Software development is Iceland’s fastest growing industry. Innovative software design is in many ways an ideal high-tech industry for Iceland, because of its low start-up costs and a resource base of highly trained professionals.36 The country is aggressively pursuing additional investment dollars in its software industry (which is exemplified by the many ads found on Icelandic websites) and it is sometimes referred to as the “Digital Island”.
 

Software Expertise

Computer professionals in Iceland can muster in-depth knowledge of a wide range of programming languages (Fortran, Cobol, PL/I, RPG, Natural, SQL, Pascal, C, C++, Java, Assembly, Visual Basic) and database systems (Oracle, Adabas, Informix, dBase, Access, Silicon Graphics), as well as advanced design and development techniques. A wide range of hardware is in use, along with the knowledge of appropriate operating systems and systems software. Icelanders are accustomed to working with international standards. Applications are not only PC-based but frequently integrated into chips for dedicated industrial use and process control systems. 

Icelandic software designers have specialist know-how and long practical experience in fields including food processing and fisheries, multimedia, Internet applications, electronic commerce, real-time telecommunications systems for aviation and transport, medical software, and general office and database systems.20

The Internet has been embraced by Icelandic software companies. Practical solutions have been developed and exported, including complex database publications on the Internet, 3D VRML browsers with 3D Sound environments, site management systems and e-mail gateways. 
 

Software companies

Many companies operate their own information technology (IT) department, ranging in size from several dozen people down to one or two workers. Departments of such small size are often specialized in one particular hardware/software. 

There are also independent software houses providing solutions and services to Icelandic companies, as well as markets abroad. Expertise within the firms frequently covers a wide range of hardware, software and application areas. A number of software companies have attained certification to ISO 9001 and TickIT standards for their products and others are working towards it. To meet the demands of a small, yet sophisticated society, software firms have worked on all types of designs. Solutions have been sold to various countries, some have been established worldwide. Exports cover such diverse fields as graphical user interfaces, object fax, virus detection, X.25 PAD communications, accountancy packages, governmental administration and record management. 

The impressive list of customers includes Citibank, Kodak, Volvo, Ford Motor Company, Visa International, Schenkers, BP, and Southwestern Bell Telephone. Icelandic software companies have worked with computing multinationals such as Unisys, Microsoft, Navision and IBM to produce add-on solutions for the global market. 
 

Furthermore, Icelandic firms have been engaged in development work with companies like Hughes, CAE, Harris and Marconi and have produced customized solutions for international organizations such as ICAO and NATO. One of the country's most dynamic sectors is in electronics applications, especially for the fishing industry, although increasingly extended to other fields. Programming is a major part of this activity, both of chips and control software as well as bar-coding systems. Some of the designs are one-of-a-kind, for example computer vision applications using digitized data gained by video scanning of food. In recent years, weighing systems, inventory management, temperature recording and control, detection and counting, time registration and auction bidding have become important export items. International distribution shows that these software exports are not confined to any single region, but are delivered across the world.

Software Investment opportunities 

Many software houses welcome the possibility of co-operation with foreign companies, through partnerships, joint ventures or capital input into projects for wider distribution. 

As the home market is limited, designers are increasingly exploring the possibilities of exporting their software products and expertise. The small size of Icelandic companies, coupled with their wide range of skills and experience, gives them a flexibility ideally suited for creation of large-scale total solutions. 

The country's location makes it ideal for tele networking, with excellent connections to Europe and the US through fiber-optic cable and satellite. Iceland is on Greenwich Mean Time, which means that the time difference with the US makes it an advantageous location for North American companies to set up software divisions for maintenance of their networks outside peak hours.13