The Startup Ecosystem of Iceland

The Icelandic startup ecosystem is impressive, especially considering the country’s small population. A harsh climate compels Iceland to build strong physical infrastructure, which has fostered an innovative spirit born from necessity. Icelandic entrepreneurs are also compelled to have a global focus from the beginning, given the country’s small consumer market. In addition, Iceland values education, and the nation is well known for high literacy rates and skilled tech workers.
Iceland developed the entrepreneurial spirit of its population and shifted from the traditional employment model towards the gig economy, even in the IT sector, which offers much more flexibility.
The government’s initiatives reflect Iceland’s culture of innovation. For instance, The Icelandic Centre for Research (RANNÍS) promotes public awareness of research and innovation, education, and culture in Iceland. As well, government organizations which specifically support startups, such as Startup Iceland and Startup Reykjavik, do an excellent job of connecting local startups with foreign investors. The efforts of these organizations are supported with favorable legislation and one of the lowest tax rates in Europe, as well as incentives for R&D and green energy. Likewise, Iceland’s public sector incentives offer foreign investors favorable legislation for investments, along with the Golden Investor Visa.
Iceland’s small population may be seen as a challenge, but the country’s position between North America and Europe means fast travel times to massive consumer markets. Iceland is on a mission to increase innovation and competitiveness, and we are convinced that this approach will prove beneficial for its startup scene.