Why This Tiny European City Is a Hotbed For EntrepreneurshipStockholm, Sweden, is rapidly becoming a hotbed for digital innovation. In fact, the capital city was recently ranked the second most prolific tech hub in the world (Silicon Valley was No. 1, according to V! firm "tomico. "t large, Sweden is home to si# billion$dollar businesses, anchored by giants like Spotify, %larna, Sound!loud, and Skype. Stockholm alone was a runner$up for the highest percentagee#it growth in &urope, according to data recently compiled by the 'lobal Startup &cosystem Inde#.Sweden has long housed rich investors with e#perience. (he caveat, though, was that it lacked business angels who were willing to support younger companies that couldn)t land larger amounts of funding from V! firms, which hindered entrepreneurial activity. &ssentially, many saw opportunity in starting a Stockholm$based business, but very few were inspired to actually do it, according to think tank 'lobal &ntrepreneurship *onitor.In recent years, however, Stockholm has made massive strides in terms of economic growth. Small businesses have become prolific creators of +obs. (he city has raised its standards for fostering new talent and implemented new regulatory systems to drive entrepreneurship. ,ithhealth care costs on the decrease, better pension plans, and ta# deductions for people who privately invest in startups, many are reali-ing that Stockholm has become a much safer placeto start a business..ere)s why this &uropean city is gaining ground as a digital I( hub and hotbed for innovation/1. Tech-savvy talent Sweden)s recent initiatives to improve the education system have paid off substantially by boosting Stockholm)s talent pool. (here are roughly 101,222 tech workers in Stockholm alone, according to a 3214 study. (hat)s nearly 32 percent of the work force, which is the highest percentage of any city in &urope.Such efforts include the push for more S(&*$focused (science, technology, engineering, mathematics schools, and business accelerators like the Stockholm School of &ntrepreneurship and the 5oyal Institute of (echnology. ,ith cheap or free access to education, students don)t have to struggle with the stress of paying off university debt before starting up.!arl ,aldekran-, 30, who co$founded the online retail marketplace (ictail in 3213, calls the city one of the best places in the world to build a tech venture. 67ree education creates this massive talent pool,6 ,aldekran- says. 6,e)ve seen a huge growth in the number of engineering and design talent.6(ictail is an e$commerce platform on which shoppers can browse products (home, garden, and +ewelry are among the most popular categories made by smaller, independent retailers from across the world.Tictail is an e-commerce platform for micro-entrepreneurs and shoppers. ,hen hiring, he adds, you can bring on top$notch engineers in Stockholm and surrounding locations for a fraction of the cost you would pay in another area, like Silicon Valley. (hose savings can then be reallocated to other areas of business. Sweden)s government has also matured by investing in subsidi-ed personal computers and a solid broadband infrastructure, which has played a ma+or role in cultivating new talent and increasing the drive for innovation.7or a platform like (ictail, which caters to micro$entrepreneurs and retail customers, the needfor tech talent is crucial. ,aldekran- and his team built out (ictail)s feed algorithm, which generates advice to business owners as they grow their presence on the platform, all from scratch.2. An increasingly strong and supportive VC presence Sweden)s venture capital scene is growing rapidly. Stockholm alone is home to firms such as !reandum Ventures, which counts more than 8392 million (:31; million under management in over 32 companies.5ecently, the Sweden$based media giant *odern (imes 'roup hired former 'oogle employee 5ikard Steiber to head up venture lab *('#, with goals to support and fund small startups.(ictail received funding from !reandum as part of its staggering :33 million Series < funding round, announced in =uly. (o date, the company has raised :;3 million.6(hey)ve been such great sounding boards for me, and they)ve helped me build up my own confidence,6 says ,aldekran-. *eanwhile, !reandum sees (ictail as filling a ma+or gap in the marketplace. 6(he startup is creating a platform and community to help micro$business thrive online,6 says investor =ohan verall, as much as :491 million was invested in Sweden in 321;, representing a 3 percent uptick from 3211, according to the &uropean !ommission. *eanwhile, ?.S. ecosystems are beginning to take notice, as success stories like %larna are upping the country)s startup credibility. ,aldekran-, for his part, was surprised that &ast !oast investors like (hrive were already aware of (ictail and its business model before it came to the ?.S. 3. Small city, big advantagesStockholm is a small hub. "s Sweden)s capital and most populous city, its current estimated population is @01,222. ,aldekran- notes that this is a blessing in disguise, since it forces business owners to think globally$$instead of trying to hack only the national market$$in the beginning stages of building a startup."t +ust three years old, (ictail is a newcomer in the tech space. It)s up against more vetted e$commerce retailers, such as &tsy and Shopify, which each have a larger, more established market reach. ,aldekran- says he views &tsy to be nationally focusedA but (ictail, by contrast, wants to help people find niche wares from different countries.*>5&/.ow a 7irst$(ime &ntrepreneur ,ent 'lobal ,ith >ne Simple IdeaB (hings to %now "bout Coing