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Denmark reaches for innovation powerhouse rank.

Article Excerpt
One of us recently returned from a periodic teaching assignment in Denmark, where this small country's rise to innovation leadership seems more impressive than ever. Danish companies play leadership roles in industries such as enzymatic processes, oil recovery, bio-fuels, and clean-tech.

Given the structural disincentives that Denmark presents to entrepreneurial activity, it's interesting that these companies are such leaders. Danish regulations are perceived to weaken competition, the tax system is viewed by some as skewing the economic incentive structures, and the labor market could certainly be strengthened further. In addition, overall R&D investments are still modest compared to the best performers and to the Barcelona objective of 3% of GDP for all EU countries (1).

Still, Denmark suffers from a lack of natural resources and must rely on innovation if it hopes to have a healthy economy. Overall, its national innovation system is structured to encourage innovation from all parties: SME's (small and medium enterprises), large firms and universities (see Perspectives, May-June 2008).

Innovation policy remains high on the political agenda. The government is currently working on the implementation of numerous measures presented in the Innovation Action Plan of November 2006: a strategy aimed at keeping Denmark among the most innovative countries in the world (2).

Among the Most Innovative

The European Innovation Scoreboard 2007, published in February 2008, indicates that Sweden, Finland, Denmark, Germany, and the United Kingdom...

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