By Romain Gauthier, Global VP – Grow with SAP for Scaleups
The Nordics stand tall as a beacon of sustainable innovation, fostering an environment where climate concerns catalyze groundbreaking advancements. According to a recent Nordic Innovation study, the region has attracted 30% of European funding in climate technology since 2015 – with most going toward B2B-oriented manufacturing and deep technology startups.
Yet, most of these startups seldom grow to scale even though Denmark, Norway, Sweden, Finland, Iceland, the Faroe Islands, Greenland, and Åland rank above average for starting new companies. In fact, the Organisation for Economic Co-operation and Development (OECD) reports that approximately 95% of Nordic scaleups have elected not to expand outside the region for 10 or more years without reaching their full potential.
While aspiring to create a more sustainable world, these ventures are quickly realizing they need a better way to navigate industry, operational, and economic complexities. For example, establishing a resilient, local business network and identifying suitable new locations for growth requires strategic planning and substantial resources. Moreover, the costs and headcount associated with supporting such expansions – financially and operationally – can pose overwhelming barriers.
Nurturing a green vision with entrepreneurial dynamism
Innovation hubs and research centers propel advancements in renewable energy with companies such as Northvolt spearheading gigafactory endeavors for efficient electric vehicle battery production. And many more emerging entities throughout the Nordics region signal a diverse landscape of flourishing eco-conscious innovation.
Unfortunately, though, not all scaleups have realized such success. Instead, they encounter an intricate blend of challenges when expanding into diverse markets within the region and across the globe. They include the potential loss of skilled workers, rising investment needs in immovable capital assets, costs associated with identifying suitable new locations, and challenges in establishing a resilient, local business network.
The key to catalyzing growth is having a strategy that smooths the transition into new territories with financial discipline, an engaged workforce, and continuous product and business model innovation. Scaleups, particularly on the high valuation end, need to reposition their business model to drive revenue and profit growth while integrating sustainable practices at every stage of expansion.
For emerging leader in sustainable lithium-ion batteries FREYR Battery, this approach provided the comprehensive and scalable technology footing to support its initial public offering (IPO) and expansion into the United States. The company now has access to data across its manufacturing processes, giving its people rich insights to help it continuously improve its operations and its solutions in line with its sustainability goals. In return, it can support joint venture initiatives by bringing new gigafactories online quickly, adding new functionality with ease during times of critical development, and running compliant financial and procurement operations.
As evidenced by FREYR Battery’s experience, adopting a cloud-based and unified business system provides the lift scaleups need to cross the chasm toward market saturation, steady expansion, continuous profitability, and, if desired, a strategic exit.
In an IDC business value white paper, surveyed scaleups and companies backed by venture capital or private equity investors reported significant advantages, such as:
- Leveraging operational data in a more timely and actionable manner to positively influence business decisions and outcomes
- Increasing operational efficiency across all lines of business while minimizing delays and errors and providing data-driven insights
- Delivering better business results by pivoting operations quickly to meet customer demand and offer higher-quality product and service experiences
Forging a sustainable legacy of economic prosperity
For the Nordic region, nurturing the growth and expansion of green scaleups isn’t just an economic endeavor; it’s also a collective pledge to shape a future where innovation thrives harmoniously with the planet. But soaring aspirations and an admirable startup culture are not enough to lay the groundwork for this legacy.
Eco-conscious scaleups also need the proper foundation of technology, processes, people, and sustainability practices to overcome the barriers that confine them within the region. Doing so provides attractive business models, purposeful products and services, and experiences that impress the heart of every customer who wants to do their part to create a greener, more sustainable future.
With each milestone achieved, every sustainable initiative embraced, and every global footprint expanded, these green scaleups can shape a future where prosperity and sustainability intertwine for future generations.
Want to learn how scaleups, such as Northvolt and FREYR Battery, are reaching new levels of growth? Explore the GROW with SAP for scaleups offering.
