The impact of socio-cultural factors on fostering startups
Aus dem Unterricht des CAS Digital Masterclass mit Manuel Nappo berichtet Ali Badiei
The impact of socio-cultural factors on fostering startups
“Studying in the time of Corona” initiated the thoughts in me on how to kick off new ideas with high uncertainty. We started our program on digitalisation in June 2020 in Stockholm. The city is ranked at the second place in generating Unicorns in its startups scene after silicon Valley.
It appeared to me that there are many social and cultural factors which had an impact on fostering successful startup mentality in Sweden. Not all the factors being mentioned may be relevant to the success in another environment but the learning can be used to improve the entrepreneurship in Switzerland. Interestingly enough the success factors vary in other countries according to different reports.
Digitalisation started very early
The people we spoke to praised the governmental push in early 90’s to create a special program for promoting IT. Many inhabitants of Sweden could then afford to own a PC, which was very expense those days, thanks to special tax refunds. The state also contributed to the very high availability of broadband access to urban and rural areas at very early stage of www. This increased the affinity to IT in times where many countries did not have internet access.
Another contribution to the educational system has been the spread of the English language from very early age in the school. The fact that no TV program is translated from English to Swedish increased the comprehension of the language. Through mastering English at early age, Swedes find the way to communicate to the rest of the world. This in turn helped them to enter the global business.
Startups think global but start Small
Having heard the above two enabling factors, it was often mentioned that Swedes always thought globally when starting new business. This has been important for the success of their innovative ideas at global scale. The realised that their ideas be it new apps or digital services will not fly in country of 10m. Despite starting small, the always had the scalability in mind.
Many companies such Spotify, Klarna, Skype or Paradox was mentioned as a role models in the context of “Think global, Start Small”. The CEOs of these companies have also invested back in the country’s startups and have been promoting entrepreneurship.
Sprechen Sie Englisch?
Let’s make a short comparison to Switzerland, where the IT infrastructure has improved to top level in the last 10 years and English is just recently becoming taught from 3rd grade (with local deviations). There is still room for improvement to promote global thinking in an early stage for the next generation. Usage of electronically based learning tools in the schools in an early stage can contribute to higher acceptance of digitalisation. Speaking a common language such as English has contributed to success in Estonia and Israel to promote scalability.
Another factor which was heard in this trip was the openness of Swedes to new ideas. This openness was partly related to their high trust towards a collective culture
As an example, Swedes are used to their national identity number “openly” since 90 years. This number links social security, banking, tax systems and many more since decades. The disadvantage of this very linked information system is rarely questioned.
One of the fast growing startups in health care, Kry, has introduced the virtual health concept in Sweden and some other European countries. The user uses the national ID to connect to the Swedish health system by using Kry. Patient’s dossier can be stored in the cloud and can be shared between doctors easily through the Kry’s software with user’s consent. In collaboration with doctors, which showed some resistance to this sensitive topic as well as health authorities, they contributed to the change of health law. But openness to new concept as a cultural factor did contribute to the latter.
Whether the above factors i.e. openness and higher trust to the system in Swedish collective culture can be introduced in the Swiss culture where federalism plays an important role in the remains an open question. Some positive cultural characteritics with deep roots in the society can hardly be changed.
Social safety net vs startups risk aversion
Swedish social system was often mentioned in our visits to entrepreneurs as an important factor on promoting startups. The safety net that the system provides in case of failure helps young or older entrepreneurs to take more risks. One interesting factor was the fact that any working individual has the right to take unpaid temporary leave from the job with guarantee to come back. The latter allows Swedes to take time and try realising their ideas.
Safety net for startups costs money
It is obvious that a higher safety net and flexibility in Switzerland may lead to higher appetite for risk but it may come with higher tax consequence as it is the fact in Sweden.
Of course long winter nights seem to contribute to hard work and more innovation as seen in this ad!!
And below, a short summary of many factor in a presentation.
A great experience
Was it worth visiting startups, incubators and talking to entrepreneurs to come to conclusions above? I could have googled it and find this article but the answer is DEFINITELY YES!
It was a very enriching study trip to watch how entrepreneurship happens in a different part of world. I could see how different social and cultural factors impact innovation and entrepreneurship. I also realised that not all the factors would bring the same positive impact in Switzerland or any other country.
A big thank to the study mates and HWZ to organise this. If you are interested to read about this study trip please have a look at this blog.