Denmark Case Study

Denmark case study

Introduction

Denmark is a small country in Europe, although, they have high taxes, a large state budget and welfare state, much economic regulation and a very open economy. Denmark has reached a successful economy against compared to other European economies. The main reasons that could possible explain Denmark's success are their flexible employment conditions, free capitalist economy, an active labour market policy, a constant learning and a modern social system among others.

Demographics

A country with a population of 5.5 millions, they had 72.749 new immigrants during 2008. Denmark policies of immigration encourage attracting and selecting highly professional and skilled workers/migrants in order to fill the gaps in the workforce to keep the ongoing success. The work force accounted 2,858 k employees during 2008 (HBR Case 1).

The immigration creates great opportunities to work in Denmark; however immigrants do not have access to the benefit from the social welfare system. Although skill workers may have a job opportunity in Demark (HBR Case 1), the high taxes and lack of welfare could possible result in reducing their wiliness to choose this country instead of other nations like Canada or Australia.

Competitive

Denmark has exceptional attributes to be highly competitive, such qualities are: High educated workforce, large investment in R&D, high level of entrepreneurial activities, they also introduce the Flexicurity concept to increase their competitiveness as a nation (HBR Case 1).

The Danish Flexicurity concept gives employers the flexibility when hiring and firing workers, while at the same time giving individuals the security of high unemployment benefits.

The Flexicurity promotes a job creation through reducing regulations of the workplace, for example it does not have a minimum wages and working hour (HBR Case 1). This lack of regulation may incentive companies to expand or contract their operations according to their needs that could possibly make more attractive to operate in Denmark than in other European countries. In addition, Denmark by being part of the European Union, makes them more attractive for non European countries who want to trade with the European market.

Denmark with its open economy is trying to attract foreign investment and has one of the easiest environments to operate a business in Europe (HBR Case 1). Nevertheless, high taxes which support the social benefits may reduce the interest to invest in this country, maybe this is the right balance for sustainable growth.

Denmark's measures have been highly effective in the country, could these be exportable? In my opinion some initiatives such as the flexible labor hours and the high flexibility to fire or hire people are good incentives to open a subsidiary in one country or another. However, unions in large countries like US, Australia, among others will be against that