How Nordic cities are cementing their place as talent hotspots
Stockholm, Oslo and Helsinki have lessons for other European countries in terms of how to encourage skilled tech workers and nurture innovation.
If there’s one thing that forward-thinking tech workers like, it’s being surrounded by other forward-thinking tech workers.
There are, of course, other pull factors, from start-up incubators and training to government initiatives and regulations that support growth, but a sense of community remains key. It’s something the Nordic capitals know well as they seek to create optimal conditions to nurture home-grown talent and attract skilled workers from overseas.
Copenhagen, Helsinki, Stockholm and Oslo all rank highly for talent in JLL’s Innovation Geographies study, which assesses the innovation and talent characteristics of over 100 global cities.
“Cities which are able to offer firms in their infancy a supportive environment are well-placed,” says Carol Hodgson, senior director of Global Cities Research at JLL. “Innovation ecosystems and talent concentration within cities are key to driving productivity and in turn stronger economic growth.”
Lessons from Stockholm
Take Stockholm, one of Europe’s most successful tech hubs and the launchpad of Spotify, which is ranked eighth for talent and fifth for innovation in JLL’s study.
“Stockholm sits at the centre of a move towards digitalisation across the wider Nordic region,” says Erik Skalin, JLL head of agency for Sweden. “The city’s ability to attract and retain talent is a major factor.”
After Silicon Valley, the city produces the second-highest number of billion-dollar tech companies per capita. But the Swedish capital is by no means a short-term success story, Hodgson says: “It owes much of its present appeal to reforms and regulatory change put in place over the past decade.”
Deregulation over the past two decades has shifted Sweden away from being a market dominated by large monopolies; the country ditched its inheritance tax in 2004, incentivising people to instead invest in small family businesses. There’s also the opportunity for Swedes to take a six-month, tjänstledighet break from work to launch their own firms.
Such moves have and will continue to encourage investment – but as Skalin points out, talent will only flourish in cities where a high quality of life is on offer.
Sweden’s economic model helps to provide this for young tech talent. “It’s a major reassurance for young professionals, with benefits ranging from childcare subsidies to healthcare and university costs,” he explains.
Yet more could be done to improve the supply of housing as demand for homes is high; Stockholm’s relative population growth in the 20 to 40 bracket is the highest in Europe, rising by 1.7 percent a year for the last 10 years.
While all Nordic capitals are small compared with their European neighbours, their size can also work to their advantage. The Nordics have a culture of collaboration and building close knit communities, and this extends to their thriving tech scenes.
In Oslo, which ranks third in Europe for talent in JLL’s study, entrepreneurs have created Startup Norway to develop their community while Stockholm plays host to Europe’s largest monthly tech meet up.
The right work and development space to help startups flourish is also essential – and the Nordics capitals have a growing array of incubators where potential investors can easily see which ideas are poised to be the next big thing. Indeed, Helsinki, which ranked eighth in Europe for innovation and fifth for talent in JLL’s study, was rated the best startup ecosystem in the world in last year's Global Startup Ecosystem report.
“While these are all cities where raising capital from, say, venture funds, is relatively straightforward, being able to nurture new innovators is just as important,” says Hodgson.
And while the private sector is instrumental in driving growth, all dynamic tech scenes need ongoing support from their respective governments.
Norway, for example, has backed initiatives such as Innovation Norway, and Investinor, as part of plans to diversify Oslo away from the energy sector.
In Finland, state-owned Business Finland (previously Tekes) is tasked with accelerating technology and innovation while the Greater Helsinki region offers new firms mentoring bodies and accelerators. It’s a move which has resonated with international investors as well as those closer to home; the amount of international funding for Helsinki start-ups has increased tenfold since 2010.
Looking to the future
While the current combination of government and private sector initiatives is underpinning strong innovation cultures that attract both home-grown talent and skilled tech workers from abroad, the Nordics nevertheless face competition from established major tech hubs like London and Berlin and newer contenders like Tel Aviv.
And with a shortage of tech workers in Europe, the challenge for the medium to long-term is how the Nordics can retain the skilled workers they need to keep powering innovation as the tech sector becomes an ever more important driver of economic growth. It needs creative thinking and further investment, says Hodgson, yet the benefits more than justify the effort.
“Keeping talent – which can be flighty – should support future economic growth,” she says. “The Nordic capital cities, however, have a very strong base to build on and they’re extremely well-positioned to continue to enjoy long-term benefits.”