Atlas Copco is part of the “Wallenberg Ecosystem”, set up to push scientific boundaries. The dividends we generate contribute to a flow where billions of SEK are granted to research and education, resulting in new insights for the benefit of people, industrial development and for the betterment of Sweden. In this interview, Peter Wallenberg Jr explains how it all works.
Since Atlas Copco was first founded in the early 1870s, our development has been tightly linked to the Wallenberg family. André Oscar Wallenberg was one of our founding fathers, and the family foundations remain our largest shareholder through their holding in Investor AB.
The Wallenberg family holds a prominent place in Swedish business and industrial development since the establishment of the country’s first private branch bank in 1856. The bank supported companies emerging during the first and second industrial revolutions – many of them becoming global industry leaders in their respective fields. By making long-term investments in these companies and then granting a majority of the dividends to research and education, an ecosystem of innovation was created, built to last for generations. This system, and the successes of each company contributing to it, now enables annual research and education grants of around SEK 2.4 billion (2020).
The system is based on a group of private, non-profit foundations that are sole owners of the holding company FAM and majority owner of the industrial holding company Investor AB, who in turn are lead shareholders of many successful companies. The oldest and largest foundation is the Knut and Alice Wallenberg Foundation, KAW, established in 1917. It is one of the largest private funders of scientific research in Europe and primarily supports research in medicine, technology and the natural sciences. We asked Peter Wallenberg Jr, Chair of KAW, Member of Atlas Copco’s Board of Directors, and one of the senior representatives of the fifth generation of the Wallenberg family, to explain Atlas Copco's role in this ecosystem and the greater value it brings.
Our Foundation’s stated purpose is to benefit Sweden by supporting basic scientific research and education. Although slightly changed in the 1920s, the direction was established already by Knut and Alice Wallenberg, who were very engaged in public development and in promoting Swedish science, trade and industry. To ensure their work could continue over time they set up a foundation that would manage the funds and hand out the grants. Over time, additional foundations have been added by, or in honor of, other family members, all in the same spirit but focused on different fields.
Today, “betterment of Sweden” (landsgagneligt in Swedish) is not restricted to geographical borders. On the contrary. The research we fund, albeit at Swedish universities, will in many cases benefit the entire world, and the science teams often consist of experts from many different countries. The results are openly shared and can be used as steppingstones for future scientific breakthroughs. We want to help Swedish companies and science institutions get a head start, but it’s really about global collaboration for the greater good.
It is based on the performance of the companies in the foundations’ investment portfolios, Atlas Copco being one of them. The higher dividends they generate, the more money goes back to the foundations, and the more goes into R&D that drives scientific development for decades to come. All parts of the system depend on each other. The foundations grant 80 percent of their received dividends and reinvest 20 percent in the existing or new holdings.
On the contrary, I would say that they are all very good at being different. What unites them is that they have the courage to follow their inner passion, and they do it with persistence. Needless to say, they are also extremely bright and talented.
We want to enable these researchers to explore pet projects they otherwise would have a hard time funding. When gifted people are allowed to follow their true passion, real breakthroughs can happen. We work together with the universities to find and promote excellent researchers with unique viewpoints and ideas. We give researchers the freedom to pursue some pretty mind-boggling projects.
Increased diversity is an important aspect of this. We have a special program to support young researchers, work to increase the number of women in natural sciences, and we fund projects enabling highly educated international researchers to pursue a career in their expert fields. The university world is often based on hierarchies and established power structures. We try to rock that world a bit to ensure a continuous flow of fresh perspectives to bring out the best ideas.
As for KAW, the largest foundation, the application always comes from the individual researchers, but their university have to nominate the candidate. We then ask a team of experts to review it to ensure the project is thought through and of high potential. The most interesting applications are then sent for peer review by several leading international experts. A basic requirement is that the research should be excellent and unique. We don’t premiere “more of the same.”
There are so many, but if I must pick a few I would highlight the recently launched SEK 3.7 billion investment in data-driven life science. When combined with innovations in data processing and artificial intelligence, this research field will impact all fields in medicine and natural sciences. This is particularly important to ensure a better preparedness against future pandemics. Related to that, we have also granted in total SEK 180 million for Covid-19 related initiatives this year.
Another example is the so-called Wallenberg AI, Autonomous Systems and Software Program, WASP, which Atlas Copco is part of. When this kicked off in 2015, Sweden was falling behind in these areas. By bringing academia and industry together in this program, things have moved forward fast and Sweden is now one of the leading nations, attracting international experts who want to be part of this development. This proves that collaboration always is the most efficient way.
Personally, I am also very fascinated by the work done at the Wallenberg Wood Science Center that explores how to develop new materials from trees. This is a highly advanced field and the research covers nanocellulose and nanostructured wood fibers, for example.
The ongoing industrial revolution is of course a game-changer that brings obvious opportunities for tech-savvy and innovation-driven companies like Atlas Copco. But it’s not only about digitizing products and solutions or implementing new technology. This development will have a profound impact on people, and people are without a doubt a company’s most valuable asset.
Companies will have to reshape the way they work, reskill their teams and make sure people are on board. This will bring about a behavioral change affecting all of us, including your customers. Atlas Copco is very good at incorporating acquired companies, and that skill can be applied to this as well. Change management will be key.
Not specifically, but as it turns out a large number of the projects we support have a direct impact on sustainability areas. This only shows that sustainability is incorporated in all aspects of society today and not a separate issue. In the same way, successful companies take sustainability into account in everything they do. Atlas Copco has always been good at constantly improving, not least driven by customer requirements, and I see sustainability as a natural part of this.
About a year ago, I was invited to an open house activity at the Atlas Copco headquarters in Sickla, where teams from different parts of the Group showcased some of their most innovative R&D projects. The solutions and the turnout was just incredible. This kind of culture, where employees on all levels are allowed to explore ideas even if they are a bit “off the charts” and not linked to existing product portfolios, is extremely valuable and something I would like to see in many other companies. It’s also much more fun to work like that, and this makes you more attractive as an employer.
Atlas Copco is in many ways a classic, traditional engineering company, but the key to your success is your ability to keep up with the times and continuously develop what you do and how you do it. A current example is the move from diesel to electric. Since I visit different parts of the organization, I know that this is the case wherever you go. It is a profound part of who you are.
As all large organizations you are struggling with speed, and that challenge will only grow with the technology revolution mentioned earlier. Linked to this, I would say that it’s very important that you establish alternative career paths to provide a steady inflow of new perspectives. If years of employment or certain job titles are basic requirements for senior positions you automatically exclude talents who joined later in life or chose to follow different career paths. Also, younger generations expect to move forward fast and they are not likely to stay in the company if they first have to put in 20 years before being considered for higher positions. Hiring and promotion processes could be more flexible and offer multiple ways to develop the individual. This will also help you increase the level of diversity.
The most fun part of this job is when I get the chance to visit all the smart and passionate researchers, to hear their thoughts and learn about what they have found so far. Being able to support them in their quest for innovation is extremely inspiring and rewarding. From the foundations’ perspective, it’s about unlocking the potential of tomorrow. My wish would be that the entire world unites in respecting and understanding the long-term value of research. Joint development is the best way forward.