scene. In fact, after Silicon Valley, Stockholm is home to the world’s highest number of billion-dollar start-ups per capita, including major names like Spotify and Minecraft.
In Sweden, there are 20 start-ups for every 1,000 employees versus five for every 1,000 in the U.S, according to the Organisation for Economic Co-operation and Development.
Sjoqvist said she has no doubt the scheme and the start-up boom are correlated.
“I think it is great way of pushing for entrepreneurship,” said Sjoqvist, founder of E.L.A.N.S (Enjoy Learning And Never Stop). “I suspect that programs like this have contributed to the large amount of Swedish unicorns such as Spotify and King.”
A new future for employees
However, despite the unorthodox scheme’s apparent success, it will likely be some time before everyone is convinced of its benefits. Not least employers.
Under the program, Swedish businesses must shoulder the disruption caused by an absent employee. In countries with stable economies, such as Sweden, that’s something most employers can generally weather. But others may find it more difficult.
Plus, even in Sweden, there remains miscommunication about the scheme’s implications. Sjoqvist noted that she had to educate her boss on it.
“At first, my employer was not even aware that this law existed so I had to show it to her,” Sjoqvist said. But after that, she said, the response was positive.
Sjoqvist and Friberg are among those who decided to leave their jobs to pursue their businesses full-time after the six-month scheme. However, there are others for whom the scheme is less successful and who decide to return to their job once the program ends.
Ingram Bogusz noted that that can in fact be a positive for employers, who may see their employees return to work more energized and appreciative of the benefits of full-time employment.
“For someone to have gone out and tried something new and had that opportunity and come back isn’t actually seen negatively. It’s seen neutrally at best, and probably even positively, because then the person has said, ‘Oh no, this job is what is actually for me,'” she told the BBC.