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Digitalization  02.04.2019

Sweden’s Digitalization Wave

Vacationers in Sweden quickly realize that the country marches to a slightly different beat. Whether they are dealing with a parking ticket, a snack bar at a football stadium or local public transport, they often don’t get very far with coins and paper currency. Cashless payments by credit card or smartphone app have long been routine. But they are only one sign that the country is a digital pioneer.

Forbes magazine acclaimed Sweden as the world’s most attractive location for business and industry in 2018. The Scandinavian country scores especially well on innovation. Not least of all, this relates to the fact that Sweden – the Hannover Messe partner country this year – has no qualms whatsoever about life in the digital age. Volvo, Ericsson, Tetra Pak, Scania and other companies were once the emblems of “Made in Sweden” quality. But now the streaming platform Spotify, payment services provider Klarna and online game developer Mojang have as well come to the fore. Skype was also cofounded by a Swedish entrepreneur. Skype and Mojang now belong to Microsoft, which paid a total of $11 billion US for them. Eight startups originated in the Swedish capital now rank as unicorns, meaning they are valued at more than $1 billion US. Only Silicon Valley can point to more of them.

Government and Business Pull Together

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But why have entrepreneurs from Scandinavia embraced the promise of digitalization so quickly and successfully? For one thing, Sweden is generally considered very open on matters relating to technological progress. Right from the beginning, there was great trust in the opportunities that digitalization offers – which Ericsson may have helped to promote early on as a leading global IT and communications company. In addition to the economy, the government also recognized the positive aspects of digitalization early. They have teamed up to advance the country’s digital transformation. An overall national digital strategy emerged about ten years ago from a dialogue with citizens and proved helpful. It is supposed to help make Sweden one of top industrial countries worldwide. The government wants Swedish companies to be in the vanguard of Industry 4.0 and thus maintain their international competitiveness. Along with neighboring countries, Sweden also has its eye on a cross-border 5G network that would digitalize commerce and production quickly and extensively. As part of a “Broadband Forum,” Sweden is also bringing representatives of the government, industry and other organizations together to carry out a domestic broadband expansion as quickly as possible. A full 95 percent of all Swedish households are due to be connected to it in 2020, including those on many of its coastal islands.

Convenience in Everyday Life

Digitalization is opening up opportunities in education, health care and interactions with official agencies. Every Swede has an identification number. Communication with officials, doctors and banks is tied to these digital identifiers, making daily life easier and more efficient. The Swedish government offers its citizenry about 3,000 electronic services. Forms for the country’s financial agency can be prefilled with available data, and the taxpayer can confirm information with the authorities by SMS. This all fits into a world where nearly three-quarters of all transactions in Sweden are cashless. Chips implanted beneath the skin – which can be used for cashless payments – are quite popular in Sweden. About 4,000 Swedes reportedly carry a chip of this kind.

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Positive Environment for Startups

If you are immersed in the advantages of digitalization in your professional and personal life, you might come up with your own ideas about the next new innovation more easily. The conditions for innovation are outstanding in Sweden. At any time, employees can take six months of unpaid leave to pursue their own business ideas. It is a piece of the puzzle that has fueled an extremely lively startup scene from Stockholm to Malmö. And then there is the teamwork – easily visible in the collaborations of companies and startups – that is strongly anchored in Swedish society. Many institutions (such as incubators and accelerators) make it easier for company founders to get started. Financial support and networks can be easily mobilized. Moreover, entrepreneurship and the enterprising spirit enjoy comparatively high esteem in society. The foundations are laid in schools and courses of study at an early stage. Swedish startups are the current leaders in financial services software, online commerce, health technology, artificial intelligence, and cyber security. Their transnational success is tied to the fact that Sweden’s growth-oriented companies think in international terms right from the outset. And then there is the fact that Sweden is one of the world’s most trend-sensitive countries, according to Interior Minister Mikael Damberg. This makes it an attractive test market for new products developed by international companies. It’s no wonder that Hannover Messe proclaimed Sweden, a country that could not be more thrilled with digitalization, as this year’s partner country.

Between now and summer, we will be shedding light on various facets of digitalization in this space and in the May edition of our customer magazine ESSENTIAL. Learn more here.


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