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Gothenburg has knowledge and competence – but potential is not being realized

Gothenburg has great potential in the form of knowledge and competence – but it is not leading to many viable companies with their own intellectual property (IP) that can create long-term employment in the region. That was one of the messages when Innovation Bazaar – a meeting place for developing cooperation between vehicle manufacturers and software providers – was arranged for the last time at Lindholmen Science Park in Gothenburg on November 7.
Kent Eric Lång

Innovation Bazaar has been arranged twice annually every year since 2012, when Vehicles ICT Arena (VICTA) began as a project at Lindholmen Science Park. The arrangement is one part of VICTA’s work to support cooperation between vehicle manufacturers and software suppliers.

The conference addressed the question of whether the Swedish cluster is prepared to adapt and develop quickly enough.

One of the two main speakers, Magnus Östberg, expressed some doubt about that.

He is the vice president for one of the three divisions in Aptiv, a global supplier that is completely different from what it was when it was spun off from General Motors (GM) 20 years ago. Aptiv designs and manufactures electronic systems and advanced safety technology and integrates hardware and software for autonomous vehicles – “safer, greener and more connected solutions to develop future mobility,” as Östberg himself put it.

After his speech to a full meeting room, Östberg expanded on his thoughts in his answers to a few questions.

How would you describe the market in Gothenburg?
“There’s great potential in the knowledge, intelligence and competence in the region. But the market is very locally limited. We don’t see it transforming into viable IP companies that we can use.”

How could that development happen?
“Take in more people from outside and attract more venture capital. In Israel, Silicon Valley and Bangalore, for example, there’s a lot more venture capital – moreover, there’s a different experience with developing businesses that are viable outside their own region. The experience isn’t just technology-based, they’re also looking at things from a larger perspective. I don’t think that’s as developed here in Gothenburg. In that context, Aptiv can help bring Gothenburg’s industry to the world stage.”

Aptiv has 6,500 engineers all over the world, four technical centers in Mexico, Poland, China and India and thirteen research and development centers, one of which is located at Mölndalsvägen in Gothenburg with 160 employees.

The other main speaker was Alwin Bakkenes, a Netherlander with long professional history in Sweden at companies like Wireless Car, Volvo Cars and Pelagicore. Today he is managing director of the automotive division in Luxoft, an international software developer with more than 13,000 employees worldwide.

He pointed out that his team at Luxoft had created 1,500 new jobs in two years. But only ten of those had been in Gothenburg – and after his presentation, he gave his opinion on why that might be:

“It’s simply easier to do complex collaborative work with industries outside Sweden – and it’s a shame that we can’t do the same thing here, and simply unnecessary.  Right now, Luxoft has leading roles in transitions at large German vehicle manufacturers, which has led to 400 jobs.”

Why is this the case?
“Sweden has a very good entrepreneurial climate and we have an immense amount of competence within vehicles and future mobility solutions, which is very much appreciated even outside the country. But many startups have a hard time finding their place in the value chain at home. This can change, if we’re brave enough to break the traditional value chains and create cooperative development with connections to IP and/or competence and help companies establish themselves and enable continued investment.”

Anders Hjalmarsson Jordanius (senior digital innovations researcher at RISE), Anna Westberg (senior vice president at Volvo Group who works with connected solutions), Make Moghaddas (partner at BEAM, which develops mobility functions and services for the transport industry) and Martin Krantz (founder and owner of Smart Eye, which was founded in Gothenburg nearly 20 years ago and develops software for self-driving vehicles using eye-tracking camera technology).

Smart Eye is an example of a Gothenburg company that has developed successfully. After starting in Martin’s basement in Gothenburg in 1999, Smart Eye has grown, slowly but surely, and now has big plans for international expansion. New shares issued earlier this autumn, for over SEK 100 million, have created conditions for the company to grow in Sweden, China, Japan and the US. The number of employees will then surpass 100.

Martin Krantz praised Gothenburg in the panel discussion:

“There’s a safety culture within the automotive industry here that’s been a fruitful environment for us,” he said.

The discussions at Innovation Bazaar were led by Kent Eric Lång, who has been the head of VICTA since it started. He summarized his impression of the conference as follows:

“It’s interesting that there’s such a positive feeling about Gothenburg. That there’s hope – that there are things to do!”

This was the last Innovation Bazaar, as VICTA has now wrapped up.

“It’s unfortunate that such cooperation is ending, of course,” says Kent Eric Lång. He stresses that this is not due to lack of support from society or a lack of structure.

“You want to see people be brave enough to try things, like Martin Krantz, who’s been passionate in his work, ever since he started out of his own home, and who believes in his company. We need more of these kinds of role models to inspire others.”

Kent Eric Lång believes in a future built on partnership and a new type of business where the automotive industry defines itself as a part of the transport ecosystem. But how can we see that in how companies organize themselves? asks Lång, and answers himself:

“There’s a good example in Anna Westberg’s and Volvo’s work with connectivity, which also encompasses a responsibility for Volvo Venture.”

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From left; Magnus Östberg, Martin Krantz, Anna Westberg, Alwin Bakkenes & Mike Moghaddas