This is a very rose colored glasses view of Iceland. Having lived there until very recently, it is not a tech utopia by any means. There are very few jobs in tech, and no matter what you do or for how long it's rare to break 1M isk a month (which is about 80,000 - 85,000USD depending on the incredibly volatile currency) due to hostile tax structures. You can make less money developing software than you can fishing, so there's not a lot of draw to stay in the tech industry.
Most of that geothermal energy? Yeah, it's sent to massive aluminum smelting plants. The entire government is also influenced heavily by the fishing industry, and there is a lot of resistance to change.
The article also talks a lot about per capita investment. Considering Iceland has 375,000 people, that's hardly the stat to lead with. ~250,000 of them live in the capital area.
Iceland is a wonderful place, with wonderful people, but the economy is collapsing and the warring 10 parties of government are effectively slap fighting each other instead of changing anything just so they can not be the Independence party. Inflation has been hovering around 8-10% a month for the last year. Iceland's real draw is its natural beauty, and the tourism it inspires. Unfortunately, what used to be a very inexpensive place to visit is now incredibly expensive to fly to, and also expensive to be in. People I know in the tourism industries have said they saw rapid growth post-covid, but rising costs have zeroed out or even made them less profitable than before covid.
It is a place I love, and a people I love, and I will continue to go back and visit yearly. It isn't going to be the next hot tech spot though.
FWIW I've worked in tech here in Iceland for 12 years and this isn't really my experience. The article is a little rose-tinted but it isn't as negative a bbarn makes things seem either. In particular salaries in tech can definitely be higher than they make out and this sector is healthy for the size of the countries population!
The inflation they're experiencing is not a sign of a collapsing economy. It's similar to other European countries right now. Also, 80k USD a year is a ton by European standards, so I'm not sure why you're using that as a point of comparison. Especially considering the employer pays significantly more (which goes to healthcare, pension, etc.) in practice. Iceland has some of the highest salaries in Western Europe.
It’s interesting you say it’s expensive to fly to. We went last year from the US on our way to Poland because it was cheaper to fly to Iceland and then take a Wizz air than to fly through Frankfurt. And I’m talking a 50% savings. It’s cheaper for us to fly to Iceland from the east coast than to fly to Dallas.
I agree that the article has rose-tinted glasses, but your post has (cynic coloured)-tinted glasses. I am replying here not to attack your post but to provide an alternate perspective.
> it's rare to break 1M isk a month (85 kUSD/year)
1M isk enough is very liveable here. If you disagree with this statement, I'm not surprised you left Iceland. Rightly so Icelandic society is undergoing a period of union-based striking in order to improve salaries for lower wage people (most recently teachers). If your motive in life is to maximise salary and pay minimal tax then, yes, Iceland isn't the best place to be.
> Most of that geothermal energy? Yeah, it's sent to massive aluminum smelting plants.
This is oddly snarky and vaguely frames this to be a negative when it is positive (especially for the economy). Roughly 85% of homes in Iceland are heated directly by geothermal energy. This drastically reduces residental electricity use. The economic situation in Iceland would be a lot worse if not for the smelters. Also, if the smelters were not in Iceland they would be elsewhere using electricity with a much higher carbon intensity. The article is wrong also, in that it praises Iceland for renewable energy when it is really just geographically lucky.
> the economy is collapsing
This is a pretty big statement that lacks any sort of support.
> the warring 10 parties of government are effectively slap fighting each other instead of changing anything just so they can not be the Independence party
As far as democracy goes, that sounds healthy to me. I agree that Icelandic politics is largely self-serving and is prone to "big fish in a small pond" mentality, but this is basically as good as democracy gets.
> Inflation has been hovering around 8-10% a month
No, annual inflation is 10%, so monthly inflation is around 0.8%. [1]
> Unfortunately, what used to be a very inexpensive place to visit is now incredibly expensive to fly to, and also expensive to be in
Yet tourism demand is quite good, which is creating a lot of jobs and bringing a lot of money into the country. It is now one of the 3 main pillars of the Icelandic economy (with electricity intensive industry and fishing). Odd that you'd look at this as a negative seeing as you have concerns about the economic health of Iceland.
> It isn't going to be the next hot tech spot though.
Iceland is barely a medium sized US city. Norway has fewer people than Massachusetts. It’s difficult to make any comparison at all between Scandinavian countries and the US in any lens given their lack of immigration and fairly uniform race and culture.
Doesn’t stop a lot of people here from trying, however.
> The article also talks a lot about per capita investment.
Comedian Ari Eldjarn has a really good joke a bout "per capita". It's an economist term, but in Iceland every five year old knows the phrase, because we, as a nation, are very frequently outliers when it comes to per capita, due to the small size of the population it doesn't take much in absolute terms, to skew the average very high or very low.
Also, as an Icelander who escaped to London almost a decade ago, I agree with everything bbarn has said. Most annoying to me was the fact that I could be a top expert in my field, and still only make about 50% above median income (assuming I can even find employment in Iceland doing that work). The bell curve in Iceland is very narrow, with almost no tail. In London I'm getting paid 4-5x what I got in Iceland, with significantly lower cost of living (and no inflation linked mortgage; if you want to be outraged, read about Icelandic mortgages)
I always tell people; Iceland is a great place to live, if you're happy being an average person, who drives an average car, lives in an average house, have an average family, with common hobbies and average ambition. If you dare dreaming bigger than that, you are considered a narcissistic capitalist and nobody likes you.
People are very supportive of start-ups, as long as they're not very successful. Once they start taking off and earning money, people change their tune. Then suddenly it's all "they couldn't possibly have been that successful without corruption", and "they need to pay more taxes"...
---
I remember reading comments on various social networks, where people cheered when my family's hotel business failed. A spate of cancelled bookings after WOW air went bust (people also cheered that), ended up causing cashflow problems and eventually the hotel was shuttered and the property was repossessed. In the end it was sold for more than outstanding debt and every creditor got paid, including the bank. - but oh my god people lost their collective minds about this. "Corrupt capitalist scum getting their comeuppance" was sort of the summary of people's opinions. My dad literally worked himself to death fixing up that hotel and trying to make it successful (he had a sudden heart attack on location in 2017). My mom was left with a ~10 million krona stake in the business along (~80k USD) with her siblings who had a similar stake, but for most of them this was a significant portion of their savings.
Just ordinary people trying to work hard and take a small risk to make something big happen, but people couldn't have that.
I countered a post I found a bit cynical in the comments, but I figured I should also counter the overly rose-tinted substack post, as it lacks some context.
> Iceland is also home to lots of "love refugees," tourists who found love during their trips to Iceland and never left.
The foreign workforce in the tourism industry is probably filled with people like this, so you're likely to get that impression. Most foreign immigrants move here to do all kinds of jobs simply because the salary is better than in their home country. For example, I once met a guy who was a manager at a software company in Poland that moved to Reykjavik to clean because it paid so much better.
It is quite common for IT related work in Iceland to be outsourced to mainland Europe. So while there is venture funding available to create new companies, the actualy labour of software development is outsourced. This to me is a red flag that counters the underlying message of the article.
> Iceland stands as a global leader in renewable energy, with 100% of its electricity grid relying on renewable resources.
Technically 99.9% as some areas require diesel generators. Iceland isn't a "leader". Iceland is geograhically lucky to have a lot of glacial meltwater (hydro) and shallow volcanism (geothermal). The virtue signalling around Iceland's grid is quite on the nose, particularly when it overlooks similarly lucky countries like Costa Rica. As an Icelander in this very field, I would say Ireland is the leader in renewable energy (if interested look up Eirgrid's DS3 project), as they're literally leaders in pushing the key technical limits of grids relative to renewable energy (i.e. inertia).
One broad aspect that is overlooked here is the need for work and residency permits. It is incredibly hard to get either of those as a non-european foreigner. Both because the requirements are highly restrictive and the directorate of immigration does its best to find reasons not to provide permits. The only recent positive change, that some here on HackerNews might find use for, is the long-term remote work visa (https://island.is/en/get-long-term-visa-for-remote-workers).
The dirty secret of all of the Nordics and tech is that there aren't that many jobs and the majority of the work is outsourced to Barcelona where labour is much cheaper.
If there weren't many jobs then why on earth is it so difficult for tech companies to get tech workers? Well, that's a rhetorical question of course, because the truth is that there's plenty of work and tech people can pick and choose. Which is why it's hard for companies to get enough engineers and the like.
Never in my life have I encountered anyone outsourcing anything to Barcelona - that's a first. At one point it was popular to try to outsource boiler-plate work to India, well that didn't last particularly long. You get what you pay for (and in the end you pay more).
I’m in managment of a Norwegian tech company which is part of a larger corporation. There are plenty of tech work in the Oslo region. It’s true that straight up “keeping the power on in the data center” type of work is in many instances handled by offshore resources, we are even using an Icelandic partner for some hosting services. But for developers, architects and technical project managers work is plentiful and pay is much higher than mainland Europe.
Sure, but the benefit to freedom by disconnecting social support services such as healthcare from employment is massive. It’s a tradeoff many seem pleased with.
In Sweden, if you invest in / trade stocks and choose an “ISK” type of account, you pay almost zero tax on your gains (you pay a very low flat tax on the total value of your stocks, and this is quite unsubstantial for most average people who invest/trade)
At least compared to most other European countries, where every profit from stocks is heavily taxed, this is quite wild.
The downside of this ofc is that losses aren’t tax deductible either, and that you still pay the tax even if your stocks lost in value during the year. But still: Your capital gains earned through this scheme are close to be tax-free. If you bought a lot of Nvidia in January and sold it now, you could even withdraw the profit to buy a house or a car - and thereby avoid most of the tax that would come as a consequence of a bigger value of your stock holdings.
Just writing this to point out that there’s more nuance to this “taxes are high in the Nordics” narrative.
Not on capital gains, with schemes available to cap salaries and shift compensation to equity, especially for executives.
So despite the public perception on progressive taxes, in practice the Nordics can be quite attractive compared to European countries which have lower income tax rates but income through equity/stocks are progressively taxed together with income taxes. So they can eat their cake and have it too in a sense, by being more accomodating for the wealthy tax-wise than most of the population realize.
Empirically I haven’t heard of anyone paying lethal doses of taxes, and I’m from Sweden so I should know. But I have heard of people dying from a lack of health insurance, or other preventable causes, but that’s in a different country..
But I get a lot of value from those taxes. To name a few:
- Education.
- Daycare/kindergarten.
- Healthcare.
- Public transportation.
- Libraries and museums.
"Taxed to death" - where does that come from? How? I'm relatively high taxed, compared to many, I pay a bit more than 40%. But what I'm left with is disposable money, except for car and house insurance (reasonably priced). Plenty left for my wife and myself, for doing everything we want, to travel, and still add to our savings. The only economic burden I can think of is unexpected visits to the dentist - that can cost you.
I'll take this system before absolutely any alternative.
I'd say California comes quite close. People in the US pay taxes too. And depending on which state you are in it can actually add up to a lot.
The advantage of the Nordic system is that it is brutally simple. You pay your taxes and there isn't a whole lot of room to change anything about that.
I lived in Sweden and Finland for a while. It's nice. Everything is taken care off. There is no drama around anything. You get sick you go the doctor. You get old, you are taken care off. Etc. When I moved from Finland to Germany as part of an international transfer in the same company, the company chose to raise my salary to compensate me for the raised tax burden ... in Germany.
Reason: the Finnish tax system is actually pretty alright. After you pay your insurances and taxes, which is pretty much just kept from your salary, that's pretty much it. The VAT is high as well. But there's very little else to take care off beyond things like your rent.
The German tax system on the other hand is death by a thousand cuts. A little tax here, a little insurance there, etc. None of it optional. Once you add it all up, it's quite a lot. So they compensated me. Of course cost of living is a lot lower so it was a quite nice raise for me. California is more like Germany than like Finland. But once you add it all up, you are paying a lot to a lot of different things.
It can also be an advantage. You are only taxed on profits so it's only a disadvantage for those who are in a business for the money. I would assume that this leads to better business relations with better opportunities because greedy people will leave.
1984.is are good for that (have self service). There used to be Greencloud but they got merged into a bigger co and disappeared. Advania sells large capacity and has no self service as far as I know
[+] [-] bbarn|2 years ago|reply
Most of that geothermal energy? Yeah, it's sent to massive aluminum smelting plants. The entire government is also influenced heavily by the fishing industry, and there is a lot of resistance to change.
The article also talks a lot about per capita investment. Considering Iceland has 375,000 people, that's hardly the stat to lead with. ~250,000 of them live in the capital area.
Iceland is a wonderful place, with wonderful people, but the economy is collapsing and the warring 10 parties of government are effectively slap fighting each other instead of changing anything just so they can not be the Independence party. Inflation has been hovering around 8-10% a month for the last year. Iceland's real draw is its natural beauty, and the tourism it inspires. Unfortunately, what used to be a very inexpensive place to visit is now incredibly expensive to fly to, and also expensive to be in. People I know in the tourism industries have said they saw rapid growth post-covid, but rising costs have zeroed out or even made them less profitable than before covid.
It is a place I love, and a people I love, and I will continue to go back and visit yearly. It isn't going to be the next hot tech spot though.
[+] [-] meheleventyone|2 years ago|reply
[+] [-] paddim8|2 years ago|reply
[+] [-] jsnell|2 years ago|reply
I assume there must be an order of magnitude mistake somewhere here, either in the currency conversion or in the timeframe.
> Inflation has been hovering around 8-10% a month
Likewise I don't believe this for moment. It'd mean an annual inflation of about 300%.
[+] [-] simonebrunozzi|2 years ago|reply
Actually, about 1/12th of that. You meant 8-10% a year. [0]
[0]: https://tradingeconomics.com/iceland/inflation-cpi
[+] [-] culopatin|2 years ago|reply
[+] [-] probablypower|2 years ago|reply
> it's rare to break 1M isk a month (85 kUSD/year)
1M isk enough is very liveable here. If you disagree with this statement, I'm not surprised you left Iceland. Rightly so Icelandic society is undergoing a period of union-based striking in order to improve salaries for lower wage people (most recently teachers). If your motive in life is to maximise salary and pay minimal tax then, yes, Iceland isn't the best place to be.
> Most of that geothermal energy? Yeah, it's sent to massive aluminum smelting plants.
This is oddly snarky and vaguely frames this to be a negative when it is positive (especially for the economy). Roughly 85% of homes in Iceland are heated directly by geothermal energy. This drastically reduces residental electricity use. The economic situation in Iceland would be a lot worse if not for the smelters. Also, if the smelters were not in Iceland they would be elsewhere using electricity with a much higher carbon intensity. The article is wrong also, in that it praises Iceland for renewable energy when it is really just geographically lucky.
> the economy is collapsing
This is a pretty big statement that lacks any sort of support.
> the warring 10 parties of government are effectively slap fighting each other instead of changing anything just so they can not be the Independence party
As far as democracy goes, that sounds healthy to me. I agree that Icelandic politics is largely self-serving and is prone to "big fish in a small pond" mentality, but this is basically as good as democracy gets.
> Inflation has been hovering around 8-10% a month
No, annual inflation is 10%, so monthly inflation is around 0.8%. [1]
> Unfortunately, what used to be a very inexpensive place to visit is now incredibly expensive to fly to, and also expensive to be in
Yet tourism demand is quite good, which is creating a lot of jobs and bringing a lot of money into the country. It is now one of the 3 main pillars of the Icelandic economy (with electricity intensive industry and fishing). Odd that you'd look at this as a negative seeing as you have concerns about the economic health of Iceland.
> It isn't going to be the next hot tech spot though.
I agree.
1 - https://www.sedlabanki.is/annad-efni/verdbolga/
[+] [-] monero-xmr|2 years ago|reply
Doesn’t stop a lot of people here from trying, however.
[+] [-] progbits|2 years ago|reply
Some people happen to prefer taxes and governments that provide value to its citizens.
https://www.icelandreview.com/culture/manoftheyear/
[+] [-] unknown|2 years ago|reply
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[+] [-] yownie|2 years ago|reply
Energy production is majority from Hydroelectric, home heating uses geothermal.
They don't pay very much for their use however, that's true.
[+] [-] valdiorn|2 years ago|reply
Comedian Ari Eldjarn has a really good joke a bout "per capita". It's an economist term, but in Iceland every five year old knows the phrase, because we, as a nation, are very frequently outliers when it comes to per capita, due to the small size of the population it doesn't take much in absolute terms, to skew the average very high or very low.
Also, as an Icelander who escaped to London almost a decade ago, I agree with everything bbarn has said. Most annoying to me was the fact that I could be a top expert in my field, and still only make about 50% above median income (assuming I can even find employment in Iceland doing that work). The bell curve in Iceland is very narrow, with almost no tail. In London I'm getting paid 4-5x what I got in Iceland, with significantly lower cost of living (and no inflation linked mortgage; if you want to be outraged, read about Icelandic mortgages)
I always tell people; Iceland is a great place to live, if you're happy being an average person, who drives an average car, lives in an average house, have an average family, with common hobbies and average ambition. If you dare dreaming bigger than that, you are considered a narcissistic capitalist and nobody likes you.
People are very supportive of start-ups, as long as they're not very successful. Once they start taking off and earning money, people change their tune. Then suddenly it's all "they couldn't possibly have been that successful without corruption", and "they need to pay more taxes"...
---
I remember reading comments on various social networks, where people cheered when my family's hotel business failed. A spate of cancelled bookings after WOW air went bust (people also cheered that), ended up causing cashflow problems and eventually the hotel was shuttered and the property was repossessed. In the end it was sold for more than outstanding debt and every creditor got paid, including the bank. - but oh my god people lost their collective minds about this. "Corrupt capitalist scum getting their comeuppance" was sort of the summary of people's opinions. My dad literally worked himself to death fixing up that hotel and trying to make it successful (he had a sudden heart attack on location in 2017). My mom was left with a ~10 million krona stake in the business along (~80k USD) with her siblings who had a similar stake, but for most of them this was a significant portion of their savings.
Just ordinary people trying to work hard and take a small risk to make something big happen, but people couldn't have that.
[+] [-] probablypower|2 years ago|reply
> Iceland is also home to lots of "love refugees," tourists who found love during their trips to Iceland and never left.
The foreign workforce in the tourism industry is probably filled with people like this, so you're likely to get that impression. Most foreign immigrants move here to do all kinds of jobs simply because the salary is better than in their home country. For example, I once met a guy who was a manager at a software company in Poland that moved to Reykjavik to clean because it paid so much better.
It is quite common for IT related work in Iceland to be outsourced to mainland Europe. So while there is venture funding available to create new companies, the actualy labour of software development is outsourced. This to me is a red flag that counters the underlying message of the article.
> Iceland stands as a global leader in renewable energy, with 100% of its electricity grid relying on renewable resources.
Technically 99.9% as some areas require diesel generators. Iceland isn't a "leader". Iceland is geograhically lucky to have a lot of glacial meltwater (hydro) and shallow volcanism (geothermal). The virtue signalling around Iceland's grid is quite on the nose, particularly when it overlooks similarly lucky countries like Costa Rica. As an Icelander in this very field, I would say Ireland is the leader in renewable energy (if interested look up Eirgrid's DS3 project), as they're literally leaders in pushing the key technical limits of grids relative to renewable energy (i.e. inertia).
One broad aspect that is overlooked here is the need for work and residency permits. It is incredibly hard to get either of those as a non-european foreigner. Both because the requirements are highly restrictive and the directorate of immigration does its best to find reasons not to provide permits. The only recent positive change, that some here on HackerNews might find use for, is the long-term remote work visa (https://island.is/en/get-long-term-visa-for-remote-workers).
[+] [-] guerilla_prgrmr|2 years ago|reply
[+] [-] busterarm|2 years ago|reply
[+] [-] Tor3|2 years ago|reply
[+] [-] yokoprime|2 years ago|reply
[+] [-] gumballindie|2 years ago|reply
[+] [-] buildbot|2 years ago|reply
[+] [-] TehCorwiz|2 years ago|reply
https://taxsummaries.pwc.com/iceland/individual/taxes-on-per...
And according to Wikipedia Iceland has a lower marginal tax rate than the US.
https://en.m.wikipedia.org/wiki/List_of_countries_by_tax_rat...
[+] [-] imartin2k|2 years ago|reply
At least compared to most other European countries, where every profit from stocks is heavily taxed, this is quite wild.
The downside of this ofc is that losses aren’t tax deductible either, and that you still pay the tax even if your stocks lost in value during the year. But still: Your capital gains earned through this scheme are close to be tax-free. If you bought a lot of Nvidia in January and sold it now, you could even withdraw the profit to buy a house or a car - and thereby avoid most of the tax that would come as a consequence of a bigger value of your stock holdings.
Just writing this to point out that there’s more nuance to this “taxes are high in the Nordics” narrative.
[+] [-] 3np|2 years ago|reply
So despite the public perception on progressive taxes, in practice the Nordics can be quite attractive compared to European countries which have lower income tax rates but income through equity/stocks are progressively taxed together with income taxes. So they can eat their cake and have it too in a sense, by being more accomodating for the wealthy tax-wise than most of the population realize.
[+] [-] klabb3|2 years ago|reply
[+] [-] ksimukka|2 years ago|reply
[+] [-] mataug|2 years ago|reply
[+] [-] tpmx|2 years ago|reply
This allows you to even out high income periods with low income periods, thus avoiding the high margin tax on income.
[+] [-] Tor3|2 years ago|reply
[+] [-] neuronexmachina|2 years ago|reply
[+] [-] busterarm|2 years ago|reply
[+] [-] jillesvangurp|2 years ago|reply
The advantage of the Nordic system is that it is brutally simple. You pay your taxes and there isn't a whole lot of room to change anything about that.
I lived in Sweden and Finland for a while. It's nice. Everything is taken care off. There is no drama around anything. You get sick you go the doctor. You get old, you are taken care off. Etc. When I moved from Finland to Germany as part of an international transfer in the same company, the company chose to raise my salary to compensate me for the raised tax burden ... in Germany.
Reason: the Finnish tax system is actually pretty alright. After you pay your insurances and taxes, which is pretty much just kept from your salary, that's pretty much it. The VAT is high as well. But there's very little else to take care off beyond things like your rent.
The German tax system on the other hand is death by a thousand cuts. A little tax here, a little insurance there, etc. None of it optional. Once you add it all up, it's quite a lot. So they compensated me. Of course cost of living is a lot lower so it was a quite nice raise for me. California is more like Germany than like Finland. But once you add it all up, you are paying a lot to a lot of different things.
[+] [-] unknown|2 years ago|reply
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