Wall Street Week: Innovation for Sweden and US national defense

Welcome to the Wall Street Week newsletter, bringing you stories of capitalism about things you need to know, but even more things you need

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Welcome to the Wall Street Week newsletter, bringing you stories of capitalism about things you need to know, but even more things you need to think about. I'm David Westin, and this week we traveled to Sweden for the story of Europe's innovation leader and the Pentagon, where the Army is seeking transformation under its new secretary. If you're not yet a subscriber, sign up here for this newsletter.

Sweden's 'Vibrant IPO Market No Accident'

Former ECB President Mario Draghi, in his report last year on the "Future of European Competitiveness," drew a direct line between the tepid growth of the European economy and its falling behind the US in innovation. He urged the EU to develop a "deeper pool of angel investors" and increase European IPOs to fund high-growth companies. It turns out that one small Nordic country — Sweden — is already doing just that. Among other things, Sweden has a vibrant IPO market, taking more companies public between 2013 and 2024 than Italy, France or Germany, the Financial Times reported, citing Dealogic data. And the World Intellectual Property Organization ranked Sweden last year second in innovation only to Switzerland (and just ahead of the US). Nasdaq has been operating in the Nordics since 2008 and has established its European headquarters in Stockholm. Adena Friedman, Nasdaq chair and CEO, credits the government's programs and other economic policies.  "The government has done a lot of work intentionally to make sure that they allow companies to take risks, allow companies to grow and expand, become global players," she said. "And then they have a great system that also encourages citizens to invest in these innovators."

In National Defense, Army Secretary Says 'the Math Just Doesn't Work'

Military spending by the US last year accounted for 37% of such spending worldwide, according to the Stockholm International Peace Research Institute. The Defense Department plans to dramatically change how it spends its money, aiming to redirect 8% of spending to higher priority programs such as missile defense. Secretary of the Army Daniel Driscoll says "we are a very wealthy nation, but the math just doesn't work." He points to General Atomics MQ-1C Gray Eagles as an example of "an exquisite $3 million piece of equipment that can be taken out by an $800 drone." Reworking the government's relationship with legacy defense contractors is harder than it sounds, but Driscoll says it's different this time because "President Trump and Secretary Hegseth are going to allow us to make these very difficult changes."

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