Sweden's Wireless Boom 2000
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Sweden’s Wireless Boom 2000 167 wireless Internet companies listed BrainHeart Magazine inventoried wireless companies in Sweden Fall . Over half of them were founded since January . Never in Swedish business history have so many new companies been established in one industry in so short a time. Considering computer penetration, Internet usage and the spread of mobile phones, Sweden has undoubtedly become , the world’s leader of the infotech revolution in -. : almost percent, or of those in our As a natural result, Swedish entrepreneurs, as well as “old” survey, are located in Stockholm. The survey shows that industry and organizations, have became absorbed with outside of the capital city, there are three areas where wire- wireless technologies, applications and business oppor- less developments are concentrated: Gothenburg, home to tunities. This is mirrored in BHM’s Wireless Survey. The Chalmers Institute of Technology, has percent of the magazine located and checked data of companies. Top companies; Malmö/Lund and Karlskrona/Ronneby have executives were interviewed. It is the first time such a huge smaller groups of wireless companies. [See map below] amount of material has been collected, culled, organized and presented to the public. This past year, journalists, business people and politicians , based on the firms’ from outside the Land of the Midnight Sun have frequently founding dates: prior to and after January . There are asked: “Why Sweden and why Stockholm?” BrainHeart some good reasons for this: Since January the number Magazine likes to answer this question by starting with a of start-ups working with wireless Internet has increased description of the social, technical, historical and psycho- rapidly [see tables below]. logical factors behind Sweden’s entrepreneurial wave at the turn of the century. Which brings us to today and back to -, founded in or , focus only on the question: wireless: They look back at the PC era as an important but “Why are there so many Swedish Wireless businesses?” bygone step toward the world of wireless communication. The reasons, boiled down to fit a wireless screen: Of the companies in the survey, percent, or a total of , – Widespread consumer use of PCs, Internet, mobile phones. have been created since January . About percent, or – The existence of a highly advanced wired and wireless companies, have been founded during year so far. infrastructure. BrainHeart Magazine predicts total of at least start-ups – Leading edge, competing telecom equipment companies: founded before the end of the year. Ericsson and Finland’s Nokia. – Sophisticated international telecom operators: Telia, Tele2 and Europolitan. – Deregulation in resulted in many new operators entering the Swedish market. Today, there are close to competing here. – Swedes have adopted the Internet fastest in Europe, and have developed and applied wireless standards including GSM, Bluetooth, WAP. Year PHOTO: MÅRTEN LEVIN. GRAPHICS: RONNIE JOHANSSON. – content providers (%) include telecommunications equipment companies, tele- – software development (%) com operators, consultants and a number of data communi- – equipment and hardware (%) cation companies from the s. They keep up with new – wireless network (%) trends, and often provide financing to new, small, wireless – consulting (%) ventures. , , Something dramatically changed . in the minds of young, well-educated people, in their The study shows that the majority of the companies overall imagination and in their dreams about professional success. are relatively small in the number of employees. Almost two- In the latter part of the s, more students wanted to thirds of the companies, percent, have fewer than become a new Jonas Birgersson, founder of Framfab, or a employees, while percent have between and new Johan Stäel von Holstein, founder of Icon Media Lab. employees, and percent have over employees. Seven Earlier, during the s and s, the same young people companies have more than , employees, among the would prefer traditional careers at Ericsson, Volvo or ABB. largest being Ericsson, Europolitan and Telia Mobile. About Birgersson, von Holstein and two or three other young entre- , people work in companies started after January . preneur media stars assumed the same roles in the world of Swedish Internet and wireless business as once Björn Borg did for tennis, or ABBA and Roxette for pop music: they , became the idols, the life style models, the cult figures. . Many of the Ericsson and Telia themselves have become important privately held companies, because of their being so new, recruiting bases for the new innovative companies, com- have not taken in any external financing. The most common parable with the role Hewlett Packard played when Silicon external financiers in the wireless sector are the Swedish Valley was young. venture capital companies: Startupfactory, Ledstiernan, Even if the entrepreneurs behind the “-generation” BrainHeart Capital or Speed Ventures. Some of the large, are in their s and s, their companies have often attracted established companies invest in projects within the company experienced board members. When looking at comments or in start-ups via their own venture capital subsidiaries. under “Management” in the BHM Survey presentation, one Examples of this are Telia and Ericsson, as well as Volvo. recognizes many well-known entrepreneurs, industrialists All are fully aware of the necessity to attract and promote and venture capitalists among members of the boards. “Grey internal entrepreneurial human capital. Panthers” – also called “The Oldies” – have always been welcomed to the Swedish new economy; they have played and still play an important role. Even more of them can be : found among the new venture capitalists. – Mobile Personal Services, i.e. applications, or enabling technologies for those applications, targeting the end user , such as location-based services, m-commerce or mobile . banking. ( companies). In the autumn of , one could find ten private venture – Wireless Broadband, i.e. network and operator services of capital companies working with technology endeavors. In all kinds ( companies). the autumn of , there are VC companies, more – Machine-to-machine (M2M) services, i.e. applications then half of them focused on IT, Internet, and wireless. The where machines communicate with each other via the total volume of venture capital in this area is difficult to Internet. ( companies). estimate. A survey in Swedish business magazine Veckans Affärer in the summer of gave a figure of SEK Not surprisingly, the survey shows most companies directly billion (US $ billion) while Förvärv och Fusioner, a or indirectly aim their business at end-users (Mobile Per- Swedish publication on mergers and acquisitions, offered sonal Services). in October a total of SEK billion (US $ billion). But whatever the precise number, according to Price Waterhouse Cooper, Sweden has the world’s fastest growing .A summary of replies shows that venture capital market and is number three measured in companies’ activities can be divided mainly into five types. available private equity and venture capital per capita in relation Many work in several fields at the same time: to GDP (Gross Domestic Product), after the USA and UK. : It is quite likely that even in the future we will see The future perspective is painted extremely bright by the Swedish start-ups acquired by foreign interests. Sweden’s entrepreneurs interviewed in the survey. Despite the recent leading position in the wireless field, and the relatively down-turn of the stock market for the IT industry world- limited market in geography and population makes this an wide, many of the “-generation” CEOs look forward excellent test bed for large corporations. [See the separate to public offerings in two or three years. One surprising fact list on page of the international companies that recently turned up by the survey is that only percent of the companies established development centers in Stockholm.] And one work in the field of machine-to-machine (M2M). Many quite certain final forecast: increasingly tough competition forecasters say that applications in M2M will have the great- will continue to emerge from the American market. est potential in the future. For example, NTT DoCoMo estimates that up to percent of its future subscribers will Per Gustafsson be machines, and not people, connected to the Internet. [email protected] Five Examples From the Survey HALEBOP – CONTENT PROVIDER COMHAT – HARDWARE PRODUCER Halebop is an attractive solution for distributing content via wireless. Comhat in Mölndal, outside Gothenburg, is a rare example of a The company was formed by Telia and Oracle, which each own 40 newly-started Swedish wireless company that produces hardware. percent of the firm, with the remaining 20 percent owned by founders The company has rights to a patent for a link antenna used for and employees. Its goal is to create a channel to large user groups communication between base stations in a mobile network. The worldwide. Halebop has chosen not to create content itself but only patent is based on innovations by Professor Per Simon Kildal of to distribute content for other actors. For example, a wireless user Chalmers Institute of Technology of Gothenburg. Comhat’s can buy tickets from a theater chain, send flowers via a shop, or customers are other systems designers and