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Denmark is no. 1 in the world of investments and business
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| Sanne Lyng Marsland |
Denmark has recently been named to be the country in the world that will have the best business environment in the world in 2007-2011 by the Economist Intelligence Unit (EIU) World Investment Prospect 2007-2011. But why is this so, Denmark was also placed top of the world for the period 2006-2010. To find the answer we asked Sanne Lyng Marsland from Invest in Denmark, Trade Council of Denmark within the Danish Ministry of Foreign Affairs.
Why do you think that Denmark has been ranked no. 1 twice in a row to be the country in world that will have the best business environment? - It seems as Denmark have found a unique working solution to compete in a globalised economy; the Danish model.
What does the Danish model consists off? -It is not size nor the language says Sanne Lyng Marsland and continues, and it is not the wage level, as Denmark has a moderate income. But, paradoxically it might be all these things put together that have forced the Danes to create a society and economy, which are uniquely efficient, flexible and adaptable to changing circumstances, creating huge value to business and society.
According to the EIY-study Denmark stands out for the successful balance that it has struck between the state and market. Sanne Lyng Marsland tells that the Danish product markets operate efficiently and the labour markets are flexible, there is a low non-wage labour cost and few restrictions on hiring and firing.”
But what about the high tax we have in Denmark? - Denmark compensates for its elevated tax burden with the quality of its public good, notably infrastructure and higher education. And contrary to the trend in some countries, Denmark has refused to compromise its social welfare system in order to compete on low taxes. It is significant that the country has achieved a high degree of competitiveness and a favourable investment climate without resorting to radical public spending and tax cuts.
And Denmark is actually scoring well across the whole range of categories of the business environment covered by the EIU. Among the most prominent are the political and institutional environment, macroeconomic stability, policy towards private enterprise and a labour market characterized by a highly educated and flexible workforce. In addition the financial system is transparent and diversified, with a strong banking sector. To all of this Sanne Lyng Marsland also mentions the Danish transport network: - The transport network that Denmark has is among the best in the world, with further improvements planned, especially in and around Copenhagen. The construction of bridges linking the island of Zealand with Germany via Jutland, and Copenhagen with Malmö in Sweden, has made Denmark a hub for businesses shipping products to other Nordic countries and to Central and Eastern Europe.
Sanne Lyng Marsland goes on to telling that Denmark in a recent study by IBM and the Economist Intelligence Unit of web-savvy nations has remained no. 1 in taking advantage of the Internet, both connection citizens securely over broadband and wireless networks as well as using its near ubiquitous hook-ups for Internet banking and government services such as tax returns. She adds that the study said that “E-procurement (for public services) is saving Danish businesses 50 million euros ($62.1 million) and taxpayers as much as 150 million euros per year. The rest of Europe is expected to follow Denmark’s lead.”
How is Denmark planning to maintain its rank as number 1, because as the report mentions Denmark is threatened of labour shortages, aggravated by firm immigration policies as well a slow growing population and there is a tendency for workers to take early retirement?
- The Danish government are aware of this and has chosen to meet this challenge head on. The government has formulated a comprehensive strategy for Denmark in the global economy, which encompasses more than 300 specific proposals. The main thrusts of the strategy are firstly more and better education, innovation, research and entrepreneurship. Secondly the extension of the number of years on the labour market through earlier graduation of students, prolongation of retirement and more active labour market policy to reduce unemployment. And thirdly to improve integration of immigrants and descendents in the labour force, attraction of immigrant with better qualifications and better-structured immigration.
So will Denmark still rank as number 1 next time the EIU-study comes out?
- It is the goal of the Danish government to maintain and further improve on the best business environment in the world so entrepreneurs can grow and compete. This includes foreign investors who will benefit equally from a friendly and favourable business environment and enjoy a friction-free and fast track procedure to set up business in Denmark. So, nobody should be surprised, if Denmark by 2015 still ranks no. 1 according to business climate and are counted among the most competitive and innovative societies in the world. |