Why Does Sweden Have So Many Startups?
theatlantic.com
theatlantic.com
"Sweden’s impressive start-up record can also be attributed to some broader aspects of how the country is set up. Its social safety net, for instance, helps entrepreneurs feel safe to take risks. In Sweden, university is free, and students can get loans for living expenses, which allows anyone to pursue higher education. Health care is free too, and childcare is heavily subsidized. None of these benefits are contingent on having a job, which means people know that they can take entrepreneurial risks and still know many of their necessities will be covered.
“I think if you want to be an innovative country, you have to give people security so they dare to take risks,” Mikael Damberg, Sweden’s minister for enterprise and innovation, told me."
The second case, which is not present in the article is that in Sweden, working in a small company is considered a risky proposition and a such small companies are offering higher salary than big companies. It means that they tend to attract the best people too. In most of the rest of Europe (DK, DE, FR from my own experience), if you want the engineer path with good money, you need to get hired by a big company.
But also well beyond other countries with developed welfare systems, such as France. I think these discussions always miss one key factor: Language.
If you don't speak English quite well at an early age (already at 10-13 years old) you are much less likely to get into software development at an early age. If you don't get into software development at an early age, you are much less likely to do a software based startup when you are in your twenties. There is a thousand times as much documentation, conferences, tutorials, courses, online fora etc in English as in other languages and this is how new ideas in IT spread. Only months or years afterwards, it's translated to Spanish or Chinese, and only if it has caught on. Just about everything new in IT spreads through English, whether it's AI or web development or anything else.
The Scandinavian languages are not that different from English, the countries are small and consume a lot of music, movies, TV etc from the US/UK. Movies and TV have never been dubbed, except for toddlers. So for the last 50-60 years or more, Scandinavians have been quite good at English. Your average 70 year old Scandinavian speaks English better than your average 20 year old Italian. A drunkard on a bench in Scandinavia is likely to speak better English than most academics I've met in Southern or Eastern Europe.
We live in an era of software driven startups. It's easy to forget that it was not always like that. There were times when successful businesses were driven by mechanics (GM), electronics (Sony), chemistry (Kodak), trade or other factors. Now it's software, and whether your language, framework, or library of choice is C, C++, Python, Lisp, Java, PHP, JS, HTML, CSS, Tensorflow, React, or almost any other tech that the unicorns are built with, the new developments in that tech will initially have spread from English speakers to English speakers. The fact that the largest software companies in the last two decades have all been American then reinforces that trend.
From a country of 5 million (Denmark) you got the creators or cocreators of C++, C#, PHP, Ruby on Rails, Turbo Pascal etc. From a country of 60 million you got ...?
France is a a power house in so many other engineering fields like nuclear power, auto industry, aviation etc so they clearly have engineering talent. But in software, not so much.
There are French programmers in all the opensource projects that I'm involved in.
But I treat "made in France" like a warning label for anything software, hard to explain exactly why :)
I guess it might be because they have very few self-thought people (probably because university is decent and free) that have that "intuition for how to simplify stuff and make it obvious and grok-able" (academic education tends to kill this "intuition" in people). Also, there's a kind of cultural "hate" for KISS and "complexity reduction" in general - they tend to view complexity as an asset somehow, quite a messed-up mindset imho...
There are lots of incredible good software and research (mostly out of INRIA) from France.
And Ocaml seems cool, though Haskell people see it like "eager Haskell with too many features and complexity and syntax on top". I took a look at the Ocsigen Ocaml web framework long ago though, and I was like "jeeez, wtff"... the language may seem cool, but that thing... ugh... But I can't really have an opinion on that since the only truly functional languages I've really played with were dynamic (Clojure and Erlang), static + functional is not really my area of experience.
I don't know about ocsigen(i don't do web development), but i guess all web frameworks are more complex than they need to be.
I haven't even mentioned all the formal verification stuff(coq, a verified C compiler, frama-c etc.) that come from inria. I mentioned PHP because the GP was saying languages like PHP that comes from denmark etc., but nothing from France.
I kinda love PHP as long as I don't have to read/write any of it myself ;)
(Oh, and you made me realize what's the core of my "french software" stereotype: getting complex-vs-simple completely backwards! ...of course, it's just a funny stereotype, the real people I've actually known are all smart and cool and understand trade-offs even when we don't agree on architecture and organizing stuff :P)
china and russia beg to differ?
Contrast with, say, an African child of well-to-do parents who has access to computers and the Internet but who doesn't (yet?) speak English. Good luck finding lots of coding resources.
I could read advanced academic papers written in English (not just technical, also philosophy and economics) well before my speaking fluency was good enough to make "live conversation" well.
Of course, there is a horrible side to it: coming from Eastern Europe and living in Western Europe, I need to "dumb down" my English a lot, and to force myself to talk slower in English when speaking with French/Italian/Spanish (French are the worse btw - never met people harder to communicate efficiently with than them... even when their language skills are ok they sprinkle that "context dependency" and "nonobviousness" into everything) people that speak "English" but are actually only fluent in a lifeless subset of "standard international business English"...
Formerly it may have mattered if you can afford a computer. But prices have come down so far that this is not an issue anymore. Hey, you could use a Raspberry with a keyboard and attach it to a TV to learn how to program.
Depends what you're looking for. E.g. for many libraries/APIs there is documentation in English and no other language.
Good education, smart people, good safety nets and a culture of doing things well & properly are IMHO better explanations.
About the culture thing: go to anywhere in Europe/World and you'll find out that the Nordic countries in general have very clean cities and all broken things like door knobs etc. are replaced faster. Design & architecture is very simple, functional and there isn't much "kitsch" to be found. I'd say this helps in startups too: you'll find people who really want to do their job well and build a solid product.
ARM and Nokia are/were not mainly software companies, but producers of chips and cell phones (where software is a part).
Not sure what bubble you are talking about.
Like you said, working at a Startup in the Nordics is considered risky, which doesn't make sense at all. Like the article underlines, Nordics countries have a insane social safety net, that even if your company fails, you're no where near as fucked as if the same thing happened in the US for example.
Yet, comparatively a very small amount of startups come out from the Nordics. Yes, Sweden has some, but if welfare = more startups were true, Denmark, Norway, Finland should all be top startup countries.
What I actually believe happens, and this is backed by personal experience, is that this safety net actual promotes doing nothing. Nearly all the gains/positives outsiders see of the system are wasted on the actual habitants. Nobody here thinks for a second longer about healthcare being free. It's taken for granted. So no, I don't think this is the reason for Sweden's success.
(Sorry for going on a tangent! Just wanted to write some of my thoughts)
Maybe it’s not right to say it’s the reason for Sweden’s success but it could be an enabling factor.
This is true. Unfortunately this has likely very little to do with your skills. To get hired by a big company there are three options:
1. You have family connections 2. Your professor in the university has connections 3. You work for a start up that get's acquired by a big company.
Exceptions confirm the rule. Also this may not be the case for companies like McKinsey or BCG.
I once applied for a job Germany at BASF. Job location would be Asia. Based on my resume I was very well suited for the job. I filled out the shitty SAP application interface. They really got back to me. "We received your application. Please also upload your 'letters of recommendation' (something that is provided to you in writing for every job you had in Germany)". I emailed them that I got my PhD in the US and worked in the US and that I don't have this but that I am happy to provide references. They emailed: " If you don't have letters of recommendation then we don't need you. We deleted you application!" This was a multinational company.
You still get the same healthcare and education, the same access to sports (even golf!) and nature (very important for us), and since there is zero stigma associated with public transportation it doesn't matter if you can't afford a car.
It's not that sport organizations in Sweden are open to everyone out of the goodness of their hearts (though I think many people support it). It's because they are required to if they want to be registered as non-profits, receive government funding, rent subsidized facilities owned by the state etc.
For instance the school system isn't very egalitarian, at least not in Stockholm, these days (nor is the housing market for that matter). The school system is quite different compared to e.g. Finland. The laws changed and so did the quality of different school. "Grade inflation" is very common etc.
Every year when it's time to sign the children up for ballet, football, gymnastics etc it's the same thing, extremely high pressure on all clubs, places fill up within hours. I'm sure that if it wasn't for Jante, there would be a huge market for more expensive clubs with shorter queues.
In what sense is the school system not egalitarian? It's not very good anymore, true, but that has other causes. I mean all schools cost the same, i.e. nothing, and anyone can apply to any school. It's even forbidden to charge for school lunch, or even ask children to bring fruits because "some people may not be able to afford that" (though this is going way too far in my opinion).
I agree that housing has changed, and prices are getting pretty crazy in places. But regardless of the price differentials between areas, which still are far from as extreme as in the US, my point is more that it doesn't matter as much which area you live in, your quality of life will be pretty similar. Building standards are extremely high in Sweden so even the cheapest places are pretty robustly made at least. And the houses on the most expensive addresses are still relatively modest, there are no doormen or valets or crazy things like that. The differences are more subtle, and there is less showing off.
Sweden may look tiny, but in fact it has GDP 1/36th of U.S., did it also generate ~$100B of startup worth in 20 years (Silicon Valley made about $2.5-3T in this time and quite a bit - maybe up to $1T - elsewhere in the U.S.)?
For US companies, acquiring an overseas company provides an easy way to repatriate cash without having to pay the higher levels of tax on it. Note that a number of successful Swedish startups were acquired either by US companies or by international conglomerates with a strong US presence. That's not a coincidence.
IMO the article misrepresents the cited study[1], which doesn't talk about "start-ups". It could just as well be represented as: in weak state countries lacking a stable operating environment for large businesses, companies are short-lived and the only option for many people is self-employment. Also, the size of state sector vs private sector just tells you how the activity in the country is organised: you can have public healthcare or private healthcare, and of course the private healthcare means more private sector activity. It doesn't mean that the private sector healthcare is a better outcome.
[1] PDF link: https://www.aeaweb.org/aea/2011conference/program/retrieve.p...
Entry level median salary for devs without higher education from the year I left recruitment (2013/2014) was 28000 USD per year. Add 3000 USD for entry level devs with university/college education.
YMMV but I don't think things have changed that much since then.
I had a look at some old notes and stats from 2012-2013. Knowledge in JS, Php, Java, Python or C/C++ were required for all of the positions.
14 recruits in the 18-20 yr, no edu bracket (high school dropouts/just graduated), mean salary 24451 USD (199200 SEK)
24 recruits in the 18-20 yr, bootcamp/vocational edu bracket (high school dropouts/just graduated), mean salary 27249 USD (222000 SEK)
17 recruits in the 20-22 yr, bootcamp/vocational edu bracket, mean salary 28869 USD (235200 SEK)
29 recruits in the 20-26 yr, higher edu bracket, mean salary 34467 USD (280800 SEK)
These were placed with employers, startups and established companies, in the tech sector. Mainly in central Stockholm and Kista (tech hub outside of Stockholm).
Make what you will of this, the amount of job seekers with bootcamp/vocational education hasn't gotten less than in 2012/2013. I believe this keeps the salaries in Stockholm down, and makes you settle for less if you want the job at all. Entry level salaries for devs in Stockholm are low.
BUT - as soon as you get some experience under your belt, you can rise quickly in salary by job hopping for a year or two.
But sadly most of them are unemployable for tech-firms. Sweden, like most other places, has a shortage of well educated engineers (and other young professionals).
Much of higher education is Sweden is very low-quality. For example, there are government subsidized university courses in Harry Potter knowledge (no joke).
A good sysadmin can make around 60k USD /year in Sweden.
Good developers make several thousand more.
So almost the double of what you said.
The unemployment rate for educated computer scientists is around 0.4%.
Your salary number is off the mark though. Median pre-tax income is roughly double that.
There's no problem getting rich by working in Sweden if you keep your costs in check (which is hard to do these days), don't over educate yourself (also hard with high youth unemployment) and eschew some of the social benefits by working in less comfortable conditions (which is becoming the default anyways).
Doesn't mean you'll be super rich just by working of course, but that's not really true anywhere. At least not if your family isn't already. If it's really a priority one could of course leverage the competitiveness of most Swedes education, attitude and knowledge of languages by going to Zurich, London or (a large city in) the US for a few years.
[0] e.g. https://www.daxx.com/article/it-salaries-software-developer-...
In the US, there's very little social safety net to catch you. If you get sick before the startup is big enough, it means personal bankruptcy - and no medical treatment. Missing revenue targets can mean missing student loan payments, missing rent, etc. There's real risk you'll end up homeless in the end.
In Sweden, you might end up poor, but the poor are still taken care of. You get your medical treatment, the state pays your rent, and you are guaranteed enough income to buy groceries.
When you run into a founder or work for one in the US, realize the absolute big risk they are taking. People in Sweden have a safety net to catch them. The result is people are more willing to take risks to start something and you also see more innovative startups that would otherwise be considered high risk in the US by founders.
Because of this, companies needed to find additional benefits, non-monetary, to give to employees, both to keep and attract employees. So, they started to offer medical insurance.
Well, it stuck and medical insurance has been tied to employment ever since. But, that incentive has long-since been removed from the books and employers can now happily pay as much as they can afford.
As for other incentives, I don't know of any incentives offered to employers that offer insurance, at least until recently. The current incentive is a fine, if they are meet the criteria and don't offer insurance.
Other than that, a perverse incentive that does exactly opposite of what you're asking, there is nothing else. I suppose you could be referring to the employer not being taxed on money spent on insuring their employes, but taxes are based on profits and the personnel expenses are not on that side of the ledger. There's no incentive, the money just isn't taxed because we tax profit, not revenue.
Um, yourself? I have an ACA plan. It handles all the catastrophic stuff, and has a very reasonable deductible. It costs me ~$360/mo. Certainly this is a different ball of wax with a family (figure more around $1100-1400/mo for a reasonable plan) that has dependents.
In my case I quit working eons ago. I bought health insurance via a state marketplace (RomneyCare). My total costs (business insurance, legal, marketing) were less than $10K. I was profitable at the end of month two. At the end of year one, even with expenses I was making 70% more than I could as an employee in most companies in Boston (and around what I could theoretically get at Google, if they would even give me the time of day). It's been 5 years, and I still question why I didn't do it earlier. Worst case I had two years of savings in the bank from average-paying software jobs.
You don't have to do crazy things that require millions of dollars. I'm working on a "big thing" (to me) now that will require ~3000 hours of development time to launch, but I'm doing it all myself, and my costs are $10-15K and learning some new skills. Though the very real potential is for it to easily replace business one, and put my income well above what even the Valley could ever pay me. I wouldn't of done that quitting a job though -- that's something I would build on the side and launch while still employed, and only quit when it's clear the revenue will cover expenses.
As a student I would would have 10000 SEK / month ($1200), in grant and student loan. [1] You would expect to need nearly all of that in any of the town Universities [2] leaving nothing for healthcare. But in Sweden healthcare is nearly free (maxed at $120 for a 12 month period).
[1] http://www.csn.se/lattlast/studiestod/studiemedel/hur-mycket...
[2] https://www.kth.se/blogs/abhineet/2016/05/livingexpense/
[3] https://www.1177.se/Stockholm/Regler-och-rattigheter/Patient...
Savings are finite, sadly.
Way to propagate an ignorant myth. The US has a massive welfare state and social safety net. The average poor person in the US can typically draw $25,000 to $30,000 in benefits per year depending on the state they live in. Those benefits include free healthcare, housing, food, work training, etc. For some states, such as Hawaii, it's nearly $50,000 per year.
Just drawing on several of the most common welfare benefits programs in the US, gets you near $20,000 per year.
According to a fact check by the Washington Post in 2014, the median total individual welfare benefits package in the US was $28,800.
Let's put it another away. These welfare benefits numbers are so high, they exceed the median income in all but a few very wealthy nations.
Proclaiming it's often insufficient is a comically loaded premise. How often? In which states? Under which circumstances? I've got the perfect response for that: it's often sufficient.
According to the OECD's numbers, the US poor live better than almost any other poor people on the planet save for those in a select few countries (eg Canada, Norway, Sweden, Australia). [1][2]
[1] https://www.forbes.com/sites/timworstall/2013/06/01/astonish...
[2] https://mises.org/blog/poor-us-are-richer-middle-class-much-...
CATO's numbers also match the Post's. They did a 2013 follow-up study to a prior 1995 study they did of work vs welfare trade-offs on a state by state basis. There is probably no more comprehensive source than their study, that I'm aware of.
"this study seeks to determine the approximate level of benefits that a typical welfare family, consisting of a single mother with two children, might receive"
[34 states come in above $25,000]
https://object.cato.org/sites/cato.org/files/pubs/pdf/the_wo...
Here are two articles that dig into how the Cato numbers are technically possible but not useful for having a real dialogue about the benefits people wind up receiving in real life:
http://www.politifact.com/rhode-island/statements/2015/feb/0...
https://www.washingtonpost.com/news/fact-checker/wp/2014/12/...
https://www.forbes.com/sites/timworstall/2015/05/04/the-aver...
> The reality, expressed mathematically, is: Total Spending On “Welfare”/Those who receive benefits = $24.77 per day. That's a lot less than $168.
I'd be interested to know where your numbers come from.
There are approximately 16 million households that qualify as poor in the US. Households that exceed the poverty line do draw some benefits as well obviously, so it's not strictly those 16m poorest households pulling against the $1 trillion (which is to say, those 16m households are not each claiming ~$61k in annual benefits).
If you instead distribute that figure among the bottom quarter of adults - in terms of income - under the age of ~65 (over 65 most are drawing on Medicare), you get to something in the neighborhood of $20,000 per adult averaged. Per household you're going to be closer to $36k to $40k (eg the bottom 25m households * $40,000 per year).
Just the various healthcare programs utilized by the poorest 16m households - including Medicaid, CHIP, etc - is likely to be over $25,000 per year per household (not per person obviously).
The maximum welfare benefits a poor person in the US can draw annually, then reasonably aligns with the median state figure the Washington Post was quoting at ~$28,800 (again, it varies by state, some are far higher than others).
As I learned from the US healthcare debate, an astonishingly high percentage of the money goes into overhead. For example, you pointed out SNAP.
https://en.wikipedia.org/wiki/Supplemental_Nutrition_Assista... says: "SNAP benefits cost $70.9 billion in fiscal year 2016 and supplied roughly 44.2 million Americans with an average of $125.51 for each person per month in food assistance."
So, $55.5 billion goes to Americans, meaning %15.4 billion or 20% is overhead.
How much of the other money is also overhead? Consider a charity which takes in $100M to "build homes for the poor", and ends up building 100 such homes. Your analysis suggests the poor are receiving $1M homes. On the other hand, if 95% of the money is spent on overhead, they are only getting $50K homes.
We know there's overhead elsewhere, though not 95% - that was used to make a point. For example, your Medicaid example is directly connected to the absurd health care costs in the US. As Wikipedia tells me: "In 2011, there were 7.6 million hospital stays billed to Medicaid, representing 15.6 percent (approximately $60.2 billion) of total aggregate inpatient hospital costs in the United States.[74] At $8,000, the mean cost per stay billed to Medicaid was $2,000 less than the average cost for all stays."
So part of that Medicaid spending is on an overpriced medical system. Another part of that spending is simply wasted in carrying out means testing and administrative overhead. These are costs which don't exist in the healthcare system of most other rich countries, and in neither case should it be viewed as money going towards poor Americans.
Furthermore, means tests requires that applicants do extra work to file the right forms, stand in the right lines, and in general deal with the bureaucracy. This can include taking time off of work (so getting paid less), trying to find a baby sitter, etc. These are monetary costs which are hidden in your analysis, which only looks at the government costs, and there are human costs of extra stress and hassle - and issues related to loss of respect and humanity aren't easy to quantify monetarily.
To get back to your text, you use numbers like "There are approximately 16 million households that qualify as poor in the US" and "you instead distribute that figure among the bottom quarter of adults". However, as DanBC pointed out from the Forbes article, the denominator "the number of people who claim benefits", gives $24.77 per day.
That suggests that there are many more people who claim benefits than your estimates suggest. I can see one place already. You limited the denominator to the "bottom quarter of adults .. under the age of ~65 [because] over 65 most are drawing on Medicare." However, https://www.ssa.gov/history/pdf/RowlandandLyons.pdf points out that 9% of the elderly draw on both Medicare and Medicaid.
About 185M people are between 18-65 years old. (Adding up https://en.wikipedia.org/wiki/Demography_of_the_United_State... ). 1/4th of that gives about 46M, which close to your estimate of 50M ($1T/50M people=>$20K/person)
About 46.3M people are enrolled in Medicare due to age. 9% of that is 4M, so that's 8% missing from your earlier numbers.
In addition, children in "[a]ll states - except Tennessee - have additional disability-specific eligibility criteria, which allow some children with disabilities to qualify for Medicaid even if their parents’ income exceeds the state-established threshold." https://www.americanprogress.org/issues/early-childhood/repo...
I think this would also affect your numbers by increasing the denominator and so lowering the overall per-person payments.
To go back to DanBC's point, why aren't you using "the number of people who claim benefits" as your denominator?
The Scandinavian countries clearly have far more generous social safety nets.
There are estimates NYC spends >$40k/year/homeless-w-mental-illness with no evidence their situation has improved. In fact, it might be getting worse!
Social safety and healthcare in America is broken. The War on Poverty has spent 10s of trillions, and our healthcare costs are the most outrageous in the world. That doesn't mean we have a good social safety net.
Were I to quit my job tomorrow, I would not receive unemployment as this goes to only those who lose their job through no fault of their own.
Health insurance, even with ObamaCare, would be based on my last year's income taxes. Thus no health subsidies - 100% out of pocket.
Welfare is probably similar in most states. Section 8, the same. So unless I had a nice stash in the bank, I'd be homeless.
The one exception, I believe, would be SNAP benefits. So I guess I wouldn't starve.
Housing programs are also often unavailable, if you were lucky enough to have got in years ago and stay in compliance with the requirements, then good for you. Most people who need housing assistance will never receive it.
Food support (SNAP, EBT & WIC) is essentially only for families, single people & couples get minimal assistance.
[1] https://www.justlanded.se/english/Sweden/Sweden-Guide/Jobs/U...
Not really. It's really hard to try and get fired, since the employees are protected pretty well. So in order to get fired you would have to mess up pretty bad, to a point where you would usually leave a lot of scorched earth, so very few people do that.
If you are on good terms with the company you can also "get fired" (I've heard of that in a few startups), so you can collect the benefits, but that only works in a small set of companys I think.
You can't just stop doing your job, show up drunk, and yell obscenities at your boss all day. Well, you can, but you probably won't get unemployment benefits.
Sadly, I have not just one - but two friends who have lost their jobs for showing up incapacitated. One wasn't alcohol, though. They were stuffed full of amphetamines - but the first one was drunk. Neither mentioned any employer offers of rehab.
[1] https://www.foretagande.se/a-kassa-for-foretagare-sa-fungera...
Many unions will offer you cheap insurances covering up to 3 times that amount. And you can actually be in the union and get many benefits even as an entrepreneur.
I wish we (the Netherlands) had a system more similar to the Scandinavian countries. We have social security, but it has gaps and holes all over the place and once you get stuck in one of those gaps there's virtually no way out. Notably, having been an entrepreneur puts you in one of those gaps.
I'm a (sufficiently) rich kid though, so no biggie.
Do you mind expanding? Is this something to do with having been ‘unemployed’ while working on your company?
Note that many entrepreneurs agree with this policy: they rather pay as little tax/premium/whatever and just sort things out themselves. The thing that bothers me is that I can't even choose to pay the same state unemployment premium as my employees are forced to pay.
But when you're not entitled to unemployment money (also happens if you've never had a job more than x months in a row), you're not entitled to all the extra benefits you get when trying to get out of unemployment. Eg you don't get day care support for kids because you're home all day, right. No matter that you're trying to reeducate yourself to get a new job - you're not costing the state any money so it's your problem. However if you are entitled to unemployment benefits and then working on reschooling yourself, then you get day care support for your kids as if you had a job.
NL is very American in that respect. The social security is designed from the perspective of the treasury, not the people's well being.
A more pessimistic view is that the government does everything it it's power to pull the social security net out under everyone, but the current the legislation makes it much easier to do for entrepreneurs.
It's much more complex than that.
It is likely a cultural thing, as young (4-6 year old) Danes on the street do some happy, unlike their older siblings and parents;
I am aware that this contradicts surveys that conclude Danes are the happiest people and Swedes aren’t - just recounting my personal impression
These kind of things matter and are very rarely captured in statistics
https://finance.yahoo.com/quote/%5EOMX?p=%5EOMX
vs the S&P 500:
https://finance.yahoo.com/quote/SPY/chart?p=SPY
SPY still seems to be doing significantly better over the last 5 years.
It's not like money injected is debt free.
But that doesn't matter. You shouldn't gauge the inventiveness and exploratory nature of a country by looking at its stock index. Especially since stock indices are irrational and get inflated for many misleading reasons.
1 very good free secondary and university education system
2 good English language skills
3 social safety net
These are a few of the reasons:
- highly skilled labour is cheap in absolute terms and the cost to performance ratio for such workers is probably amongst the absolute best in the world. Good for a start-up!
- For the individual worker a job as a highly competent senior developer on average in my 20 years of experience is pretty much just double that of a garbage collector. Salaried men don't get ahead much but start-up workers do to a similar extent as they do in other start-up hubs in the world. Good for the early employees getting shares or stock options.
- Social security systems would still leave me able to stay in my nice home in my nice suburb even without a job. It would not affect the healthcare or education for me and my family at all. I would have to cut down on my intercontinental vacations with my family though. It feels like bet I could make without too much anxiety.
-Sweden has had, and still have to some extent, lots and lots of world leading large tech companies in pretty much every industry like automotive, telecom, different types of processing industries etc. Lots of skills, knowledge and ideas has spun off these large companies or started as suppliers to these. I think this ecosystem is one of the more critical factors which the other Scandinavian countries lack. I cannot come to think of even one Scandinavian unicorn-ish type of company from another Scandinavian country than Sweden. Finnish Rovio is close though, but I cannot come to think of any other non-Swedish company. Sorry but please fill me in here Norwegians, Danes and Finns!
- Stockholm specifically, where all the companies mentioned in the article are from, is a tech hub with lots of skilled and nice people living and working here and lots of good tech companies which makes it start-up friendly for the same reasons it would anywhere else in the world.
- The Swedish society, compared with most other I've experienced, is pretty well oiled and modern (not saying there isn't room for lots of improvement) where infrastructure like transportation, administration of personal and company affairs etc work quite well. More time and energy to focus on stuff that matters like your business and your family.
- The weather sucks for at least 6 months of the year. No I'm serious here. Having pretty much nothing else to do than to work and watch Netflix frees up lots of time and energy for work.
My five cents…
Well, Skype is half-Danish, so there's that :-)
Others that I know of are Unity (founded in Copenhagen), Zendesk (started in Copenhagen), Steelseries, Endomondo, Just-Eat, Tradeshift, Trustpilot, Flying Tiger, Sitecore, TC Electronic, Soundboks, Navision.
It kinda depends on how you define "startup". Bu no, not quite as many as Sweden, but we do have our own established large companies that have spun off into daughter companies in different areas or helped create successful startups.
It was a startup at one point, though ;-)
I live in Sweden, and I’ve lived abroad in both the UK and US, and I’d say living in Stockholm is a lot cheaper than London, and certainly a lot cheaper (and much easier, if you can find an apartment that is) than NYC or SF. But of course it depends on your way of life I guess.
FWIW I’ve bootstrapped my business, and as someone else suggested in this context the social safety net takes away a lot of the anxiety in doing this. It’s not easy, but I also know if shit hits the fan I won’t be out on the streets the next morning.
It used to be possible (or at least not impossible) to rent an fairly cheap apartment close to the city and find a way to do something on your own. Conditions for getting a student loan, leave of absence or unemployment used to be more favorable.
Since 10 years ago the government have been actively trying to get more people to work. With the consequence that it is harder to do anything else. Studying, getting unemployment (risking your job) and living (housing costs have doubled) has all become harder to do. Most people these days would risk their job or apartment and do something on their own, because chances are will have a significant reduction in life quality if they fail.
Most startup activities these days seem to be running around cocktail parties trying to get (more) investors for you local clone of something else. Which is understandable, people need to pay their mortgage and attain social standing, but it's largely the opposite of what has made some Swedish startups successful in the first place.
One could try getting investments. But while Sweden is in generally has high degree of equality, it can also be very insular. Especially in recent times as social status matters a lot. You shouldn't expect to show up and compete based on your ideas. It's very much "who you know".
>How a tiny country with high government spending bred a large number of vibrant young businesses
The article then goes on to attribute almost all of Sweden's success to deregulation and anti-monopoly laws---i.e., less government intervention ∝ more startup success.