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09:20 Welcome & Introduction
09:35 Foreign Company Investment
Presentations by: Stephen Brugger,
Leif Bech Fallesen, Erik van Snippenberg and
Minister Troels Lund Poulsen
10:30 Panel Discussion
Panelists: Erik van Snippenberg, Anne Skovbro
Karsten Hønge and Claus Frelle-Petersen
11:00 Break

About the 2010 Business Barometer
– Conducted between August 24 and September 13
– Sent to 237 general managers of AmCham member
companies encompassing a broad cross-section of the
international and danish business base
– Received 106 responses (45% response rate)
– Respondents represent companies with headquarters both
inside (35%) and outside (65%) Denmark
– Primary focus: company trends (investments/jobs) and talent

Business Barometer Results – Company trends
How have/will your company’s investments in Denmark
change(d) over the past year/next year?

Business Barometer Results – Company trends
What was/is the trend with respect to the number of people employed
in your company in Denmark over the past year/next year?

Business Barometer Results – Company trends
Is/has your company considered options of moving
investments/jobs out of Denmark

Business Barometer Results – Company trends
If you answered ”yes” to considering moving investments/jobs out of
Denmark, which of the following are/were factors in the decision?

Business Barometer Results – Company trends
Will the slow growth in labor productivity negatively impact your
company’s future investments in Denmark?

Business Barometer Results – Company trends
How would you rank Denmark’s openness to foreign companies and the
degree to which its policies will help to attract and retain global companies?

The Threat of Low Productivity Growth
Leif Beck Fallesen
Editor-in-chief and CEO, Børsen
September 23, 2010

Source: OECD Economic Outlook No. 87
Threat of low productivity …
N. Zealand
Korea
Slovakiet
Luxemb.
Irland
Norge
Australien
Tyrkiet
US
Schweiz
OECD
Spanien
Finland
Tjekkiet
Østrig
Mexico
UK
Japan
Danmark
Tyskland
Portugal
Grækenland
Euroområdet
Holland
Italien
Frankrig
Sverige
Canada
Belgien
Polen
Island
Ungarn
Potential growth in GDP 2012-25
0 1 2 3 4

115
110
105
100
95
90
85
80
2006K1
… exacerbated by sharp drop in investment
2006K2
2006K3
Quarterly national accounts, total final demand (2006Q1=100)
2006K4
2007K1
2007K2
2007K3
2007K4
2008K1
2008K2
Gross fixed capital formation
2008K3
2008K4
2009K1
Government consumption
2009K2
Private consumption
2009K3
2009K4
2010K1
Export
2010K2
CRITICAL

U.S. perform much better
5
4
3
2
1
0
-1
-2
-3
Labour productivity in the total economy
Percentage change from previous period
DK US Euro area
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Source: OECD, Economic Outlook no. 87

3000
2500
2000
1500
1000
500
0
-500
-1000
2797
3069
682
Gazelles and high growth companies take a hit
750
High growth companies
4224
4062
1013 998
4316
877
4690
970
4303
849
3775
3456
3495
757 744 792
The Gazelles
3926
931
5310
1344
7122
2077
8059
2477
7029
2139
3470
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Gazelle: a company that has doubled its profits or turnover in a four year period
High growth company: a company with continuous growth in a four year period
These are high productivity companies
1051
9000
7000
5000
3000
1000
-1000
-3000
Source: Greens Analyseinstitut

Anatomy of the Danish model
• Flexicurity – combining a flexible labour market (U.S.) and
social security (welfare state) as a competitive alternative
to the U.S. capitalist model
• In heyday (2003-2006) The Danish model provided high
growth rates, low unemployment, sound public finances
• Highest tax rates in the world, or close
• Bottom line 2010: The model no longer provides growth
going forward

70
60
50
40
30
20
10
0
-10
-20
Heyday of the Danish model 2003-2006
- debt constraint removed!
Public net foreign debt
Germany
US
Denmark
2001 2002 2003 2004 2005 2006 2007 2008 2009
Belgium
Italy
Greece
US
Luxembourg
Slovak Republic
Czech Republic
Sweden
Denmark
Finland
Poland
Spain
Netherlands
Austria
Ireland
Germany
United Kingdom
Hungary
Portugal
France
Government debt 2010
(Maastricht-defintion)
0 20 40 60 80 100 120 140
Source: OECD, Economic Outlook no. 87

NL
SE
DK FI
LU
IE
BE
UK
DE
CY
SL
ES
MT
CZ
FR
AT
PL
EE
SK IT
LV
LT
EL
RO
PT
HU
BG
GDP isn’t everything: Happy Danes
Share of population, who declare themselves very og somewhat satisfied with their lives
(2008)
20% 30% 40% 50% 60% 70% 80% 90% 100%
Source: Eurostat

Japan
Finland
France
Denmark
Norway
Sweden
Germany
Iceland
Netherlands
Portugal
Poland
US
Spain
Italy
Ireland
UK
Happiness doesn’t keep you alive
Suicide rates per 100.000
0 2 4 6 8 10 12 14
Source: World Health Organization

Japan
France
Sweden
Switzerland
Iceland
Italy
Spain
Norway
Greece
Austria
Netherlands
Germany
Belgium
UK
Finland
US
Denmark
Ireland
Portugal
Poland
Lithuania
China
Estonia
Latvia
Greenland
Russia
Happier for a shorter time!
Life expectancy at birth (years)
60 65 70 75 80 85
Source: World Health Organization

1. Switzerland (1)
2. Sweden (4)
3. Singapore (3)
4. United States (2)
5. Germany (7)
6. Japan (8)
7. Finland (6)
8. Netherlands (10)
9. Denmark (5)
10.Canada (9)
Globally competitive Danes
Global Competitiveness Index rankings
2010-11 (2009)
Number of participators for Denmark: 35
11.Hong Kong SAR (11)
12.United Kingdom (13)
13.Taiwan, China (12)
14.Norway (14)
15.France (16)
16.Australia (15)
17.Qatar (22)
18.Austria (17)
19.Belgium (18)
20.Luxembourg (21)
Source: World Economic Forum

Challenge 1: High wages
(but should raise productivity)
Compensation per employee in the private sector
Percentage change from previous period
5
4
3
2
1
0
DK US Euro area
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Source: OECD, Economic Outlook no. 87

Challenge 2: Competitiveness of industry
Strong trend decline in wage competitiveness
and industrial export market share
Relative unit labour cost
Value
Volume
Source: Danmarks Nationalbank

45
40
35
30
25
Netherlands
Norway
Denmark
Germany
Challenge 3: Short working hours
Average weekly (actual hours worked)
UK
Ireland
Sweden
Belgium
France
Finland
EU-27
Italy
Austria
Luxembourg
Spain
Portugal
Slovenia
Slovakia
Iceland
Bulgaria
Czech Republic
Source: Eurostat Statistics in focus - 12/2010
Poland
Greece

Norway
US
Netherlands
Sweden
UK
Spain
Germany
Belgium
Finland
EU27
Denmark
France
Challenge 4: Early retirement
Average retirement age
56 57 58 59 60 61 62 63 64 65
Source: Eurostat

Hungary
Belgium
Sweden
Finland
Denmark
Netherlands
Italy
France
Norway
Germany
US
UK
Iceland
Challenge 5: Marginal taxes not competitive
(From second to fifth)
Top marginal personal income tax rates for employee
0% 10% 20% 30% 40% 50% 60% 70% 80%
Source: OECD

65
60
55
50
45
40
35
30
25
Switzerland
Australia
Slovak Republic
Japan
Challenge 6: Bloated public sector
World’s highest public consumption
United States
Canada
Luxembourg
General government total outlays 2010
Per cent of nominal GDP
Poland
New Zealand
Norway
Spain
Czech Republic
Ireland
Germany
Hungary
Iceland
Greece
Euro area
Portugal
Italy
Austria
Netherlands
United Kingdom
Belgium
Finland
France
Source: OECD, Economic Outlook no. 87
Sweden
Denmark

NEGATIVE -
Future of the Danish model
Medium and long term
• Decline of natural resources; gas production peaked 2008,
self-sufficiency stops 2017.Oil available for 15-20 years
NEGATIVE -
• Highest public consumption in the world, taxes mirror this,
rates not competitive in a global competition for the best
brains
POSITIVE -
• Structural assets – ageing is well funded and debt outlook
much better than most
- Denmark can afford fiscal stimulus of growth

16%
14%
12%
10%
8%
6%
4%
2%
0%
-2%
DK
HU
The Danish model: Structural assets
Pre-emptive financing of ageing
Sustainability gaps (S2 in percent of GDP)
Adjustment required so as to reach a target debt of 0% of GDP in 2060
BG
EE
IT
SE
PL
FI
DE
AT
BE
PT
FR
EU27
NL
MT
LT
SK
CZ
CY
RO
LV
ES
Source: European Commission,Economic and Financial Affairs
SI
UK
LU
IE

The gazelles need help
Source: Greens Analyseinstitut

Conclusion
• The Danish Model stalled in 2006, reforms of early retirement
scheme failed, tax reform was half-hearted, efforts to contain
growth in public consumption miscarried
• Strong structural assets can facilitate higher growth rate in
Denmark, if policy is tilted towards private sector growth
• Strong voter preference for public consumption, financed by
higher taxes
• Without reforms, the Danish Model is unlikely ever to deliver as it
did in 2003-2006. 2011 elections crucial
• Growth policy of government is not clear

Critical success factors for attracting
health industry investments
Erik Van Snippenberg, SVP and Area Director,
North West Europe,
GlaxoSmithKline

GSK – Key facts

Shifting pendulum – from west to east:
Percentage of Subjects Randomized by Region
for Industry Cohort, 2000 vs. 2007
North
America
41% > 36%
Latin
America
3% > 7%
EU Core
21% > 12%
Source : Centre for Medicines Research. © CMR, a Thomson Reuters business
EU Non-Core
8% > 21%
EU Accession
4% > 8%
Middle East &
Africa
2% > 3%
Industry Performance
Asia Pacific
2% > 10%

The cake is getting bigger
42

Country openness towards FDI
The 2010 OECD FDI Index

Who wins?
OECD Factbook 2010

Denmark is losing momentum
World Economic Forum: Global Competitiveness Report 2010-2011

Recent large pharma investments in Denmark
Ernst&Young, Biotech in Denmark 2008
One of the strongest life science clusters in Europe
#1 in the world concerning biotech patents
Major GSK investments in Danish
biotech – 2,2 bn. Euro over the past
4 years
…… all willing and able to go global.
#2 in Europe on the Best Performance Index of Biotech Innovation
3 rd largest commercial drug development pipeline in absolute numbers
GSK rates DK best in Europe in regard to clinical research investments – 3 rd globally

Five levers for Denmark to improve investments
Continous improvement of the conditions for health
care research
Further relieve for corporate and entrepreneur
taxation
More competetive and transparent public
procurement
Engage the regional sector
A more global mind-set and structured efforts

The challenge is …..

Thank you!
49

11:25 Talent
Presentations by: Stephen Brugger,
Bill Allen, Jan Rose Skaksen and Margrethe Vestager
12:30 Panel Discussion
Panelists: Jan Rose Skaksen, Margrethe Vestager,
Torsten Schack Pedersen and Charlotte Mark
13:00 Final Remarks
Networking Lunch

Business Barometer Results – Talent
What was/is the trend with respect to the number of people employed
in your company in Denmark over the past year/next year?

Business Barometer Results – Talent
Do you agree that the shortage of highly qualified labor will continue to be a
problem in the coming years?

Business Barometer Results – Talent
How do you rank Denmark’s ability to attract and retain highly
skilled foreign employees?
Poor
Below
Average

Business Barometer Results – Talent
How important are the following to enhance Denmark’s ability to attract and
retain highly skilled foreign employees?

Denmark’s 2020 labor force
Jan Rose Skaksen
September 23, 2010

1. Fiscal sustainability
Two big challenges for Denmark in
the coming years
– It will be an ongoing fight to avoid big and increasing
public debt
2. Reasonable growth rates
– Denmark seems to have a structural problem in
generating productivity growth
• The first challenge is there for sure. The “size” of
the second challenge is more uncertain – but the
implications of sustained low growth rates are very
serious

The problems behind the challenges
1. The difficulties in achieving fiscal sustainability is
closely connected to the size of the labor force.
2. The difficulties in achieving growth is closely
connected to the size of the labor force as well as
the quality of the labor force.

Forecast, labor force (DØR)

Age distribution of population (FM)

GDP pr capita decomposition (ØEM)

1. Danes could work more
2. Immigration
How can the labor force increase?

Pct.
90
80
70
60
50
40
30
20
10
0
15-
19
Is there room for Danes to participate
more at the labor market?
20-
24
25-
29
30-
34
35-
39
40-
44
45-
49
50-
54
55-
59
DK RAS Min. OECD Maks.OECD
60-
64
65-
69
90
80
70
60
50
40
30
20
10
0
Pct.

Is there room for Danes to work more hours? (ØEM)

Do immigration have an impact on the
labor force

Is immigration a solution to challenges?
More employed immigrants increase growth – but it
does not necessarily contribute to solve fiscal
challenge
There is a big difference between different types of
immigrants with respect to labor market
participation
There is no doubt that highly skilled immigrants
contributes to both growth and fiscal sustainability
Access to foreign experts may have very big impact
on the productivity of firms

The quality of labor
If we cannot increase the quantity of labor – maybe
we can increase the quality.
It is a bit “unclear” how much education
contributes to growth

Labor productivity decomposition (ØEM)

Education probably more important than
decomposition shows
The level of investments depend on the quality of labor (well
known that IT-investments and skills are complementary)
Total factor productivity depends on the quality of labor
In a study (FUHU, 2010) using data on all Danish companies,
we find that education not only increases the productivity of
the person getting the education – it also increases the total
factor productivity of the firm
This “collective” effect benefits companies and all employees
in companies
The collective effect is at least as high as the individual effect
of education
One person more with a long further education increases
GDP with 400.000 kr.

Development in further education in Denmark (ØEM)

International comparison of shares of 25 to 34 years old
with further education, 2007 (ØEM)

Expected share with further education 25 years after finishing
primary school

Students entering further education (ØEM)

Conclusion
1. In the coming years the labor force is shrinking
2. This creates big problems for future public budgets
3. Apparently Denmark has a structural problem in increasing
productivity
4. Upgrading on education is sloving down – and educating
labor is one important way to increase productivity

We need talent
– from all over the world
3 ways to make it smooth and attractive to do
your best in Denmark:
• The Danish authorities ought to be polite, open and
efficient
• Think a potential employee as a whole person –
with a spouse who would like a job, children who
have to go to school and the family have a need to
integrate with the Danes
• You have to get used to living in Denmark – taxes…

2820
2810
2800
2790
2780
2770
2760
2750
Arbejdsstyrken skrumper med 50.000
personer
Tusinde personer Tusinde personer
2009 2011 2013 2015 2017 2020
Kilde: DREAM, befolkningsfremkrivning 2009
2820
2810
2800
2790
2780
2770
2760
2750

Produktiviteten i Danmark har været stærkt
aftagende
Pct.
6
5
4
3
2
1
0
-1
5,1
3,1
2,2
2,5
1967-73 1974-79 1980-87 1988-93 1994-00 2001-03 2004-08 1967-2008
Gennemsnitlige vækstrater for produktiviteten for hele økonomien siden 1967 Kilde: Danmarks Statistik
1,9
0,6
-0,2
2,4

Why? Usually
Danes know
best
themselves…
Background:
• A lot of people are retiring in the coming
years and few are entering the labour
market. Supply will be short. Not only in
Denmark but all over Europe.
• Jobs are moving. Not only bluecollar, but
also whitecollar – eg. R&D
• Denmark wants to be a knowledge
economy. Knowledge comes in many
different types of people.
• Denmark is talent magnet no. 6 behind the
US, Canada, Holland, Great Britain and
Sweden. Why not be no. 1?

If we want to
be the no. 1
talent magnet
3 goals:
1. Increase the number of internationals and
increase the time they stay in Denmark.
Increase the number of international
students.
2. Bridge building between upper secondary
and tertiary, tertiary and business to
enable students to graduate one year
earlier.
3. Make more money find their way to
Denmark in R&D
We need a strategy for
attracting talents

Then what
can we
do?
Open the doors for the qualified global
workforce:
• Your job has to be worth more than DKK
200.000
• You have to have a health insurance
• Your children can go to kindergarten or
school
• If you have worked here for 2 years and
you lose your job you can stay for 6 months
and not lose access to kindergarten or
school
• If you have a degree from a Danish
university you can stay (today only 6
months)

What can
we do?
Keeping talents:
• Today: 3 years with 25 pct. tax or 5
years with 33 pct. tax. But if you stay…
• We propose that you get used to it…
5 years with a tax of 23, 25, 27, 31, 33
pct.
• Get the children to school: Today app.
600 children are on the waiting list for
international schooling. This will have to
change so all children have access to
international schools
• Be polite, open and efficient and speak
foreign languages

Danmark sakker bagud på uddannelsesfronten
United States
Andel af 55-64-årige med en videregående uddannelse, 2006
Canada
New Zealand
Denmark
Finland
Australia
Sweden
Norway
Netherlands
United Kingdom
Switzerland
Germany
Japan
Belgium
Iceland
Ireland
France
Spain
0 5 10 15 20 25 30 35 40
Kilde: Educationa at glance 2008, OECD
Canada
Japan
Korea
New Zealand
Ireland
Norway
Belgium
France
Denmark
Australia
United States
Sweden
Spain
Finland
United Kingdom
Netherlands
Switzerland
Germany
Andel af 25-34-årige med en videregående uddannelse,
0 10 20 30 40 50 60

We have to be
smarter:
Education, education, education:
• Bridge building
• Internationalisation of every school and
university.
• Using our strenghts in knowledge

Technology :
•
•

Last but not least:
It is not a
competion for
jobs. It is a push
for more jobs!

Adults too!

Radikale reformer styrker også de
offentlige finanser:
Mia. kr. Virkning i 2015
1. Afskaffe efterlønnen gradvist over 10 år fra 2012 10,4
2. Forkortelse af dagpengeperioden 4,0
3. Genoptjeningskrav, ungeregler mm 2,0
4. Håndholdt beskæftigelsesindsats 3,0
5. Udenlandsk rekruttering 0,5
6. Skat Der Virker 2,0
7. Reduktion i erhvervsstøtte ordninger 5,0
8. Effektivisering og regelforenklinger 3,5
9. Reduktion i aldersbetingede ydelser 2,0
10. Fremrykning af Forårspakken 3,0
I alt 36

Pct. af BNP
4
3
2
1
0
-1
-2
-3
-4
Den offentlige bruttogæld skal mindskes vha. reformer
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Konvergensprogram 2009 (Med nye tiltag) Baseret KP09 (Uden nye tiltag) Strukturel saldo (pct. af BNP) med RV tiltag
Pct. af BNP
4
3
2
1
0
-1
-2
-3
-4