Something is really bubbling below the surface of the Swedish entrepreneurial scene, with a new generation of young companies bursting with world-changing ideas in IT, biotech and a whole range of other areas. For anyone who recognizes this in time, there is big money to be made.
Back in the mid-nineties, Swedish e-Vikings swamped the world’s IT industry with innovative products and new companies. You could even argue that Sweden had a central role in the whole development of the internet as we know it today. But what happened then?
Let’s take a step back. Despite – or because of – the large number of multinationals in Sweden (more per capita than in any other country in the world), there hasn’t been an entrepreneurial climate here for hundreds of years. All the country’s many innovations have been developed by huge corporations such as Ericsson, Volvo, SAAB, ABB, Electrolux and others.
Swedish innovation, in other words, has not produced new corporate stars for ages. But don’t mistake this for a lack of competence or creativity. On the contrary, many Swedish multinational brands have a reputation for leadership in terms of excellence, design, quality and creativity.
Sweden has the highest average level of education in the world, and Stockholm has the highest concentration of highly educated people of any capital or large city. It is also worth noting that Sweden has always had the highest density of high-tech gadgets – most telephones per capita, most video recorders per capita, most cellular phones etc and some of the best IT infrastructures in the world – both at the general level and at the corporate level.
The lack of Swedish entrepreneurship has actually been due to a lack of political willpower, understanding and competence. The miserable effects of this include insecure citizens who believe they need a strong state to take care of them and provide them with secure employment.
But during the mid nineties there was a minor revolution in which young, talented people started to question the assumptions of a job for life, large corporations and governmental control. With the sort of self confidence and self esteem usually associated with Americans, they challenged the international IT markets with their entrepreneurship, innovation and creativity.
For a while this was tremendously successful and the world was amazed by the strength of Swedish IT entrepreneurs, but they were easily struck down when the IT Bubble burst. There was no experience of how to deal with failure, no acceptance and no forgiveness – just as might have been expected in Japan.
This played right in to the hands of the left-wing politicians, who happily cemented and defended the old systems. Everything went back to normal – no entrepreneurship, no innovation unless you were a giant corporation.
But self-confidence has gradually returned and the visionaries’ forecasts from before the crash have all been fulfilled. Slowly, very slowly, venture capital is returning and the success of a number of Swedish startups is reinstating confidence in young entrepreneurs.
The election of a centre-right government in Sweden has led to more measures to simplify and encourage entrepreneurship. As I write this article, the force of ideas whose time has come is about to be released in a wave of entrepreneurship that will again astonish the world. IT companies and mobile services are leading the way, but remarkable clean tech companies, biotech companies, Nanotechnology companies and various design, gaming, gambling and media companies are not far behind.
Talented, well-educated and international entrepreneurs are back, with high ambitions and fighting spirit. What is still missing, however, is access to capital and the guidance of venture capital firms with international roll-out experience.
It is interesting to see how a small country such as Israel, with 2/3 of Sweden’s GDP per capita hosts 50 American VC companies. Sweden, a world leader in high tech, does not have a single one. The domestic Swedish venture capital market for early stage investments is still immature and insufficient. For foreign VC companies, this is an open market ready for entering.
My guess is that that foreign VC companies are already set to start setting up here over the next couple of years. The potential is simply too big not to be exploited.
There are already lots of great new companies in the pipeline. They are innovating in areas as diverse as digital ID and mobile email. Take Elucidon, for example, which has created a super smart search engine, giving meaning and structure to unstructured qualified information.
New ground is also being broken in creating revolutionary new digital IDs and global policies for digital trade (Global Trust Centre or Domain Trust Server). New internet operating systems such as Xerion are being developed here in Sweden.
At IQube, the company I founded to foster and encourage Swedish entrepreneurship, we’ve seen dozens of ideas come forward which have the potential to make it big internationally. One such company is Momail, which has developed a service that will change the way we use our mobile phones. Momail provides the cheapest and fastest email to mobile phones in the world. If users and parents only knew how much money and time this MMS killer would save them.
In a similar vein, another young, entrepreneurial Iqube company has developed a new browser for mobile internet. With Squace , mobile internet gets a whole lot easier, faster and cheaper.
Swedish ideas could even change the way the world falls in love: First Date First Date, a new Swedish dating service, will challenge Match and the American giants – but will be better and smarter.
I’m just mentioning companies in my sphere – there are lots more out there. The message these companies are sending to the world is clear: the Swedish E-Vikings are back.
Johan Staël von Holstein is founder and CEO of IQube, a Swedish incubator that focuses on helping early-stage companies and entrepreneurs to grow and achieve commercial breakthrough. IQube is a shareholder in The Local Europe AB, publisher of The Local.