As part of the Innovation Module of my MBA, we took a class trip to Iceland – and no, it wasn’t just a holiday. The aim of the trip was to understand why Iceland was becoming such a key player in the Innovation industry, and in particular environmental and sustainable technologies.
A few facts about Iceland: there are 370,000 habitants (equivalent to the size of Bristol) and it has a strong innovation and entrepreneurial scene which is at the centre of the country’s strategy. It is reportedly the most sustainable country on earth with 100 percent hydro and geothermal energy power sources.
Since the 2008 crash, they have come a long way and now have a high revenue per capita of $55,322 PPP versus the UK’s $44,920. Because of its natural resources and geographical location, it has become a world leader in sustainable technologies.
What makes Iceland so unique?
What makes Iceland so unique is its natural resources. Some of the companies we visited have created their business model around this.
Fertram Sigurjonsson, the founder and inventor of Kerecis, came up with the idea that fish skin had similar characteristics to human skin and could be used more successfully to cure chronic wounds than current alternatives. In Iceland, cod is already an industry in itself, but the skin was discarded and not used. Sigurjonsson’s idea could make use of the industry’s by-product while also creating a pioneering new method for skin graft. Today the products are developed and manufactured in Isafjordur, Iceland, and are authorised for sale in Europe, the United States and several other regions of the world. This is a fast-growing company rooted in science and environmental sustainability. It employs 200 people with its regional headquarters located in the United States, Switzerland and Iceland.
The other resource that is in abundance in Iceland is green energy via harnessing geothermal and hydropower. Together with hydroponics technologies, Vaxa Farm is able to produce a variety of leafy vegetables on their vertical farms, all year round. They are still experimenting on what vegetables are the best to grow, but their systems have already shown to carry multiple benefits. It uses a fraction of the water compared to traditional farming and as all its energy comes from green resources, it is completely sustainable.
Another company, Carbfix, has attracted worldwide interest in their latest technologies that mineralise CO2. It can be combined with various Carbon Capture Technologies; the process involves mixing the CO2 with water and injecting the carbonated water into the Cobalt rocks of Iceland.
The CO2 is solidified and stored away forever. Carbfix was established as a subsidiary of Reykjavik Energy (OR) in late 2019 and began operations as a separate entity on January 1st 2020. The company’s mission is to become a key instrument in tackling the climate crisis by reaching one billion tons of permanently stored CO2 (1 GtCO2) as rapidly as possible.
what can we learn from Iceland?
· Be ambitious– Nanom is producing tailored nanomaterials on-demand at industrial volume. They are hoping that their patented nanoparticle technologies will make batteries that are far more efficient than the ubiquitous lithium-ion version used today.
It all started in the inventor Armann Kojic’s garage in Croatia, and they are now based in Reykjavik and have partnered with the University of Iceland and in Palo Alto California looking to licence their products worldwide.
· Have the right infrastructure -The ecosystem is organised to boost entrepreneurship. Due to its size, you have easy access to official bodies and agencies. The country aligns its objectives with all other ministerial departments to favour export and has a flexible labour market.
So how does the UK compare to Iceland, and does the UK has a role to play in the environmental technologies?
In 2020, the Intellectual Property Office (IPO) in the UK received 26,368 patent applications versus 88 In Iceland
There were more than 726,000 new businesses launched in the UK in 2020 which represents 1.08% of the population and 3224 in Iceland with 370,000 habitants, representing 0.87% of the population.
During the trip, what transpired was the large scale of funding that start-ups receive for sustainable ideas. All of the companies we visited were able to get early-stage funding from the Icelandic government or European funding scheme.
This is where the UK could seize this opportunity to become one of the leader in the low carbon industry: “By one estimate, the low carbon economy in the UK could grow 11 per cent per year between 2015 and 2030 – over four times faster than the rest of the economy.”
The UK government is clearly aspiring to this and through the latest wave of the Industrial Strategy Challenge Fund, and they now expect to invest more than £3 billion.
It is important that the UK government delivers the infrastructure and early-stage funding necessary for these ambitious projects to flourish. With the right support and innovative spirit shown by Iceland, the UK can take up a leading role in fighting the climate crisis outlined by the government’s commitment during COP26 last September.
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Barbara Bouffard – Co-Managing Director