Innovation and Innovation Policy in Denmark
Innovation and Innovation Policy in Denmark 
Overview of Innovation Policy
The Danish economic boom seems to have come to an end. GDP growth in 2008 was -1.1 percent in 2008, significantly reduced from 3.2 percent in 2006. With negative growth rates in the fourth quarter of 2007 and the first quarter of 2008, the economy has been in or close to 'technical recession' for a while. This comes after a period of very positive growth rates combined with restrained inflation and unemployment rates at an unprecedented low. The positive employment situation in recent years, however, has gradually created a genuine labour shortage and thereby put a significant damper on the Danish economy growth. This development may have negative effects on Danish innovation in the medium-long run.
European Innovation Scoreboard (EIS) indicators still place Denmark among the top performing EU countries (no 5 on the 2008 SII indicator), with an innovation performance well above the EU average. Denmark has been labelled an 'innovation leader' in the EIS2008 along with Sweden, Switzerland, Finland, Germany, and UK. However, together with Sweden and UK, Denmark is in the sub group of ‘slow growers’ on innovation performance.
Denmark scores high on the first five EIS indicator parts (enablers and firm activities) and more mediocre in the last two indicator parts (outputs). Denmark tops the ‘Linkages and entrepreneurship’ and is sixth on ‘human resources’, fourth on ‘finance and support’, eight on ‘firm investment’, and third on ‘throughputs’. However, in general the placement is a backdrop compared to earlier years and more seriously, Denmark is placed low on both ‘innovators’ and on economic effects’.
Over the past 5 years, Human resources, Finance and support and Throughputs have been the main drivers of a stagnating innovation performance, in particular resulting from strong growth in Private credit (7.5%) and Community trademarks (5.4%). Performance in Firm investments, Linkages & entrepreneurship, Innovators and Economic effects has worsened, in particular due to decreases in Innovative SMEs collaborating with others (-8.0%), SMEs introducing product or process innovations (-5.7%), New-to-market sales (-7.7%) and New-to-firm sales (-8.5%).” (c.f. http://www.proinno-europe.eu/EIS2008/website/docs/EIS_2008_Final_report.pdf p. 32)
Major Innovation Challenges and Policy Responses
Challenge 1: To increase the supply of highly skilled labour: The obstacles to innovation have changed little within the last years. The growing labour shortage has become increasingly problematic, but this probably ends with the recent recession in the global economy. However, the challenge of supplying relevant highly skilled/educated labour resists.
Challenge 2: To strengthen human capital formation: Another aspect of the recent labour shortage is Denmark's own inability to provide human resources equivalent to the demands of innovation. The recent policy response is comprehensive and ambitious, but the proposed initiatives have a very strong focus on formal competencies and limited emphasis on improving creativity, collaboration and learning by doing, using and interacting, where Denmark historically has done well.
Challenge 3: To promote innovation by SMEs: The Danish focus on science-based sectors and 'high technology research' in fields such as nanotechnology, information technology and biotechnology, has been argued to fail to take into consideration characteristics of the Danish national innovation system, such as the large number of SMEs. There has been limited emphasis on the innovative capabilities of firms and their need for research-based competences, although recent Danish innovation strategy has increased the emphasis on the role of SMEs.
Innovation Governance and Policy Trends
The current Danish research and innovation system is the result of a major restructuring, culminating in 2006 in the release of the Danish Globalisation Strategy. The overall aim of the various reforms and initiatives has been to create governance structures better suited to coordination of and cooperation between the different actors in the national innovation system. As a consequence, the Danish governance system is currently characterised by strong political and administrative coordination. At the same time, there is a highly prioritised political vision and good stakeholder involvement in the formulation of innovation policy objectives. A large number of initiatives to improve the overall functioning of the innovation system have been launched and many more are imminent. Critics, however, claim that the political vision is not as clear as the government tends to claim: the initiatives point in various directions and lack coherence.
In February 2007, the Danish Council for Technology and Innovation published an 'Innovation Action Plan'. It marks the first occasion that all Danish public innovation initiatives are presented in a single framework. The action plan, which builds on the Danish Globalisation Strategy, consists of more than 70 potential but concrete initiatives intended to turn Denmark into one of the most competitive and innovative countries in the world. The action plan has two main objectives.
- All Danish enterprises, including SMEs, have to become more innovative and remain so.
- Knowledge transfer and collaboration between public research and private enterprises has to be strengthened.
The action plan as a whole targets a number of areas that were previously not accorded a high priority in Danish innovation policy. The SME sector, which had been somewhat neglected compared to a number of high technological areas, now receives more attention.
Future Actions
The Danish government has reformed and reorganised more or less all aspects of the innovation system over the last eight years. The most important reforms have targeted universities, public research institutions, the technology service system, the advisory and funding structures and the regional innovation system. At the same time, new strategies and action plans have been formulated regarding national and regional growth, collaboration between the public and private spheres, knowledge development, strategic research, etc.
In 2006 a new and very ambitious Globalisation Strategy was presented with the objective to make Denmark ‘to be among the countries where it is best to live and work — also in 10 to 20 years' time'. The strategy argues that Denmark is to achieve this goal by developing a strong competitive edge and social cohesion by means of high-quality interaction and collaboration among stakeholders. The means to achieve these objectives are as follows: (1) a world-class educational system, (2) strong and innovative research, (3) more entrepreneurs, and (4) more innovation and change. The part of the strategy directly related to innovation policy became operational in early 2007 with the introduction of an innovation policy action plan, 'InnovationDenmark 2007-2010'.
Over the past few years, Denmark has come one step closer to meeting the identified objectives, in the sense that the ambitious goals have been transformed into concrete initiatives and a funding plan has been presented. All the initiatives are still in an implementation phase, however, and it is therefore too early to know whether these initiatives are appropriate enough.
| Annual Country Reports |
 Country report 2009 for Denmark
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| Country report 2008 for Denmark
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| Country report 2007 for Denmark
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| Country Report 2006 for Denmark
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| Country Report 2005 for Denmark
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| Country Report Denmark September 2004
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| Denmark - Trend Chart Country Report, September 2003
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| Denmark - Trend Chart Country Report, March 2003
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| Denmark - Trend Chart Country Report, October 2002
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| Denmark- Trend Chart Theme-specific Country Report, May 2002
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| Denmark - Trend Chart Country Report, November 2001
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| Denmark Trend Chart Country report June 2001
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| Denmark Trend Chart Country Report Dec 2000
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| Innovation News |
 Online debate contributes to Danish Innovation Strategy 2010-2013 |
| Latest TrendChart Deliverables |
| Workshop Briefing Denmark 13_2006 |
| Workshop Briefing Denmark 11_2006 |
| The Nordic experiences with trans-national cooperation |
| Workshop Briefing Denmark 10_2006 |
| Workshop Briefing Denmark 9_2005 |
| New Support Measures |
| DK 82 Knowledge voucher (small scale innovation projects) |
| DK 92 Regional innovation agents |
| DK 91 Advanced Technology Group - GTS |
| DK 1 Business Development Finance - The Growth Foundation |
| DK 90 Innovation center for eBusiness - IBIZ |
Who Is Who
Senior Official(s) for Denmark
Thomas Christensen
Jan Windmüller
Correspondents for Denmark
Kaare Aagaard
Ebbe Krogh Graversen
Sanne Haase
Karen Siune
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Innovation Performance
Performance in Innovation Scoreboard 2008Find Out More
List of relevant websites
