Tendencies of Swedish IT market

Despite the fact that Sweden has not always been a welfare state, now it is quite a stable and prosperous country with a good standard of living, a country, which is constantly developing. Let’s see how this development influences IT market, for example.

 Sweden is making large annual investments in education and research and it is well-known for  its  good  education  level.  Development  has also come into information  and  communications  technology,  where  Sweden  is  one  of  the leading  countries  in  the  world.   However,  the current  problem  in  labor  market  is  that  there  is  not  enough  workforce in service companies, information technology, school system and health care sectors. Despite high technology level, Swedish people love their nature and concern for nature is playing a big role in future decisions. That is why Sweden is also putting a lot of effort to improve the environmental technology, which will be one of the most important industries in the future.

• Swedish IT sector

is  strongly  bound  to the  development  of  society.  Sweden  has   many  successful  companies  in  IT and  telecommunication  sector  and  the  companies  have  a  great  capacity  of innovation. However from 34 000 of companies in Swedish ICT sector are micro enterprises  with  under  100  000€  turnover. 

IT sector  can be divided into four sub-sectors: Software and IT services,  Tele-and  data  communications,  manufacture  of  hardware  and  retail and services of computer . IT sector in Sweden is mostly dominated by the software market. Most of them have specialized in systems  software  for  communications,  business  systems  and  applications software for telecommunications.

Software products and IT services earn 32% of the turnover in IT-sector. The growth in the software products and IT services has been  very  strong.  The  turnover  has  increased  32.5%  between  the  year  2005 and 2009. The second in the IT-sector is Telecom and datacom services with 27.3%, manufacture of hardware comes next with 24.5% and the fourth largest is retail and servicing the hardware.

Swedish IT-  sector employs about 3.9% of the total Swedish work force. Despite  the economic recession, Swedish IT sector has stayed healthy. The main reason of IT sectors welfare is that the companies in Sweden believe that the  IT-services  and  IT-products  are  essential  for  survival  in  the  future.  IT solutions are the key factor when it comes to make the business more effective and  environmentally  friendly.  That  is  why  the  companies  are  putting  effort  to develop  the  IT  solutions. Especially environmentally friendly  solutions  are  the focus in the future in Sweden. Almost every  company  uses  computers (97%) and 96% of them have an access to Internet. Internet has increased its significance in  doing  business.

• Mobile services

Are an  increasing  trend  in  business  life.  Already 60% of all companies are using mobile Internet connections in 2010. Swedish  people  are  interested  in  a  product  which  can  increase  their customers’  competitiveness and  increase  the  company’s  value  for  its  owners, customers and another interest groups.

Swedish people are open-minded to test new services and products. The good thing is that they might accept the new product or service very easily, but the challenge is to keep the product or service updated. People in Sweden are well educated  and  they  are  looking  all  the  time  new  innovative  ways  to  run  the business.

• Conclusions:

• The majority of companies cost  are spent on software research and development. So they are willing to invest on software if they can see the product useful for the business. The most favorable applications  are  such  as  ERP,  CRM,  financial  management  and  information software, on which the companies are spending about 60% of their founds.

-The environmental study concentrated more on macro indicators which means background  forces  behind  the  company’s  activities  such  as  social, technological,  economical  and  political  environment.

-Sweden’s lifestyle  and  culture  form  an  ideal  market place, because they are open-minded to test new services and products. The people  are  well  educated  and  they  are  all  the  time  searching  for new  innovation solutions  to  run  their  business.  The positive point is that the customers are willing to  accept  new  innovation,  but  they  can  also  replace  it  when  they  can  find  a better  solution.  So the  major  challenge  is  to  keep  the  product development up.

• Sweden  is  one  of  the  leading  countries  in the development  of  information  and  communications  technology.  Almost every company has computer and Internet access and already 60% of all companies had  a  mobile  Internet  connection  in  2010.  So, mobile  phones  are  becoming more and more important on daily business.

• Swedish  people  are putting  a  lot  of  effort  to  improve  the  environmental  technology,  so  this  “eco” thinking has a strong position in Swedish culture.

• Sweden is making a lot effort to software research and development and they want to be the top leaders in the software markets by 2020.

-The global software leaders Microsoft, International Business Machines (IBM), Oracle and SAP are also leading the Swedish software markets, but they are controlling particular areas of software branch which is why the local companies have also  acquired  a  good  position  on  the  market.

-Swedish software and IT services have a larger number of companies than the other sub-sectors,  but  most  of  them  are  small  companies.

• IT outsourcing has been a steadily growing part of the Swedish IT market, which is considered to be the largest market within the Nordic region and the 3rd largest in Europe. Every year more Swedish companies decide to outsource. The majority of Swedish companies decide to outsource due to conditions such as a shortage of IT domestic skills and high costs of performing in-house solutions, or a need to re-focus on core competencies. In order to avoid multiplied risks associated to outsourcing.

And what tendencies in Swedish IT market would you like to point out? It is interesting to know your opinion!