In 2006, a cross-party agreement called the welfare agreement (Velfærdsaftalen) paved the way for measures to make Denmark more competitive. It may be time for a new political consensus to carry on that process.
A new review on growth and competitiveness in 2017, released by the Ministry of Business, points to the fact that more investment is needed – both in new growth areas and in existing firms.
Kent Damgaard, the deputy head of the confederation of Danish industry, Dansk Industri (DI), told DI Business that “the good news is that things are basically going well in Denmark, but it is also clear that if we want to continue to be a country with growth and balance, we will have to address the issues that the review raises.”
He went on to say that “our productivity has to improve, the supply of labour increased, and there must be more investment in our companies.”
Research and education vital
“On the political side, we ought to invest massively in research, education, digitalisation and infrastructure. That’s why DI suggests that politicians set up a ‘globalisation fund’ of 25 billion kroner to strengthen education and research so that we can measure up to the very best in the world. Other countries, for example in Asia, invest much more in these areas than we do,” Damgaard said.
As well as reforming the labour market, it is also important that companies have access to qualified employees at all levels. This can only be done by concentrating on education long-term and making sure that as many people as possible contribute through the labour market.
Reduced company taxes
Damsgaard would also like to see changes to the tax system.
“The way the system is put together today, it hampers investment to some extent. Lower company taxes would pave the way for more firms being able to afford to invest, for example, in digitalising their processes,” he said.
He would also like to see it made easier for companies to obtain capital from external sources. “One could, for instance, look into how it could be made more attractive for individuals to invest their pension savings in a company that they can see development potential in,” he suggests.