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KTH ROYAL INSTITUTEOF TECHNOLOGY
From research to business in the Swedish ICT SectorEric GiertzProfessor, Industrial Economics and Management, KTHFounder & Chairman, KTH Executive School
LUCAS-dagen, Lund 2016-10-20
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Reports
• Vinnova analys 2013:07• Företag inom informations- och kommunikationsteknik
i Sverige 2007-2011
• Vinnova analys 2015:06:• Small and beautiful – The ICT success of Finland & Sweden
• Vinnova analys 20016:07• Svensk konsultsektor i ny belysning
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160000Employees inICTcompanies inSwedenindifferentbusinesslogics
Software
NetServices
ServiceandMaintenanceofICTsystems
ICToperations
ICTconsultancyfirms(Commercialsystems)
ICTconsultancyfirms(R&Drelated)
Hardware(Components)
Hardware(Completeproductsandsystems)
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Internet related Business models
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A Swedish gaming industry
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ICT Consultancy companies
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Understanding the Swedish saga throughan historical exposé
• The foundation was build by very few strong actors!
• The turbulance around 2000 created new conditions
• Today we have an entrepreneurial and dynamicindustry with many different actors!
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KTH
ASEAVattenfall
EricssonTeleverket
SaabDefence
ASEASJ(rail)
PrivateCompanies
PublicPartners
Government
EXPORT
”Developingcouples”Fourpartiesplanfromacornstooaktrees
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CloseGovernment–IndustryCooperation
ASwedishcomputerindustryisborn– 1948ThepublicagencyMMNisestablishedatKTH– BESKiscompletedin1953(theUS,France,BritainandSweden)– SARAin1957(Saab)– D21in1962– Facit leavescomputersin1963– Anewdevelopmentcouple12,000mainframecomputers(failed)
Ericsson +Televerket =Averytightcouple– 1970Ellemtel – ajointventureisestablished– Jointdevelopmentofelectronicandautomatedswitching– 1976Televerket putsAXEinoperationinSödertälje– 1978Ellemtel transfersAXEcompetencetoEricsson
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Gov’twasinvolvedinICTrestructuring
Datasaab isestablished– Stansaab established1971(SRT,SaabScania,SUAB)– Alfaskop isahugesuccess– SRTleavesin1973– 1978Stansaab &SaabScaniacomputerdivision=Datasaab
Astate-ownedPCindustryisborn– January1978– ameetinginLinköping– August1978ABC80isintroduced– 1979Governmenttakesover
Ericsson andNokia takesover
NMT &GSMopensworldmarketforEricsson
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ANewerastartsinthe1990th
• Televerket &Ericsson aredivorced– Liberalizationin1993– EricssontakesoverTeli (1994)andEllemtel(1995)
– Telia ABmakesIPO2000– Telia acquiresSonera in2002
• Ericsson readytoconquertheworld!– Ericsson outsourcinglate1990s– Ericsson ontopMarch2000
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1,84,0
1,6
3,1
EricssonofSwedishGDP NokiaofFinnishGDP
Direct impact
Indirect impact(sub-contracting&partnering)
%of GDPin 2000
WORLDRECORD!?
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38.2%
28,742,1
9,6
15,1
SwedishICTSector FinnishICTSector
DirectshareofEricsson/Nokia
Share ofICTSector ValueAdded in2000,%Other ICTfirms’share
57.2%
61,8 42,8
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Anexplosionin2001
• Ericsson survivedwhenbubbleburst– Ericsson hitby3Glicensees– LeaveshandsetstoSonyEricsson– Morethan8,000consultantsarekickedoutin2001– SavedbynewissuedsharesinJuly2002– EmploymentinSwedenfrom43,000to21,000infouryears
• AdiversifiedICTSectorisborn
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0
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Sweden
TheICTsectorasapercentageofGDP
NMTCf.Ch 2
GSM1st disrupt
Inwirelessnetworkeq.:
1. Huawei2. Ericsson3. Nokia
(Siemens;Alcatel-Lucent)
Worldwide:Frommonopoliestocompetition
The2nd disruption
CloudcomputingMobileInternet
Bigdata,analyticsTechconvergence
Services,software,deeperdiffusionofICTinusingsectors
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In2012Swedenhad 6times asmanyICT-companies but only twice the
number of employees
ICmanufacturing
ITmanufacturing
ITwholesale
Telecom oper.
Software
ICTconsulting
ICTmaintenance0%
10%
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Finland Sweden0
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Finland Sweden
Companies
ICmanufacturing
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Software
ICTconsulting
ICTmaintenance0%
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Finland Sweden0
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Finland Sweden
Employment
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Finland Sweden
21- y.
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Finland Sweden
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Finland Sweden
Otherregions
Capitalregion
Region
ICmanufacturing
ITmanufacturing
ITwholesale
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Software
ICTconsulting
ICTmaintenance0%
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Finland Sweden0
5 000
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Finland Sweden
Companies
ICmanufacturing
ITmanufacturing
ITwholesale
Telecom oper.
Software
ICTconsulting
ICTmaintenance0%
10%
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Finland Sweden0
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Finland Sweden
Employment
0%
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Finland Sweden
21- y.
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0-4 y.
N/A
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0%
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Finland Sweden
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Finland Sweden
Otherregions
Capitalregion
Region
ICmanufacturing
ITmanufacturing
ITwholesale
Telecom oper.
Software
ICTconsulting
ICTmaintenance0%
10%
20%
30%
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Finland Sweden0
5 000
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Finland Sweden
Companies
ICmanufacturing
ITmanufacturing
ITwholesale
Telecom oper.
Software
ICTconsulting
ICTmaintenance0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Finland Sweden0
20 000
40 000
60 000
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Finland Sweden
Employment
0%
10%
20%
30%
40%
50%
60%
70%
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100%
Finland Sweden
21- y.
11-20 y.
5-10 y.
0-4 y.
N/A
Age
0%
10%
20%
30%
40%
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Finland Sweden
250-
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Finland Sweden
Otherregions
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Region
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Concentrationto Stockholmanduniversities
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Internet-related businessmodels
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Internet-relatedbusinessmodels
• ProofofConcepts• Industrialexits• LovedbyBusinessangels&VCs
• Employratherfewpeople• GreatimportancefortheuseofICTinothersectorsofindustry
• TechnologybasedB2B-companiesservemanycustomersinconsolidatedindustries
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Finlandvs Sweden:PartII
0
200
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2008 2010 2012 2014
SuperCell
Rovio
Fingersoft
Other Companies
Finland SwedenMobilefocusvs Broadfootprint
Superconcentratedvs Concentrated
FinlandSweden
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ICTpermeatesmanysectors
Threeaspectsinfocushere:
– ICTconsultantsasdriversofchange
– Embeddedsystemsinengineering
– Internetofthings- cloudcomputing
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TheimportanceofR&D-relatedConsultancy
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R&DrelatedICTConsultancyfirms
Typicalcustomers:EngineeringCorporationsmakingcomplex&assembledproducts
• Developingsoftwarecomponents(embeddedsystems)incostumerproducts&systems
• Developingsoftware&systemsforproductionprocesses
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Ericsson
Firm XX
Atlas CopcoDeLaval
SaabFirm XX
Kockum
HusqvarnaViking
Saab Automobile
Ericsson
Ericsson
Saab
Saab
Hemocue
Autoliv
Ericsson Mobile
Firm XX
SaabVolvo
Atlas Copco
Volvo
Kapsch
Firm XX
Firm XX
Firm XX ABB
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Is there a Swedish paradox?
• Sweden tops European Innovation Scoreboard 2016
• Stockholm top ranked among Europeanregions in the World Competitive Index of regions in 2014. (# 6 in the world)
• World Economic Forum ranks Sweden number 6 in Global Competitive Index 2016-2017 edition
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