Which country has the best football team in the world? Is it the reigning world champions, Germany? At Euro 2016, it's Germany, besides other pre-tournament favourites France, Spain and Italy, that has enthused so far. At the Copa America, Argentina and Chile – not Brazil, who exited ignobly – are contenders. All these teams have a common denominator: they are traditional top tier footballing countries.

And yet, in relative terms, it's tiny Iceland that can make a strong case for being called the world’s best team. For a remote island, sandwiched in between the United Kingdom and Greenland, with a population of just over 300,000 – incidentally, the population of Leicester – achieving qualification for Euro 2016 was an astounding feat. (For India, it's also a reminder that size isn’t a requirement to leave a footprint on the global game.) Iceland is the smallest nation by population to qualify for the European Championship.

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Its rise shares similarities with that of South America’s Uruguay. The South Americans have long been admired for their outstanding achievements in the game. Like Iceland, they also have a limited talent pool, with a population of just 3.7 million, but Uruguay finished fourth at the 2010 World Cup in South Africa. The Celeste are a veritable conveyor belt of talent, with Luiz Suarez, Edinson Cavani and Diego Godin, among others, in their ranks.

So how did Iceland progress from a qualifying group that included heavyweights such as the Netherlands, Turkey and the Czech Republic, and contain Cristiano Ronaldo's Portugal admirably in their first Group F fixture on Wednesday?

Their participation is no fluke. Their footballing achievements had been limited to a famous 1-1 draw against France in 1998, but they came preciously close to qualifying for the 2014 Brazil World Cup, only failing to defeat Croatia in a two-legged play-off.

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Even at the cutting-edge of elite football development, the Icelandic explanation for their rise is remarkably simple, even understated – “They built it.”

Countering the harsh winter

Back in the early 1990s, Iceland were minnows, not of the dwarf status of San Marino or Lichtenstein, but with little prospects of escaping the netherworld of European football. Then, they decided to start building full-size domed football fields to counter the unforgiving Arctic cold and scarce daylight. The Football Association of Iceland accelerated the building boom across the country.

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All-weather pitches mushroomed and, crucially, allowed football to be played 24 hours a day. Breidablik, in the southern suburbs of Reykjavik, was one of the clubs to benefit. Today, they have one of Iceland’s most advanced youth academies.

Investment was also directed heavily towards coach education. Iceland have one Uefa-qualified coach for every 500 people. That is a staggering statistic, considering England have one for every 5,000 people. In 2011, Iceland swayed Swede Lars Lagerback to accept the position of coach of their national team. Lagerback, a veteran of seven European Championships, struck a chord with his assistant and joint-coach Heimir Hallgrimsson. The latter is the maverick detective on the ground, Lagerback’s eyes and ears in Icelandic football, because the head coach lives in Solna, a suburb of Stockholm.

Making the best of limited resources

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Apart from his coaching experience and tactical know-how, Lagerback’s biggest contribution was the professionalisation of Iceland’s set-up. He transformed a meagre support system, adding physios, specialist coaches and a video analyst to the back room staff. Then, he moulded Iceland’s golden generation of players, with Swansea’s Gylfi Sigurdsson as talisman, into a well-organised and compact team.

At Euro 2016, the term “golden generation” has almost become a platitude. Belgium has one, and so does Northern Ireland, and even Wales, if you like. For Iceland, this crop of gifted players may well be a one-off, because building indoor halls and coach education alone may not be enough to sustain and develop its footballing riches.

For now, Iceland want to build on their excellent performance against Portugal. Birkir Bjarnason’s single strike earned Iceland a valuable point. They frustrated the Portuguese and superstar Ronaldo. “I thought they’d won the Euros the way they celebrated at the end, it was unbelievable,” remarked Ronaldo afterwards snidely, perhaps painfully conscious of his own country’s repeated failures at major tournaments. Iceland’s Euro campaign is already a success and, at the Stade Velodrome in Marseille against Hungary, it may even become better.