Abolition of Laws Serious Blow to Innovation Skip to content

Abolition of Laws Serious Blow to Innovation

The planned abolition of laws on the deployment of funds acquired by the state through its sale of Landssíminn, the national telephone company, could have serious consequences for a new innovative initiative, Frumtak.

“It came like thunder out of clear skies. We don’t know where we stand now,” Finnbogi Jónsson, managing director of the New Business Venture Fund and chairman of the board of Frumtak, told Morgunbladid.

Frumtak is a collaborative fund between the New Business Venture Fund, the Icelandic pension funds and other investors in innovative companies and starters.

The New Business Venture Fund was supposed to receive a total of ISK 2.5 billion (USD 22 million, 15 million) for the sale of Landssíminn.

ISK 1 billion (USD 9 million, EUR 6 million) was granted to the New Business Venture Fund in 2005 and the remaining amount was supposed to be delivered between 2007 and 2009 to enable the fund to participate in Frumtak.

Only ISK 100 million (USD 867,000, EUR 614,000) of the ISK 1.5 billion (USD 13 million, EUR 9 million) have been received.

“We cannot believe that the government is going to cancel its contribution to innovation in this country. If there ever was need for it, it is now, we sense enormous demand for participation in projects both at the New Business Venture Fund and at Frumtak,” Jónsson said.

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