Commission: productivity of service sector too low

A lack of competition, government regulation and a low level of education may all have contributed to the poor productivity levels in the domestic service sector, according to a new report

The productivity of the nation's service sector is too low, according to a report from the government’s productivity commission, Produktivitetskommissionen.

The commission was established to examine why the productivity of Danish businesses is improving at half the annual rate of other European countries. There has been 0.8 percent growth in Denmark compared to an average 1.6 percent in Holland, Germany and Sweden between 1995 and 2010.

While the productivity of Danish businesses that operate internationally grew annually by 2.4 percent, businesses that focussed on the domestic market actually reduced by 0.3 percent a year between 1995 and 2010.

“The weak development of productivity in the service sector is the main reason that Denmark has fallen behind countries such as the US and leading European countries,” Peter Birch Sørensen, chairman of the Produktivitetskommissionen, said in a press release. “Increased productivity in the service sector will both benefit consumers and our international competitiveness.”

The report identifies supermarkets, taxis, legal services and the catering industry as areas that have failed to keep up with leading economies at improving service efficiency by producing more with less.

The commission identified three possible reasons for why the productivity of these industries is improving at a slower rate.

First are rules and regulations that restrict how businesses can operate. Regulations, such as those limiting the maximum size of supermarkets, often prevent businesses from finding cheaper ways of operating.

Second is a lack of competition in the small Danish domestic market. High levels of competition produce an incentive for businesses to improve their efficiency as they attempt to provide cheaper products than their competitors – without this competition, there is less incentive.

The final explanation was that those employed in Danish service industries tend to have a lower level of education compared to more productive countries – only 23 percent of those employed in the service industries completed a higher education, compared to 34 percent in the US.

“If the share of higher educated employees in the Danish service sector was raised to the same level as in the US, productivity in the service sector would increase by about ten percent,” Sørensen wrote.

The commission will release another report in the summer with specific proposals for improving Denmark’s productivity.




  • Danish universities increase security checks on researchers from China, Russia, and Iran, reports DR

    Danish universities increase security checks on researchers from China, Russia, and Iran, reports DR

    Danish universities, especially Aarhus University, now rigorously screen researchers from China, Russia, and Iran to prevent espionage, following recommendations and increasing concerns about security, reports DR

  • Danish Originals S7E5: Camilla Stærk

    Danish Originals S7E5: Camilla Stærk

    This week, Bonderup-born, London-trained, New York-based Danish designer Camilla Stærk talks about her work, anchored against a strong foundation of her Danish heritage combined with her fascination with Old Hollywood and film noir, and expressed in what she describes as the whole universe: of fashion, furniture, lighting, rugs, accessories

  • Young Copenhageners supply study grants by selling cocaine

    Young Copenhageners supply study grants by selling cocaine

    In recent years, the spread of cocaine has accelerated. The drug is easily accessible and not only reserved for wealthy party heads. Copenhagen Police have just arrested ten young people and charged them with reselling cocaine

  • 5 Mistakes I Made When I Moved to Denmark

    5 Mistakes I Made When I Moved to Denmark

    Here are five mistakes I made that helped me understand that belonging isn’t a strategy—it’s a practice. This isn’t a story of struggle—it’s a reflection on growth, told through the lens of emotional intelligence.

  • Analysis shows that many students from Bangladesh are enrolled in Danish universities

    Analysis shows that many students from Bangladesh are enrolled in Danish universities

    Earlier this year, the Danish government changed the law on access for people from third world countries to the Danish labor market. Yet, there may still be a shortcut that goes through universities

  • Danish Flower company accused of labor abuse in Türkiye

    Danish Flower company accused of labor abuse in Türkiye

    Queen Company, a Denmark-origin flower producer with pristine sustainability credentials, is under fire for alleged labor rights violations at its Turkish operation, located in Dikili, İzmir. Workers in the large greenhouse facility have been calling decent work conditions for weeks. The Copenhagen Post gathered testimonies from the workers to better understand the situation

Connect Club is your gateway to a vibrant programme of events and an international community in Denmark.


  • “It’s possible to lead even though you don’t fit the traditional leadership mold”

    “It’s possible to lead even though you don’t fit the traditional leadership mold”

    Describing herself as a “DEI poster child,” being queer, neurodivergent and an international in Denmark didn’t stop Laurence Paquette from climbing the infamous corporate ladder to become Marketing Vice President (VP) at Vestas. Arrived in 2006 from Quebec, Laurence Paquette unpacks the implications of exposing your true self at work, in a country that lets little leeway for individuality

  • Deal reached to bring more foreign workers to Denmark

    Deal reached to bring more foreign workers to Denmark

    Agreement between unions and employers allows more foreign workers in Denmark under lower salary requirements, with new ID card rules and oversight to prevent social dumping and ensure fair conditions.

  • New association helps international nurses and doctors Denmark

    New association helps international nurses and doctors Denmark

    Kadre Darman was founded this year to support foreign-trained healthcare professionals facing challenges with difficult authorisation processes, visa procedures, and language barriers, aiming to help them find jobs and contribute to Denmark’s healthcare system