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.
- 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!
Firstly, a very insightful and valuable blog for those within and outside of Sweden. I think you have made some fantastic point about Sweden as one of the leading innovators of the ICT industry, however it is evident that there is a clear gap in local expertise.
You mention a lot of IT is now outsourced as costs are high in deliverables of in house projects, it would be great to understand your thought on the freelance/contractor market-this would be in terms of the growth areas you may have seen or the decline of numbers in this specific area.
Looking forward to learning further 🙂