An excellent education system, a business-friendly administration, startups with international reach – these are among the key ingredients for the impressive business performance posted by the country that has given us the political drama television series ‘Borgen’: Denmark. We take a closer look at the Danish ecosystem.
Among the national ecosystems which most favour entrepreneurs, Denmark comes top of the Forbes ranking of ‘best countries for business’ for 2015. A country famous for design and technology, for Bang and Olufsen audiovisual equipment and also for Vestas, one of the largest wind turbine manufacturers in the world, Denmark is often quoted as a shining example by no lesser figures than leading US Democrat politicians Bernie Sanders and Hillary Clinton.
Spirit of enterprise encouraged by a cutting-edge education system
Among the reasons why Denmark is today such a business-friendly country there are a number of cultural features that strongly favour innovation. Firstly, the country has a high quality education system, as evidenced by the most recent PISA report. Education is free and, perhaps crucially, the pedagogical approach encourages both teamwork and personal initiative very early on in one’s school career. Moreover, as in the entrepreneurial world, failure is acceptable in the Danish value system. The quality of Danish education continues at university level. The Technical University of Denmark, whose student population numbers 10,000, feeds high-performing young graduates into the ranks of Danish companies.
This is fertile ground for generating startups, which can count on being able to recruit home-grown qualified and motivated professionals. It is perhaps also worth mentioning that the programming languages C++, PHP and, more recently, Ruby on Rails have all been developed by Danish engineers.
…and a business-friendly administration
The state authorities also play a major role in fostering the entrepreneurial spirit. Business founders find the administration accessible and efficient. In Denmark you can set up a company with very few documents and capital of just one Danish crown – the equivalent of 10 eurocents – within 5 minutes.
Moreover, as is often the case with small countries – Denmark has under six million inhabitants – it is a must for any ambitious company to expand into international markets and this philosophy is firmly rooted in Danish business culture.
International stars in promising markets
And if one expected that the ranks of Danish startups would be packed with unpronounceable names, reality shows otherwise. Young Danish firms are aiming firmly at the international scene and choose their names accordingly. Among them we find food home delivery sector ‘unicorn’ JustEat – a major shareholder in France’s Allo Resto which is also doing very well in London. Another e-commerce star, TrustPilot, which specialises in customer feedback monitoring, raised $80 million in capital last year. Alongside these two enormous successes we can also cite open business platform Tradeshift, website optimisation specialist SiteImprove, brand experience creation company Falcon Social and the Vivino app, which wine-lovers will appreciate.
Such examples encourage others to follow suit. Three times as many startups have already been created in Denmark this year as in 2015. And given that success often breeds success, venture capitalists are now coming to the party. Last year 65 startups attracted $280 million in venture capital from all over the world, with local providers such as investment company Sunstone, Northcap and SEED Capital also contributing funds.
Today this thriving little startup ecosystem meets up in co-working spaces which bear comparison with those in Berlin or in neighbouring Stockholm, including RocketSpace, Founders House and Startup Village Copenhagen in the Islands Brygge harbour-front area of Copenhagen.
All in all, then, this is clearly an atmosphere which favours entrepreneurship. And what if we pointed out that in addition to being pro-business, Denmark features high on most published lists of ‘best countries to live in’?