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While some places have the distinct advantage of being considered innovation hubs, other places are quietly transforming themselves into startup centers. Iceland is one of those places.
Years ago the media focused on Iceland as another failing country following the 2008 recession. Today, the media tends to focus on Iceland as being the spotting ground for the cast of Game of Thrones or an exotic travel destination.
Despite those two differing perspectives, the small and scarcely populated country has a lot more than Vikings and Volcanoes to offer the international community.
Rising from the (Volcanic) Ashes
In the early 2000s, Iceland transitioned from being a predominantly fishing and aluminum smelting based country to a global banking and finance magnate. The three biggest banks in the country expanded to more than ten times the size of the country’s economy, making it a haven for investors.
This success was not long-lasting — the 2008 recession had a hard and direct impact on the Icelandic banks.
Soon after the start of the financial crisis, the Icelandic government found itself in desperate need of a bailout from the International Monetary Fund and the neighboring Nordic countries.
The severe recession and poor state of the government led many to believe that Iceland would use the bailout money to simply stay afloat, constantly teetering on the edge of collapse.
Despite this grim outlook, or perhaps because of it, the tiny country with slightly more than 325,000 inhabitants was able to transform its image. Much of this shift has been due to the government’s emphasis on innovation and entrepreneurship.
The founder of Startup Iceland, Bala Kamallakharan told Forbes:
“Ten years ago, becoming an entrepreneur was considered a bit quirky in Iceland. Now it’s a different story. Successful startups have become role models for the younger generation, and becoming an entrepreneur is considered an eligible career path.”
Today, Iceland is home to a thriving startup community that is focused on bringing innovations to the local inhabitants as well as sharing transformative innovations with the global community.
Some of the innovations focus on improving the banking world that led to the near destruction of the country’s economy, while others harness and build the natural resources of the country.
Meeting the Energetic Needs of the Nordics
One of the most important things a country needs to ensure long term sustainability is the availability of energy sources. Sustainable and renewable energy can provide a lifeline of support for the country’s inhabitants for generations to come.
Today, Iceland is the largest producer of renewable energy in Europe and the only country in the world with 100% renewable power – a far cry from the heavily polluted state they were in following World War II when they relied on coal to grow the economy.
Much of this progress is due to the prevalence of geothermal energy in Iceland and the potential it has to power the world’s electricity. To capitalize that energy, Iceland has begun partnering with energy companies and startups to bring forward the innovation needed to bring geothermal energy to the world.
The accelerator Startup Energy Reykjavik offers a ten-week mentor program that provides $40,000 in seed funding to startups in the energy industry.
Leveraging Technology to Increase Tourism
Having an abundance of geothermal energy is great for creating a startup scene focused on innovation in renewable energy, but it’s also great for the hot springs and natural pools it creates.
The hot springs, the cast of Game of Thrones, and the cheap flights to the country have made tourism grow by 40% in 2016, marking the sixth consecutive year of double-digit tourism growth.
This growth is expected to continue, leading Iceland to increase their need for sustainable innovation that can accommodate tourism in numbers greater than their population.
Iceland expects the number of tourists in 2017 to total 1.7 million. Click To TweetThe government funded accelerator Startup Tourism offers a ten-week program for startups with innovative solutions to help meet the need of the 1.7 million tourists the country expects throughout 2017.
DoHop has raised more than $4.3 million for their online search engine that simplifies access to the country by offering flight, hotel and car rental information. Other companies such as Bokon, have created management software to meet the needs of the business travelers to Iceland.
As the government’s desire to improve the travel experience continues, innovation in travel and tourism is likely to grow in Iceland.
From Vikings to Victors
The growth of the Icelandic innovation sector showcases the ability of a country to transform a bleak outlook into a new future. More than anything, what the Icelandic people experienced was a shift in thinking that placed innovation and entrepreneurship at the forefront.
Without the sink-or-swim mentality after the recession, and without the need to seek alternative ways of growing their small and isolated community, Iceland may not have become the innovation powerhouse it is today.
As long as the government continues nurturing and cultivating the innovation, we’re sure exciting things will continue to come out of Iceland.
Learn about corporate innovation coming from all corners of the globe with our #CorporateInnovationAroundTheWorld series:
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