Denmark
Green heart, populist body?
“We are a small country,” explains Steen Hommel, “but we are very international in the way that we work.” Hommel, who heads up Invest in Denmark, a “fully integrated part of the Ministry of Foreign Affairs”, would say that, wouldn’t he? After all, it is his job to attract outside investors to spend money in Denmark. But there is something in what he says. This is a country that is highly digitalized and that spends a great deal on research and development (R&D). And its capital, Copenhagen, is arguably the most environmentally friendly city in the world. You can’t get more international than trying to save the planet.
Copenhagen has done much to earn Denmark its highly regarded outward-looking reputation. It has for decades engaged with environmental issues much more profoundly than more glamorous European capitals, such as London, Paris or Rome. By 2009, it had been named the greenest city in Europe in the Siemens/economist Green City Index; it received a green boost when named 2014’s European Green Capital; and it now aims to be the first city on the planet to be carbon neutral (by 2025).
Best for bikes
Characteristically, it’s the humble bike that is the most visually arresting of Copenhagen’s sustainability efforts. The online eco-magazine Yaleenvironment360 reported in 2013 that “36 per cent of trips to work or school in the Danish capital are made by bike, and more than 20,000 cyclists enter the city centre at peak hours”. With around 400 kilometres of cycle lanes, “Copenhagen simply isn’t designed for cars,” explains Copenhagen-based journalist Peter Stanners. “Instead, bicycles, trains, buses and the metro offer a quick and reliable means of transport around the city, at any time of day or night.”
Bikes and an excellent public transport system complement a number of other green initiatives. An impressive 98 per cent of the city’s heating is supplied by waste heat from electricity production, which is channelled through pipes into people’s homes. According to C40 Cities (a network of cities collaborating to address climate change), the system reduces household bills by €1,400 a year. It’s “saved the Copenhagen district the equivalent of 203,000 tons of oil every year”. That’s 665,000 tons of CO2. One of the most interesting green developments is Amager Bakke (see Business Spotlight 2/2017). Set to open in December 2018, it’s not only a cutting-edge “waste-to-energy plant” that will boost the city’s 2025 carbon-neutral ambitions. It will also have skiers on its external artificial ski slope, which leads directly to a hiking area.
Of course, it’s not just the capital that is environmentally ambitious. The island of Samsø is already 100 per cent reliant on renewable energy, through wind, solar energy and biomass. A huge offshore wind farm in the Baltic Sea will provide enough electricity for 600,000 households when it opens in 2022. By 2015, more than 40 per cent of Denmark’s energy was from wind power, and the aim is that it will reach 50 per cent by 2020. Moreover, it aims to be the first country in the world to be completely free of fossil fuels by 2050.
The local government has done much to attract businesses involved in sustainability, which explains why Copenhagen is home to a major cleantech cluster, with around 170 members. The city is spending around €360 million on its carbon-neutral ambitions. It is also a bastion of the Social Democratic party (which has provided every lord mayor since 1938), and in the 2017 local elections, the Social Democrats again came first (with 27.6 per cent). They were followed by two environmental parties: the Red−green Alliance (18.4 per cent) and a new party, The Alternative (10.5 per cent).
Best for business
Denmark, a country of just 5.6 million people, is considered to be one of the world’s best places to do business, with the World Bank placing it third in its Ease of Doing Business rankings. Hommel emphasizes the country’s transparency, its political and economic stability, and its flexibility. Denmark comes a creditable 12th in the World Economic Forum’s Global Competitiveness Report, which measures indicators such as infrastructure, education, innovation and market size. It also has a growing reputation for hosting data centres — Facebook is building one in Odense, says Hommel. And with it, he adds, “they’ve signed a contract for 6,900 households” to receive “surplus heat from the data centre”, replacing coal.
In the EU’S 2018 Innovation Scoreboard, only Sweden is ahead of Denmark, and in both 2017 and 2018, Denmark led the EU’S Digital Economy and Society Index (followed by Sweden, Finland and the Netherlands). The country’s spending on R&D is also consistently high, at around 2.9 per cent of GDP from 2009 to 2015 (in the same period, the UK’S R&D spending was around 1.7 per cent and Germany’s rose from 1.7 per cent to 3 per cent).
For decades, Denmark’s concept of “flexicurity” has attracted praise. This is a system broadly supported by employers and unions that makes hiring and firing easy, on the one hand, while on the other, the welfare state is very strong. High job turnover is a feature of the labour market. But for people without work, there is income security in the form of a strong safety net and active policies to ensure that people find work and/or training quickly.
Challenges to the Danish model
Recently, however, the efficacy of flexicurity has been questioned in an age of austerity. Denmark was hit hard by the financial crisis of 2007–08, reflected in high unemployment, a 6 per