Iceland’s tech clustering – diversity, equity and doing what’s good for business and staff

Martin Banks Profile picture for user mbanks November 28, 2023
Part 2 of our look at what is emerging out of Iceland’s adoption of clustering tech startups looks at three examples from the more human side of business – personnel management and health care. In the process, it also takes a look at the island’s increasingly positive approach to Diversity, Equity and Inclusion


The place of women in Icelandic society has come a long way since the first time they called for the `kvennafrí', or Day Off back in 1975. There is still a way to go, however, to the point where another kvennafrí – with Prime Minister Katrín Jakobsdóttir refusing to work - was called this to reassert the pressure. That being said, Iceland is already doing far better than most countries in its efforts to achieve good Diversity, Equity and Inclusion (DEI) numbers.

It is believed, for example, that Iceland is the only country in the world with women running a Venture Capital business, let alone being a 'cheque-writer' in a male-led operation. But Iceland has three such businesses, so the tech sector, and the members of the Reykjavik tech cluster, are already a favourite hunting ground for them.

The women’s perspective in action

As well as tech per se, they are also on the lookout for the emergence of start-ups being headed up by women and fostering marketable ideas that are born of a woman's perspective on what is needed to make life better for everyone. The take up is, for now, slow, but there is a general belief amongst those VCs that that women's perspective will bring forth real fruit. Some is already starting to emerge.

One such is Alda, something of a rarity amongst rarities, in that it is one of the very few companies founded by an all-women team and one of the just 2% of such businesses in the world to have won VC backing. It even has another claim on rarity in having one of the founders, Sigyn Jónsdóttir, works as the Chief Technology Officer. One further rarity is that it is operating in the DEI space that is becoming increasingly important to HR departments across first world countries. Based on a collective experience as consultants to businesses, the realisation came that much of the work was subjective, primarily because there is still a lack of objective data on DEI on which HR departments can judge their own position or, more importantly, measure it.

Jónsdóttir says: 

We're a software company and a production company, but we mainly focus on DEI, providing software for workplaces and organisations to gather their DEI matters to get a complete overview of their data and metrics. We want to advocate for a more diverse tech industry, and being a female CTO is a huge step towards that. There are not too many female CTOs. 

The company started software development just over a year ago and launched its first product two months ago. It is based on the founders’ combined 20 years experience of DEI and AI consulting. That face-to-face experience has now been digitized, which required creating new ways to collect the data and a platform on which to run the AI. Jónsdóttir says: 

It's a lot of fun, and it's also super interesting for me as CTO to be developing a digital product based on something that has already been done as a proof of concept in the consulting. So I know that the metrics work because I've seen them work in the consulting. And I've seen that they are powerful metrics.

This raises then the core question: is there a need for it that can be seen clearly by those business managers outside of women, the LGBTQ community and the differently abled etc? In particular,; is there some data that shows a business is not working as well as it might? Jónsdóttir insists: 

Absolutely, it's not the bottom up; it is really a top down need now.

The key need from a business perspective is the growing competition to attract the right staff, across the board, in every business. As Jónsdóttir observes, there is now a generational shift coming into play as the next cohort comes into play. They want to know what companies are doing to create work environments where everyone thrives (discontentment can spread like a virus), and where the best technologies are to be found to get the best work out of everyone. 

Another factor she points to is the growing level of brand damage that can now be created by scandals about employment conditions. Not only do potential new staff turn away, but potential customers increasingly opt to be not seen as supporting such companies, she argues: 

They cost a lot, a scandal in a company. So companies are actually seeing how much it costs them to not have this in good shape. What we are seeing is businesses would maybe fire the CEO because the stock had gone down. And the stock would stay down, because people know that there's never one person at fault. It's the culture that allows it to happen.

That culture is often driven by biases that are rarely even conscious, but rather hidden and implicit in the way many people think. Alta is now part of the four-year EU-funded project setting out to tackle such biases, with Jónsdóttir leading its contribution. It is using AI to identify and counter deep bias around DEI. She indicated it is too early to pinpoint a specific application that will come out of the project, but the long term goal is to come up with a tool, or tools, that help business managers identify biases in their company cultures and ways in which their impact can be reduced or removed.

 Taking hirees on a journey

Also in the hiring business, though more directly than Alda, is 50 Skills, a five-year old business aimed at helping employers and employees have better control over most if not all of the HR requirements of on-boarding and off-boarding staff, to the point where now the goal is to provide both sides with the tools needed to go on a journey together in a way that fits well with the changing needs of those employees with specialist and in-demand skill sets. 

To this end the company has created a new service product, called Journeys. This is designed to allow businesses far more flexibility in how staff are onboarded and employed, with many options now automated, all in order to improve their work experience. 

According to Árni Gunnsteinsson, the company’s VP of Operations, it gives both sides the opportunity to create whatever kind of employee onboarding and employment environment they want to set up. This could, therefore, make a useful tool for the growing number of businesses that work with skilled and specialist personnel on a per-project basis – the high end of the gig economy selling their skills to several employers - rather than in full-time employment:

I can imagine placing a temporary employee into a company, you would want to get them up and running in that job as fast as possible.  So you could set the milestones that you have to reach for this employee to get up and running, including all the information about the job or project.

Employee on-boarding is already a well-established business sector that is widely used. The increasing complexity of business operations, and the speed at which business operate now make it imperative that staff are in place and fully `joined up’ with the business as soon as possible. The same goes for off-boarding, of course: stories of past employees with still-operational passwords to ex-employer data  can still be heard.

The other side of that is a small coterie of employers now gaining reputations for the way they use off-boarding technologies to get rid of personnel, unwanted after a merger or acquisition, as fast as humanly possible. Gunnsteinsson said this was a market they wanted no part of if at all possible: 

You could set up a process to do that, I guess. But we just launched Journeys a few weeks ago and Its main focus is on creating efficiency in onboarding processes. But we also have cases like where a customer wants to create a unique experience for their own customers.

His example takes the idea of on-boarding out into a new area altogether – the on-boarding by 50 Skills’ customers of their own customers to improve their own experience of that business: 

We have a customer which is selling tickets to shows and musicals. So, a customer goes online and purchases a ticket for something two months down the road. And then they get a text message about the reservation, with a link to a form where they can order pre-show drinks or food. They can also get a video message from one of the actors or performers, perhaps with some special offer they can buy or respond to.

This is moving on-boarding into the area of enhanced user experience as marketing tool, but he sees the same approach being very useful for promoting better internal relations with and between staff, creating journeys that can help keep staff informed and incentivised, both collectively and individually.

A little something for the smaller pharma

Some of those gig economy specialists are likely to work in and around the pharmaceuticals business, maybe even helping to meet the special needs that pharma as a whole, and the medium-sized pharma businesses in particular, have with managing their supply chains - both inbound and outbound. Making this work effectively is the target for Plaio, which has developed a visual planning tool that can not only control supply chains but also schedule work rotas and processes, and provide an integration between different ERPs systems, for those mid-sized pharma companies that buy in bulk for regional distribution.   

According to the company’s VP of Business Development, Olafur Palsson, it is the fundamental nature of the pharma industry that means it requires supply chain management capabilities that are significantly different from other industries. This becomes even more important as developments in new drugs come in at the same time as `Pharma 4’ starts to come into play. Standard supply chain packages need to be customised if they are to meet the needs of life sciences, which makes them expensive, and can take two years or more to get them onboard and working properly. 

That would be OK for the big pharma companies though they tend to have their own specialized services. But the problem is significant for the many mid-sized pharma businesses in Europe and around the world, explains Palsson:

If you're Merck, or J&J or Pfizer, you would go with your own solution because your operations are so complex and so unique. What we do is have a very visually optimised interface solution that's focused on the mid-market pharmaceutical companies. Just within Germany, Switzerland, Sweden and the UK there are some 2,000 of those companies. And for the rest of Europe, they run into thousands more. And then there's the rest of the world. There's nothing really for them, and while `Industry 4.0’ has been called a new industrial revolution, Pharma 4 implementation will more likely resemble an evolution in which digitalization and automation meet very complex product portfolios and cycles.

Palsson is also head of digital transformation for Plaio, so has the job of taking the company, and more importantly its customers, into the digital era. Many of those customers are full manufacturers in their own right so there is now a growing need to fill that wide gap in terms of advanced planning, which is essentially the most critical part of the manufacturing process. The big problem for the customers is that, in 90 to 95% of the cases, this planning work is currently done on spreadsheets:

We saw a solution that could be up and running within a matter of two to three months, out of the box.

From the in-coming demand data, the system can manage planning for the manufacturing, the shop floor, and then all the way through procurement, purchasing raw materials and on through the supply to customers, end to end. It can also be used by virtual pharmaceutical companies, which he estimates currently accounts for some 65% of Plaio’s customers today. They outsource the manufacturing to contract manufacturing organisations, so these customers are also understand the goal is to have them all using the Plaio system to manage both their own and the collective business.

Most of the customers currently concentrate on the bulk manufacture of well-established, generic drugs and the Plaio system fits very well this sector. Palsson is, however, aware that the changes occurring in drug development, and in particular the growth of new, genetics-based offerings that can be tailored to suit a particular patient’s needs, will mean some future development work to allow the delivery end of the supply chain to be tuned to a far finer level of granularity in order to accommodate these developments.  


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