China Pushes Ahead of Sweden in IT

This article was published in Ny Teknik today under the title "China pushes ahead of Sweden as IT-country" and I have taken the liberty to make a short trans-script.

OPINION. We are about to lose our position as "hotspot" and become a technical developing country. Support the entrepreneurs and increase number of seats at universities otherwise we risk to be stuck with the low-cost jobs in Sweden, warns David Almström, head of Scandinavia, Symbio.

Newly started enterprises decreased in Aug 2012, according to Bolagsverket. Number of AB was reduced by 130, compared to same month 2011. IT companies that might be more willing to take risks is where the reduction is most obvious. According to Assistera less 292 companies was started 3Q 2011 compared to year before.

As I just returned to Sweden after 15 years in the IT industry in China, I'm asking myself what's happening. Stockholm has been perceived to be a hotspot for startups - is Sweden losting out?

Despite hyped Swedish IT companies like Spotify and Klarna the willingness to invest is at record-low levels, according to SvD in Aug. Second quarter this year is the worst since 2007.

Working in the extremely fast-growing market for mobile solutions, I've seen whom we'll be competing with in the future. In countries like China, development have been exploding the last couple of years and it just goes on.

If Sweden are to be competitive, we have to improve the conditions for entrepreneurs. To leverage the entrepreneurial talents, education is required. For IT-entrepreneurs joining universities, excellent knowledge in basic science like mathematics is necessary. 

And how does it look in Sweden?

Well, the number of Swedish students not reaching acceptable levels have double between 1995 and 2008. If we check how engineers graduating, we also see a negative trend. Since the new millenium until last year, the number of registered students at engineering educations have decreased by 22% and number of graduates 15%.

Except lack of competence, lack of capital can be another reason for the ever decreasing new IT companies.

This leads to qualified jobs move outside of Sweden while lower salary jobs remains. When tax revenues decreases, the common welfare is reduced and poverty increase. Time to act to change this trend before to late.

Invest in eduction - both elementary and university. Maybe look at California and Silicon valley where the university have in its roots to collaborate with the private sector and professors are encouraged to engage and support innovations to become growth companies. Thereby also easier to find stakeholders willing to invest.

Politicians should stop plans to reduce 10,000 number of university seats. Improve the safety net for entrepreneurs. In Finland, the government have something referred to as Forced Leave, whereby a company losing revenues and struggles financially can put employees on forced leave. During forced leave, the employee get paid by the government (unemployment funds) and can be re-employed if situation improves.

If politicians do not act drastically with the support of universities, other stakeholders and investors, we may drain Sweden of competence. The result is moving away from a country seen as hotspot for entrepreneurs and early adopters to become a technical developing country. Not a future anyone of us wants.