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In many respects, the Danish economy is world-class. For three years running, the Economist Intelligence Unit has nominated Denmark as having the world’s best economic climate for foreign investors, and Denmark is also among the highest placed countries in several other international comparison tables.

Since 1982, Denmark has pursued a consistent, stability-oriented, macro-economic policy, which among other things has resulted in Denmark today being the EU country with the largest budget surplus of approx. 3.5% of GDP. In addition, unemployment is below 3%. Denmark also has one of the best-developed infrastructures in the world, a very high general level of education and a very competent workforce.

Industry structure
The Danish industry structure is characterised by many small and medium-sized companies. Contrary to the general assumption, the percentage of small companies in Denmark is nonetheless no greater than in Europe generally.

The average Danish company has ten employees, while the average company in the Nordic countries and EU-15 has seven employees. The figures hide the fact that Denmark has relatively few very small companies, while the average large Danish company has considerably fewer employees than large EU-15 companies.

This industry structure has both advantages and disadvantages. The relatively large number of medium-sized companies gives Danish trade and industry great flexibility and the ability to adapt quickly to changed market conditions. On the other hand, the relatively few large companies result in lower average productivity, as the value increment per employee in large companies is typically greater than in small companies.

Labour market
The Danish labour market is one of the most flexible in Europe, allowing companies to adjust the number of employees according to market demands. Industrial relations are highly organised and major disputes and strikes in the labour market are very rare.

Denmark has a highly skilled and well-educated workforce that contributes substantially to the strong productivity of Danish trade and industry.
A large, well organised postgraduate education system ensures that skills and productivity are continuously improved. Denmark also has competitive labour cost levels. Total labour costs – wages and non-wages – are considerably lower in Denmark than in most other EU countries. This is due to the employers’ low cost burden in terms of social security, labour taxes etc.

Competitive labour costs and high productivity levels combine to make the Danish workforce one of the most cost-effective in Europe. This is further accentuated by the Danes’ approach to work, which is best characterised by the words: efficiency, company loyalty, motivation, self-reliance and creativity.

Industrial policy
The Danish industry structure is, as earlier mentioned, charac-terized by relatively few large companies and a relatively well qualified workforce with great professional and geographic mobility. This industry structure has made it easier for Denmark to pursue an industrial policy targeted at the overall framework conditions for trade and industry, where selective indu-stry grants are only provided to a limited extent. All else being equal, this has led to a faster and more effective structural development of both agriculture and industry, with less competitive farms and companies having to yield to more competitive ones. The associated social challenges have been tackled through a well-developed social and labour market system.

Hence, Denmark can point to several positions of strength, where Danish trade and industry are among the world leaders.
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About our work
NordicHouse in Krakow is a consulting company, which was created with the purpose of initiating and developing the interregional cooperation between the Nordic countries and the Southern Poland through promotion of contacts for business, tourism and culture.