How Denmark attracts tech companies
Denmark’s Ministry of Foreign Affairs plays a role in attracting foreign companies to establish a presence in the country, whether that be a research and development centre, a regional headquarters or a sales office, and Invest in Denmark is the part of the ministry tasked with doing that.
“Our job is to attract foreign companies to Denmark,” says Andreas Clausen Boor, team leader for the tech team at Invest in Denmark. “And if they are interested, we assist them. We introduce them to the right clusters.
“We also try to help entire industries when those industries are considered strategic. For example, we encourage the development of ecosystems, especially for up-and-coming sectors, such as quantum computing, that are not yet fully developed.”
One area where Denmark stands head and shoulders above other European countries, according to the World Bank report, is in the ease of doing business. For all the eight years that the report has been published, Denmark has ranked the highest in Europe in this respect.
One element that is particularly interesting for startups is Denmark’s highly flexible labour laws. The government makes it easy to reduce the workforce, while at the same helping employees to develop skills for their next positions. These laws follow what is sometimes known as a “flexicurity” mode – a high degree of flexibility for employers, along with a high degree of security provided to employees by the government.
“This model is important when you venture into investments abroad,” says Boor. “You really don’t want to get stuck in a situation you can’t get out of.
“As a country, we consider it important to have a skilled workforce. Although the number of potential workers is limited by the small Danish population, the skill level is very high – not just in terms of research at universities, but also in terms of the graduates that go to work in companies.”
Boor adds: “We are very good at cooperation in general, and that is important when you are establishing ecosystems. In general, there is strong cooperation between research institutes and businesses.
“Because we are a small country, we know that to compete, we need to be super innovative. Of course, for that, you need very good researchers and the ability to take that research and feed it into solutions that can be brought to market. Denmark is already pretty good at that. Here at Invest in Denmark, we help companies to network with members of the local research community.”
Although foreign companies are unlikely to grow their user base substantially, given Denmark’s small population, there are some things that are very attractive about Danish users. Denmark is one of the most digitised countries in the world, ranked fourth in the International Institute for Management Development’s World digital competitiveness ranking 2021.
“The high degree of digitisation makes Denmark a very good destination for companies that want to develop user-friendly technology,” says Boor. “All Danes use technology every day – and many do so most of the day. They communicate not only with each other, but also with companies and public entities. This makes it a good market for companies to test their solutions.
“Another key selling point is that it is much easier to be sustainable in Denmark because of the access to green, clean energy. While this is true for all industries, it is particularly attractive for anybody with a datacentre, because they use an enormous amount of electricity. Denmark has other programmes for sustainability – for example, heat exhaust is fed back into district heating systems.”
The Danish government tries to focus on certain strategic industries – those where Denmark has a research advantage or where the skills level is high. There are also sectors where the country would like to develop expertise to be able to export in the future.
“We have some export strategies for tech in general,” says Boor. “When we export tech solutions, it’s quite often related to govtech, because we are super strong at that. That’s an area where we can compete with most countries in Europe.”
Robotics and drones
Robotics and drone technology are also big areas for Danish innovation. These technologies are focused in the area around Odense, where the term “cobot” was invented in reference to collaborative robots, which help people to do their work, like a co-worker.
“Normally when we think of robots, we think of these huge assembly lines,” says Boor. “But that’s not what they are doing in Odense. They have developed the technology that you can apply to almost any setting where a human being needs help to do repetitive tasks.
“They are doing robotic arms, for instance, that are super advanced and use AI [artificial intelligence]. Let’s say you’re working as a biochemist, and you have to put these molecules into a flask – and you need to do that repeatedly. The robotic arm will do that for you.”
Boor adds: “There is also a very strong drone environment centred around an airport in Odense that is now used for drone testing. It is a unique place in Europe, where you can fly drones beyond line of sight. That is not allowed in most places.
“We also have a competitive edge in AI, in the fintech sector and in quantum computing and quantum technologies in general. And then there is sound engineering. There is a very strong tradition of sound engineering in Denmark, not just speakers and hearing aids, but super complicated sound solutions where you can measure all sorts of things with the acoustics.”
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