The Nordic countries have a lot in common – they are all small and open economies that depend a great deal on foreign trade. Despite their swift economic development, these countries can’t necessarily be considered the typical model of efficiency, given that they adopted their own Nordic Model combining economic systems with social welfare.
Some of the Nordic countries have achieved international acclaim across many different industries; from Norway’s Stavanger-based Equinor leveraging strong synergies between oil, gas renewables, carbon capture and hydrogen, to Denmark’s LEGO, which has been a source of fun for people of all ages since 1932.
In this article, however, we will take a look at three industries driven by technology that are making particularly big waves in the Nordics: fintech, life science and cleantech.
The fintech industry
The Nordics are already home to 300+ fintechs.
Several factors highlight the strengths of the Nordic region and explain why it is excelling within the fintech industry. Increased investment, new government initiatives, an openness to new technology and social welfare programmes, grants and tax breaks that stoke the flames of entrepreneurship mean the Nordics are already home to 300+ fintechs.
The Nordic region is second only to Silicon Valley in terms of the number of unicorns per capita, with 27 unicorns from a population of 26 million. Having brought in over USD 2 billion in fintech funding in the second half of 2021, the Nordics are bound to attract further investment which will surely increase the number of unicorns emerging from this region as the fintech sector matures.
Klarna, currently Europe’s most valuable fintech unicorn, and Zettle by Paypal are two Stockholm-based fintech mobile payment companies that have opened the door to many more start-ups. The success of Nordic fintechs is seen across the entire industry landscape, including companies such as alternative lenders Fellow Finance and Lendify, online payment providers Holvi and Vipps, and personal financial management companies Tink and Meniga.
Paving the way to a ‘cashless society’
As society evolves, so too must financial services and apps. Deloitte has stated that it is unlikely that millennials will visit branches or use financial services in the same way as previous generations. According to Bambora, the Nordics are hoping that by moving away from using physical cash – thus turning society ‘cashless’ – they will be able to lower costs for merchants, offer better security and make it harder for criminals to launder money.
Localisation: the key to success in fintech
The closer you get to a person’s wallet, the more important it is to speak their language.
Fintechs aim to make financial solutions more accessible and convenient for all. Those who secure investment will next be looking to scale up beyond the limits of the Nordics – something that requires a thorough understanding of the needs and norms of their new target market. To make a success of scaling up, it’s important to provide information in a transparent, trustworthy and comprehensible manner.
After all, as Nataly Kelly says, “the closer you get to a person’s wallet, the more important it is to speak their language”. Simply put, this means communicating in the languages of your system’s users and offering services tailored to the needs of each locale you wish to provide for.
The life science industry
The life science industry is another in which the Nordics see a significant engagement. Built on a solid foundation of high-quality education and collaboration, the Nordics have already produced over 3,500 life science companies. To name but a few of the biggest players from the industry, they can count Novo Nordisk and LEO Pharma, both world leading pharmaceuticals, and from medtech Bang & Olufson, Medicom, Coloplast and Getinge. With Denmark as the second largest medical device market in Europe and Norway as a centre of excellence for medical imaging, the breadth of expertise demonstrated in the Nordics is really something to behold.
This success in the life science industry wouldn’t have been possible without the support and commitment of a variety of institutions; from the Nordic life science consortium – a platform that enables the Nordic countries to collaborate and showcase the region and its achievements to the rest of the world – to universities, such as Karolinska Institutet, focused on life science, to well-known researchers and research centres, such as Danish National Biobank in Denmark and Umeå Plant Science Centre in Sweden. All these players make significant contributions that enable the Nordics to remain a hotspot for pioneering R&D.
Medicon Valley is a prominent international life science cluster in Europe that spans the Greater Copenhagen region of eastern Denmark and southern Sweden. In recent years, Medicon Valley has grown to be the strongest of the Nordic life science clusters thanks to a dynamic ecosystem and vibrant talent pool including 350+ biotech, medtech and pharma companies; 9 outstanding life science universities; 14,600 life science researchers; and world-class research facilities such as European Spallation Source and MAX IV.
Rising stars in life science
The Nordics share the same values: openness, trust, sustainability, equality and innovation.
ApoGlyx from Sweden, Respinor from Norway and RetinaRisk from Iceland were announced as the winners on the Nordic Life Science Investment Day 2021 in the Biotech/Pharma, Medtech/Diagnostics and Digital/E-health categories. Other industry newcomers to keep an eye on include LS CancerDiag from Finland and Medvasc from Sweden. LS CancerDiag hopes to save millions of lives by preventing cancer as well as enabling personalised care through early detection of Lynch syndrome, while Medvasc is looking to optimise the procedure of delivering anaesthetic in laser treatment of varicose veins, a significant medical conundrum that is yet to be solved.
“Given their shared values of openness, trust, sustainability, equality and innovation”, summarises Helena Strigård, Director General at SwedenBIO writing for Nordic Life Science News, “the Nordics are the perfect setting for partnership and investments” in life science.
The cleantech industry
Cleantech, or clean technology, is a term used to refer to companies and technologies that aim to improve environmental sustainability. The Nordics are rich in natural resources, which played a key role during the early industrialisation of the region. Rigorous environmental requirements have spurred both knowledge and technological development, which in turn stimulate environmental technology exports.
Whether through public R&D, cleantech-friendly policies or other cleantech innovations, the Nordics attract and facilitate a lot of investment. For example, Cleantech Scandinavia – the leading Nordic cleantech investor network – runs an internationally established network of different stakeholders with an interest in Nordic cleantech including investors, industrials and public actors. The aim of the Nordic Cleantech Innovation Cluster – part of the Nordic Council of Ministers – is to turn the Nordic region into a pioneer for sustainable growth by promoting entrepreneurship, innovation and competitiveness among Nordic businesses.
Global Cleantech Innovation Index
The Global Cleantech Innovation Index explores which countries currently have the greatest potential to produce entrepreneurial cleantech start-ups that will commercialise clean technology innovations over the next 10 years. In 2017, Denmark, Finland and Sweden ranked in the top three places in the GCII, with Norway taking ninth spot. The index demonstrates how a country can get ahead by adapting to the growing demand of renewable energies, by building connections between start-ups and other channels to increase their rate of success, and by increasing international engagement with cleantechs to encourage the adoption of clean technologies.
Cleantech start-ups to keep an eye on
Investors have been particularly present in the agriculture, transportation and logistics, recycling and waste, manufacturing and industrial, and energy sectors of the cleantech industry. Start-ups making a name for themselves within these sectors include Voi and Quantafuel.
Providing for the transportation and logistics sector, Stokholm-based Voi offers electric scooter and bike sharing to encourage the use of more sustainable transportation across many European cities.
As part of the recycling and waste sector in Norway, Quantafuel provides a clean solution to plastic waste. All types of plastic waste are converted into environmentally friendly fuel and chemicals.
Sweden leads the way in cleantech investment
In 2020, the top 5 investments in Sweden totalled 880 million euros.
Of the Nordics, Sweden is blazing a trail. In terms of the number of investments made and deals secured, Sweden comes out on top. In 2020, the top 5 investments in Sweden were secured by Northvolt, Oatly, Renewcell, Scandinavian Biogas and Tibber, coming to a total of 880 million euros. Northvolt secured the largest investment of the year, with 532 million euros raised in equity from international investors.
While the Nordic region provides a good environment for the emergence of unicorns in general, Sweden in particular has the ideal conditions for cleantech companies to thrive, with an ecosystem tailored to start-ups in combination with ambitious climate goals.
It is of course still unclear exactly what the future of the fintech, life science and cleantech industries has in store, but one thing is for sure – the Nordics will play a pivotal role in shaping their future.