Software Industry in Iceland
Software companies
Many companies operate their own information technology (IT) department, ranging in size from several dozen people down to one or two workers. Departments of such small size are often specialised in one particular hardware/software type.
There are also independent software houses providing solutions and services to Icelandic companies, as well as markets abroad. Expertise within the firms frequently covers a wide range of hardware, software and application areas. A number of software companies have attained certification to ISO 9001 and TickIT standards for their products and others are working towards it. To meet the demands of a small, albeit sophisticated society, software firms have worked on all types of designs. Solutions have been sold to various countries, some have been established worldwide. Exports cover such diverse fields as graphical user interfaces, object fax, virus detection, X.25 PAD communications, accountancy packages, governmental administration and record management.
The impressive roll call of customers includes Citibank, Kodak, Volvo, Ford Motor Company, Visa International, Schenkers, BP, and Southwestern Bell Telephone. Icelandic concerns have worked with computing multinationals such as Unisys, Microsoft, Navision and IBM to produce add-on solutions for the global market.
Furthermore, Icelandic firms have been engaged in development work with companies like Hughes, CAE, Harris and Marconi and have produced customised solutions for international organisations such as ICAO and NATO. One of the country's most dynamic sectors is in electronics applications, especially for the fishing industry, although increasingly extended to other fields. Programming is a major part of this activity, both of chips and control software as well as bar-coding systems. Total process control applications have been developed which cover data acquisition from process lines and management of this data for all control and monitoring purposes. Some of the designs are one-of-a-kind, for example computer vision applications using digitalised data gained by video scanning of food. In recent years, weighing systems, inventory management, temperature recording and control, detection and counting, time registration and auction bidding have become important export items. International distribution shows that these software exports are not confined to any single region, but are delivered across the world.
Foreign subsidiaries
Foreign companies operate freely in Iceland's IT sector. IBM has operated a branch since 1967, and Hewlett Packard has been in Iceland since 1985. Japanese firms have also invested in the industry. Most leading computer and software brands are represented, either as subsidiaries or through authorised local service agents. Players include Microsoft, Oracle, Software AG, Informix, CA, Compaq, Digital Corporation, Novell and many more.
Communication links
Iceland is strategically located in the North Atlantic Ocean, between Europe and North America. Through the main international airport at Keflavík, Icelandair has numerous flight connections daily to Europe and North America. Other airlines such as SAS, Lufthansa, LTU, Canada 3000, Cargolux, Atlanta, Air Iceland and Íslandsflug operate passenger and cargo flights to and from the country.
Companies can build their business on sophisticated telecommunication facilities, through fibre-optic cable connections, which offer reliable direct international links for telephone, fax and data networks. There is also an extensive cellular mobile phone system. Iceland linked up with CANTAT in 1995, the first fibre-optic cable between North America and Europe to use synchronous digital hierarchy (SDH) technology with the capacity to carry B-ISDN and asynchronous transfer mode
(ATM) services.
In 1995 Iceland also became the first country in the world to have a completely digital public telephone system. Telephone charges are among the lowest in the OECD, and the number of Internet hosts in the country are the highest per capita in the world.
Education
Iceland has long been one of the world's most literate countries. Education is compulsory for ten years, Many have studied abroad, mostly in Europe or North America.
English and a Scandinavian language are part of the basic education. Most people entering further education add a third foreign language, usually German or French. Communication is therefore very easy at general, business and technical levels. This has also meant that it is unnecessary to translate software into Icelandic, even though this is often done for marketing purposes. As a part of the curriculum, all schools include some computer education, and advanced courses are available at various levels. Several hundred students have graduated from the University of Iceland with a B.Sc. degree in Computer Science, and a Master's Degree became available in 1998. Computer skills also feature heavily in a number of other university majors. Other colleges offer software-related studies as well and have produced hundreds of qualified programmers.
Refresher courses are also available, covering everything from basic use to implementation of the latest algorithms and computer technology.
Investment opportunities
Many software houses welcome the possibility of co-operation with foreign companies, through partnerships, joint ventures or capital input into projects for wider distribution.
As the home market is limited, designers are increasingly exploring the possibilities of exporting their software products and expertise. The small size of Icelandic companies, coupled with their wide range of skills and experience, gives them a flexibility ideally suited for creation of large-scale total solutions.
As a member of the 380 million-strong European Economic Area (EEA), Iceland has open access to the European Union (EU) and is committed to keeping in line with business legislation there. Furthermore, public sector bodies in any of the EEA countries are obliged to openly advertise all tenders for service contracts in excess of GBP100,000. Companies in Iceland have access to pan-European funds for designing new technologies by virtue of EEA membership, and have been invited to join in prestigious development projects on the strength of their skills in fields such as digital technology applications.
The country's location makes it ideal for telenetworking, with excellent connections to Europe and the US through fibre-optic cable and satellite. Iceland is on Greenwich Mean Time, which means that the time difference with the USA makes it an advantageous location for North American companies to set up software divisions for maintenance of their networks outside peak hours.
Part of this successful computerisation has been an across-the-board adaptation of computer technologies to existing industries, rather than adapting these industries to computer technologies. Probably no other industry in the world crosses borders as easily and naturally as software, leaving the choice of investment location to non-physical factors such as the business environment and human resources.
