Thanks in part to Sweden’s neutrality in the face of global conflicts during the twentieth century Sweden has built up an enviable standard of living with extensive welfare benefits. Stockholm is at the heart of Sweden's economic life and it possesses a modern distribution system, a skilled labour force, and excellent internal and external communications. Timber, hydroelectricity, and iron ore are all important Swedish exports, with privately owned firms accounting for about 90% of domestic industrial production.

The vast majority of Stockholmians are employed in service industries. Almost half of Sweden’s businesses have their headquarters in Stockholm, including several major banks and insurance companies and the clothes retailer H&M. The biggest growth area in recent years has been in the high technology sector and there is a major IT centre located in Kista, in northern Stockholm. Among the most important employers in Stockholm are IBM, Ericsson, Volvo, Ikea, Saab, and Electrolux.

Stockholm is also a popular location for holding international conferences thanks to its impressive venues, such as the Stockholm City Conference Centre, and the Stockholm Globe Arena. Office costs in Stockholm are comparable with other European capitals. Tourism has also become a significant contributor to the city's economy in recent years.