The new innovation arena and the innovative Sweden

That Sweden is innovative is a message that is often hammered home, both here in Sweden and in the international press. We often place, if not at the top, then at least amongst the best, often in the company with such countries as neighboring countries, Switzerland, the Netherlands, Korea and Japan. Both in rankings produced by international organizations as well as in research reports on the subject.

Factors such as tolerance, talent and maturity of technology, as well as our open and transparent economy, and not least our international technology-heavy companies that invest in research and development, are often highlighted as factors explaining Swedish innovative power. 

But what is needed in order for us to continue to aspire to the title as one of the world’s leading innovative countries? And are we really as innovative as we appear to be in the rankings? If we are to succeed in consolidating our top position in the fierce international competition and not end up behind, how should we proceed? 

The report " Agenda för ett innovativt Sverige" (agenda for an innovative Sweden) developed by Kairos Future on behalf of Innovationsföretagen (the Federation of Swedish Innovation Companies) discusses these issues and how we can understand the new arena of innovation, its opportunities and challenges, and the prerequisites and conditions of innovation and innovation systems.

Innovation in a fast-paced world
Today's business environment can be described as raplex - rapidly changing and increasingly complex. This development started to pick up speed in the 1980s and is showing no signs of slowing down. The consequences of this development are, among other things, that it has become increasingly difficult for companies to perform well over time, while the differences between companies in the same industry have increased dramatically

The increasing raplexity is associated with other shifts and long-term trends such as:

  • From planning to split vision; that it is becoming increasingly important to have an idea of ​​where the world is going but at the same time keep full focus on the present.
  • The new exponential logic that, as a result of digitalization, is spreading into more and more areas, and where the human, linear thinking, brain tends to underestimate the speed of development.
  • Servicification, and not least the platformification, of an increasing number of industries. This means that more and more companies must relate to the ecosystems that are being created by the global platform companies and have a strategy about which ones they want to be included in and which ones to avoid.
  • The development of Artificial Intelligence that allows us to go from human teams to teams of man and machine. How we work and who we work with will be a direct consequence of this, and we can also expect that in the long term, AI will accelerate the pace of innovation in all parts and areas of the innovation process.

However, it is not only the business landscape itself that is changing, much indicates that our entire society is in an existential phase, where the of world as we know it since 30, 40 or even 70 years is being shaken to the core. This demands innovations on completely different levels, that are able to deal with global societal challenges which are results of everything from the climate crisis to geopolitical shifts in power.

Existential social challenges in the making
Against this background, it is hardly controversial to say that our time places unusually high demands on us when it comes to ingenuity and innovation. But what is it that causes some nations, organizations or companies to perform beyond their given conditions in this increasingly difficult-to-navigate and complex reality? Understanding the central components of an innovation system creates a framework within which we can have a continuous dialogue regarding how we can improve the conditions for innovation in our time, at the general level, but also for ecosystems, individual companies and individuals.

The triple metre of innovation
Innovation is a system that has the ability to search, create and scale. The search is about being curious and knowledge-driven, capturing trends, ideas, problems and opportunities. Creating is conceptual and includes the ability to formulate, build and test new ideas and solutions. Finally, scale means being "industrial" and having the ability to realize, commercialize and scale up ideas in the market.

However, it is relatively rare that there is an even distribution among these driving forces. Both individuals and companies are drawn to one or a couple of them, while sometimes being completely uninterested in the others. In order to succeed from idea and prototype to commercial success however, the last ability, to scale, must be in place. It is difficult to imagine that the classic big Swedish companies, that our internationally successful society building- and engineering companies, or that our unicorns like Klarna or Spotfiy would have reached the position they are in today without this ability.

The innovation system – An interplay between dimensions and levels
An innovative culture that has the ability to capture the triple metre of innovation is the foundation of an innovative system. But it is not enough. Prerequisites in the form of knowledge and skills, institutions that enable innovation and innovation processes, and financial capital are also required.

If you look at the national innovation system, this also consists of different levels - from the individual to the supranational level, where the nation works together with other nations to collaborate around supranational challenges.

So how good is Sweden as an innovation system compared to our closest competitor countries? This question was asked to both the members of Innovationsföretagen and to Kairos Future’s network. The short answer is that despite our fine awards, we are quite mediocre. The strengths lie in the will and ambition to be first, and in creative and conceptual individuals. The weaknesses lie in the ability to allocate resources to that what is new, both in companies and at societal level, in the design of the tax system, and cooperative ability between companies and society. At least according to those who should know!

The conclusions can be summarized in that the way forward is about forward orientation, both in terms of the state's ambitions, as well as the ambitions of individual companies and the ability to handle present and future business at the same time. If we are to continue to be in top rankings over the world's most innovative countries, then both courage and will to be first and foremost will be needed.

Perhaps, what we need is more go on an individual level, that we simply have are a little too satisfied and comfortable, that we are more entrepreneurs and innovators in theory rather than in practice. 

If you wish to read more on the subject, you can download the report “Agenda för ett innovativt Sverige”, in Swedish, here or read about it on Innovationsföretagens website. There you can also find a list of points that summarizes the successful innovation system of the future.

Want to know more about how your organization can work systematically with innovation? Do not hesitate to contact Mats Lindgren who authored the report or Katarina Stetler, director of innovation at Kairos Future.

By Mats Lindgren