5th maj, 2011

The State of Innovation – Denmark

The Danish ministry of Economy and Business Affairs has issued a report about innovation in Denmark – “Vækst gennem innovation”.
Overall the Danish companies are innovative, placed in a middle group in a European context. The report has three types of innovation
·         Product
·         Process
·         Organization
·         Marketing
Danish companies are strong in the last two but lacking in the first two. Herein lies a problem in my opinion. Products and processes are bread and butter for companies while organization and marketing innovation doesn’t bring home the bacon. Innovative ways to collaborate and organize doesn’t change the fact that the guys working in the businesses are still more expensive than our competitors.
The source of innovation in Danish companies is primarily their own R&D (45%) only a few buy their R&D from others (7%). The low percentage of companies buying R&D signals a “not invented here” attitude in Danish companies. This could be harmful as it encourages parallel R&D and wasted efforts. I was surprised to learn that almost half (45%) of Danish companies collaborate with external sources for innovation. The innovation partners (pun intended) are primarily Danish or European suppliers or customers. The report also shows that the use of the knowledge generated by universities is still too low. Only 15% of companies use universities as a source of innovation, which is way to low.

The report points to IP protection as one of the key factors to secure investments in innovation. It also quotes an OECD report about innovation for showing that too hard competition (not being able to get any returns from investments in innovation) is harmful for growth. This indicates that IP is central to competition as well (until a certain level of course).

The OECD publication “The OECD Innovation Strategy: Getting a Head Start on Tomorrow” is also interesting reading from a Danish perspective. In the publication it is shown that compared to Countries like USA, Germany, UK and Sweden new businesses in Denmark file more PCT patent applications. More than 15% of Danish companies under 5 yrs old filed PCT patent applications. This indicates that new innovative companies in Denmark have understood the importance of IP.

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