Seriously, What’s Up With Sweden?

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Essays

At 9.5 million people, the country’s population is somewhere between Michigan and New Jersey. It’s slightly bigger than New York City. It’s GDP per capita is high, but not in the top 10 (depending on whether you’re using purchasing power parity or nominal GDP), and lower than the United States’.

And yet, if you look at the last 10 years of technology activity coming out of that country, they have a *stunning* number of companies that either have $100M revenue or 100M users. And in the B range, the numbers are maybe even more startling. In the last 10 years, they have Mojang (to Microsoft, $2.5B), Spotify (private, ~$10B), Skype (to eBay, $2.5B), King (to Activision, $5.9B), Klarna (private, ~$2.5B), mySQL (to Sun, $1B) to name a few *off the top of my head*… It’s incredible.

I’m not the only one whose noticed this. A group of researchers at Wharton pointed out the fact that the country has supported an incredible amount of startup activity with infrastructure and private equity dollars at many stages of development. As the study points out, “More than 94% of the population is online with the fourth highest usage in the world. Over 91% of the population accesses the Internet at least once a week.” The most popular job in Sweden is “programmer”… As early as 1994, the government was providing tax breaks to families to buy personal computers. Indeed, they made a big top-down investment in technical education and infrastructure, and that has contributed to their success.

They are not alone on this front: South Korea has a large pool of unicorn successes: our partner LINE, our partner Jay’s company Nexon, Daum/Kakao, Naver, Coupang, and many more. And the country’s technical education is rigorous and their national technical infrastructure as thorough as anywhere in the world. A thin reading would conclude that this is the key to Sweden’s success, and the story stops here. I don’t agree. Korea has 50 million people, and their successes are largely consumer internet, while the companies coming out of Sweden touch almost every piece of the innovation ecosystem. I think something special is happening in Sweden.

Look at the Billboard Top 10 today. Look at it last year. Or the year before. Or every year since 2008… And then 1999 and 2000. The common thread? Max Martin. He is a Swedish music producer who has produced Britney Spears, The Weeknd, Justin Timberlake, Taylor Swift, her bff Katy Perry… you name it. I noticed, a few years back, when someone from the music business told me about this strange aberration in modern pop music’s lineage, that Sweden is also notoriously good at making pop music (see: ABBA, Ace of Base, Miike Snow, Robyn). Like billion dollar software companies, they punch well above their weight. 

I then found this quotation from Max Martin, saying that he had: 

public music education to thank for everything.

It turns out that Sweden has a nationwide, government-funded, music theory, composition, and performance after school program. So, every single kid in the country grows up knowing what it’s like to start with a piano as an unintelligible blob of black and white, to learning the basic architecture, to some of the more sophisticated methods, to recreating great works, and finally to pure composition. Does that process not sound like learning to code, or messing around with circuits until you can create a dancing LED wall, or taking an idea, pulling together the resources and turning it into $1b of market capitalization? 

A truly phenomenal entrepreneurial ecosystem requires infrastructure, investment, and patience, yes. But I believe that there is a *strong* link between Sweden’s music education program and their later amazing success in entrepreneurship. Entrepreneurial ecosystems are *cultural* as much as they are purely technical, or technocratic. And the cultures of radical collaboration, risk-taking, persistence in the face of likely failure, and a celebration of creativity are highly endemic to pop music production, as they are to tech. Perhaps those cities that are looking to generate a robust and successful tech ecosystem should consider thinking a bit further outside the box.

PS:

Pacific Standard covered the music education phenomenon beautifully here: https://psmag.com/swedish-pop-mafia-222786f8b551#.sw5b4wxy7. My favorite quotation was: 

IN THE 1940s, CHURCH leaders and cultural conservatives in Sweden rallied together around a solemn mission: to safeguard the country’s youth against the degenerate music — the “dance-floor misery” — that was being piped in from America.

So, we owe the likes of this and this to those church leaders and cultural conservatives. Ironic, don’t you think?

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