Forbes' ranking is based on a comprehensive compilation of data on 139 countries. The countries receive scores in 11 categories: protection of property rights, innovation, tax burden, technology, prevalence of corruption, freedom (personal, trade and monetary), bureaucracy, investor protection and stock market performance. Sweden ranks among the top ten countries in seven of these categories.
Sweden has undergone a transformation to reach the top. Forbes paints a picture of 'a transformation built on deregulation and budget self-restraint with cuts to Sweden’s welfare state. The reductions in the scope of the Swedish welfare state has allowed tax cuts, incentivized employment, and, together with some scrapped taxes on wealth, successfully made Sweden consistently ranked the most or one of the most competitive economies in the world.