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Reykjavik, the capital of Iceland, is a charming and spirited city known for landmarks like the Hallgrímskirkja church and the Harpa concert hall. With a population of over 130,000 people speaking primarily Icelandic, it is a thriving cultural hub and a blend of traditional Nordic roots and modern innovation.
Reykjavík, is the capital and largest city of Iceland, a small island -country located in the North Atlantic Ocean.
The city of Reykjavík is mostly located on the Seltjarnarnes peninsula, at the southeastern corner of Faxa Bay, in southwestern Iceland. The area coastline is characterized by peninsulas, coves, straits, and islands. Reykjavík is a spread-out city: most of its urban area consists of low-density suburbs, and houses are usually widely spaced
Reykjavík is believed to be the location of the first permanent settlement in Iceland, which, according to Landnámabók, was established by Ingólfr Arnarson in AD 874.
Until the 19th century, there was no urban development in the city location. The city was founded in 1785 as an official trading town and grew steadily over the following decades, It is among the cleanest, greenest, and safest cities in the world.
Reykjavík has a subpolar oceanic climate closely bordering on a continental subarctic climate, At 64° north, Reykjavik is characterized by extremes of day and night length over the course of the year.
Iceland is a representative democracy and a parliamentary republic. The modern parliament, Alþingi (Althing), was founded in 1845 as an advisory body to the Danish monarch. It currently has 63 members, elected for a maximum period of four years.
The head of government is the prime minister who resides in Reykjavik and together with the cabinet, is responsible for executive government.
The president, in contrast, is elected by popular vote for a term of four years. Its functions are diplomatic and may veto laws voted by the parliament. The elections for president, the Althing, and local municipal councils are all held separately every four years.
The cabinet is appointed by the president after a general election to the Althing; however, the appointment is usually negotiated by the leaders of the political parties, who decide among themselves which parties can form the cabinet and how to distribute its seats, Only when the party leaders are unable to reach a conclusion by themselves within a reasonable time, the president exercise its power to appoint the cabinet personally.
Iceland is divided into regions, constituencies and municipalities
The Reykjavík City Council governs the city of Reykjavík and is directly elected by those aged over 18 domiciled in the city. The council has 23 members who are elected using the open list method for four-year terms.
The council selects members of boards, and each board controls a different field under the city council's authority. The most important board is the City Board that wields the executive rights along with the City Mayor.
The economy of Iceland is small and subject to high volatility. It has been diversified into manufacturing and service industries in the last decade, particularly within the fields of tourism, software production, and biotechnology. Abundant geothermal and hydropower sources have attracted substantial foreign investment in the aluminum sector, boosted economic growth, and sparked some interest from high-tech firms looking to establish data centers using cheap green energy.
Tourism, aluminum smelting, and fishing are the pillars of the economy. For decades the Icelandic economy depended heavily on fisheries, but tourism has now surpassed fishing and aluminum as Iceland’s main export industry. Tourism accounted for 8.6% of Iceland’s GDP in 2016, and 39% of total exports of merchandise and services. Since 2010, the number of tourists visiting Iceland increased by nearly 400%.
Following the privatization of the banking sector in the early 2000s, domestic banks expanded aggressively in foreign markets, and consumers and businesses borrowed heavily in foreign currencies. Worsening global financial conditions throughout 2008 resulted in a sharp depreciation of the krona vis-a-vis other major currencies. Iceland's three largest banks collapsed in late 2008. Three new banks were established to take over the domestic assets of the collapsed banks. Two of them have majority ownership by the state, which intends to re-privatize them.
Since the collapse of Iceland's financial sector, government economic priorities have included stabilizing the krona, implementing capital controls, reducing Iceland's high budget deficit, containing inflation, addressing high household debt, restructuring the financial sector, and diversifying the economy.
Having come through the crisis a decade ago, Iceland is now enjoying an economic revival, with technology, renewable energy and tourism replacing the unsustainable boom in banking. The employment rate is the highest in the world.
Reykjavik combines a capitalist structure and free-market principles with an extensive welfare system. The city has been at the centre of Iceland's economic growth and subsequent economic contraction over the 2000s, a period referred to in foreign media as the "Nordic Tiger" years or "Iceland's Boom Years." Except for a brief period during the 2008 crisis, Iceland has in recent years achieved high growth, low unemployment, and a remarkably even distribution of income. The economic boom led to a sharp increase in construction, with large redevelopment projects such as Harpa concert hall and conference centre and others. Borgartún is the financial centre of Reykjavík, hosting a large number of companies and three investment banks.
The Icelandic infrastructure for telecommunications networks and services is highly advanced, and unique for such a small nation. All population centres in Iceland have access to high-speed fibre-optic cable services and over 90% of Iceland’s population has access to the Internet, either at home or work, if not both.
Reykjavík is not severely affected by congestion although per capita car ownership in Iceland is among the highest in the world at roughly 522 vehicles per 1,000 residents.
Several multi-lane highways run between the most heavily populated areas and most frequently driven routes.
Public transportation consists of a bus system called Strætó bs. Route 1 that connects the city to the rest of Iceland.
Reykjavík Airport, the second largest airport in the country (after Keflavík International Airport), is positioned inside the city. It is mainly used for domestic flights.
Reykjavík has two seaports, the old harbour near the city centre which is mainly used by fishermen and cruise ships, and Sundahöfn in the east city which is the largest cargo port in the country.
There are no public railways in Iceland, because of its sparse population, but proposals have been made for a high-speed rail to link the city and Keflavík.
Iceland is one of the most technologically advanced countries in the world.
According to the IMD competitiveness report, Iceland has the second highest information technology skills in the world along with having highly extensive connectivity and advanced communications technology.
The Icelandic government has even formulated its policy on the information society, living up to the slogan: Iceland, the e-nation.
After the recovery of the financial crisis in 2008, the country is seeking to diversify its economy into new avenues to make sure its current upswing can be sustainably maintained. “People who used to work in banking have now moved into technology,” says Kristinn Árni Lár, founder of tech website Northstack. Technology jobs are becoming more and more important for the economy.
Reykjavik is home to three main accelerators; Startup Reykjavik, Startup Energy Reykjavik and Startup Tourism.
Despite tight investment laws and high living costs, the Icelandic capital is home to some truly progressive startups involved in multiple sectors across the GovTech spectrum.
Reykjavik is also well-known for its status as a smart city. Solutions span from car sharing, smart lighting, and air quality sensors. The city is also home to a number of co-working spaces including Minor Coworking, Harbour Square, Hoftdatorg, and Armuli which offer opportunities for the capital's startup community to grow and prosper.
Reykjavik’s GovTech ecosystem includes startups in the fields of UrbanTech, Healthcare, EdTech, ShipTech and more. Some of the startups with the most applications in 2019 are Better Reykjavik, Ankeri, Viska, Kara Connect and Pay Day.
