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Cold inspires hot run on high-tech

The Economist/ AFR | Feb. 5, 2013
A group of Finnish students have embarked on a most constructive piece of entrepreneurialism in history after returning from MIT.

The founder of Hemfrid, Monica Lindstedt, is also in the business of selling time. She has turned her company into a house cleaning giant, applying professional management to domestic cleaning and turning it into an employment perk. Hemfrid has persuaded the government to treat house cleaning as a tax-deductible benefit, like a company car. It has also convinced companies that this is a great way to reward their employees and free them from domestic distraction. Hemfrid now has 10,000 regular customers and 1326 employees, 70 per cent of them born abroad.

Nordic entrepreneurs are also reinventing retirement homes for baby boomers. A Finnish private housing association, Asunto Oy Helsingin Loppukiri, has built a community in the suburbs of Helsinki that is dedicated to the idea of helping people help themselves. The residents took an active part in designing both the common areas (which include saunas and exercise rooms) and their individual flats. Most own shares in the company. It tries to offer a balance between independent living and community involvement. The members eat together once a week and tend a communal allotment whenever they feel like it.

Despite all this entrepreneurial energy, the Nordic region still finds it hard to turn start-ups into enduring companies. There are too many examples of successful entrepreneurs who have gone elsewhere. These include not just members of the post-war generation such as Ingvar Kamprad, the founder of giant IKEA (who lives in Switzerland), and Hans Rausing, the founder of Tetra Pak, a huge packaging company (who went to live in England) but also members of the up-and-coming generation. Mr Zennström, along with many of the brightest Swedish investors and entrepreneurs in his age group, lives in London. Too many successful start-ups still choose to sell themselves to foreign (mainly American) multinationals rather than becoming local champions.

Still, there is reason to hope that the entrepreneurial boom will also produce a new generation of global champions. The region’s lifestyle entrepreneurs have a chance of becoming global moguls for the same reason Mr Kamprad did: because they are riding the wave of demographic change. And the high-tech entrepreneurs have a chance of founding enduring companies because they are building up businesses as well as mastering technology.

One example is Rovio Entertainment, which struck gold with Angry Birds, which was downloaded more than 600 million times in 2011. Having produced one big hit, most games companies would have started looking for the next one but Rovio instead set about turning Angry Birds into a brand.

 

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