Iceland: the virtue of mavericks

On the weekend of October 20, I accompanied my Polish business partner, Professor Jan Lubinski, on a visit to Reykjavik. For an European country, Iceland is quite remote. It takes full three hours of light from London, Amsterdam or Paris to reach Reykjavik. Yet, once one has landed, remoteness disappears and one quickly finds familiar references: faces, architecture, street signs, even landscape - nothing appears exotic or strange: Scandinavian affinity is unmistakeable and widespread: general sense of courtesy, solidity and efficiency.
Remote, Iceland is also small: 300 000 people on a territory, which is five times smaller than France. Yet, it is remarkably prosperous, with an estimated GDP per capita of close to 30 000 euros (higher than Sweden, Finland, France and UK and comparable to Denmark). Together with Luxembourg, and to a lesser extent with Baltic countries, Iceland demonstrates that the small is very efficient economically (and also quite equitable, with low disparity of incomes). In case of Luxembourg, its prosperity can be, at least in part, explained by its central location in the heart of Europe. This obviously does not apply to Iceland. One may consider the abundant geo-thermal energy as a contributing factor. Nevertheless, the success of Luxembourg (which boasts the highest GDP per capita in the world) and of Iceland cannot be explained by their geography or resource endowment alone.  The key to their success is the astute mix of management and governance, which combines a deeply engrained tradition of political democracy (Iceland has the oldest legislative assembly in the world, set up in 930) and the ability to seize economic opportunities. Thus, Iceland took advantage of its abundant and cheap electricity to attract aluminium producers and thus diversify its exports. It is not surprising that Roman Abramowitch, in his capacity as a Governor of remote Russian region of Chukotka, was visiting Iceland the same weekend we were (Unfortunately we did not meet).
Despite the small size of their country, Iceland and Icelanders have a strong maverick even wilful streak. They have joined Schengen Agreement on free movement of people but not the European Union. They refuse the jurisdiction of International Court of Justice. They also launched three Cod Wars against United Kingdom. The result of the last one, which finished in 1976, was the de facto establishment of 200 miles exclusive fishing zone for Iceland. What tilted the balance in Iceland’s favour was not the size of its fleet but a threat to close a strategic NATO base at Keflavik.
Iceland has recently demonstrated again its headstrong character, when it authorised whale hunting. I was told that the owner of the whale hunting fleet kept it in tip-top shape for the last fourteen years.
The business that invited us to Reykjavik is another example of the country’s inventiveness and willingness to take risk. We spent two days with Decode, one of biotechnology legendary firms, which set up a genetic database of Icelandic population and used this information to develop drugs for common disease. The main market of DeCode is in the United States, where DeCode is listed on NASDAQ  (DCGN), but its main research infrastructure and state-of-the-art genotyping facilities are based in Reykjavik. Its founder, Kari Stefansson, left Harvard to launch DeCode and was able to attract high-quality staff. DeCode’s success is far from assured but it is a bold bet. In any case, it gave us, as founders of Read-Gene, strong incentives to persevere.