Innovative Swedish ICT leads the way
Published: 17 Apr 2012
As several smart Swedish start-ups are emerging on the global information and communication technology (ICT) stage, Sweden ranks number one in the digital economies of the world. Interesting innovations and cutting-edge technologies abound.
Computers are a natural part of the Swedish education system. Photo: Lena Granefelt / imagebank.sweden.se
The Swedish top spot is awarded by the World Economic Forum's* "Global Information Technology Report." It looks at the use of ICT as a tool for economic growth in 138 countries. The report compares technological infrastructure, political initiatives, consumer attitudes and several other factors. Sweden ranks just ahead of Singapore and Finland.
Some factors mentioned as reasons for Swedish ICT successes are: a good education system in the ICT field, the government's promotion of broadband infrastructure in the 1990s, and tax deductions for home computers in the 1990s. Sweden was also one of the first countries to establish a telephone network, which provided the basis for present-day multinational company Ericsson, producer of telecommunications infrastructure.
The fact that Sweden hosts several fast growing ICT companies is a sign of the Swedish ICT know-how, says Daniel Goldberg, editor-in-chief of the news site Computer Sweden.
Examples of Swedish ICT success stories abound. One of the fast growers is QlikTech. The company was founded in the 1990s as a small consultant service in Lund in southern Sweden, but in recent years, innovations by its engineer Håkan Wolgé have transformed the company entirely. Its software now facilitates cross-referencing of all kinds of business data, and is used by 22,000 companies. It was recently launched on the NASDAQ stock exchange with a 2011 turnover of USD 327 million.
In a cultural climate of widespread illegal downloading of music, a group of Swedes invented a perfectly legal, free solution for listening to music online: Spotify. This Swedish online music streaming service has grown from zero to seven million users in selected countries around the world in just seven years.
But the Swedish story of fortune above all others is Skype, the free internet calling tool. Co-founded by Swedish entrepreneur Niklas Zennström, Skype was sold to eBay in 2005 for USD 2.6 billion. In November 2011, Zennström invested SEK 37 million (about USD 5.5 million) in new Swedish cell phone application Wrapp, which allows users to give and receive digital gift cards.
Who is next? No one knows. But Goldberg of Computer Sweden says Swedish engineers like to focus on specialized ideas that might grow big.
"Take Scalado, a company founded in 2000," he says. "It develops the zoom function for images on cell phones, now in use in every other cell phone camera.
"Or Polar Rose, founded in 2004, which sells facial recognition tools that allow users to name people in their photos on photo sharing sites like Flickr. The company was bought by Apple in 2011. Both are successful because they are so specialized."
Polar Rose's technology is in place in a billion devices, according to a press release from the company.
According to Goldberg, large companies like HP and Microsoft send talent scouts to Sweden to hunt for the hottest new entrepreneurs.
The Swedish gaming industry is also interesting. One of the latest successful computer game designers is Markus Persson. A lone inventor, Persson created a modest pastime called Minecraft in 2009, "a game about placing blocks while running from skeletons." Persson had humble hopes of earning the equivalent of a programmer's salary from sales of the game, but by the end of 2011, Persson's startup Mojang had nine employees, Minecraft had been downloaded by more than 5.5 million users, and the company's turnover was USD 80 million.
"I'm over the moon, of course. I never expected it," Persson says.
Another Swedish gaming success is Magicka, a game developed by a team of students at Luleå University of Technology. In 2008, the team won first prize in Sweden's largest game development contest, Swedish Game Awards. In February 2012, Magicka had sold over 1.3 million copies online.
Interview with Arrowhead Studios' Emil Englund about the future of the computer game Magicka.
The next big thing?
What's the next big thing, then? Cecilia Sjöberg from Vinnova, a government agency charged with promoting innovation and research, mentions machine-to-machine communication – such as pacemakers being connected to remote monitoring systems, or GPS transmitters that report a vehicle's location, which will enable transportation companies to pinpoint airplanes, trucks, cars or packages.
"Machine-to-machine communication may also be sensors, such as drug sensors, that collect data and transmit them for analysis," she says.
Robotics is another huge field, according to Sjöberg. "We see a lot of R&D going into making robots useful in homes and in health care," she says.
But social innovations, such as open-source code writing or Wikipedia are also attracting a lot of attention at Vinnova. "Crowd funding is one example — a lot of people connect, let's say via Facebook or via crowd funding sites, and decide to invest small amounts in some venture or business," she says.
Social innovation also comes into play as more and more government agencies understand that they may benefit from being a lot more transparent. The Swedish Tax Agency, for example, made data on its tax collection available to everyone. Very soon, someone had constructed an application that allows each citizen to see on their cell phone exactly how much of the tax money they pay that go to health care, defense, education, and so on. That way, the point of paying taxes is brought home more clearly, which is in the Tax Agency's interest.
*The World Economic Forum is an independent Swiss foundation that also runs the well-known, annual Davos conference on world affairs.
This feature has been published by the Swedish Institute.