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Denmark is a highly developed European economy with strong business innovation and the world’s leading renewable energy technology. The Innovation Strategy: Denmark A Nation of Solutions (2012-20), launched in December 2012, represents a shift to a demand-driven innovation policy approach, with enhanced knowledge flows and stronger innovation capabilities in the educational sector.
Hot Issues are major national STI policy priorities, as self-reported by countries in their responses to the OECD STIO 2014 policy questionnaire.
Improving the framework conditions for innovation (including competitiveness)
Except for availability of venture capital, which is on par with the OECD median, Denmark ranks near the top among OECD countries on the Ease of Entrepreneurship Index (Panel 1j), and the entrepreneurship environment has improved regularly over the last decade. Since November 2013, the Danish Growth Fund (Vaekstfonden) can support Danish entrepreneurs with subordinated loans. Other new initiatives to facilitate entrepreneurship include the Green Entrepreneurship House and the Entrepreneurial Company Registration (IVS). The tax on capital gains from unlisted portfolio shares, also known as the entrepreneurship tax, was abolished as part of the 2012 tax reform; as part of the growth plan adopted in April 2013, the government has increased efforts to diffuse knowledge on IPRs to companies and entrepreneurs, particularly to designers and creative industries, as well as to students. Since July 2013, initiatives have been launched to enhance enforcement of IPR rules by the police and public prosecutors. Standard contracts for commercialisation aim to make it easier for large and small businesses in creative industries to collaborate on the commercialisation of designs and ideas.
Innovating to contribute to structural adjustment and a new approach to growth
Denmark is a leader among OECD countries in terms of its RTA in bio- and nano-technologies and environmental technologies (Panel 3). The Danish government has commissioned eight growth teams with members from industry in areas in which Danish businesses are or can be internationally competitive. Based on their recommendations the government has published specific growth plans for each of the following seven areas: the Blue Denmark; Creative Industries and Design; Water, Bio and Environmental Solutions; Health and Care Solutions; Energy and Climate; Food Sector; and Tourism and Experience Economy. A growth plan for ICT and Digital Growth remains to be published. The plans address specific barriers to investment and focus on areas in which new markets can be developed. For example, government regulations mandating efficiency improvements in the wastewater sector could help to develop more cost-effective technology, through which savings can be achieved in the cost of wastewater treatment for large businesses that currently pay higher costs to treat their wastewater. In terms of corporate development activities, the creation of a single, transparent and efficient means of access to Danish health data could attract medical research to Denmark.
Improving overall human resources, skills and capacity building
Overall, Danish STI skills lie in the mid-range of OECD countries (Panel 1t, u, v, w), although expenditure on higher education and the rate of PhD graduates in science and engineering are at the top of the mid-range of OECD countries (Panel 1s, w). Denmark’s national innovation strategy includes a range of initiatives to strengthen innovation capacity through education. The government anticipates that at least 25% of a youth cohort will complete a master’s degree by 2020, and that the uptake of PhD students will remain at the 2010 level of 2 400 a year. The Danish government established (end of 2013) the Quality Committee (kvalitetsudvalget) to look into how to improve the quality and relevance of higher education.
One of the initiatives of the Danish innovation strategy is to create a coherent and cross-cutting research and innovation council. As a result, the Danish National Advanced Technology Foundation, the Danish Council for Technology and Innovation, and the Danish Council for Strategic Research have been merged into a new foundation (InnovationsFonden – Denmark). In 2013, the Ministry of Higher Education and Science (MHES) called on a broad variety of stakeholders to prepare the so-called INNO+ catalogue containing promising focus areas for strategic investments in innovation. In November 2013, five focus areas were selected and are to be carried out as part-nerships addressing social challenges. The five areas selected for 2014 are: blue jobs via green solutions; intelligent, sustainable and efficient plant production; Denmark as a preferred country for early clinical testing of new medicines; water-efficient industrial production; and building renovation of world-class standard. The mandate of the Danish Council for Research Policy was widened as of spring 2014 to include technological development and innovation. The development of quantitative impact assessments is continuing, and the Central Innovation Manual on Excellent Econometric Impact Analyses of Innovation Policy (CIM) has been updated and is now called CIM 2.0.
To encourage the business sector’s contribution to growth and job creation, new societal innovation partnerships to start next year will focus on accelerating innovation efforts in areas in which Denmark has a solid knowledge base and a strong business-sector advantage. The five areas selected from the INNO+ catalogue as priorities so far will receive funding from the InnovationsFonden – Denmark.
The Fund for Green Business Development was established in 2013 and will be extended through 2016. It provides grants to Danish companies to help address increasing resource scarcity, raise business competitiveness and growth and make environmental improvements. The fund runs a programme to promote green industrial symbiosis between companies so that waste or reserves of a given resource, e.g. water or materials, of one company become a resource for another company.
Denmark has a strong science base, which has been increasingly dominated by universities over the past five years (Panel 4). Public expenditures on R&D were among the top five OECD countries (Panel 1a). Danish scientists perform well in terms of S&T publications in top international journals and patent applications (Panel 1c, p). The University Act was amended to give universities more autonomy for arranging their management structures. As part of the government’s effort to increase the internationalisation of higher education, a two-part action plan has been launched. The first part, Enhanced insight through global outlook, focuses on sending more Danish students to study abroad, creating stronger international learning environments, and improving Danish students’ foreign language skills. The second part, Denmark – an attractive study destination, focuses on attracting the most capable international students and retaining international graduates in Denmark. Danish universities are also in the process of implementing open access policies regarding research data.
While the ratio of BERD and triadic patents to GDP are at the top of the mid-range of OECD countries (Panel 1d, f), Denmark has a large share of leading global corporate R&D investors for the size of its economy. The Market Development Fund (2013-15), a new type of initiative, supports the development process just before commercialisation, when a functioning prototype must be customised to fit the demands of the market. The fund co-finances facilitation of end-consumer testing and adaptation of the new product or service, thereby shortening the developer’s time to market and strengthening the potential for growth and employment. In 2013 the Danish Growth Fund introduced subordinated loans to facilitate the access of SMEs to debt financing. In 2012 a tax credit scheme was introduced to provide the opportunity for firms with a negative balance sheet to obtain a credit for the tax value of their R&D expenditures. The scheme has greater impact on young small innovative companies owing to a built-in maximum of R&D expenditure to be granted a tax credit. The maximum is increased fivefold from 2012.
Danish universities and PRIs are active in patenting (Panel 1p) although the share of public R&D expenditures financed by industry is slightly below the OECD median (Panel 1o). The new innovation strategy: Denmark A Nation of Solutions (2012-20) focuses on better knowledge exchange between companies and knowledge institutions, between public and private sectors, as well as across national borders.