Promoting start-up investment in the Swedish capital
Start-ups such as Spotify, Skype and King have all helped to put Stockholm on the map as a world-leading tech hub. The city boasts the most unicorns - any tech start-up company that reaches a $1-billion market - per capita outside of Silicon Valley.
Invest Stockholm is the official investment promotion agency of the city and markets it internationally as the business capital of Scandinavia. The team's multiple experts provide their knowledge to match business opportunities with potential international investors.
The agency has a strong and connected network of local contacts that can help provide information on establishing a company, as well as sorting out offices, hotels, lawyers, accounting firms, and creating marketing and press material.
"Our team is dynamic and can offer tailor-made services to our client's needs," CEO Anna Gissler says. "Thanks to our Stockholm Business Alliance partnership that includes 55 municipalities, we are able to serve the industrial sector with site visits and logistical assistance such as obtaining permits. All of our services are free of charge."
With a wealth of experience, Gissler says the focus for most organisations looking to invest in the city rests on market, density, climate and geological prerequisites, although it varies according to industry. Density, for instance, is important for the retail and hospitality industry, while climate is especially important for businesses such as data centres, where the cold Scandinavian weather is crucial.
The geological prerequisite is important primarily for industrial organisations and data centres, as the risk of earthquakes is extremely low. Finally, connectivity, talent, competency and language are also key, especially in the booming tech scene in Stockholm.
Simplicity is one of the advantages of investing. "In our region, it's very much about plug-and-play solutions, and setting up operations is a simple and transparent process," Gissler says.
However, one challenge lies in a lack of awareness of the city. "International organisations might simply not know this about Stockholm," she says. "There's not enough knowledge about our region generally, especially about our business climate. We, as the official investment promotion agency, want to inform [businesses of] and highlight the benefits of setting up operations in our region. That's why marketing the city of Stockholm is an integral part of our work."
Stockholm is the largest capital city in the Nordic region, in size and population. It is also the financial centre of the area, boasting the largest stock exchange. This is why the Swedish capital often acts as a business gateway to other Nordic countries.
"Accessibility and connectivity is also an important factor and Stockholm continues to develop rapidly, especially with the recent extended flight routes and the expansion of Stockholm Arlanda Airport," Gissler argues. "Of course, Swedes have been ranked at the top of class when it comes to speaking English and, in terms of doing business, that's very important."
Another important partnership programme in which Invest Stockholm participates is the Stockholm Business Alliance. It represents 3.8 million inhabitants, and gives the city a competitive edge in Sweden and across major European regions.
"This is a unique partnership that has proved to work very well and is clearly what differentiates Stockholm from other Swedish regions, as well as the rest of the Nordic countries," Gissler says.
Connectivity and accessibility is important for any trading partner especially amid the tumult and uncertainty of Brexit. The European Medicines Agency, for instance, is relocating from London to another member state in the wake of the referendum result. Stockholm submitted a bid to become the new headquarters for the organisation, though Amsterdam was chosen in late November.
More generally, there has also been an increase in requests from financial industries - especially fintech - as Stockholm is considered a hub for tech and innovation. The Swedish capital is earning the reputation and clout of a tech leader generally, but it also offers specialised services, focusing on more nuanced segments of the wider technology industry.
"There's a wide range of clusters based in tech, but there are also strong clusters within medtech, cleantech and fintech," Gissler says. "This is due to high density and available competency in our region. The concentration of competency and knowledge is one of the reasons behind Stockholm being able to produce so many unicorns. This type of environment is not only very inspirational, but also provides a basis for companies to experiment and explore new things."
Sweden has a long history of globally powerful companies. Ericsson, SKF, ABB and Sandvik all paved the way for the tech innovation that the region is known for today. In the 1990s, the government also offered a tax break for residents to buy personal computers, which helped Swedes become early adopters of technology. A few years later, Stockholm built the world's largest open-fibre network - infrastructure that is still being used today.
The size of the Swedish market, relative to bigger economic hubs, has also been a powerful motivator for many new companies. "Stockholm start-ups are born with the aim of reaching an international market from day one," Gissler says. "If you combine this with an open society, political stability, sustained economic growth, free education, strong social security system, a culture of sharing and a supportive start-up ecosystem, you have what has made Stockholm such a huge tech hub."
Stockholm is not just attractive to investors, it's a magnet for top workers, too. In collaboration with LinkedIn, Invest Stockholm conducted a survey that revealed the city has a zero-net outflow of talent to any other region in the world.
Companies such as Amazon and COMSA have chosen to invest in Stockholm, with the latter regarding the city as "one of the most internationalised business centres, with great connectivity to the rest of the world and international business know-how", Gissler says.
Amazon Web Services also decided to settle in the greater Stockholm region. The company cited the city's strategic geographic location in Scandinavia, excellent access to high-performance networks, and incredible access to a talented and educated workforce. Another drawcard is the area's commitment to green energy and sustainability.
"The low energy cost has been really valuable, and being able to sell the heat that is being produced is not only environmentally friendly, but also another way to make money," Gissler says.
Access to top investors, connectivity, stability and infrastructure are all good reasons to invest in the Stockholm region, and are consistently cited as deciding factors for companies that choose to relocate.
"I think our organisation and the services we offer have played an important role in generating investment in the city," Gissler reflects. "We are able to assist with information about opportunities in the region and guide these companies on how to establish a strong presence in Stockholm. Most importantly, we put you in touch with the right people."
Given the nature of the agency's work, it is closely observing the evolving trends in foreign direct investment (FDI), which Gissler regards as "more important than ever". Part of this earnest focus lies in the potentially seismic shift looming from Brexit.
However, it also goes beyond that. "As an FDI organisation, we need to highlight Stockholm - not only in relation to Brexit, but also because there is a lack of awareness about our region and its many opportunities," she says."Going forward, it's going to be interesting to see how the EU will respond to Brexit and how FDI will evolve in Europe, as well as in relation to markets outside the EU."
Stable government, sustained economic growth and a wealth of talented tech professionals means Stockholm is fast becoming a start-up capital. Investors looking for the next big tech innovation will do well to cast their eyes on Sweden's capital.