When you think of an entrepreneur, you probably conjure a picture in your head: a tenacious achiever, a passionate risk-taker – essentially one of the “hungry dogs.” But culturally, this is not a universal characterization.
I was recently invited to Norway to teach an “Innovation Crash Course” workshop to postdocs and PhDs at the Technoport 2018 Deep Tech conference, which focused on deep tech and what governments, universities, entrepreneurs, and corporations are doing to speed research from R&D labs to make a real impact on society. I was fortunate enough to spend time with entrepreneurs, potential entrepreneurs, and those supporting entrepreneurship in the Nordics, and the experience taught me quite a lot – including not to filter my view of entrepreneurship with a US-centric lens.
This article in Entrepreneur outlines “7 Traits of Successful Entrepreneurs,” which include tenacity, passion, tolerance of ambiguity, vision, self-belief, flexibility, and rule-breaking. But, it makes me think –are we looking only at entrepreneurship from an American perspective? This post shares my experiences in Norway and my thoughts on how the region’s culture and social policies influence its entrepreneurs.
The Entrepreneurial Scene in the Nordics
Although Americans are known for our entrepreneurial spirit and the “American dream,” Nordic countries are also embracing entrepreneurship. Interestingly, according to The World Bank Economy Rankings, Sweden is ranked #13, Norway #19, and Denmark #34 for ease of starting a business, as compared to the U.S. at #49. (New Zealand is in the #1 slot.)
Oslo, Norway is seen as one of the world’s best startup hubs even though it’s one of the most expensive cities in the world. Entrepreneurs can expect a refreshingly balanced approach to work/life and a great environment to base tech or communication startups. Norway’s startup scene is also starting to blossom in terms of investment, and these articles in Shifter and Medium show how other Nordic countries, specifically Finland and Sweden, are doing particularly well in terms of investments, with Denmark also catching up.
The Problem for Entrepreneurship in Norway
Although there is a welcoming environment, is the drive to be an entrepreneur similar to the U.S.? An in-depth article in Inc. magazine reports, “The problem for entrepreneurship in Norway is it’s so lucrative to be an employee,” says Lars Kolvereid, Professor at the University of Nordland, who was the lead researcher for the Global Entrepreneurship Monitor in Norway.
In the U.S., about one-quarter of startups are founded by so-called necessity entrepreneurs – people who start companies because they feel they have no good alternative. In Norway, there is less necessity; the number is only 9 percent, third lowest in the world after Switzerland and Denmark, according to the Global Entrepreneurship Monitor.
The social welfare system is quite different there as well. The article explains there are no private schools in Norway; education is public and free, from nursery school through graduate school. In addition, the unemployment rate is low, and, if you are unemployed, there are generous benefits. Every Norwegian worker also receives free health insurance in a system that produces longer life expectancy and lower infant mortality rates than in America. At age 67, workers get a government pension of up to 66 percent of their working income.
Zoltan J. Acs, a professor at George Mason University and former chief economist for the Small Business Administration’s Office of Advocacy, summed it up, “The three things we as Americans worry about – education, retirement, and medical expenses – are things that Norwegians don’t worry about.”
Essentially, the wealth and comfort prevalent in Norway and Denmark mean there is less of a “hungry dog phenomenon,” something that was even remarked upon by the people I met with at the Technoport conference. This makes it a challenge to recruit young people to work for startups since they are well compensated in the public sector, don’t have debt, and generally lack incentives to take the risk. In addition, while I was in Denmark I heard that many startups are bought by American companies before they have a chance to make an impact on the Danish economy, so the benefits are not seen by the founding country.
Of course, Norway’s generous social benefits are financed largely from higher taxes, another consideration for entrepreneurs. However, as the Inc. article explains, Norwegian entrepreneurs tend to see taxes as an exchange of cash for services, rather than a burden. All of these factors certainly set a different stage for Nordic entrepreneurs as they consider starting their own businesses.
A Need for Entrepreneurship and Innovation in the Public Sector
I met with MIT alumni in both countries and came away with a better understanding of a need for entrepreneurship in the public sector. There is a strong corporate culture of innovation programs that are challenging the current thinking, but these share some of the same challenges that U.S. corporations face. Examples include budget cycles that are often incompatible with the reaction time needed to respond to new market changes and conditions, attention that gets divided between current versus future business challenges, functional silos, and challenging organizational dynamics.
A Successful Transformation from an Oil-Rich Economy
The economic impact of the oil industry is another factor when considering entrepreneurship in Norway. The focus of the Technoport conference was on energy, education, and ecosystems. And, although Norway’s oil industry has always been a key economic contributor for the country, it is a finite resource with all constituents looking ahead to what industries can, will, or should do to replace (or supplement) oil in the future.
In an article in TechCrunch, Anita Krohn Traaseth, the CEO of Innovation Norway, says that it’s time for the country to look beyond oil. “Norway needs to develop and build several growth sectors to contribute to a more diversified and sustainable national economy.”
“The fundamentals in Norway to make a successful transformation are solid,” she explains. “We still have a low unemployment rate, we still have a huge capital reserve to make necessary investments for the future, we have a strong growth of entrepreneurial focus and companies. This is all about how we prioritize, reposition investments, build competence, and have the guts to make important, and maybe radical, political decisions today to secure tomorrow.”
Just as entrepreneurship in the U.S. is complex and driven by many factors, so is the entrepreneurial environment in the Nordics. On the plus side for Nordic entrepreneurs, because higher education is free in Norway, students don’t graduate with the crippling debt that is an issue for so many young professionals in the U.S. This provides an opportunity to focus on jobs they love, versus jobs that can pay back the loans.
A Forbes article titled “Four Things Entrepreneurs Can Learn from Denmark’s Work Culture” cites teamwork, a flat, non-hierarchical structure, autonomy, and a compassionate management style as reasons for successful entrepreneurship – quite a different list than the seven traits listed by Entrepreneur at the start of this post.
At Technoport I was able to see that Norway is working to create a vibrant entrepreneurial ecosystem to provide solutions to some of the world’s most difficult problems. I believe the mix of people I met in Norway and Denmark – young, older, entrepreneurs, corporates, and investors – are all willing to learn from each other and are looking for their role in supporting the entrepreneurial ecosystem.