RIO country report 2017 : Denmark.
Date: 2018-04-11
Institutions: Joint Research Centre
Subjects: Denmark, EU research policy, financing, innovation, knowledge management, labour market, organisation of research, public financing, research and development, research budget, research policy, research report, research staff

RIO Country Report 2017: 
Denmark 

Research and Innovation 
Observatory country 
report series 

Knudsen, M.P., Christensen, J. L. 
Christensen, P.  

2018 

EUR 29187 EN 

 
 
 
 
 
This publication is a Science for Policy report by the Joint Research Centre (JRC), the European Commission’s 
science  and  knowledge  service.  It  aims  to  provide  evidence-based  scientific  support  to  the  European 
policymaking  process.  The  scientific  output  expressed  does  not  imply  a  policy  position  of  the  European 
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JRC111331 

EUR 29187 EN 

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ISSN 1831-9424 

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How to cite this report: Knudsen, M.P., Christensen, J.L., Christensen, P., RIO Country Report 2017: Denmark; 
EUR 29187 EN, Publications Office of the European Union, Luxembourg, 2018, ISBN 978-92-79-81276-7, 
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RIO Country Report 2017 

The  R&I  Observatory  country  report  2017  provides  a  brief  analysis  of  the  R&I  system  covering  the  economic 
context,  main  actors,  funding  trends  &  human  resources,  policies  to  address  R&I  challenges,  and  R&I  in 
national and regional smart specialisation strategies. Data is from Eurostat, unless otherwise referenced and is 
correct as at January 2018. Data used from other international sources is also correct to that date. The report 
provides  a  state-of-play  and  analysis  of  the  national  level  R&I  system  and  its  challenges,  to  support  the 
European Semester. 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Summary 

Key findings  

Denmark’s  macro-economic  situation  is  sound  with  low  inflation,  low  unemployment, 
stable public finances and a positive balance of payments. After growth rates of 1.6% in 
2015, 1.7% in 2016, and an estimated 2.1% in 2017, the European Commission foresees 
real GDP growth of 2.0% in 2018 easing to 1.9% in 2019. 

One of the main challenges is to increase productivity growth, which has been weak for 
the  last  decade.  Achieving  stronger  productivity  growth  would  be  important  for 
addressing  societal  challenges  such  as  the  increasing  costs  from  an  ageing  population 
and  preserving  the  social  welfare  system  at  the  current  level.  Moreover,  higher 
productivity  growth  would  alleviate  some  of  the  emerging  problems  with  shortages  of 
skilled labour. 

Danish  R&D  intensity  is  relatively  high,  about  3%  of  GDP.  Public  R&D  is  projected  to 
remain  at  around  1%  of  GDP.    Denmark  is  an  innovation  leader  in  the  EU,  but  there  is 
still a potential to increase the innovation performance in particular of SMEs.  

Challenges for R&I policy-making in Denmark  

 

 

Improve  the  innovativeness  of  firms  and  the  commercialisation  of  research. 
Despite the good performance of the R&I system in terms of research quality and 
volume  and  good  overall  innovation  performance,  there  is  still  a  potential  for 
improving  the  innovation  performance  of  SMEs.  One  of  the  measures  to 
accomplish this is strengthening the interactions between actors in the system. 

Increase the quality and availability of human resources. As growth has picked up 
after  the  economic  and  financial  crisis,  shortages  of  skilled  labour  have  emerged 
in several industries as well as outside the larger cities. 

  Support  innovation  to  boost  productivity  growth.  There  is  scope  for  further 
support to improve innovation management and implementation capabilities in the 
business sector, in particular amongst SMEs.  

Main R&I developments in 2017 

A new comprehensive R&I strategy "Denmark – Ready for the Future" ("Danmark - Klar 
til  Fremtiden")  was  launched  in  December  2017  (Regeringen,  2017a).  It  has  two  main 
priorities: 

- Increase the quality of R&D 
- Increase the societal impact of R&D  

Smart specialisation 

Denmark does not have a single combined strategy for smart specialisation, but rather a 
collection  of  strategies,  which  together  form  the  Danish  Smart  specialisation  strategies. 
These include the Government's growth plans and the regional growth and development 
strategies.  Smart  specialisation  priority  areas  for  Denmark  are:  manufacturing  and 
industry,  energy  production  and  distribution,  sustainable  innovation,  health  and  social 
work  activities,  agriculture,  forestry  and  fishing.  In  the  2014-2020  period,  the  INNO+ 
initiative supports smart specialisation investments in: transport, environment and urban 
development,  food  production  and  bio  economy,  health  solutions,  innovative  production 
and innovative digital solutions. Danish research and innovation policies are in tune with 
the  smart  specialisation  approach,  but  further  coordination  and  alignment  of  strategies 
between the national and regional levels is recommended.  

 
 
 
 
 
 
Foreword 

The  R&I  Observatory  country  report  2017  provides  a  brief  analysis  of  the  R&I  system 
covering the economic context, main actors, funding trends & human resources, policies 
to  address  R&I  challenges,  and  R&I  in  national  and  regional  smart  specialisation 
strategies.  Data  is  from  Eurostat,  unless  otherwise  referenced.  The  report  provides  a 
state-of-play and analysis of the national level R&I system and its challenges, and is used 
to support the European Semester. 

Acknowledgements 

This  report  was  reviewed  by  Tauno  Ojala,  Joint  Research  Centre,  Anne-Mette  Mikkelsen 
and Joakim Quistorff-Refn, The Danish Ministry for Higher Education and Science.  

Authors 

Knudsen,  M.P.,  Centre  for  Integrative  Innovation  Management  (C*I2M),  Department  of 
Marketing & Management, University of Southern Denmark, Odense 

Christensen, J. L., Department of Business and Management, Aalborg University, Aalborg 

Christensen,  P.,  European  Commission,  Directorate-General  Joint  Research  Centre,  Unit 
B.7, Knowledge for Finance, Growth and Innovation, Brussels 

 
 
 
 
 
 
Contents 

1  Economic context for R&I .............................................................................. 4 

1.1  Structure of the economy ............................................................................. 5 

1.2 Business environment ................................................................................... 6 

2  Main R&I actors ............................................................................................. 7 

3  R&I policies, funding trends and human resources ...................................... 10 

3.1  Public allocation of R&D and R&D expenditure ............................................... 10 

3.2  Private R&D expenditure ............................................................................. 12 

3.3  Supply of R&I human resources ................................................................... 13 

4  Policies to address innovation challenges .................................................... 14 

4.1  Challenge 1: Reinforcing the links between actors to improve the innovativeness 
of firms and the commercialization of research .................................................... 15 

Description ................................................................................................. 15 

Policy response ........................................................................................... 15 

Policy Assessment ....................................................................................... 16 

4.2  Challenge 2: Increase the quality and availability of human resources .............. 16 

Description ................................................................................................. 16 

Policy response ........................................................................................... 17 

Policy Assessment ....................................................................................... 17 

4.3  Challenge 3: Support innovation to boost productivity .................................... 18 

Description ................................................................................................. 18 

Policy response ........................................................................................... 18 

Policy Assessment ....................................................................................... 19 

5  R&I in National and Regional Smart Specialisation Strategies ..................... 19 

5.1  Policies – levels of aggregation and coordination ............................................ 19 

5.2  S3 priorities .............................................................................................. 20 

5.3  Related policies and prioritizations ............................................................... 21 

5.4  Assessment .............................................................................................. 21 

6  References ................................................................................................... 23 

Table 3: Abbreviations ..................................................................................... 26 

Table 4: Factsheet ........................................................................................... 27 

List of figures .................................................................................................. 27 

List of tables .................................................................................................... 27 

 
 
 
 
1  Economic context for R&I 

The  Danish  economy  is  performing  well  on  the  macroeconomic  fundamentals  with  low 
unemployment, low inflation and a strong positive balance of payments. Fiscal discipline 
and  stable  public  finances  have  resulted  in  decreasing  budget  deficits  and  have  created 
the pre-conditions for a moderately expansive  fiscal policy in 2018. Despite low interest 
rates, investments and private consumption were subdued in the past years, but recent 
consumer  confidence  surveys  and  investment  figures  are  slightly  more  positive  (Danish 
Economic  Councils  ("De  Økonomiske  Råd"),  2017).  After  growth  rates  of  1.6%  in  2015, 
1.7% in 2016, real GDP growth is estimated to have been 2.1% in 2017. The European 
Commission expects real GDP growth of 2.0% in 2018 easing to 1.9% in 2019, driven by 
private  consumption  (1.9%  annual  change)  and  investments.  There  are  signs  of 
shortages  for  skilled  labour  for  certain  groups  on  the  labour  market.  Despite  labour 
market  reforms,  the  shortages  of  labour  in  certain  sectors  may  hamper  growth  in  the 
medium  term.  In  the  longer  term,  the  Danish  Economic  Council  predicts  an  average 
growth  slightly  above  2%  for  the  2017-2025  period,  and  an  improvement  of  the 
budgetary position resulting in a small budget surplus in 2025 (Danish Economic Councils 
("De  Økonomiske  Råd"),  2016).  Similarly,  the  latest  OECD  forecast  of  the  Danish 
economy predicts annual growth rates at 2% in the coming two years, driven by private 
consumption and public investments (OECD, 2017a).  

Consumer  prices  were  flat  in  2016,  but  the  European  Commission  expects  inflation  to 
progressively pick-up with an increase of 1% in 2017, 1.4% in 2018 and 1.7% in 2019. 
Unemployment is forecast to drop from 5.9% in 2017 to 5.5% in 2019.  

The financing of both a high level of social welfare and the needs of an ageing population 
are some of the main societal challenges for Denmark. This in turn results in challenges 
for the R&I-system and the labour market. One of the most pressing of these challenges 
is a relatively smaller supply of skilled labour  to support the  recovery  after the financial 
crisis.  In  several  industries  and  regions,  a  lack  of  skilled  labour  is  starting  to  show. 
According  to  the  European  Centre  for  Development  of  Vocational  Training  the  share  of 
graduates with STEM skills is in the low end of the European ranking (CEDEFOP, 2017), 
and the demand for such competences in Denmark is expected to grow twice as much as 
the  European  average  in  the  period  until  2025.  For  this  period,  Danmarks  Vækstråd 
(Danish Growth Council) estimates, based on the Danish macroeconomic model DREAM, 
that  there  will  be  a  need  for  85.000  additional  skilled  workers  (Danmarks  Vækstråd, 
2016).  Several  other  reports  point  in  the  same  direction  (Danske  Regioner,  2016;  Reg-
Lab,  2016).  The  supply  and  quality  of  labour  have  been  stimulated  through  several 
labour  market  reforms  and  tax  incentives  aimed  at  increasing  work  incentives,  but  the 
supply of skilled labour will still be a challenge in the short and medium-term.  

Productivity growth in Denmark has been sluggish during the past two decades and has 
become  a  political  priority.  According  to  both  the  OECD  and  the  European  Commission, 
some of the reasons for the unsatisfactory growth in productivity are lack of competition 
in  the  building  and  construction  sector  and  in  domestically  oriented  service  sectors 
(European  Commission,  2017a).  Moderate  investment  levels,  and  low  inflation  and 
interest rates have also contributed to sluggish productivity growth as these factors limit 
the  reallocation  of  resources  (Jensen  &  Jørgensen,  2016).  Moreover,  it  is  normal  that 
productivity  growth  is  reduced  with  increasing  labour  shortages  as  companies  often  are 
forced to recruit some labour with lower skills (ibid.).  In general, technological progress 
through  improved  innovation  performance,  including  technology  diffusion,  is  considered 
crucial to achieve a higher rate of productivity growth. 

Whereas  the  development  of  the  general  economic  situation  in  Denmark  with  steadily 
rising  GDP  per  capita  remains  positive,  the  overall  figures  hide  marked  differences  not 
only  between  people  in  or  out  of  the  labour  market,  but  also  between  regions.  The 
Government launched in 2015 a strategy termed “Growth and development in the whole 
of  Denmark”,  which  focused  on  competitive  advantages  and  framework  conditions  for 
regional areas outside the larger cities including the movement of public sector jobs  out 

4 

 
of  the  capital,  Copenhagen  (Regeringen,  2015b).  The  Government  has  recently 
reinforced 
the 
announcement  of  a  second  wave  of  moving  Government  institutions,  or  parts  of  these, 
away from the Copenhagen area. 

inequalities  and  opportunities 

focus  on  regional 

including 

the 

1.1  Structure of the economy 

SMEs  play  an  important  role  in  Denmark  with  a  slightly  higher  contribution  to  the 
economy  in  terms  of  value  added  compared  to  the  EU  average  (59%  vs.  56.8%).  The 
share of micro-firms in the firm population is estimated to have grown to 88.7% in 2016. 
Large  firms,  above  250  employees,  make  up  0.3%  of  the  firm  population  in  2016 
(compared to 0.2% for the EU). The number of people employed in SMEs was somewhat 
below the  EU average in 2016, at 63.6% compared to  the EU average of 66.6% (Small 
Business Act (SBA), 2017). While Denmark is below the EU average on the share of firms 
classified  within  high-tech  manufacturing,  it  is  significantly  above  the  average  share 
within knowledge-intensive services. 

Another key characteristic of the Danish economy is its openness. The World Bank Doing 
Business  monitoring  system  for  2016  lists  Denmark  as  number  1  in  the  world  in  2015 
and 2016 concerning ‘Trading across Borders’ (The World Bank, 2016). Also, according to 
the  UNCTAD  statistics  for  Denmark  (UNCTAD,  2017),  the  level  of  FDI  inflows  has 
increased  steadily  over  the  last  years  even  though  it  is  still  below  its  pre-crisis  values1. 
For the FDI outflows, the level has recovered  following the economic and financial crisis 
and was in 2016 above the average level of the pre-crisis years reaching 14 543 million 
USD. The FDI outflows as % of GDP accounted for 4.7% in 2016.  

Danish  production  is  to  a  large  extent  knowledge-based.  The  manufacture  of 
pharmaceuticals  and  medical  chemicals  as  well  as  software  consultancy  and  supply  are 
the  largest  sectors  regarding  intramural  R&D  expenditures.  Nevertheless,  only  a 
relatively  small  share  of  firms  performs  intra-mural,  firm-based  R&D  which  is 
concentrated  in  a  few  industries.  Outside  this  group  of  R&D-performing  firms 
technological,  R&D-based  knowledge  is  also  used,  but  in  a  more  indirect  manner.  The 
application  of  Danish  industrial  R&D  in  firms  is  supported  by  several  branch  specific, 
specialised  R&D  institutions  who,  through  an  efficient  knowledge  dissemination  system, 
supply  private  firms  with  updated,  R&D  based  knowledge.  This  applies  e.g.  to  several 
sub-industries within agriculture such as  slaughtering, which do not  statistically account 
for  a  large  share  of  firm-level  R&D  (Christensen,  Dahl,  Elisasen,  Nielsen,  &  Østergaard, 
2011). Hence, even if the Danish industry is well represented in what is usually classified 
as low-technology industries (e.g. food, furniture, textiles, and agricultural products) the 
production of these products is often highly knowledge-based and automated. 

The  European  Innovation  Scoreboard  listed  Denmark  as  second  in  Europe  in  both  2015 
and  2016,  and  third  in  the  latest  2017  Scoreboard  after  Sweden  and  Switzerland. 
Denmark scores above average on all 25 indicators in the scoreboard, but is not as well-
performing on access to venture capital and the share of innovative SMEs as on the other 
indicators.  Moreover,  Denmark  has  experienced  a  decline  in  performance  on  the 
scoreboard from an all-time high in 2013 at 139.5 to the 136.7 in 2016. 

The creation of new, Danish firms has picked up in recent years according to the Global 
Entrepreneurship  and  Development  Index  (GEDI)  (The  Global  Entrepreneurship  and 
Development  Institute  (GEDI),  2016).  According  to  GEDI,  Denmark  has  a  strong 
entrepreneurship  performance  evidenced  by  the  fact  that  the  parameters  of  the  overall 
GEDI rankings are consistently at or close to the top in the world. Denmark was in 2016 
ranked 4th in the world of 132 countries, up from 6th of 130 in 2015. In 2017, Denmark 
was 5th.  

1 In 2016, inwards FDI decreased to only 921 million USD compared to 4 102 million USD in 2015. However, 

the FDI statistics are "lumpy" and therefore data for one year are not necessarily indicating a new trend.   

5 

 
 
                                           
According to Eurostat data, Denmark had a business birth rate of 11% in 2015, which is 
relatively  high  compared  to  other  comparable  EU  countries.  However,  exit  rates  were 
also  at  a  relatively  high  level  (OECD,  2015),  which has led  the  government  to  prioritise 
stimulating  higher  quality  start-ups.  The  primary  policy  attention  has  been  a  relatively 
low share of high-growth entrepreneurial companies (Erhvervsministeriet, 2013). 

Although Denmark is faring well in terms of the GEDI measurement of access to capital, 
according  to  the  Government  and  data  from  European  Innovation  Scoreboard  (see 
below),  this  is  still  a  frequently  mentioned  barrier  for  entrepreneurs,  especially  among 
those  with  plans  for  rapid  growth.  Therefore,  in  September  2016,  the  Minister  for 
Business  and  Growth  announced  in  the  draft  government  budget  a  range  of  policy 
initiatives  addressing  financial  constraints  for  entrepreneurs.  Subsequently,  in  August 
2017  concrete  proposals  were  made  (Aug.  31,  2017)  in  three  policy  areas:  tax  reform, 
business  promotion,  fiscal  budget  (see  further  details  in  the  sections  on  policy 
development).  In  November  2017,  a  political  agreement  on  business  growth  and 
entrepreneurship  was  reached  aiming  at  alleviating  administrative  burdens,  promoting 
digitalisation, tourism, lower taxes on specific products/services, and improving access to 
capital.  According  to  this  agreement  access  to  capital  will  be  facilitated  by  way  of 
increased  tax  incentives  to  invest  in  unquoted  companies  either  directly  or  via 
institutional investors.   

1.2 Business environment 

Generally,  Denmark  has  a  favourable  environment  for  doing  business.  In  its  “Doing 
Business” analysis, the World Bank ranks Denmark as the third best country in the world 
in 2017 (the same as in years 2014, 2015, 2016) (The World Bank, 2015, 2016, 2017). 
Denmark is faring well on all indicators used by the World Bank.  

The  favourable  business  environment  makes  it  attractive  also  for  foreign  investors  to 
invest in Denmark.  According to a survey by The Danish Business Investment Authority 
“Invest  in  Denmark”2  investors  invest  in  Denmark,  because  they  would  like  to  leverage 
unique  local  knowledge  and  specialized  competencies  (Invest  in  Denmark,  2015). 
Moreover,  Denmark’s  skilled  workforce  is  highly  appreciated  among  most  investors 
surveyed. One third of the investors indicated that they would set up a R&D department, 
a  centre  of  excellence,  or  research  collaboration  with  a  Danish  university.  Especially 
within the Danish industrial strongholds like renewable energy, pharmaceuticals, and the 
maritime industry, investors find Denmark attractive.  

The favourable business environment is also due to a good performance regarding factors 
such  as  administrative  procedures  and  regulation,  access  to  finance,  other  resources 
(e.g.  technological  knowledge),  and  digital  infrastructure  and  services.  The  latter  is 
indicated  by  the  leading  position  (no.  1)  in  the  EC  Digital  Economy  and  Society  Index 
(DESI) for the past three years (2014-2016). The EU SBA Fact sheet provides a range of 
parameters  on  what  is  broadly  termed  ‘responsive  administration’.  This  includes 
administrative  burdens  and  regulations  and  assessment  of  the  interaction  SMEs  have 
with  public  administration.  Denmark  performs  generally  better  than  the  EU  average  on 
nearly all parameters (Small Business Act (SBA), 2017).  

Establishing  a  business  is  easier  in  Denmark  than  in  most  OECD  countries.  Regarding 
administrative barriers for establishing a business, the World Bank Doing Business survey 
2016  compared  requirements  and  costs  in  Denmark  with  other  high-income  OECD 
countries  and  finds  that  this  comparison  is  favourable  for  Denmark  (The  World  Bank, 
2016)3.  In  addition  to  several  programmes  for  reducing  administrative  burdens,  an 
extensive net of advisors and courses organised at the municipality level help overcoming 
barriers for entrepreneurs and small businesses.  

2 An organisation under the Ministry of Foreign Affairs, which actively promotes Denmark as a host country for 
FDI.  Investing  in  Denmark  assists  about  45  investment  projects  in  Denmark  annually.  The  agency  seeks  to 
provide a one-stop service for foreign companies that intend to locate or expand a business in Denmark.  
3 Similar conclusions can be derived from the evidence provided in the Small Business Act for Europe.  

6 

 
                                           
Denmark also offers a favourable framework for insolvency that includes short turn-over 
and less costly procedures for recovering debt. There has been no significant initiatives in 
this  area  in  2017,  but  the  Danish  Business  Authority  has  introduced  an  early  warning 
system  that  provides  free,  impartial  and  confidential  counselling  services  for  distressed 
companies (Small Business Act (SBA), 2016). Denmark is rated above the EU average on 
insolvency procedures. 

Denmark is among the top three EU performers  on access to  finance. Nevertheless, the 
European  Innovation  Scoreboard  indicates  that  access  to  venture  capital  is  not  as  well 
functioning as other parts of the capital market. Particularly with respect to the segment 
of  high-growth,  innovative  firms  the  government  has  been  keen  to  improve  access  to 
finance,  and  has  addressed  the  just  mentioned  lack  of  equity  funding  in  recent  policy 
documents  such  as  Uddannelses-  og  Forskningspolitisk  Redegørelse  (Styrelsen  for 
Forskning  og  Innovation,  2017b),  and  the  new  R&I  Strategy  "Danmark  –  Klar  til 
fremtiden" (Regeringen, 2017a).   

innovative  public  sector 

A  well-functioning  and 
is  important  for  the  business 
environment.  An  innovation  survey  in  the  public  sector  was  performed  by  Statistics 
Denmark  in  2014  following  the  Oslo  manual  type  of  innovation  surveys  for  the  private 
sector. In general, a high frequency of innovation was identified across all types of public 
organisations. As could be expected, process innovations were the most frequent type of 
innovation. 80-90% of public sector organizations surveyed, such as Health, Culture, and 
Education, have introduced at least one innovation. In a harmonised survey in the Nordic 
countries, shares of public innovative organisations in Denmark and Iceland were slightly 
higher  than  in  the  other  countries  (Bugge,  Mortensen,  &  Bloch,  2011).  Similarly,  the 
European  Commission  InnoBarometer  for  Europe  2010  shows  that  Danish  public 
organisations innovate more frequently than the average EU public organisation (Gallup, 
2010). Overall, Denmark performs well in public sector innovation.  The policy initiatives 
include  the  establishment  and  support  of  the  Centre  for  Public  Innovation4,  and  the 
appointment of a Minister  for Public Innovation and Modernisation within the Ministry of 
Finance  with  the  objective  to  improve  public  sector  innovation,  digitalisation,  and 
governance5.  

Public  procurement  is  used  extensively  for  stimulating innovation.  Among  several  policy 
initiatives  is  the  scheme  Innovative  public-sector  purchases  (The  Market  Maturation 
Fund,  2018),  which  aims  to  make  it  easier  for  public-sector  institutions  to  obtain 
innovative  new  solutions.  The  Innobarometer  2010  (Gallup,  2010)  shows  that  Denmark 
performs best in the EU on using public procurement to stimulate innovation. 

2  Main R&I actors 

The  Danish  Government  is  active  in  promoting  research  and  innovation,  and  there  is  a 
well-established and centrally organized funding infrastructure. 

4 www.coi.dk 
5 https://www.fm.dk/om-os/minister-for-offentlig-innovation-sophie-loehde  

7 

 
 
  
 
 
 
 
 
                                           
Figure 1: The Danish R&I system 

The  main  responsibility  for  research  and  innovation  lies  with  the  Ministry  of  Higher 
Education and Science. As of January 2017, the Ministry is divided into two Agencies: The 
Danish Agency for Science and Higher Education and The Danish Agency for Institutions 
and Educational Grants. 

Furthermore, the Ministry of Industry, Business, and Financial Affairs have tasks related 
innovation. Several sectoral ministries; the Ministry of  Energy, Utilities and Climate, the 
Ministry of Environment and Food, and the Ministry of Foreign Affairs, all have larger R&I 
programmes.  These  ministries  have  specific  agencies,  which  implement  the  respective 
policies. 

The  regional  level  has  increased  the  funding  substantially  for  business  development.  In 
2016,  the  regions  provided  1.1  billion  DKK,  (€148  million)  compared  to  2.9  billion  DKK 
from the national level. In total, 4.9 billion DKK (€658 million) was available for business 
development  in  2016  (Uddannelses-  og  Forskningsministeriet,  2016).  The  regional  and 
local levels have also increased the funding for research by 40% over the last 10 years to 
a total of 3.6 billion DKK (€483 million). These funds are primarily financing research at 
hospitals. 

8 

Political level and high-level cross-cutting policy level               Ministry mission-centered coordination               R&D funding allocation            R&D performers           Parliament Council for Research and Innovation Policy  Government National Research Foundation  Ministry for Science and Higher Education Independent Council for Research Agency for Science and Higher Education Public Research committee Innovation Fund Denmark  Universities  Other Public Research Actors Government Research Institutes  Other ministries, such as Ministry of Environment and Food Ministry of Energy, Utilities and Climate   GTS-institutes  Firms  Hospitals  Private funds   Agency for Institutions and Educational Grants  
 
The  eight  universities  are  the  main  performers  of  public  R&D.  Other  important  public 
research  performers  are  the  Danish  University  hospitals.  Since  2014,  the  university 
colleges of higher education and the business academies have been required to engage in 
stronger  knowledge  supplying  roles  and  have  started  to  build  research  capacities,  but 
these are still in their early development. 

The Danish government is also co-financing seven private certified Advanced Technology 
Group’s  -  ATG's  (research  and  technology  organizations).  Their  primary  objective  is  to 
stimulate primarily SMEs to become more competitive and innovative6. 

The private sector performs about two thirds of all R&D in Denmark, and although a large 
share of private R&D is performed by Novo Nordisk A/S (as seen from table 1 below Novo 
Nordisk performs as much R&D as the other 9 firms in the top-ten R&D ranking together) 
many firms are highly R&I intensive. 

According  to  Statistics  Denmark  (2015),  44%  of  all  companies  in  Denmark  had 
innovation activities in 2015. 30% were engaged in product or process innovation, 27.5% 
in  organizational  innovation,  and  28%  in  marketing  innovation.  The  indicator  is 
somewhat  lower  for  SME’s  according  to  the  European  Innovation  Scoreboard  (European 
Commission,  2017b)  where  only  34.7%  of  SME’s  have  introduced  a  new  product  or 
process.  The  index  for  EU  in  2010  is  set  at  100.  For  Denmark  the  index  was  110.7  in 
2010.  After  initially  increasing  to  118.8,  it  has  decreased  to  97.9  in  2016;  a  significant 
decrease over a relatively short period. 

To  some  extent this drop may be a  statistical phenomenon.  Linkages  for innovation are 
important gateways to access and transfer knowledge. Compared to the EU average, the 
European  Innovation  Scoreboard  2017  (European  Commission,  2017b)  indicates  that 
Denmark has experienced one of the largest declines on this indicator from index 152.6 
in  2010  (EU  index  100  in  2010)  to  114.8  (2016),  while  the  index  for  the  EU  has  only 
decreased  slightly  in  the  same  period  to  95.3.  However,  in  this  period  there  was  a 
merger  of  research  entities.  This  will  by  definition  statistically  result  in  fewer  linkages. 
More  importantly,  relatively  few  companies  collaborate  with  knowledge  institutions  like 
universities  (15.4%  in  2014)  representing  a  small increase  compared  to  2012  (14.9%). 
On  the  other  hand,  collaboration  with  public  organizations  including  research  and 
technology  organizations  has  decreased  since  2012  from  11.1%  to  6.8%  in  2014.  The 
level  of  collaborative  patterns  with  research  and  technology  organizations  therefore 
remains a persistent challenge. 

innovation  performance, 

To  stimulate 
the  Government  has  established  both 
demonstration  programs  (e.g.  the  EUDP  program)  and  the  Market  Maturation  Fund 
(MMF)  to  stimulate  commercialization  efforts.  The  Market  Maturation  Fund  has  in  2016 
funded 38 new projects with 172m DKK. The MMF supports projects with co-financing (up 
to  45%)  and  supports  only  prototype  testing  and  adaptation  of  innovative  solutions 
towards  the  market.  An  evaluation  of  the  Fund  showed  that  25%  of  the  participating 
firms were able to enter the market faster due to the funding and 26% of the participants 
stated  that  they  would  not  have  reached  the  market  without  the  funding  (The  Market 
Maturation Fund, 2017). 

To  stimulate  collaboration  between  R&I  actors,  the  Danish  government  has  since  2007 
supported more than 22 nation-wide innovation networks. These networks are designed 
to  facilitate  interaction  between  universities,  RTO’s  and  firms  and  are  topically  defined 
e.g. focusing on transport, production, energy including offshore technologies, food, and 
service  innovation.  The  innovation  networks  are  therefore  as  such  not  R&D  performers, 
but  are  designed  to  facilitate  knowledge  exchange  between  R&D  performers  including 
firms.  An  application  round  was  completed  in  the  spring  of  2014  for  a  further  four-year 
period (2014-2018) with a total funding of €39m supporting 22 networks. A report on the 
performance  of  the  innovation  networks  from  the  Ministry  of  Higher  Education  and 
Science  showed  that  after  a  period  (2010-2014)  more  firms  were  engaged  in 

6 As of January 1st. 2017, DELTA was merged with Force Technology resulting in a reduction from eight to seven 
ATG’s in Denmark https://dk.madebydelta.com/om-os/kundeinformation/ 

9 

 
                                           
collaborative projects and more companies engaged in collaborative projects for the first 
time, a decrease was registered from 2014 to 2015. This decline continued according to 
the  most  recent  performance  account  of  the  networks  (Styrelsen  for  Institutioner  og 
Uddannelsesstøtte,  2017).  Even  though  the  number  of  companies  becoming  innovative, 
based  on  participation in  the  innovation  networks,  increased  over  the  period  from  2007 
to  2015,  the  networks  had  the  best  performance  in  the  years  from  2011  to  2014.  The 
current innovation networks have been offered a 6-month extension (until end of 2018). 
It is expected that a new application round will follow offering network funding for 2019-
2020. The Government's new strategy for  research and innovation (Regeringen, 2017a) 
points to the innovation networks as one measure for increasing the links in the research 
and innovation system further in order to address the challenge of the lacking innovation 
performance of small and medium sized companies. 

Finally,  larger  societal  partnerships  involving  public  actors  as  co-creators  and  public-
private  innovation  efforts  have  been  established  and  are  notable.  Examples  include  the 
Danish  MADE  initiative,  which  focuses  on  production  and  Internet  of  Things  for 
manufacturing;  and  BloxHub,  which  aspires  to  bridge  architecture,  design,  construction 
and  digitization  by  connecting  companies,  researchers  and  organizations  to  create 
solutions  for  a  good  city  life.  A  recent  mid-term  evaluation  of  MADE  (Innovation  Fund 
Denmark,  2017a)  showed  that  the  participating  firms  were  more  innovative  and 
productive  than  the  industry  as  a  whole.  The  evaluation  highlights  several  positive 
benefits  that  hold  a  large  potential  for  industry,  if  implementation  and  dissemination  of 
the developed technologies can be ensured. 

The Danish research & innovation (R&I) system has undergone upgrading in all respects 
and, as indicated by bibliometric statistics, the quality of scientific outputs in Denmark is 
world  class.  The  Danish  R&D  and  innovation  system  is  also  very  productive.  Patents 
constitute an indicator  of R&D output performance. Due to its small size, Denmark only 
accounts for a small proportion of World patents (0.61 in 2015), but if patent applications 
are  normalized  by  billion  GDP,  the  share  was  6.24  in  2015,  which  is  well  above  the  EU 
average  of  3.53.  The  number  of  international  scientific  co-publications  per  million 
population  has  shown  an  overall  increase  from  1166.12  (2009)  to  2228.92  (2016). 
Hence, the level of research in Denmark is high regardless whether it is measured by the 
number  of  scientific  publications  per  inhabitant  or  citations  per  publication.    Overall,  on 
the  research  excellence  composite  indicator,  Denmark  is  ranked  5th,  which  is  similar 
compared  to  previous  years  (Vertesy  &  Tarantola,  2012).  The  Government  will,  though, 
according  to  the  recent  Strategy  for  Research  and  innovation  (Regeringen,  2017a), 
increase  the  excellence  of  research  further  and  broaden  it  to  more  research  areas  (see 
section 4).  

In sum, despite the high quality and relative volume and effort in research, there is still 
potential  for  improvement  on  the  innovation  output  side,  particularly  concerning  the 
innovation performance of SMEs, as well as the level and availability of human resources 
for R&I; notably in the private sector. 

3  R&I policies, funding trends and human resources  

3.1  Public allocation of R&D and R&D expenditure 

Denmark’s gross domestic expenditure on R&D (GERD)  reached  2.87% of  GDP in 2016, 
which is a small decrease from 2015 (2.96%) and 2014 (2.91%). The level remains well 
above  the  EU  average  (2.03%).  The  public  research  budget  for  2017  was  21.5bn  DKK 
(€2.9 billion) or 0.92% of GDP in 2016 (Statistics Denmark, 2017b) down from 1.01% in 
2015 and 1.0% in 2014 due to budget cuts in 2016. For 2018, the proposal for the fiscal 
budget is 22.2bn DKK (€ 3.0 billion) of public expenditures on R&D, which is estimated to 
amount to about 1.0% of GDP. In the new R&I strategy, the Government has confirmed 
its commitment to the 1% target for public R&D expenditures.  

10 

 
 
Figure 2: GERD by Source of Funds for Denmark 

Source: Eurostat, November 2017 

The  share  of  total  public  R&D  performed  by  the  higher  education  sector  (HES)  has 
increased  in  total,  but  experienced  a  slight  decrease  in  2016  as  %  of  GDP.  The  flows 
from business to higher education for R&D purposes has decreased from financing 5.0% 
of public R&D in 2008 to 4.4% in 2015 (Regeringen, 2017b), despite a significant policy 
focus  on  increasing  collaboration  between  business  and  universities.  Private  non-profit 
organizations  account  for  a  significantly  larger  proportion  of  the  funding  of  R&D 
performed  by  HES  compared  to  the  investments  from  business.  According  to  a  recent 
mapping of private funding 12 private non-profit foundations contributed around €1.3bn 
for  research,  innovation  and  higher  education in  the  three-year  period,  2012-2014,  and 
have  doubled  their  contribution  in  the  2007  to  2014  period.  These  funds  are  mainly 
invested in the eight universities. The external share of funding of university research is, 
according to the Government, the highest in the OECD and the new R&I strategy (ibid. p. 
12)  states  that  the  regulatory  framework  for  such  investments  will  be  assessed  with  a 
view to further smoothen the investment process. Three foundations invest more than a 
third of their funds directly on innovation (about €52m). "Industriens Fond" (The Danish 
Industry  Foundation)  funds  initiatives  strengthening  the  competitiveness  of  Danish 
industry. Based on open and thematic calls, the foundation funds some €15m per year. 
The two other foundations are Realdania and Novo Nordisk Fonden. 

Public  funds  contribute  directly  around  €300m  to  innovation.  These  funds  support  the 
innovation  networks,  the  ATG-institutes  and  the  InnoBooster  scheme  of  the  Innovation 
Fund  Denmark  among  others.  The  InnoBooster  scheme  is  directed  at  SME’s  and  on 
average  award  170  000  DKK  (€23  000)  kr.  to  the  awarded  applications.  In  2016,  the 
scheme received 1475 applications and awarded 351 grants (Innovation Fund Denmark, 
2017b),  which  by  far  is  the  largest  volume  of  the  schemes  in  the  Innovation  Fund.  In 
total,  the  scheme  has  received  more  than  4200  applications  since  program  inception  in 
2014. In total, 580 million DKK (€78 m) have been awarded to InnoBooster applications. 
A  recent  evaluation  of  the  InnoBooster  program  highlights  that  for  many  of  the 

11 

 
 
 
 
 
participating  SME’s,  the  instrument  provides  the  “necessary  push”  to  move  forward  on 
innovative initiatives (Iris Group & The Danish Innovation Foundation, 2017: 8). 

Denmark  is  a  member  of  the  European  Spallation  Source  (ESS),  which  is  part  of  a 
European investment in research facilities oriented towards research in new materials. It 
is  expected  to  be  finalized  by  2019.  Denmark  will  invest  2bn  DKK  (€  269  million)  from 
2014-2022 on this initiative. The Government launched in 2015 a strategy to ensure that 
Denmark makes the most out of these substantial investments.  

Public funding of R&I is also provided through international  programs. The Danish share 
of total EU contribution from the EU framework programs has been stable at 2.37% from 
FP6  and  2.36%  from  FP7.  However,  in  absolute  terms,  there  was  an  increase  in  EU 
contribution  to  Denmark  of  almost  168%  from  €396.1m  in  FP6  to  €1,060.6  million  in 
FP7.  Regarding  Horizon  2020,  the  Danish  share  of  total  EU  contribution  is  €726  million, 
equaling about 2.5%, which makes Denmark the fourth most successful Member State in 
the  competition  for  FP  fund  relative  to  the  size  of  its  population  (Uddannelses-  og 
Forskningsministeriet, 2016). 

3.2  Private R&D expenditure 

Business  enterprise  R&D  expenditure  (BERD)  had  increased  to  a  level  of  1.96%  of  GDP 
up  to  2011,  but  decreased  to  1.89%  in  2016.  BERD  contributes  about  two  thirds  to 
overall  GERD.  The  investment  in  R&D  by  the  business  sector  is  an  important  driver  of 
innovative  performance,  and  especially  relevant  for  realizing  a  higher  innovative 
performance of SMEs. Hence, the decrease over the last 5 years may in part explain the 
challenges of increasing the overall innovative performance of SME’s. 

The  government  funding  of  private  business  R&D  has  been  decreasing  (from  0.06  in 
2009 to 0.05 in 2015), similarly to the business sector’s own funding that has also been 
slightly  decreasing.  In 
terms  of  sectoral  distribution,  manufacturing  of  basic 
pharmaceutical  products  and  pharmaceutical  preparations  is  the  most  important  R&D 
performer in the Manufacturing sector, followed by manufacturing of computer, electronic 
and  optical  products,  and  manufacturing  of  machinery  and  equipment.  In  the  Services 
sector  Information  and  communication  and  Financial  and  insurance  sectors  are  the 
primary  R&D  performers.  Table  1  shows  the  top-ten  R&D  performing  firms  in  Denmark. 
As mentioned, Novo Nordisk is dwarfing the rest of the firms in terms of the R&D volume. 
It is also seen from the table that pharmaceuticals is the most important R&D performing 
sector in Denmark.  

Table 1: The largest R&D performers in Denmark 

EU RANK 
2017 

EU RANK 
2016 

EU RANK 
2015 

Company name  

Industry  

22 

81 
89 

121 
129 

144 
188 

233 
251 

253 

26 

80 

87 
114 

126 
170 

193 
212 

216 
244 

22 

86 

84 
118 

141 
159 

165 
240 

264 
255 

NOVO NORDISK 

H LUNDBECK 

DANSKE BANK 
NOVOZYMES 

DANFOSS 
VESTAS WIND 
SYSTEMS 
GRUNDFOS 
GN STORE NORD 

ARLA FOODS 
WILLIAM DEMANT 

Pharmaceuticals & 
Biotechnology 
Pharmaceuticals & 
Biotechnology 
Financial Services 
Pharmaceuticals & 
Biotechnology 
Industrial Engineering 
Renewable Energy 

Industrial Engineering 
Technology Hardware 
& Equipment 
Food Producers 
Health Care 
Equipment & Services 

Source: (IRI - Economics of Industrial and Economic Research, 2017) 

R&D exp. 
2016 (€m)  

R&D 1-
year 
growth  
14,7 

R&D 
intensity %  

1.996 

355 
329 

237 
221 

198 
140 

114 
101 

100 

-7,7 

-8,2 
-0,4 

2,4 
26,9 

4 
-6,2 

-12,9 
2,6 

13,3 

16,9 
4,9 

12,5 
4,2 

1,9 
56,7 

9,1 
1,1 

6,2 

12 

 
 
3.3  Supply of R&I human resources 

Increasing the education of PhDs has been a political priority.  The share of new doctoral 
graduates per 1000 of the young population  was 2.23 in 2016 above the EU average  of 
1.07  (2013)  and  has  increased  from  1.14  since  2009.  A  review  of  the  Danish  Doctoral 
Education  from  2017  (Styrelsen  for  Forskning  og  Innovation,  2017b)  found  the  Danish 
system  to  be  well  functioning,  and  Danish  doctorate  thesis  to  be  of  a  very  high 
international  standard.  Furthermore,  the  share  of  new  graduates  in  STEM  per  1000 
population  has  increased  from  1.89  to  2.58  in  2015.  For  new  graduates  in  STEM  per  1 
000  persons  aged  20–29  years,  both  the  shares  of  men  and  women  are  above  the  EU 
average  (EUROSTAT,  2014).  According  to  Eurostat  (2014),  with  10.6  researchers  per 
1000  population  Denmark  is  ranked  2nd  in  Europe  only  after  Sweden  and  at  the  same 
level as Finland, and Denmark is considerably above the EU level of 5.6 researchers per 
1000 population (ibid.). 

The  recovery  after  the  crisis  combined  with  an  ageing  labor  force  is  expected  to 
progressively  lead  to  an  emerging  under-supply  of  certain  types  of  skills  in  the  labor 
market  (Ministry  for  Economic  Affairs  and  the  Interior,  2017).  For  highly  skilled  people 
with a tertiary education the employment situation is in general good. 

Despite a challenge in securing an adequate labour force for the long term, there is also 
a  positive  development  in  key  indicators  of  the  supply  of  high-skilled  human  resources. 
The  share  of new doctoral graduates per 1000 of the  young population is above the  EU 
average  and  has  increased  since  2010,  as  has  the  new  graduates  in  STEM  per  1000  of 
the  young  population  (EUROSTAT,  2017).  In  November  2017,  the  Government  made  a 
new  political  agreement  on  the  distribution  of  funds  for  higher  education  (Uddannelses- 
og Forskningsministeriet, 2017). This agreement focuses  on quality in education as well 
as employability of the new students. A special emphasis is on increasing the number of 
study places for STEM students. 

Table 2: Supply of human resources 

13 

 
 
 
The Danish Government established the Disruption Council in May 2017 to advice on how 
to  better  address  the  challenges  and  utilise  the  opportunities  created  by  new 
technologies  and  increased  globalization  (Regeringen,  2017b).  One  theme  on  the 
Disruption  Council's  agenda  is  1the  “Competencies  of  the  future”,  where  the  focus  is 
particularly  on  the  future  competencies  needed,  when  taking  the  future  automation  of 
work  tasks  and  functions  into  account.  At  present,  no  detailed  analysis  has  been 
presented on this, but one premise of the Councils work  seems to be that Denmark has 
not sufficiently exploited its strong digital position to increase productivity growth.  

4  Policies to address innovation challenges7 

The  Danish  Government  on  6  December  2017  launched  a  comprehensive  new  strategy 
for research and innovation (Regeringen, 2017a). The strategy has two main goals: 

1.  Danish research must be at the highest international quality (The "Nobel" goal). 
2.  Research must benefit society (The Relevance goal). 

These two goals are supported by  28 initiatives.  It is part  of the Nobel goal to set up a 
‘Nobel  pact’  with  the  objective  to  reach  the  highest  level  of  research  quality  and 
rewarding  excellence.  For  the  Nobel  goal,  the  specific  initiatives  include  creation  of 
individual career paths, recruitment, and incentives for talented researchers as well as a 
new  performance  based  funding  model  for  the  universities,  new  research  system 
infrastructures,  and  stimulating international  research  collaboration.  The  Relevance  goal 
is  supported  by  activities  related  to  strategic  funds  and  capacity  for  technological 
research,  focus  on  digitalisation  as  well  as  value  creation  in  firms  from  research  and 
focus  on  the  connectivity  and  coordination  between  public  and  private  funding  of 
research.  Moreover,  technology  transfer  from  higher  education  for  societal  use  will  be 
stimulated, and both higher education quality and more graduates from STEM educations 
are policy objectives.  

The  new  R&I  strategy  builds  on  previous  R&I  policies.  It  specifies  and  extends  the 
ambitions  for  the  already  very  high  science  performance  and  has  the  clear  objective  to 
make  research  more  useful  for  society.  The  RESEARCH2025  (FORSK2025)  themes  are 
still relevant to the new strategy, and through the Innovation Fund funds are allocated to 
research  under  the  following  themes:  New  technological  opportunities,  Green  Growth, 
and  Better  Health  (three  of  the  four  themes  in  RESEARCH2025).  The  new  R&I  strategy 
will later be followed by separate strategies for digitalisation and growth in life sciences.  

High public R&D investments will support the strategy.  Public R&D investments dropped 
slightly  below  1%  in  2016  because  of  budget  cuts,  but  expenditures  are  estimated  to 
have been about 1% of GDP for 2017 following a smaller increase in the budget for 2017 
(Styrelsen  for  Forskning  og  Innovation,  2017b).  The  Government  has  confirmed  in  the 
new strategy its commitment to keeping public R&D investments at 1% of GDP.  

Effective policies for R&D and innovation ensure the efficient and effective working of the 
innovation  system  regarding  the  generation,  dissemination,  and  use  of  knowledge.  The 
new  R&D  and  innovation  strategy  addresses  all  parts  of  the  innovation  system. 
Nevertheless,  the  discussion  in  the  previous  sections  pointed  to  the  potential  for 
improvement  in  some  areas.  In  this  section,  we  discuss  three  identified  challenges  for 
improving the Danish innovation performance: (i) increase the innovativeness of SMEs, in 
particular  the  number  of  high  growth  innovative  firms,  (ii)  increase  the  quality  and 
availability  of  human  resources,  and  (iii)  support  innovation  to  boost  productivity.  The 
challenges  are  on  different  levels  of  aggregation  and  have  different  time  perspectives, 

7 We note that at the time of writing the Government has put forward proposals for new policy initiatives, 
notably a tax reform and a new industrial policy. Political negotiations are currently focused on these proposals 
and the fiscal budget for 2018, which could therefore not be systematically taken into account in this report.  

14 

 
 
 
 
                                           
but  are  nevertheless  strongly  linked.  They  are  not  new  in  the  Danish  context  and  were 
presented in the 2016 RIO report (Knudsen, Christensen, & Christensen, 2017).  

4.1  Challenge  1:  Reinforcing  the  links  between  actors  to  improve 
the  innovativeness  of  firms  and  the  commercialization  of 
research 

Description 

This challenge is related to the overall connectivity of key actors in the innovation system 
as well as the commercialization capabilities  at firm level. The former  has been a policy 
focus  for  many  years,  but  improvements  are  still  needed  as  also  recognized  in  the  new 
R&I  Strategy.  At  the  firm  level,  a  challenge  for  Danish  SME’s  is  to  improve  their 
innovation  capabilities  by  benefitting  to  a larger  degree  from  the  strong  science  system 
to  enhance  innovation  output.  This  is  demonstrated  above  by  the  declining  innovation 
performance within the Innovation Scoreboard (Chapter 2). 

Policy response  

Several  policies  to  enhance  collaboration  between  actors  in  the  system  have  been 
implemented  in  the  past,  including  funding  of  22  innovation  networks.  The  Innovation 
Fund's  InnoBooster  program  (established  in  2014)  aims  to  support  the  innovative 
capabilities  of  SME’s.  In  2017,  an  evaluation  showed  that  the  program  has  been 
successful  in  providing  the  “final  push”  to  firms  (Iris  Group  &  The  Danish  Innovation 
Foundation, 2017). Similarly, the Market Maturation Fund supports initiatives to promote 
growth,  employment  and  export,  particularly  for  SMEs  and  within  three  focus  areas:  (i) 
market development through co-funding for private enterprises’ innovative solutions, (ii) 
market  development 
innovative  public  procurement,  and  (iii)  market 
development  through  industry  partnerships8.  These  initiatives  are  directed  at  R&I 
developments, which are very close to market introduction. 

through 

A  strengthening  of  the  RTO  system  (including  the  private  "Advanced  Technology  Group 
Institutes")  has  also  been  prioritised.  Although  at  a  relatively  small  scale,  the  ministry 
invites applications for additional funds that are simultaneously aimed at supporting new 
policy focus areas like drones, space, and the circular resource economy. The regulations 
on  collaborative  agreements  between  actors  will  be  reviewed  and  possibly  relaxed. 
Technology transfer in terms of spin-outs, licensing, and other use of IPR is a priority in 
recent  government  plans.  Over  the  past  years,  the  Danish  universities  have  initiated  a 
process  of 
their 
commercialization capabilities and attention from a traditional linear approach towards a 
more  collaborative  and  interactive  model.  In  line  with  this  work,  physical  ‘Innovation 
Hubs’  and  ‘Science  and  Innovation  Parks’  are  being  built  to  provide  shared  facilities  for 
researchers,  student  entrepreneurs,  and  businesses.  Funding  of  such  activities  is  also  a 
focus of private foundations. 

transfer  offices 

reconfiguring 

technology 

improve 

their 

to 

At  the  regional  level,  the  six  regional  growth  fora  have,  to  a  large  extent,  focused  on 
innovation  in  the  private  sector.  Examples  are  strengthened  collaboration  between 
research institutions and SMEs and counselling on growth plans and innovation audits in 
SMEs.  The regional growth fora spent approximately DKK 800m (approximately €107m) 
on regional growth measures in 2016 (Uddannelses- og Forskningsministeriet, 2016). 

The new R&I strategy from December 2017, includes initiatives to strengthen research in 
technology and technology transfers from universities to business. To further incentivize 
private  firms  to  carry  out  R&D,  the  Government  will  increase  the  tax  benefits 
progressively from 100% to 110% in 2026. It will also improve coordination between the 

8 https://markedsmodningsfonden.dk/in_english  

15 

 
 
                                           
different  funding  instruments,  between  universities  and  simplify  the  administration  of 
R&D programmes.    

Policy Assessment 

Despite continued efforts over the last decades and with some notable progress, there is 
still  a  potential  for  improving  the  links  between  the  actors  in  the  R&I  system.  This 
assessment  resonates  with  The  Danish  Council  for  Research  and  Innovation  Policy 
(Danmarks  Forsknings-  og  Innovationspolitiske  Råd,  2016),  which  points  to  inadequate 
links between key actors and a fragmented innovation infrastructure. They recommend a 
more holistic, systemic approach to innovation policy, but it is questionable whether this 
will be sufficient. There is an even higher need to improve the  conversion of the  strong 
science  performance  into  improved  innovation  performance  of  SMEs.  The  decreasing 
share of SME’s that introduce new products and processes is a significant challenge since 
research  has  shown  that  converting  non-innovative  to  innovative  firms  is  hard  (Suárez, 
2014).  The  Market  Maturation  Fund  has  been  successful  in  supporting  the  initiatives  of 
SME’s, but the absolute volume of funding is limited.  

The  Productivity  Commission's  (2014)  proposal  for  larger  societal  partnerships  including 
public actors as co-creators and public-private innovation efforts resonates well with the 
intentions  of  improved  commercialisation.  Examples  of  new  initiatives  include  the  MADE 
initiative for production aimed at improving the performance of the manufacturing sector 
and  BloxHub  focusing  on  city  life.  The  first  evaluations  are  positive.  There  has  been  a 
continuous policy to enhance network-based innovation. The audit of the Danish network 
and  cluster  initiatives  showed  that  especially  small  firms  with  less  than  50  employees 
benefit  from  participation  in  the  networks  in  terms  of  improving  their  innovative 
capabilities  to  increase  their  innovation  output  (Styrelsen  for  Forskning  og  Innovation, 
2016a;  Styrelsen  for  Institutioner  og  Uddannelsesstøtte,  2017).  The  new  R&I  strategy 
recognises 
links  between  actors  as  well  as 
commercialisation  of  innovative  efforts  by  firms,  but  the  proposed  policy  initiatives  can 
only  be  expected  to  have  an  effect  in  the  longer  run,  hence  there  needs  to  be  a 
continuous effort. 

these  challenges 

improving 

for 

4.2  Challenge  2:  Increase  the  quality  and  availability  of  human 

resources  

Description 

With  the  recovery  from  the  economic  and  financial  crisis,  there  is  now  a  lack  of  skilled 
labour  in  several  industries  and  regions.  Ensuring  an  adequate  supply  of  skilled  and 
highly  skilled  labour  is  a  pre-requisite  for  lifting  Danish  innovation  performance  and  for 
addressing the productivity challenge. Statistics Denmark collects yearly data on vacant 
positions  in  private  firms.  Comparing  figures  for  the  first  quarter  each  year  indicates 
18.000 vacant positions in 2013 (Q1) increasing to 31.500 in 2017 (Q1). The increase is 
noted  in  all  5  regions  in  Denmark.  Plumbers,  electricians,  and  IT  specialists  are  among 
the  type  of  labour  most  often  listed  by  firms  as  being  in  scarce  supply  (Statistics 
Denmark, 2017a). One in four firms reports that a shortage of these types of labour has 
hampered  their  growth  (Ministry  for  Economic  Affairs  and  the  Interior,  2017:  90-91; 
Statistics Denmark, 2017a).  

Furthermore,  while  the  development  in  the  general  economic  situation  in  Denmark 
remains positive with an increasing GDP per capita, the overall figures hide marked and 
increasing differences,  not only between people in or out of the labour market, but also 
between  regions.  The  increasing  regional  inequalities  are  particularly  problematic  for 
companies  outside  the  larger  cities  especially  with  respect  to  attracting  enough  skilled 
labour. 

16 

 
 
Policy response 

A  previously  formulated  target  that  at  least  25%  of  youth  cohorts  should  complete  a 
master’s  degree  by  2020  has  been  reached.  This  has  led  the  previous  government  to 
down-scale  certain  educational  programmes  at  the  universities.  Denmark  has  also 
strengthened  the  Industrial  PhD  and  Post-Doc  programmes,  and  efforts  are  made  to 
increase  the  supply  of  skilled  labour  including  upgrading  the  existing  work  force,  and 
there  are  plans  to  increase  innovation-related  and  entrepreneurial  skills  in  courses  and 
programmes throughout the education system. The supply and quality of labour has also 
been  stimulated  through  several  labour  market  reforms  and  tax  policies  focusing  on 
increasing  the  work  incentives,  including  postponing  retirement.  However,  there  is  no 
robust assessment  as to the responsiveness  of  the supply of labour to these incentives, 
yet.  

One  of  the  two  main  objectives  of  the  new  R&I  strategy  from  December  2017  is  to 
increase  the  quality  of  Danish  research  further  from  its  current  high level.  This  is  to  be 
achieved  through  the  establishment  of  special  "Nobel"  research  centres  in  collaboration 
with  private  philanthropic  funding,  the  introduction  of  a  performance  based  research 
funding  model,  improved  career  possibilities  for  researchers,  further  international 
research cooperation, and further investments in research infrastructures. Moreover, the 
Government  plans  to  establish  a  technology  "pact"  between  business,  universities  and 
public authorities to stimulate STEM education.    

As  a  response  to  the  challenges  associated  with  regional  inequalities,  the  Government 
launched in 2015 a strategy “Growth and development in the whole of Denmark”, which 
focused  on  competitive advantages and framework  conditions for  regional areas outside 
of the two largest cities (Regeringen, 2015b). As one of many parts of this strategy, the 
Government decided to move 3900 government jobs from Copenhagen to other regions 
in the following four years towards 2018. A status in September 2017 showed that 2546 
jobs had been moved. 23 of the planned 44 institutions had completed their move. The 
Government  announced  on  28  November  2016,  a  second  wave  of  relocation  of 
government jobs, which is planned from 2018 onwards. These initiatives are focused on 
reducing the regional inequalities in job opportunities and stimulating the economy in the 
regions  through  the  indirect  effects  from  these  jobs.  A  head  count  showed  that  22%  of 
the  moved  jobs  were  filled  with  employees  that  moved  or  commuted  to  the  new  site 
(Regeringen,  2017c).  Another  2016  policy  initiative  is  the  introduction  of  a  2-year 
subsidy  to  firms  in  rural  areas  (in  2016)  employing  high-skilled  people  for  innovation 
projects. In total, 122 policy initiatives aimed at this challenge were planned. Around half 
of  these  have  been  implemented  (Regeringen,  2015a).  The  attention  to  regional 
disparities continues in recent policies, for example in the business promotion agreement 
of November 12th, 2017. 

Policy Assessment 

All  projections  show  that  there  will  be  a  shortage  of  people  with  STEM  skills  and  skilled 
craftsmen. Therefore, the initiatives to create more interest in STEM educations and the 
efforts  to  improve  research  as  well  as  the  careers  perspectives  of  researcher  are  highly 
needed. Still, the skills challenge can only be resolved in the medium to long term as it 
takes  time  to  train  people.  But  the  challenge  is  also  to  ensure  upgrading  of  existing 
labour  supply,  in  view  of  future  demands  for  skills.  This  is  not  only  a  matter  of  deep 
technical  skills,  but  the  future  requirements  of  the  skills  profile  of  workers  also  require 
more  ‘soft’  competences  like  collaborative  capabilities  to  function  in  increasingly 
networked work environments (European Commission, 2016; OECD, 2017b; Vækstforum 
Nordjylland,  2016).  The  work  of  the  new  Disruption  Council  is  aiming  to  provide 
analyses, solutions, and suggestions for bridging the current supply and the future needs 
of  skills  –considering  the  digitalisation  and  automation  opportunities  and  the  challenges 
that  these  developments  pose  to  qualifications.  It  is  important  for  the  success  of  the 
work in the Disruption Council and elsewhere that a broad view of the skills challenge is 

17 

 
applied,  implying  that  recommendations  and  initiatives  go  beyond  a  narrow  focus  on 
technical skills and STEM educations only. 

The  skills  challenge  relates  not  only  to  the  education  system,  but  also  to  the  labour 
market.  This  is  accentuated  by  the  need  to  improve  labour  market  inclusion  and 
improving  the  employability  of  disadvantaged  groups.  The  job-integration  measures 
agreed  in  the  2016  tripartite  negotiations  (August  2016)  aimed  at  improving  the 
integration  of  newly  arrived  refugees  and  migrants,  as  well  as  providing  incentives  for 
companies  to  create  10  000  new  apprentice  places.  The  tripartite  negotiations  in  2017 
more  generally  addressed  the  need  for  upgrading  of  the  existing  workforce  (valid  for 
2018-2021)9.  Ideally,  an  improved  labour  market  inclusion  would  provide  part  of  a 
response to the skills challenge. The extension and widening of the researcher tax credit 
scheme  from  5  to  7  years  is  an  example  of  a  relevant  initiative  targeted  at  the  highest 
education  levels,  whereas  the  initiatives  for  educating  low-skilled  for  new  job 
opportunities with higher qualifications remain limited. 

The  shortage  of  skilled  labour  is  most  felt  in  the  outermost  regions,  where  companies 
experience  the  largest  problems  of  hiring  the  skilled  labour  they  need.  The  strategy  to 
promote  growth  and  development  in  the  whole  country  is  an  attempt  to  alleviate  the 
problem of regional inequalities (Danske Regioner, 2016), although the exact net effect is 
still to be established. In addition, there are targeted labour market and tax measures in 
place  to  encourage  mobility,  but  so  far,  the  problem  of  increasing  regional  inequalities 
persists. 

4.3  Challenge 3: Support innovation to boost productivity 

Description 

Many advanced economies including Denmark have  experienced a weak development in 
private  investment  in  the  aftermath  of  the  economic  and  financial  crisis.  The  level  of 
investment  in  non-R&D  expenditures  has  followed  OECD  trends  up  until  the  financial 
crisis, but decreased significantly below the OECD average after 2010 (Danish Ministry of 
Business  and  Growth,  2016).  Like  other  OECD  countries,  Denmark  has  seen  a  shift 
towards  service  sectors  accounting  for  a  larger  proportion  of  GDP  compared  to 
manufacturing and agriculture. However, analysis shows that so far sectoral shifts cannot 
explain  the  drop  in  productivity  growth10.  Still,  improved  productivity  in  the  services 
sector  has  been  a  policy  focus;  in  particular  there  has  been  a  focus  on  increasing 
competition in services.  

A  challenge  such  as  low  productivity  growth  can  probably  only  be  addressed  through  a 
broad range of measures. Nevertheless, there is significant scope for R&D and innovation 
and infrastructure investments to support improvement in the business sector  especially 
resources, 
amongst  SMEs.  Together  with 
improvements  in  the  business  sector  have  the  potential  to  provide  a  significant 
contribution to a stronger productivity development. 

increased  qualifications  of  human 

Policy response 

Following recommendations from the Productivity Commission  (2014) and the Economic 
Councils,  the  Government  has  been  attentive  to  the  effects  on  productivity  from 
increased  competition,  smooth  and  limited  regulation,  and  high  efficiency  of  the  public 
administration.  Concerning  R&I,  in  addition  to  reinforcing  the  links  between  R&I  actors 
(challenge  1)  and  the  need  to  increase  the  quality  and  availability  of  human  resources 

9 https://www.regeringen.dk/nyheder/trepartsaftale-2017/ 
10   This  phenomenon  is  sometimes  referred  to  as  "Baumol's  disease".  However,  the  analysis  by  the  Danish 
Economic  Councial  Danish  Economic  Councils  ("De  Økonomiske  Råd").  2017.  Autumn  Report:  Konjunktur 
og  offentlige  finanser,  Langvarigt  offentligt  forsørgede,  Brancheforskydninger  og  vækstudsigter:  1-272. 
Copenhagen: De Økonomiske Råd.) shows that Denmark is not (yet) impacted by "Baumol's disease”. 

18 

 
 
                                           
(challenge  2),  Denmark  has  improved  the  funding  possibilities  for  R&I.  Support  is 
provided  by  the  Danish  Growth  Fund  for  on-going  business  development  in  sectors  of 
high societal importance (see below in the section on smart specialisation).  

Policy Assessment 

Improved  innovation  performance  is  a  key  to  address  the  productivity  challenge. 
Therefore, the policy response to the productivity challenge should also address relevant 
shortcomings  in  the  innovation  system  (‘system  failures’)  in  order  for  innovation  to 
contribute to a stronger productivity development. Importantly, the measures to improve 
funding  complements  the  measures  addressing  the  skills  challenge  and  improving 
interactions between R&I actors. 

5  R&I in National and Regional Smart Specialisation 

Strategies  

Danish  business  support  policies  have  applied  the  smart  specialisation  principles  for  a 
long  time.  In  their  original  formulation  (Foray,  David,  &  Hall,  2009),  it  was  emphasized 
that  smart  specialisation  describes  a  process,  which  departs  from  the  embedded 
strengths  of  a  region  and  involves  entrepreneurship  and  regional  stakeholders.  Policy 
processes in Denmark have to a large extent been pursued in this manner for a couple of 
decades.  At  a  national  level  of  aggregation,  key  actors  from  both  public  and  private 
organisations  are  consulted  for  advice,  and  at  a  regional  and  local  level  they  are  also 
engaged  in  the  actual  implementation  phase.  Hence,  the  Local  Action  Groups,  an 
European  Regional  Development  Fund  (ERDF)  supported  scheme,  are  particularly  active 
and  with  a  high  involvement  of  local  actors  in  Denmark  (ibid.).  Furthermore,  cluster 
policies  (see  below)  are  likewise  often  organised  with  the  involvement  of  regional 
stakeholders  participating  in  the  process.  Recently,  the  regions  have  integrated 
innovation  in  their  overall  development  strategies11  and  only  in  a  few  cases  have  they 
also carried out smart specialisation12 or innovation analyses. The Danish ERDF Program 
for 2014-2020 (Erhvervsstyrelsen & The European Regional Fund, 2017) focuses on four 
objectives:  enhanced  innovation in  SMEs,  more  high-growth  firms,  energy  and  resource 
efficiency  in  SMEs,  as  well  as  smart  and  green  urban  development.  For  example,  it  is 
stated in the guidelines for the program in support of Innovation in SMEs that ‘Innovation 
should  be  within  an  area  identified  in the  regional  growth  and  development  plan  and in 
the description of the regional intelligent specialization, which typically will be integrated 
in  the  regional  growth and  development  plan.’  (pp.13,  translation  from  Danish).  Similar 
formulations  are  made  when  explaining  support  under  other  priorities.  This  illustrates 
that  it  is  a  pre-requisite  for  Regions  to  use  S3  approaches,  and  that  the  smart 
specialisation  approach  is  typically  integrated  in  the  overall,  regional  growth  and 
development strategies. 

5.1  Policies – levels of aggregation and coordination 

The  collection  of  strategies,  which  jointly  make  up  the  Danish  smart  specialisation 
strategy  include  the  Government’s  growth  plans;  the  annual  growth  partnership 
agreements  between  the  Government  and  the  Regional  Growth  Fora;  and  at  a  regional 
level the growth and development strategies  of the Regional Growth Fora.  Furthermore, 
the  national  innovation  strategy  and  the  national  cluster  strategy  contain  elements 
promoting  smart  specialisation.  The  Danish  Growth  Council  coordinates  and  promotes 
cooperation  and  development  between  the  national  growth  strategy  and  the  regional 
growth and development strategies. 

11 See e.g. The North Jutland regional development strategy http://www.rn.dk/Regional-Udvikling/Strategier-
og-planer/REVUS.  
12 See e.g. the North Denmark expert assessment of the Smart specialisation implementation Asheim, B. 2014. 
North Denmark Region RIS3 Expert Assessment 1-36. Brussels: DG Regional and Urban Policy .  

19 

 
 
                                           
Regional  growth  fora  try  to  ensure  coordination  and  synergy  between  the  Danish 
Government’s  growth  strategy  and  the  specific  regional  key  strengths.  The  aim  is  to 
convert  the  Government’s  growth  plans  in  selected  business  areas  into  specific  actions 
with consideration for the strengths existing within the region. Ideally, an efficient smart 
specialization  strategy  would  have  a  large  degree  of  overlap  between  the  prioritized 
areas  at  the  regional level  and  priorities  at  the  national  level.  Regional  strongholds  and 
national  priorities  do  not  necessarily  overlap.  Therefore,  the  partnership  agreements 
between  the  Government  of  Denmark  and  the  regional  Growth  Fora  are  important 
instruments in ensuring coordination. 

At  a  lower  level  of  geographical  aggregation  other,  local  initiatives  seek  to  stimulate 
growth. For instance, on the Island of Funen, a part of the Region of Southern Denmark, 
five  municipalities  out  of  10  (including  the  largest,  Odense)  have  joined  forces  to 
stimulate  growth  on  the  island  through  collaboration  with  local  industry  and  relevant 
research  environments.  The  initiative  "UdviklingFyn"  ("Development  Funen")  was 
established  in  its  current  form  in  2012,  but  was  preceded  by  other  smaller  initiatives 
centred  around  the  City  of  Odense.  Priorities  include  robotics,  drones,  tourism,  and  the 
maritime  area,  which  are  all  based  on  existing  or  emerging  industrial  strengths.  The 
initiatives  are  primarily  focused  on  clusters.  In  part,  the  initiatives  of  Udvikling  Fyn  are 
parallel  to  the  initiatives  taken  by  the  Regional  Growth  Forum,  but  no  explicit 
coordination of the efforts seems to take place. 

5.2  S3 priorities 

Over  the  past  few  years,  Denmark  has  improved  the  funding  possibilities  for  R&I  in 
certain  areas  and  has  pursued  analyses  and  policies  in  line  with  the  3S  approach. 
Although  not  directly  related  to  development  of  3S,  the  Danish  Government 
commissioned  in  2012  eight  growth  teams  with  members  from  industry  in  areas  where 
Danish  businesses  are,  or  can  be,  internationally  competitive.  Based  on  their 
recommendations, the Government published during 2013 specific growth plans for each 
of  the  following  areas:  Blue  Denmark;  Creative  Industries  and  Design;  Water,  Bio  and 
Environmental  Solutions;  Health  and  Care  solutions;  Energy  and  Climate;  Food  Sector; 
Tourism  and  Experience  Economy  ICT  and  Digital  Growth.  The  plans  addressed  specific 
barriers to investment and focus on areas in which new markets can be developed.  

Based on these plans, the current Smart specialisation priority areas of Denmark for the 
2014-2020 period are (European Commission, 2017c): 

1. Manufacturing & industry 
2. Energy production & distribution 
3. Sustainable innovation 
4. Human health & social work activities 
5. Agriculture, forestry & fishing 

The  degree  of  alignment  with  national  priorities  varies  across  regions.  For  example,  the 
regional  priorities  of  the  Central  Denmark  Region  are:  Energy  and  Environment, 
Foodstuffs,  and  Welfare  Technology.  The  Region  of  Southern  Denmark  has  a  focus  on: 
Health  and  Social  Innovation,  Sustainable  Energy,  Experience  Economy.  The  Growth 
Forum of the North Denmark Region (Growth and Balance’, 201013) listed the priorities of 
the  North  Denmark  Region  as:  Tourism  and  Experience  Economies,  Construction 
Industry,  Energy,  Food,  Health  and  Life  Science,  ICT,  Intelligent  Transport  (including 
Logistics),  and  Maritime  Sector  (European  Commission,  2017d).  The  regions  are  not 
obliged  to  coordinate  their  actions  and  plans  across  or  with  other  regions,  which  may 
lead to some duplication. 

13 In September 2017, a new partnership agreement with the government was signed. Priorities are focused on 
three areas; Technology and digitalisation, the Maritime sector, green growth and circular economy.  

20 

 
 
 
 
                                           
5.3  Related policies and prioritizations 

An important Danish policy initiative complementary to the smart specialization priorities 
is  the  INNO+  catalogue  (Ministry  of  Science,  2013),  which  in  a  3-5  year  perspective, 
presents areas for strategic investments in innovation, channeled through, among others, 
the  Danish  Innovation  Fund.  The  current  efforts  in  INNO+  are  linked  to  the 
Research2020  efforts  and  priorities  (Ministry  of  Science,  2013).  The  INNO+  catalogue 
was created through the involvement of stakeholders from the Danish society  with their 
input on promising technologies and business areas of the future. The INNO+ catalogue 
entails prioritized areas for innovation policy:  

Innovative transport, environment and urban development 
Innovative food production and bio economy 
Innovative health solutions 
Innovative production 
Innovative digital solutions 
Innovative energy solutions 

There seems to be a potential for  further  regional coordination with the national INNO+ 
priorities  to  support  the  implementation  of  smart  specialization  strategies.  The  smart 
specialization  priorities  are  broad  enough  to  cover  the  sub-priorities  under  the  areas 
listed in the national priorities.  

At  the  national  policy  level,  the  RESEARCH2025  catalogue  (Styrelsen  for  Forskning  og 
Innovation,  2017a)  also  provides  sectoral  priorities  in  line  with  the  smart  specialization 
priorities and is an important new policy development for 2017. Similar to the creation of 
the INNO+ catalogue, the RESEARCH2025 Catalogue was created in a process  involving 
a  variety  of  stakeholders  including  businesses,  organizations,  ministries,  and  Danish 
knowledge  institutions.  The  RESEARCH2025-catalogue  will  function  as  a  source  of 
inspiration  and  a  basis  for  prioritizing  future  research  investments.  19  areas  are 
prioritised  and  presented  under  four  main  themes:  1)  Technology,  production,  new 
materials,  and  digitisation;  2)  Health;  3)  Food,  environment,  energy,  transport  and 
climate; 4) Education, Public sector and globalisation14. 

Regional investments in cluster development are covered by the ERDF programme, when 
the  industrial  focus  areas  of  the  clusters  belong  to  the  overall  regional  smart 
specialisation  priorities.  Cluster  policies  and  cluster  investments  are  therefore  closely 
related to the smart specialisation policies. The Danish cluster strategy 2.0 (Styrelsen for 
Forskning  og  Innovation,  2016b)  (2016-2018)  is  an  update  of  the  first  cluster  strategy 
from  2013  and  aims  at  enhancing  value  creation  from  the  cluster  efforts  (Styrelsen  for 
Forskning  og  Innovation,  2016b).  A  recent  evaluation  of  cluster  performance  finds  that 
there are positive effects from clusters (Styrelsen for Institutioner og Uddannelsesstøtte, 
2017).  Cluster  policy  is  a  well-established,  highly  valued  and  popular  type  of  policy  at 
both national, regional, and municipal level.  

5.4  Assessment 

Denmark  has  a  long  tradition  for  S3-like  policies  from  before  the  S3  concept  was 
developed.  For  example,  Denmark  was  one  of  the  first  countries  to  implement  active 
cluster policies, especially from the mid-1990s onwards. In line with the S3 approach, a 
mapping  was  done  and  subsequent  extensive  policy  initiatives  were  implemented  in 
1993-94 on eight ‘Resource Areas’. These analyses laid out the links between and within 
sectors  defined  not  by  the  statistical  production  activities  of  firms,  but  rather  by 

14 Published June 2017 Styrelsen for Forskning og Innovation. 2017a. FORSK2025 – fremtidens løfterige 
forskningsområder: 1-224. Copenhagen: Ministry for Science and Education. 

21 

 
 
 
 
                                           
commonalities  of  market  and  assets  amongst  a  wider  range  of  actors15.  The  debate  on 
regional  competitive  advantages  in  the  years  following  the  Resource  Area  mapping  was 
focused on specialisation/diversification and regional strongholds, which provided a basis 
for  national  and  regional  priority  setting.  The  formulation  and  implementation  of  the 
initiatives following the Resource Area analyses engaged key actors from private industry 
and organisations outside the usual policy making spheres.  

It  is  clear  from  the  above  that  a  number  of  policy  areas  run  parallel  with  smart 
specialisation policies. It is also clear that regions differ in how they pursue 3S and which 
areas  they  prioritize.  Moreover,  the  smart  specialisation  efforts  are  often  integrated  in 
the  general  pursuit  of  industrial  policy.  In  this  perspective,  the  coordination  and 
alignment  of  smart  specialisation  strategies  in  Denmark  is  complicated.  Likewise,  it  is 
difficult to assess the stage of implementation of 3S in Denmark16 because of the highly 
integrated nature of the initiatives. Generally, the way smart specialisation was originally 
formulated,  i.e.  as  a  policy  process  involving  experimentation,  recognising  and  utilising 
locally  embedded  resources  and  existing  strongholds,  and  involvement  of  key 
stakeholders  in  an  entrepreneurial  discovery  process  (Foray  et  al.,  2009),  fits  well  with 
how  policy  processes  have  been  implemented  in  Denmark.  Nevertheless,  as  also 
discussed there seems to be room for further coordination and alignment across different 
policy levels in Denmark. Such coordination efforts are not  easily defined as they would 
potentially include coordination across the regions (the industrial differences are not that 
large and the geography not that challenging) as well as the local municipal levels (as the 
example of "UdviklingFyn" demonstrates). 

15 In fact, even a few years prior to this, Michael Porter published his influential book on National Competitive 
Advantages (Porter, M. E. 1990. The Competitive Advantage of Nations. New York: Free Press) in which Danish 
cases played a key role and was designed in a somewhat similar way as the resource area mapping. 
16 The Danish Business Authority (ErhvervsStyrelsen) maintains a database that keeps track of current 
European Regional Development Fund projects 
https://regionalt.erhvervsstyrelsen.dk/projektliste?Fond=R&Indsatsomraade=Innovation+og+videndeling  

22 

 
 
 
 
 
                                           
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25 

 
 
 
Table 3: Abbreviations  

BERD 

DESI 

EC 

ERA 

EU 

EU-15 

Business Expenditures on Research and Development 

Digital Economy and Society Index 

European Commission 

European Research Area 

European Union 

The 15 Member States of the European Union from 1995 until 30.4.2004 (BE, DK, DE, EL, ES, 
FR, IE, IT, LU, NL, AT, PT, FI, SE, UK) 

EU-28 

The European Union of the current 28 Member States 

FDI 

Foreign Direct Investment 

GBAORD 

Government Budget Appropriations or Outlays on R&D 

GDP 

Gross Domestic Product 

GERD 

Gross Domestic Expenditures on R&D 

GOV 

HES 

PPI 

PRO 

R&D 

R&I 

S3 

SME 

Government 

Higher Education Sector 

Public Procurement for Innovation 

Public Research Organisation 

Research and development 

Research and innovation 

Smart Specialisation Strategies 

Small and Medium-sized Enterprise 

26 

 
 
 
Table 4: Factsheet  

List of figures  

Figure 1: The Danish R&I system ............................................................................ 8 

Figure 2: GERD by Source of Funds for Denmark ......................................................11 

List of tables   

Table 1: The largest R&D performers in Denmark .....................................................12 

Table 2: Supply of human resources .......................................................................13 

Table 3: Abbreviations ..........................................................................................26 

Table 4: Factsheet ................................................................................................27 

27 

 
 
 
 
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