About Nesta

Nesta is an innovation foundation. For us, innovation means turning bold ideas into reality and changing lives for the better. We use our expertise, skills and funding in areas where there are big challenges facing society.

Use case: testbeds in Sweden – a national strategy responding to multiple challenges

  • Geography: Sweden
  • Facilitators: The Swedish Government, The Innovation Agency Vinnova
  • Timeframe: 2016–ongoing

The national strategy ‘Testbed Sweden’ was set up to provide a common framework across Sweden, coordinating the many existing test and demonstration facilities across the country. Some of its aims include to: coordinate existing testbeds better and establish new facilities that can solve challenges for society; engage and facilitate opportunities for small and medium-sized enterprises (SMEs) to test their products and processes in a real-world environment, despite lack of resources; and narrow the ‘valley of death’[1] for firms, caused by the lack of risk capital and decrease in business research and development investments (as a percentage of GDP).

Key success factors and lessons

  • A coordinated network of testbeds can contribute to solving complex challenges: Countries across the globe are likely to already have a range of testbeds operating individually. Coordinating them into networks, both nationally and internationally is, according to the Swedes, necessary to solve the many complex challenges facing modern society. The Swedish National Testbed Strategy aims to facilitate better coordination between the many individual testbeds operating across the country. Having them operate as an integrated system is meant to enhance the quality of each testbed, increase the number of innovators using the testbeds, and improve Sweden’s opportunity to market the country with an ‘innovation supply-chain’. They are also looking to integrate them into a European system of testbeds.
  • Public investment in testbeds can contribute to closing the funding gap for innovative firms: Testbed Sweden is partly developed to close the widening ‘valley of death’ for firms. As the picture above depicts, the theory states that public funding and coordinating testbeds will incentivise firms to bring their ideas and technical opportunities closer to successful commercialisation. This progress then incentivises private capital investment when the technologies are more mature, narrowing the valley where many innovators struggle.
  • Engaging SMEs in testbeds is challenging: A challenge of many testbeds in Sweden has been to support SMEs to participate. They often struggle with resources to be able to test their technologies and commercialise their innovations or access testbeds if they are not customised. Some testbeds are providing access to expertise and wider mentoring and business development advice, although they are still rare.
  • Testbeds are a critical part of the innovation and commercialisation process: The Swedish Government is convinced that investing in testbeds supports economic growth of the country by being open and providing the right environment for investors. It is recognised as an integral part of the innovation system, allowing innovators to advance their solutions in a secure environment. An evaluation of testbeds within health and social care has shown that several tested innovations have gone on to implementation, while others have been identified as less mature. Interviewers also claimed that testbeds contributed to better coordination of private and public stakeholders, one of the key aims of the strategy.

[1] The ‘valley of death’ is a common term with innovators, referring to the difficulty of covering the negative cash flow in the early stages of a start-up, before their new product or service is bringing in revenue from real customers.