IT market situation in the Nordic countries
The U.S. and Asian markets are very often cited examples of the fastest growing technology markets, probably due to the high popularity of companies whose services are known worldwide. However, many forget how important the Scandinavian market is and what brands this region is associated with. What is the situation in the IT market in the Nordic countries?
Technology market potential in the Nordic countries
Start-up owners have become convinced of the benefits associated with the Nordic countries. Sweden, Norway, Denmark and Finland are known for their fast-growing environment for young companies looking to expand their businesses. With the help of the region's potential, several have already managed to become giants on the world stage. Among the global organizations are two brands in the cell phone area that were once considered leaders in this category. The brands have managed to introduce some particularly important innovations in the industry, such as Bluetooth technology. A popular brand from Finland even boasted the title of best-selling phone company for a while. According to the Helsinki Stock Exchange, it accounted for 4% of the country's GDP, 21% of exports and 70% of market capital.
The cell phone industry is not the only area the Scandinavians have done well. The region has also seen the emergence of significant companies in the fields of instant messaging or audio and media streaming services. These successes have established Scandinavia as the best environment for start-ups, able to easily compete in the future as a strong player on the technological map of the world. One of the region's biggest successes became the streaming music and podcasting app - it revolutionized the entire music industry and the method of consuming podcasts and music.
The success of Nordic companies has attracted more investors, who have seen considerable potential and the opportunity to quickly build a huge customer base from around the world. Organizations that have been thriving in the Nordic market for a long time are successfully investing in the development of the technology ecosystem, which could be another incentive for start-ups. Companies related to new technologies or applications are not the only popular organizations in the region. Scandinavians are also thriving in traditional industries, such as automotive, furniture and fashion.
Why do the Nordic countries have so many technological advances? The answer may lie in their culture - computers and the Internet appeared very early throughout the region. Rapid adoption of new technology resulted in early successes and early familiarity with them.
What technologies is Scandinavia currently developing?
Recent years have significantly affected the technology market around the world - all due to a pandemic and shortly afterwards a war. These events forced a change in the way the technology market developed and functioned. Many technological areas began to think about issues such as, for example, the reduction in demand for technology, the availability of suitable specialists, inflationary pressures, increased cyber attacks, the resource supply chain, and increased energy costs. These consequences have not escaped the Nordic countries either, changing their priorities. Companies with a presence in these regions are choosing to invest more in technologies that support countries in their digital transformation.
Many organizations with a presence in Scandinavia continue to develop cloud infrastructure services. Spending in this area is expected to increase in the coming years. Cloud technology is becoming a basic item present in every company, and all indications are that it will drive investment in organizations aiming to improve business performance. The leader in this technology is Sweden, where the demand for the right IT professionals in this field is growing.
One of the faster-growing technologies that is emerging as the centerpiece of many discussions around the world is artificial intelligence. Its considerable potential makes many countries decide to support the development of this area. Scandinavians are already planning to implement artificial intelligence in the coming years. Why are companies setting such a goal? AI alleviates skill shortages in the workforce, is capable of transforming the work environment and can improve the brand experience of customers.
A solution that many organizations in the Nordic countries are now using is the Internet of Things (IoT). It is responsible for reducing costs, improving efficiency or optimizing processes, among other things, and is often cited as a way out of the energy crisis. Scandinavians continue to invest in this area, improving smart grids, electric vehicle charging or payment-related technologies.
The challenge faced by the Scandinavians
The Nordic countries have considerable potential for technology companies looking to expand properly on a global scale. Nevertheless, the region is not without its problems - the most common of which turns out to be a shortage of suitable IT professionals. This challenge is compounded by a number of smaller factors that do not necessarily belong to the business sphere.
The first issue affecting the shortage of qualified IT experts is the low birth rate. Sweden also estimates that by 2040, one in four people will be 65 or even older. This translates directly into the amount of suitable labor in the country. According to the 2019/2022 Hays Skills Index, the country will face a shortage of, at best, as many as 19,000 IT professionals by 2030.
How are the Nordic countries trying to solve the above problem? Going beyond the region's borders in search of IT specialists, while taking advantage of a new cooperation model, namely nearshoring, can be a very beneficial solution. Such an option is gaining considerable popularity, as some companies are already declaring their willingness to continue nearshoring cooperation to the same or greater extent. The ability to select the right IT partner according to one's preferences allows for a high degree of customization in relation to the project, which leads directly to the successful resolution of the entire project.
The popularity of IT outsourcing in Scandinavian countries was not always as high as it is today. It wasn't until the outbreak of the pandemic that interest in this type of cooperation increased significantly. Despite initial layoffs to keep the company afloat, employers changed their strategy very quickly. The need to ensure adequate development during lockdowns caused the digital transformation to move forward six years, increasing the need for the right experts and technological expertise.
What direction to take to find the right partner?
Choosing the right business partner can be a difficult task, given the large number of candidates. Access to suppliers from all over the world is now very simplified - in no time we can contact the selected company to agree on terms of cooperation.
Which direction would be the most appropriate one to take the first step, thus narrowing down the list of searches for the perfect IT service provider? It turns out that the frequently chosen region is Central and Eastern Europe, specifically Poland, which boasts a very sizable pool of technological talent. IT specialists from Poland are known not only in Europe, but also around the world for their high skills. Proof can be seen in the fact that Poles have not disappeared from the TOP 10 list of top programmers since 2019. Currently, they are in 4th place in terms of European countries and 7th in terms of the whole world. What, then, is responsible for the huge success of Poles? The answer may be the country's highly developed education system. Technical majors are highly popular in Poland - about 300 thousand students are educated in them every year. Every year about 15 thousand well-prepared IT experts seek jobs in the field of new technologies.
Companies from all over the world have been working with Polish IT service providers for a long time. Poles demonstrate their experience, finding their way easily through a wide variety of tasks. Polish IT services are also characterized by very favorable prices in relation to high quality. In addition, Poland is in a very good geographical location, which guarantees ease of establishing and maintaining contacts. One of the advantages is also the absence of a language barrier - Poles are ranked among countries with very high English proficiency. In the EF English Proficiency Index, Poland ranks near the top among European countries and the rest of the world.
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