$Unique_ID{COW01103} $Pretitle{411} $Title{Denmark Industry in Denmark} $Subtitle{} $Author{Henning Dehn Nielsen} $Affiliation{Ministry of Foreign Affairs} $Subject{industry danish denmark production percent industrial now agriculture large business} $Date{1990} $Log{Table 1.*0110301.tab Table 2.*0110302.tab Table 3.*0110303.tab } Country: Denmark Book: Facts about Denmark Author: Henning Dehn Nielsen Affiliation: Ministry of Foreign Affairs Date: 1990 Industry in Denmark Danish industry is highly diversified. Airplanes and ball bearings are among the very few goods that are not in production. Even cars are manufactured, though in a special el-version designed for pollution-free urban traffic. Since time immemorial - and the days of the stone age man and the Vikings - and up to our own time Denmark, lacking more interesting raw materials, has been a predominantly agricultural country. One had to make do with what was available - one's soil and one's intelligence - and the result was then and is now that Denmark is one of the world's leading agricultural nations. However, with the population demanding greater affluence, industry too had to expand its base. After some energetic attempts just before the turn of the century, and again during the 1930s, the final and convincing breakthrough came in the 1960s, the decade when industry surpassed agriculture in all the more important economic indices. Thus today industry employs 16 percent of the work-force and agriculture 6 percent, and industry accounts for 68 percent of the exports as compared with agriculture's 15 percent. Formerly, the captains of industry and agriculture would get all worked up as soon as the discussion turned to whose business was the biggest. That debate has now run its course, also because in many products it is hard to determine precisely where the agricultural ingredient ends and the industrial ingredient begins. For instance foodstuffs, Denmark's biggest industry, are wholly dependent on deliveries from agriculture Danish agriculture has always been known for its efficiency. This is also true today when the law provides that enterprises should be run by private families and not by joint-stock companies. This way of doing business yields remarkable results with regard to both production standards and job satisfaction. The relative importance of the individual industries Before examining various industries more closely, let us first glance at one year's total production value in Denmark by industrial origin: [See Table 1.: Production value 1987] Exports by industries The scarcity of domestic raw materials means that Denmark has to import large amounts to ensure a production - and has to export large amounts in order to pay for the sizeable imports. Consequently, Denmark is among the nations with the biggest external trade per capita. This in turn means that Denmark - in her own interest-has always been a staunch supporter of the most liberal trade policies. That is a position Denmark has adopted - and continues to adopt - in the OECD and as a member first of EFTA and now of the EC. In the tables below are shown exports by industrial origin and of countries of destination: [See Table 2.: Type of commodity 1987] [See Table 3.: External trade by countries 1987] Enough food for New York and Tokyo Now for a closer look at the various industries. In the Middle Ages, agriculture, as in so many other countries, was characterized by a population huddled together in villages and ruled by the local squire. This led to a clumsy and undemocratic production method. In Denmark that system was abandoned early. About 200 years ago the peasants were liberated and given their own land. They plucked up courage and moved the farm buildings out into the fields, thereby greatly increasing their daily output. Later came the folk high schools - a uniquely Danish educational and cultural movement inspired by N.F.S. Grundtvig- which further broadened the peasants' knowledge and stimulated their initiative. There followed a rapid end to cattle diseases, the introduction of techniques which were constantly improved upon,etc. In the late 1800s, when cheap grain from North America and Russia ruined the economy of many farmers in Europe, the Danes made a bold decision. Shifting swiftly from the cultivation of plants to animal production, they turned the cheap foreign grain to advantage by using it as fodder instead. In the following decades the main commodities became butter, eggs and bacon for England and meat for Germany. As member of the EC, Danish agricultural production has been partly restructured, with the emphasis now being placed more on cheese, veal for Italy and pork for Japan, while new sophisticated export articles are being continuously developed in such areas as dairy products and fast foods. Danish agriculture yields a sufficient surplus to feed not only the country's own people, but also the combined populations of for instance New York and Tokyo. While being their own masters, the farmers soon moved ahead to organize on a co-operative basis for wholesale purchase, production and distribution. These efforts were named the Co-operative Movement, a form of partnership which is still being imitated in many other countries. The first well-known co-operative dairy, founded in 1822, was Danish. Ever since the liberation of the peasants, the law concerning the size of lots has contained the provision that a farmstead must be just big enough to support one family. Consequently, today only 15 percent of the farms use hired help. Besides, the joint-stock company form is prohibited. The thorough modernization of farming has of course enabled families to manage larger and larger holdings, as a result of which the number of farms has naturally declined. Today there are about 84,000 farms left as compared with a steady 200,000 during the first half of the century. The average age of the Danish farmer is 52. The world's biggest pelt auctions As an island kingdom, Denmark of course has a well-developed fishing industry - a fleet of some 3200 vessels whose main catch is cod, herring, sprat, mackerel and plaice. Uniquely among EC-countries Danish fishermen catch large quantities of industrial fish destined for the production of herring meal and herring oil. Of the total catch, industrial fish acount for 14 percent of the value and 76 percent of the volume (1987). Of all the world's industries Danish fishery is perhaps the one that comes closest to genuine economic democracy. The value of each catch is divided according to fixed rules among the entire crew from captain to deckhand. This so-called "partnership fishing" makes everyone eager to catch as much as possible. Linked to farming, there is a large production of mink pelts. The mink are fed on fish offal from the many tinned-fish factories. As an offshoot of mink-breeding the world's largest auctions with all kinds of pelts are held in Denmark every year. How an industry is developed At first glance it seems puzzling that a country almost totally lacking raw materials could become an efficient industrial nation. How did it get the incentive to industrialize? In the case of Denmark there is a solution to the puzzle. As mentioned above, Danish industry since its inception has had a solid base in quality goods derived from agriculture and fishing. From grain, potatoes and beets an industrial production of beer, aquavit and sugar was developed; from meat and fish came tinned food and from animal intestines pharmaceutical products. One of these, insulin, has become an article with a worldwide sale and is now also produced in a very advanced gene-spliced variety. For the processing of agricultural produce- as in agricultural production itself - machinery was needed. Danish industry took that upon itself. Machines for the production of butter, sugar, chocolate etc. are now Danish industrial specialties. Next, the finished merchandise had to be packed. This gave rise to a packing industry. Then the wares had to be transported, sometimes to the other end of the world. This required refrigerating equipment and ships. The ships needed engines, paint and navigational equipment. All of which Danish industry supplied in increasingly advanced forms. The latest in the electronics industry, for instance, is a fully automated ship's bridge. The same industry also delivers landing systems for airports as well as mechanisms and measuring equipment for space shuttles. If you can make measuring equipment for one purpose, you can also make it for other purposes, so the Danish electronics industry now also produces instruments that can take blood tests without piercing the skin. Thus an advanced industrial production in one area will stimulate progress elsewhere in a logical chain of developments. By such rational methods Denmark has gradually reached the point where it can produce almost anything. A pioneer in the areas of environment and energy Contributing greatly to the industrial success is the country's highly trained work-force. Compulsory education was introduced as early as 1814, and in 1829 a university-level engineering education was inaugurated, incidently with Hans Christian Orsted, the discoverer of electromagnetism, as its first head. The skilled personnel ensures quality products with a perfect finish. To that, many Danes add an eye for good design. Examples of this are found in the electronics of the entertainment industry (Danish radios are on display at the Museum of Modern Art in New York) and in such areas as furniture, silverware, porcelain and clothing. Among the industries that are just now advancing by leaps and bounds are biotechnology, information technology (especially the software side), the food industry and the development of environment a protection and energy-saving equipment. As an EC-country, Denmark has played her part in setting high standards for both the internal and external environments and has long lived up to these standards. This has led to the manufacture of equipment for environmental protection, which has also turned out to be a very valuable export article. In the same way, despite recent large oil and gas strikes in the North Sea, Denmark has pioneered in the saving of energy. Affiliated with that is now an equipment industry with large export earnings. Denmark is the world's leading exporter of windmills. Just turn the key, and a whole factory starts up Sometimes firms will join forces and offer a foreign customer a factory all ready to go at the turn of a key. Examples of this are pharmaceuticals factories for the Far East, cold-storage plants for the Middle East, and safari hotels for Africa. Or firms will cooperate - perhaps in partnership with the State - to deliver a system for sale abroad. Examples of this type of systems export are the delivery of a complete health system for Quatar, the delivery of signalling systems for a whole railway net etc. Danish builders and architects have also made names for themselves abroad. Recent examples are the National Bank of Iraq, the Museum of Art in Dusseldorf, Paris' newest triumphal arch, and blocks of flats in London's dock area. Danish engineers have likewise acquired a reputation as bridge builders. Denmark herself has recently entered a new period of bridge and tunnel building. The Faro Bridge has attracted international attention by its appearance and capacity. A 22-kilometre long bridge and tunnel across the Great Belt, scheduled for completion in 1966, is at present under construction. Affiliated with industry is a handicraft sector which benefits from the skilled labour, and a trade sector which commands international respect for its proficiency in selling abroad. The transport sector comprises shipping, which includes some of the world's biggest firms. With a tonnage in 1987 totalling 4.8 million GRT (of which one third is less than 5 years old), the merchant fleet earns 90-95 percent of its gross freight through overseas trade. Three quarters of the freight is earned in line service. Besides the usual types of vessels, the merchant fleet consists of many special-purpose vessels, from those used in Arctic waters to those designed for environmental emergencies. A future growth industry From the start, the financial and insurance sectors have sought to adjust to the EC's internal market and, along with it, to the new freedom to operate without restrictions in all of Europe. In Denmark 20 percent of the credits are granted by commercial and savings banks, 30 percent by mortgage credit associations and 20 percent by the State and foreign lenders. With foreign currency receipts totalling 15 milliard/billion kr. in 1987, tourism is now the fourth largest export business. Futurologists estimate that by the year 2000 it will have advanced into second place. Although Denmark is not among the countries enjoying the most sunshine, her beaches are lovely and special interest tours are being given high priority. Museum attendance is booming. Danish culture also has other things to offer the world. The TV-series "Matador" has been shown in many countries, and the films "Babette's Feast" and "Pelle the Conqueror" have won Oscars in Hollywood. As shown in the table of production values, the public sector accounts for 17 percent of the national product. This is no particular indication that the State is a partner in business. The large figure primarily reflects a massive State involvement in the health and social welfare sectors. State economic activities are confined to investments in public works and the postal and telecommunication services. It is expected that the few remaining enterprises of a purely commercial nature will soon be privatized. Large or small enterprises? The commercial life of Denmark comprises small and medium-sized enterprises. In agriculture, the joint-stock company form, as mentioned,is prohibited. Political priority is given to the individually owned enterprise. In industry and other trades the right to establish joint-stock companies is unrestricted and this mode is preferred by many. The typical Danish business venture starts with an individual owner - a combination of a bright idea and some savings. If the idea is a really good one, the business may eventually become global in scale. Examples of this kind are marine engines, heating and refrigerating units, pumps, medicine, toys etc. But the vast majority - 75 percent of all companies - have less than 50 employees. Rather than a handicap, this modest size has often been considered an advantage since the channels of command in a small business are correspondingly short and new ideas quickly find their way to the production line. A small business too can easily be geared down if global market trends should temporarily take a turn for the worse. Still, the establishment of the EC's internal market with its 320 million consumers raises the question of whether the structure of Danish industry is truly competitive. A number of Danish firms have merged of their own volition and the government has contributed its share by issuing a blueprint for the creation of socalled networks linking small and medium-sized enterprises. They are encouraged to work together in groups on research projects, export drives etc. The government has underscored that while it has no desire to downgrade the small enterprise, it is convinced that Denmark also needs an infusion in the form of socalled "industrial locomotives". Small is still to be considered beautiful in Danish commercial life, but smoke from some large new enterprises should be allowed to drift across the scene.