Catching up with Nordic start-ups

The lessons we can learn from Scandinavia’s tech supremacy

America may be the single most important country in the world when it comes to technological and innovative start-ups, but there’s little doubt which is the most important region. Having given us Ericsson, Nokia, Skype and Spotify, Scandinavia has become a global leader in IT, mobile and multimedia development, and the pace of innovation shows no sign of slowing.

Sweden is currently no.1 in the world for IT, according to the latest Global Information Technology Report from the World Economic Forum. In fact, all four Nordic countries are among the top 10. And Scandinavian start-ups continue to flood the tech space.

From Sweden, we have transactional knowledge market Mancx and mobile app developer Cartomapic. From Denmark, we have the app developer Podio, which is currently making waves in Silicon Valley, and Unwire, a mobile platform provider which enables the hosting of TV content on mobile phones.

From Finland comes Web of Trust, a crowdsourcing venture which has partnered with Facebook, and Rovio Mobile, developer of smartphone phenomenon Angry Birds. In Norway, Bird Step continues to bring a raft of leading-edge mobile connectivity products to market.

For all David Cameron’s attempts to promote tech innovation, specifically through the establishment of Silicon Roundabout, Britain cannot remotely compete with this rate of development. So what can we learn from the Nordic countries?

Government support

Let’s start at the macro level – specifically, the overarching political and economic factors. It’s not just about prosperity;countries such as Germany, Switzerland and the UK all enjoy a good standard of living, but can’t compete with Scandinavia when it comes to tech.

However, the benign social and economic conditions prevalent across the Nordic region, coupled with a common belief in centre-left, redistributive government, are certainly a help. Take Sweden for example; Andreas Bernstrom, the CEO of Stockholm-based VoIP company Rebtel, says the country’s strong welfare system “makes the people feel safer and enable make them to take the risk to start their own company. There is an option to fail.” Bernstrom adds that Sweden’s high taxes on wealth and income mean that “to make money as a salaried person has always been difficult, so people have been pushed towards starting their own business.”

Furthermore, specific pro-tech policies at government level play a key role. All across the Nordic belt, government support for tech innovation is evident in basic conveniences such as free WI-FI, and each administration has introduced specific measures to encourage tech development; for example the Danish government created a national e-government strategy back in 1999, while the Finnish administration has set up a tech liaison agency, FinNode, and based it in the heart of Silicon Valley.

The British government may have introduced the odd pro-tech measure, but its support pales into insignificance against Scandinavia; in Britain, most of the encouragement for tech innovation comes from private investors and accelerators. If David Cameron and his cabinet colleagues are serious about tech innovation, they’ve got start making up ground on the Nordic leaders.

Clustering

To catch up with Scandinavia, we’ve also got to embrace clustering – the pooling of ideas by a group of organisations for common gain. This is prevalent within each Nordic state; witness the decision by seven Norwegian tech companies to create the Movation innovation partnership back in 2006, or the merger of Finland’s top three technology universities two years later. It is also common practice to share ideas across national boundaries, as demonstrated in the creation of the Nordich Tech Five, a pentagonal alliance linking universities in Denmark, Finland, Norway and Sweden.

According to Mattias Guilotte, co-founder of Mancx, the compact nature of the region encourages a shared sense of purpose, and a willingness to help each other out.

“We’ve been fairly good at clustering initiative and entrepreneurs. Sweden’s small scale makes it easy to get in touch with people. We could actually get in touch with the vice president of spotify and ask them to help us, and they would.” Similarly Bart Denny, founder of Cartomapic, told us that “Stockholm is a relatively small town, and you can hear start-up conversations in plenty of cafes – that helps a lot.” Danish rowing-champion-turned-lifestyle-coach Mette Bloche said that, in her country: “The advice websites we have for start-up businesses are really popular. People help each other all they can, and sharing best practice information is very common.”

Tech culture

Yet perhaps the biggest single factor in Sweden’s supremacy is the willingness of everyday people to embrace new technology, specifically regarding IT and communication.

In 2009, a survey in Denmark found 72% of the population used the internet every day, 10% more than the UK. According to Mette Bloch, “people are not afraid of the internet in Scandinavia, everyone buys online.””

This enthusiasm for innovation, particularly mobile innovation, goes back decades. Andreas Bernstrom says that “Sweden is very strong is engineering, from building the first telephones, to the global expansion of Nokia. Engineering has always been sought after, and tech is just the latest manifestation of that.”

Matthias Guilotte, of Mancx, believes that history and tradition play a crucial part in start-up trends:

“We are in the second generation of engineers and people with a strong tech background, and people are inspired by those who went through the 1999 tech bubble, and showed you can become a tech millionaire. Even if many people lost money, they left their dream behind.”

This culture may take years to take root in the UK, and require a change in attitude from government as well as everyday people. But, if we are serious about making Britain into a world-renowned tech hub, we have to give everyone a stake in the products it provides.

When it becomes common for old grannies to surf the net, school children to use laptops in exams and parents to allow their kids online without fearing for their safety, we’ll finally have the chance to catch up with the Nordics.

 

 

 

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