Swedish Entrepreneurship (Blog Post)
|Swedish Entrepreneurship (Blog Post)
|© edegan.com, 2016
"Det är en bra uppfattning", or "that is a good idea" in English, is a Swedish phrase likely used in the early stages of many familiar start-ups. In a seemingly confusing and not oft reported trend the cold Nordic nation of less than 10 million people is responsible for churning out a slew of major tech firms from a seemingly unstoppable entrepreneur base. QlikTech, MySQL, TradeDoubler, Skype, SoundCloud, Klarna, Spotify, Rebtel, King.com, the Pirate Bay, Kazaa, and Mojang, some of the most recognizable names in tech, are all firms started by Stockholmers over the past 25 years. Sweden, when combined with the other Nordic countries of Denmark, Norway, Iceland and Finland, make up for 6.5% of the world’s billion-dollar exits from 2005 to 2012, according to statistics provided by Stockholm-based venture capital firm Creandum. What factors allows such a small environment to be so effective at producing entrepreneurs?
There appear to be a few answers to this question. Sweden has a GDP per capita of $47,900, 26th in the world, and a highly educated population, ranking among the top 20 nations in terms of education expenditure. The nation also ranks as the 10th happiest on earth. While these factors certainly seem to give a Swedish entrepreneur a head start, a 2013 study from the Stockholm School of Economics uncovers other interesting traits. The study identifies Sweden's social democratic political system with low income inequality and Swede's cultural aversion to "showing off" as two large factors in promoting entrepreneurial spirit. These factors helped produce the identified crowding-in spirit of "if they can do it, I can do it," in the small, largely homogeneous country.
Other cited factors include the government-sponsored, widely developed broadband network pushed out in the 1990s, and the government-instigated PC-lending program that put computers in the hands of even the lower classes from an early stage, which helped cultivate a high-tech, early-adopter society. Swedish winters were also mentioned, as they are long, dark, and cold, which supposedly encourage people to stay inside and "noodle away" at creative endeavors, such as programming or gaming. These factors combine into an impressive history of both well established tech firms and second generation start ups to draw expertise and inspiration from.
Finally, a model of looking inward for talent and outward for business allows Swedish start ups to take advantage of highly educated, low cost Swedish technicians for labor and the relatively homogeneous greater Nordic market as a jumping-off pad. Plus, after viewing Swedish simplicity like IKEA, you have to admit they have pretty desirable design skills as well. Not all is cheery in the entrepreneur atmosphere of Stockholm however, the study also cites a lack of a "critical mass" of investors, a cultural aversion to crowdfunding, and overall deficiency in starting capital as barriers to startups. All of this in mind however, it is clear to see the many traits and factors which help Stockholm rule the tech startup world.