Iceland’s innovation economy is increasingly defined by how it transforms natural resources into high-value products. At the center of this effort is the country’s strong ecosystem of research institutions and specialized companies working across food science, biotechnology and marine industries.
According to Jonas Vídarsson, Director of the research & innovation dipartment at Matis Iceland, the government-owned food and biotech research institute plays a critical role in strengthening this ecosystem.
“Matis is the Icelandic food and biotech research institute,” Vídarsson explained, noting that the organization focuses on increasing the value of biological resources while supporting food safety, food security and public health.
Seafood remains one of Iceland’s most important economic pillars, accounting for roughly a quarter of the country’s export value. However, Iceland’s strategy is no longer simply about catching more fish.
“The catches of the Icelandic fleet are not going to increase much,” Vídarsson said. “So we just have to do more with what we fish.”
To achieve this, Icelandic researchers and companies are focusing on innovation across the entire value chain. From biotech applications and pharmaceuticals derived from marine byproducts to advanced food processing and genetics research, the goal is to create higher-value products while maximizing sustainability.
The approach has also created opportunities for international collaboration. Vídarsson noted that Iceland and Japan share a similar focus on quality and premium products rather than competing solely on price.
“We are focusing on similar things in regards to quality and high-end products,” he said. “Japan has a big consumer market that appreciates quality.”
Craft spirits rooted in Icelandic nature
While research institutes like Matis help drive innovation at the scientific level, Iceland’s entrepreneurial sector is also building global brands around the country’s unique natural resources.
Founded in 2009, Reykjavik Distillery has built its identity around locally sourced botanicals and wild ingredients. Managing Director Snorri Jónsson said the company’s concept was rooted in rediscovering traditional Icelandic knowledge of berries and plants.
“Our concept from the beginning was the utilization of Icelandic wild-foraged botanicals to make unique spirits,” Jónsson said.
Unlike large global producers, Reykjavik Distillery focuses on authenticity and small-batch quality rather than mass production. Wild bilberries, crowberries and other botanicals gathered directly from nature give the company’s products their distinctive character.
Jónsson emphasized that the company competes by offering something different from global brands.
“A small company like ours cannot compete on volume,” he said. “We compete on uniqueness and authenticity.”
Tourism has played an important role in the brand’s growth, as visitors discover the spirits while traveling in Iceland and later seek them out abroad. The company has begun expanding exports, particularly in the United States, while exploring opportunities in Asian markets known for appreciating premium products.
“Our core is to make great spirits,” Jónsson said. “We want to continue evolving in the direction of premium spirits and hopefully reach premium Asian markets.”
A shared emphasis on quality
Together, institutions like Matis and companies such as Reykjavik Distillery illustrate Iceland’s broader economic strategy: combining scientific research, natural resources and craftsmanship to create high-value products.
For markets like Japan where quality, traceability and authenticity are highly valued, Iceland’s approach offers promising opportunities for deeper partnerships in both innovation and premium consumer goods.
