This paper illuminates Sweden's pioneering practices in fostering entrepreneurship and innovation within its higher education institutions (HEIs), positioning the country as a leader in the European Innovation Scoreboard. Swedish HEIs serve as pivotal hubs in the national innovation ecosystem, collaborating extensively with diverse stakeholders to drive sustainability and inclusivity. Despite disparities in research funding distribution, autonomy empowers HEIs to spearhead innovative endeavors. While the COVID-19 pandemic accelerated digital transformation in education, challenges persist in bridging research outputs with local innovation ecosystems. Recommendations urge policy coherence, enhanced digital pedagogy, and proactive collaboration strategies to fortify Sweden's position as a global innovation frontrunner.