Innovation Renaissance
Jan 12, 2015
How Innovation is the way to rebuild Iceland's economy. Presented at the Iceweb conference on November 14, 2008.
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About Hjalmar
•Started 4 companies in 11 years
•Some have succeeded, others not
•Currently: DataMarket (datamarket.net)
•Never bankrupt, a few happy investors
•Almost 100 man-years
•A few million dollars in foreign currency
Arctic trade bubble
•First 300 years - incredible wealth
•Sagas, ships, trade and treasures
•Where did the money come from?
Arctic trade bubble
•Debt of Venice to the Pope paid with unicorn horn!
•Burst in the 1200s
•Result: 700 years of misery
Fur and fish farming bubble
•In the 1980s
•Result: Over investment in many rural areas
Non-bubbles
•2007
•Currency from: Fish, aluminum, tourism, banking
not “export”
Banking
?
Non-bubbles
•September 2008
•Currency from: Fish, aluminum, tourism, banking
not “export”
Banking
?
Import-Export in short
•Export: Fish, aluminum and happy tourists
•Import: Everything else!
Iceland’s risk•When one pillar of the economy is hurt,
our standard of living hurts equally
•What if:
•Fishing stocks dwindle?
•Aluminum prices collapse?
•Travel becomes too expensive?
No more bubbles!
•We cannot afford another crash
•(we don’t even know yet if we can afford this one)
•Icelandic economy must diversify
People
•A major resource:
•Educated
•Hard-working
•Resourceful
•Natural selection...
Why Not?
•Innovation is not an industry
•Innovation is a mentality
•A mentality that needs nurturing
•Innovation is the way to harvest the people resource
Diverse Economy•10-20 pillars instead of 2-4
•Realistic?
•CCP equals Iceland’s capelin fishing
•Marel is bigger than ferro silicon
•Össur is bigger than Icelandair
•They were all typical start-ups
[email protected]“Genius is 1% inspiration, 99% perspiration”“Genius is 1% inspiration, 99% perspiration”
Put another way...
•Innovation is a stroke of genius, then a lot of hard work
•Not necessarily by the same people
•You can be a part of innovation, without being an idea-person
The Innovation Pyramid
•1000 people get an idea
•100 companies are started
•10 succeed
•1 may become a superstar
100 x 4 = 1 x 400
•100 x 4 becomes...
•10 x 50 and maybe...
•1 x 1000
•Value is created on all levels
The Wrong Reasons
•This path is probably very narrow now
•In some cases for all the wrong reasons
•Immediate action: Make sure we keep the best going!
Get out of the way
•There is still some capital around
•In ISK
•What better use than fund companies that will make money in foreign currency?
Get out of the way
•Reward investments in startups, e.g. with tax breaks on returns
Encourage Innovation
•Innovation culture:
•Social networking, studies, info exchange
•Make innovators role models
•Imprint that “Failure is also success”
Be a little helpful
•Make sure that current funds continue
•Frumtak, Rannís, development funds
•Innovation on the curriculum
•Tax incentives for knowledge driven industries?
Recap
•Bubbles and Iceland
•Why Innovation?
•Harvest the manpower
•Diversify economy
•Sustainable resource
Recap
•Bubbles and Iceland
•Why Innovation?
•Innovation Culture
•Immediate action
•Get out of the way
•Encourage innovation
•Be a little helpful
Nyskopun.org
•Wiki site (Icelandic)
•Single purpose:
•Help making Iceland the best possible environment for innovation
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