Social vs. Manufacturing: Differences in American and Scandinavian Startup Culture

4/27/11

Are Americans more social and Scandinavians more interested in making things? These questions came to my mind when we recently compiled our annual list of Sweden’s 33 most innovative startups at Ny Teknik, a Swedish weekly magazine covering business, technology and science news.

The companies in the finished list, as well as those (several hundred) candidates that didn’t make it, seemed to be more geared towards what you might call “hard technology” than those on similar lists from the U.S., where there is a lot of interest in “soft technology.”

“Social” is hot among American entrepreneurs and investors, while manufacturing technology can at most be considered lukewarm.

We, on the other hand, had one company on our final list developing new low-friction coatings for bearings and axles in automotive applications, another focusing on advanced cross-binding agents for polymers, and a third with a highly advanced embossing process for producing holographic signs and stickers. Not to mention the ones that were sorted out during the ranking process, like the guys with a new method for aluminum casting that saves energy, gives better quality in the finished goods, and a more rapid manufacturing process.

I’m not talking about a clean-cut dichotomy. There is a great deal of overlap; biotech and cleantech, especially in the energy field, are clearly attracting a great deal of interest—and money—on both sides of the Atlantic. Still, the difference in focus is evident, but why is that so?

The simplest explanation would be to attribute it to cultural differences, to argue that Americans have more of a knack for making friends and influencing people. While Scandinavians are more concerned with making things. (We, or at least the Danes, gave the world Lego bricks, didn’t we?)

A more reasonable explanation is perhaps that startups tend to reflect the existing enterprise structure. Sweden has still got a large manufacturing industry; with two heavy truck and two car manufacturers there is a nearby market for a startup in low-friction coatings. There is a pool of talented people who have first-hand knowledge of the sector, including investors, consultants, and experienced managers. While in the U.S., the success of Facebook, Twitter, and the like has fostered a herd of new social-media entrepreneurs and investors. In other words, success breeds success.

If this is the real explanation, it also leads to a somewhat depressing conclusion. What our late-industrial societies need is break-out innovations, the ones that not only reflect what we’ve already got, but can grow into something totally unexpected, like Google did a decade ago. Instead, Larry Page exhorts his employees to be even more “social.”

Erik Mellgren is a Swedish journalist who worked for Xconomy Boston in 2008 as part of the Stanford Innovation Journalism Fellowship program. His real job is with Ny Teknik, a leading technology and innovation magazine in Sweden, but he loved seeing the Red Sox at Fenway. Follow @

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