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Online Extra: Skype Is "What Evolution Is All About"


Q: What it is about the Internet, technologically or culturally, that has made possible the emergence of technologies as disruptive as VOIP?

A: The Internet is simply a network built to take a packet of data from one place to another. There are no services on the Internet itself: It's just a carrier of data. And it's completely open, which means you're allowing anyone in the world to innovate new services and applications. There are no barriers, because you don't have to manufacture big machines or switches. And you can innovate anywhere in the world -- in India, Estonia, the U.S., or France -- and you just upload the application to a Web server, and it's available worldwide. It's the perfect open and free market, without trade barriers.

The great thing about the Internet is that it allows for open innovation. The speed of innovation is growing exponentially. What we've seen in the last five years is the same level of innovation we saw in maybe 20 to 50 years before that. It's possible because of the aggregation of technology and interconnected networks. So, the Internet is, in some senses, the fundamental infrastructure for speeding innovation.

Q: What about innovation in Europe? There's a huge amount of technical talent here, and Europe has produced lots of world-changing inventions. But there are negatives: The level of financial support for R&D by governments and corporations is low. So what are the advantages and disadvantages for you of being based in Europe?

A: The advantage of being in Europe is that you're in neither of the huge markets. You're not in the U.S., which is very large and homogeneous. It's such a big market. If you make it in Sweden, that doesn't mean you'll make it in France. They have very different cultures and languages, and different ways of selling things. Europe is very fragmented. It's a fiction that the European Union has created a single market.

Q: That affects entrepreneurs in good ways and bad. It means they have small domestic markets, but they also have to learn how to be global sooner than American companies, which can grow up completely in a single domestic market.

A: Take somebody like me, from a small country like Sweden with 9.5 million inhabitants. It could be an interesting market for some kinds of businesses, but not for the kind I'm doing. So you're forced to look outside your home country. People learn foreign languages early and know they have to do business elsewhere. There are a lot of very successful Swedish multinationals that have figured that out, like Ikea, H&M, Volvo, Ericsson.

American companies don't have to look outside. That's the advantage of Europe -- most of all for people in the smaller countries like Sweden or the Netherlands.

The disadvantage is that the environment in Europe is very bad for entrepreneurs to create businesses. There's too much regulation, too many taxes. And I think people in Europe are far less entrepreneurial than people in the U.S. or China.

Q: People say that the nature of innovation itself is changing, especially for big corporations. Things are getting so complex and expensive that many companies can't afford to go it alone. Could this prove to be an asset for Europe, given its long experience in collaborative ventures?

A: The world is getting more complex, and with the speed of innovation you cannot do everything. In the old days, when we had poorer communication and access to information, big corporations had advantages because they could do everything in-house. Now, it's so easy to get information that you don't need to be big anymore. You could even say that today, being big is a disadvantage. It's no longer the big that beat the small. It's the fast that beat the slow. And big companies tend to be slower.

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