Sweden has only a 10m people total population but it is 2nd to Silicon Valley when it comes to number of unicorns per capita they produce. With alumni such as Minecraft, Skype, Spotify, King and iZettle, Stockholm is often called Europe’s unicorn factory.
We have recently explored Stockholm’s entrepreneurial ecosystem with a group of executives from UCLA Anderson School of Management and had the opportunity to visit some of the unicorns mentioned above and this is what we have learned.
Here are some of the top incentives which make this small place one of the most potent innovation and entrepreneurial ecosystems in the world:
HIGH TAXATION - the social benefits and the high government taxation provides entrepreneurs with a safe environment to take risks and fail. The Swedish government has also introduced new tax advantaged employee share options for small and early-stage companies to promote the recruitment and retention of key employees.
INTERNET CONNECTIVITY - almost ¾ of the of country has access to superfast fiber optic broadband and 90% of people use the internet compared with 85% in US. In the 1990’s government subsidized households to buy PCs and present successful founders like Klarna CEO say this is the reasons he started coding at 10.
HIGH TRUST - intrapreneurship thrives when there is a high level of trust both within individual economies and society at large. Employees are thus more innovative if given a lot of responsibility and autonomy. Trust is deeply rooted in the culture – Swedes trust the government to spend their money! Trust also breeds collaborative culture within teams.
SUCCESS BREEDS SUCCESS – more than 50 people have existed startups in Sweden with more than $100m each. This has created a surge in angel investing and serial entrepreneurs with experience of growing in startups which are critical to an ecosystem
GO GLOBAL MINDSET – given that Sweden is a relatively small country and commercial market, Swedish entrepreneurs adopt a “go global” mentality from the start which makes them more attractive to venture capitalists and fundable.