Unleashing Iceland's Tech Titans: How Small is Powering Mighty Innovations

Iceland, a place of fire and ice, might not at first glance seem like a likely place for the development of bleeding-edge technology and world-beating startups. After all, with less than 400,000 people calling this sparsely populated island home, it’s hard to believe that such a small nation would be punching above its weight on the global startup scene. Countries and capitals clamouring for the title of the world’s next tech hub have nothing on this small nation, which draws tourists 10 times its size and venture capitalists who are just as committed to staying there as the tourists are to leaving. In this new economy, recognisable geographies of innovation (advanced cities in advanced nations) are evolving. Instead, innovation is now striking in places as far-flung from high-tech as it is from familiar. Iceland is one such example, using its distinctive resources and a spirit of ingenuity to become a lighthouse of entrepreneurship others are striving to emulate.

HOME to Pioneers: Iceland's Tradition of Innovation

Finding Inspiration in the Familiar

Innovation in Iceland rarely departs far from the past; startups in aquaculture or natural resources often draw heavily on the island’s history and natural resources. One company, Kerecis, is a great example of this: its fish skin-based dressings, used for wound care, provide a great leap from the traditional uses of marine products to a cutting-edge medical technology. But this is just one of many examples in Iceland’s startup ecosystem of how the wealth of the sea is regularly being investigated and utilised in new ways – with an increasingly important emphasis on sustainability and the circular economy.

Past Lessons Shaping Future Frontiers

And even further than the natural resource narrative, Iceland’s fintech scene is digging into the island’s history for innovative solutions to the future. From the experience of the 2008 banking crash, Icelandic fintech startups such as indó and Monerium are reimagining financial transactions with an aim toward resilience and sovereignty. For instance, new ventures such as Blikk’s quest for secure, account-to-account payments demonstrate the move towards lower costs and increased security of financial transactions.

A Strong Support Network: HOME to Innovation

The Backbone of Growth: Funding and Talent

For Iceland’s startups, venture capital and accelerators are only the beginning. National grants and European programmes, such as Horizon Europe, promise to expand the scope of innovation still further, from aluminium smelting to digital technologies. Crucially, though, this ecosystem is not complete until you bring in an all-important element in human form. Co-working and entrepreneurial hubs bottle the energy of the capital, Reykjavík, which acts as a cultural and economic centre. Bright minds fill the spaces in its core.

HOME of Creative Minds

It seeps through every aspect of Iceland’s tech industry, too. There are startups working in everything from music technology to video game development. CCP Games, the company behind EVE Online, dominates the local games industry and remains an inspiration for many of the young game makers moving into Iceland now. And the storytelling techniques that shaped Iceland’s historical sagas have been finding new expression in digital mediums as well, adding to the richness of Iceland’s emergent creative output.

Looking Abroad: Iceland's Global Reach

But Icelandic startups are not simply interested in local success – even highly successful Icelandic startups are invariably looking beyond Iceland. Oculis, for example, is making big waves in eye care while Sidekick Health has developed a digital care platform already making inroads into the rest of Europe and into the US. This global thinking from the get-go is instilled in startups from the beginning, preparing them for the diverse challenges of international markets.

Strategic Importance: Iceland at the Crossroads of Tech

With its location and an entrepreneurial spirit that is just beginning to garner the interest of global organisations such as the NATO Innovation Fund, Iceland’s venture capital scene is young, but thriving and primed to make huge contributions both to local and global tech. New accelerators such as DIANA are indications of Iceland’s shift towards an important new role in the world of global tech.

Evolution of Innovation: Iceland's Journey

Being a historically remote and isolated place, Iceland is now rapidly emerging as a hub of digital technological progress and creative entrepreneurialism. Combining a deep cultural heritage, a grounded strategic vision, and a ferocious creative energy, Iceland could become a shining example of how resourcefulness and creativity can turn being remote into a breeding ground for global innovation; a place where startups and venture capital can both blossom, making Iceland a place to watch for decades to come.

About HOME

Home is not a place. Home is an idea. Just as the idea of eureka turns ‘disaster into opportunity’, ‘tradition into the future’, ‘natural beauty into technological breakthroughs’, home for Iceland is about the North Atlantic island being both the source and the key to worldwide tech innovation, where centre and periphery can work together. ‘Home reshapes what it means to be Icelandic in the world,’ says Örn as he sips his tea. At a more practical level of motivation, however, the sentiment that drives Icelanders forward – the spirit that makes the island tick – is clearly and without pretence, being at home.