When you think of Denmark, you think of its famous Carlsberg beer, bacon and of course, Hans Christian Anderson.
(article continues below)
But did you know the Danish government actively promotes entrepreneurship and encourages dynamism?
During the past decade, Denmark has been putting in place many initiatives for promoting entrepreneurship, the ease of obtaining credit and financing, as well as education on entrepreneurship. All this is done in the hope of spurring on the setting up of start-up firms.
According to the World Bank's Doing Business 2009, Denmark is ranked 5th in the world on the ease of doing business, after Singapore, New Zealand, United States and Hong Kong. The government's efforts to promote entrepreneurship can be credited for this.
It is indeed relatively easy to get your company started in Denmark, as the paperwork is not horrendously bureaucratic. Additionally, within the Doing Business 2009 report, Denmark is ranked 3rd in the world on trading across borders, after Singapore and Hong Kong. Evidently, the global connection exists in this relatively small city.
Although small, the Danish venture capital market has grown steadily over the years. It attracts more venture capital, compared to other countries in Europe. The 'Vaekstfonden', a public venture capital fund created by the Danish government, has contributed to the increasing ease of access to financial resources for start-up firms. There is also the 'Seed Capital Denmark' fund, a public-private fund that invests in firms at their seed stage (the initial stage of the venture).
An extensive network of 'growth houses', offices that are made ready for start-ups, provide the necessary infrastructure and internal support needed for new businesses. This has also made it relative easy for entrepreneurs to register their businesses as it provides guidance on legal concerns. Those starting their businesses can also gain useful tips and advice from seasoned entrepreneurs and businessmen alike.
Programs to educate on entrepreneurship are also underway. Denmark does not have a long tradition of producing entrepreneurs, and the government intends to change that, and they are doing so by increasing the level of education on business, technology and internationalisation.
The International Danish Entrepreneurship Academy (IDEA) is an organization that aims to increase the number of successful entrepreneurs. The young generation of Danes are effectively changing their attitudes towards starting their own businesses, with many deciding to follow their dreams. Statistics collected by the OECD show that the number of yearly start-ups in Denmark are higher than in other neighbouring countries such as Sweden and Finland.
High taxation (that can rise to more than 60% for personal income tax), however, places a damper on attracting international talents to Denmark and retaining highly skilled staff. Hence, firms may experience problems in finding the right person for the job. For a small country that is also a welfare state, human resources is an area that needs to be beefed up.