A man passes by five guys lying in the sun doing nothing. “I’ll give 10,000 kroner to the laziest one of you,” he says. Four of the guys immediately jump up and showcase their impressive laziness. The fifth stays in the sun without moving. The fifth guy gets the money.
Incentive is king
People operate according to incentives. This fact is as true in the US as it is in Denmark.
“Why don’t you start a business? You’ve got nothing to lose. It’s impossible to end in the gutter. The safety net’s got you.” This argument is popular in Denmark as a way of convincing somebody to become an entrepreneur.
There’s only one problem: it doesn’t work. On the surface, the argument looks plausible: there’s a definite limit as to how low you can go. Ultimately, the state will take care of you. So why not start a business since there’s nothing to lose?
Easy for a wolf to clean up in the land of the sheep (Photo: Colourbox)
In reality, the Danish safety net works the other way round. You’ve got every basic need covered at all times. This is hugely demotivational. If you were facing the gutter as a realistic alternative, you would be motivated to create your own future.
The Danish safety net is good in a number of ways. However, entrepreneurship is not one of them. The problem in 2014 is that Denmark needs entrepreneurship to create growth. The Danish safety net removes a vital incentive for achieving this.
A nation of sheep
When it comes to entrepreneurial risk-taking, Denmark is a nation of sheep. Generally, the required entrepreneurial aggression is missing. There are exceptions, however rare. Toke Kruse, the founder of Billy’s Billing, decided to abandon the safety net and move to Silicon Valley to maintain the vital entrepreneurial motivation.
“The safety net in Denmark flies in the face of becoming an entrepreneur,” he says.
“You know that you have something to fall back on. If you find yourself on a burning platform, you get creative and find yourself willing to make sacrifices.”
In Denmark, society has already taken care of your future. This security kills. It kills entrepreneurship.