Swedish Startup Space

Why Sweden has more start-ups than heavy metal bands

Written by on February 27

Some say there are more heavy metal bands in Sweden than there are electric guitars. I say there are more start-ups in Sweden than there are heavy metal bands.

But seriously, how can such a (relatively) small population defy the statistical average when it comes to successful start-ups per capita? Why are conditions conducive to the entrepreneurial environment we have today? What makes Sweden the European capital for start-ups? The answer may be obvious.

There are some factors (from the past two decades) that are worth noting, such as the above-average level of computer literacy due to government subsidies for home computers, the dotcom bust releasing thousands of highly-skilled software and hardware engineers into the labor market, the introduction of friendlier laws for those starting their own ventures, the warming of foreign investors to Sweden’s habitual start-up successes, and the gradual erosion of the Jante Law, to name but some. These precursors birthed a generation of innovators and early adopters of hardware and software technology.

Flashback. In 1943, while studying the usage of hybrid seeds among farmers in Iowa, USA, sociologists Bryce Ryan and Neal Gross categorized the spectrum of adoption rates by classifying five groups of farmers: innovators 2.5%, early adopters 13.5%, early majority 34%, late majority 34%, and laggards 16%. They define innovators as “risk-takers who have the resources and desire to try new things, even if they fail”, and early adopters as “selective about which technologies they start using. They are considered the ‘one to check with’ for new information and reduce others’ uncertainty about a new technology by adopting it.”

Today, the internet is the proverbial sun to the bustling solar system of Swedish start-ups.

Flash-forward. These two groups are particularly relevant to modern day Sweden, where smartphone penetration, internet penetration and mobile phone subscription rates are approximately 52%, 94% and 140% respectively. This widespread mobile and fixed broadband penetration led to a shift toward IP-based solutions (internet telephony, internet TV, internet grocery shopping, even internet psychiatry), and we have been feeding off of as well as feeding this IP-centric culture ever since. As the internet and its adjacent technologies became more central to our culture, more aspects of our lives began to revolve around it. Today, the internet is the proverbial sun to the bustling solar system of Swedish start-ups.

The reason there is such a healthy and flourishing industry for successful start-ups is because the percentile for innovation and early adoption is higher than both Ryan & Gross’ estimation as well as the European average. This statistical advantage is a core contributor to the Swedish entrepreneurial edge. In turn, this increases start-up adoption and survivability rates for end-users and developers alike.  Simply put, embracing technology yields more embraceable technology.

Simply put, embracing technology yields more embraceable technology.


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