17 May Knowledge-based sectors prime remote nations for growth
Áslaug Arna Sigurbjörnsdóttir, Minister of Higher Education, Science and Innovation, Iceland, showcases the nation’s key growth sectors and underlines opportunities in developing knowledge-based economies for developing states.
What is the government doing to improve Iceland’s innovative ecosystem?
Iceland’s innovation policy was adopted a few years ago. We put innovation firmly in the forefront of the government’s agenda, which had not been done before. Traditionally, our country is based on its maritime, heavy industry and tourism industries. Our mission is to establish an efficient support system for the innovation sector and create a strong and competitive platform for entrepreneurs and startups to grow in Iceland. Our long-term goal is to have the highest portion of our export revenues coming from knowledge-fueled industries. In line with our innovation policy, funding of research and development has increased. We have done this through increased contribution to competitive research and technology development funds. Our research and development tax initiative is generated by international comparison. Iceland’s research and development activity has increased significantly in recent years. We want to continue to increase the output and efficiency of governmental support to take down walls and increase innovative thinking. We want to reduce overhead costs, simplify regulations, support international networking and encourage collaboration and knowledge transfer between the public and private stakeholders. We are working on making Iceland an attractive workplace for scientists and experts from all over the world. Our companies need a diverse amount of knowledge to bolster our target industries. We implemented important economic measures that helped us through the COVID-19 crisis. We can continue to build. If we play our cards right, Iceland can establish itself as a technologically advanced country in the north with high living standards that produces global contributions to the creation of sustainable economies.
We are forming a new ministry that links higher education with innovation for a reason. We recognize that higher education will play a crucial role in fostering a knowledge-based economy. There are several universities in Iceland. We put a focus on creating high-quality education and an active scientific environment. It is important that rapid changes caused by the digital transformation and new technologies not only apply to those living in Reykjavik. We put emphasis on higher education throughout the country, and digital access is one of the key factors in doing so. Higher education institutions must create a strong bridge between academia and industry. We are building many companies that require a strong bridge between these two areas. We have a strong education system and resources and quite innovative thinking.
How would you assess the startup scene in Iceland?
Startups in Iceland are currently very active. There are many exciting companies showing up on the scene. Iceland has a small, well educated and open-minded population. It is relatively easy to start a company and recruit an initial local team. However, as companies scale up, they may run into recruitment challenges, especially for the highly specialized roles. The government is aware of this and has introduced tax initiatives and further actions to attract international employers to Iceland and stimulate international collaboration. The major startup entities in Iceland include solid health technology entities, such as Controlant, that provided monitoring and supply chain visibility for global Pfizer distribution, Sidekick Health for digitally delivered clinical treatments, biopharmaceutical pioneer Alvotech, and orthopeadic entity Össur. We also have robust biotech startups such as Kerecis, that works on fish-skin technology. We have companies popping up in the fintech field such as Lucinity and Meniga. We also have high-tech startups related to food production, such as Marel. We are seeing major growth in local startups in the biotech, gaming and high-tech industries.
What opportunities has the COVID-19 crisis opened up for citizens in Iceland?
The COVID-19 pandemic has shown the world that it does not matter where you sit, you can build a great company anywhere. The same applies for working for the government. I hope this will be an example to all ministries and employers. Working methods and procedures are changing quite rapidly. People want more flexibility; they want to work from home and abroad. This framework equalizes opportunities for people all over Iceland. Iceland is a big country and quite rural. One no longer needs to live in the capital to get an appropriate job. In the ministry, we are trying to measure outcomes instead of working hours. These types of innovations are crucial for further development of the economy.
How has Iceland become a frontrunner in the use of green energy?
Iceland has been using renewable energy for over a century. All local electricity and district heating demand is met by renewable resources, including hydroelectric and geothermal sources. By using domestic energy, Iceland has drastically increased its living standards and created opportunities for energy dependent industries to produce goods in a more responsible way. Our aluminum industry plants are driven entirely by renewable energy, for example. Iceland recently adopted a new energy policy that lays down an ambitious target of becoming completely independent of fossil fuels by 2040. We are well positioned to be one of the first nations to reach this goal. Iceland’s renewable energy expertise lies mainly in the three following areas: geothermal energy, hydropower and carbon capture utilization and storage. We want to play a part in the development and production of clean energy alternatives. Iceland is in a good position to be a leading example for the world. We develop ideas here that can be used elsewhere. Additionally, access to renewable energy and low electricity prices paired with high fossil fuel prices make Iceland an ideal market for electric vehicles. Carbfix is an Icelandic company that has become one of the leading carbon capture entities. It has developed groundbreaking technology to put capture carbon dioxide in the ground. This is a permanent solution that does not involve any risk of carbon leaking out. We are aware that natural resources are limited. We need to focus on the resources of knowledge, innovation and creativity.
How has Iceland’s relationship with the U.S. fostered development in innovation?
One might think that being based on an island in the middle of the Atlantic is a disadvantage. However, our location is advantageous for startups. Iceland is a midpoint between Europe and the U.S. The location provides opportunities for collaboration between Iceland and the U.S. Not only are there cultural influences from both sides of the Atlantic, but many also use the country as a stopover point. Many local scientists and experts received their training in the U.S. and have brought that experience and network back to Iceland. We have had important and fruitful collaboration between our countries and have initiated a number of successful startups in partnership. There are many opportunities for more fruitful collaboration between the U.S. and Iceland in the startup community. The U.S. is an important market for Iceland’s knowledge-driven and technology industries. Our population is small; if you have an idea that can change the world, you need to get it out of Iceland. We are building an exciting future. I want to welcome everyone to visit and work. We have fostered opportunities that will have a huge impact on challenges we all face.
You have had an amazing political career from very early on in your life. What are your key motivators that have led you to the position you have now?
In the fall of 2015, I ran as the secretary of the Independence Party at the age of 25. In my speech I emboldened young people to make an impact, engage, participate and campaign. I want youth to put words into action. This was a turning point for me as a politician and a very bold move in running against a long-standing sitting member of parliament. Being 25 years old and taking on a leadership role within the largest party in Iceland was challenging but also an amazing opportunity. I was always interested in making society better and simpler. I had previously thought becoming a politician would come later in life. However, I could not complain about the fact that there are no young people in politics if I did not run myself. Politics needs diversity; they need young people’s voices. Since I was elected, I have always stressed the importance of young people’s participation in politics. I was minister of justice from 2019 to 2021, which is a huge role. I was the youngest ever to fill this role. These are amazing times with many available opportunities for those who step up.