Promoting entrepreneurship in the - Region Midtjylland

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Promoting entrepreneurship in the - Region Midtjylland

IntroductionThe Central Denmark Region is making a substantialeffort to promote entrepreneurshipand business development in cooperation withthe Region’s innovation system. This will helpto ensure that the Region will also be globallycompetitive in the future – among the best inthe world.The purpose of this publication is to provide anin-depth and coherent insight into why and howentrepreneurship and business developmentare being promoted in the Region.the three main areas of action: Entrepreneurshipin education, Development offers to entrepreneursand SMEs, and Skills development forplayers in the innovation system. Finally, Section6 describes how the Central Denmark Region isusing measurement of results and evaluationto follow up on the programme and assess thesocioeconomic return.Thanks to the players in the regional innovationsystem for their inspiration and help in the preparationof this publication.The publication was written with a number ofdifferent target groups in mind. The Region’spoliticians can draw on the publication whenthey need to communicate the Central DenmarkRegion’s efforts to promote entrepreneurshipand enterprise.Foreign regions and business promoters canuse the publication to gain an insight into howthe Central Denmark system is constructed andhow it functions, and to find potential partnersand interfaces between areas of initiative andprojects.Players in the innovation system can usethe publication to support the no-wrong-doorambition and to ease new employees’ ability tounderstand the system and the connectionsbetween the individual areas of initiative.Entrepreneurs and businesses can use thepublication to gain an insight into the Region’sinnovation system and the regional offers whichare available.Section 1 reviews the status and the challengesin relation to the Central Denmark Region’sglobal competitiveness and the Region’s entrepreneurialactivities. Section 2 provides adescription of the objectives and principleswhich the Region has specified in relation tothe business promotion programme. Section 3describes the Region’s policy structure. Section4 reviews the Region’s total innovation systemand provides a brief description of the individualplayers – or groups of players – who are activein the system. Section 5 presents the Region’sfull programme within entrepreneurship andbusiness development, and reviews the individualinitiatives which have been commenced underIntroduction | 3


ContentsIntroduction................................................................................................................................ 31. Challenges............................................................................................................................... 71.1. Competition and the challenges it poses..........................................................................................................81.2. Challenges related to entrepreneurship........................................................................................................ 102. Business promotion in the Central Denmark Region – goals and principles....................... 143. The policy structure.............................................................................................................. 164. The innovation system in the Central Denmark Region....................................................... 184.1. Development of entrepreneurial culture and skills..................................................................................... 214.2. Basic local guidance ............................................................................................................................................ 244.3. Specialised guidance .......................................................................................................................................... 284.4. Consultancy and dissemination of knowledge............................................................................................. 324.5. Accelerated development .................................................................................................................................. 364.6. Capital ..................................................................................................................................................................... 405.Programmes within entrepreneurship and business development in theCentral Denmark Region....................................................................................................... 455.1. Entrepreneurship in courses............................................................................................................................. 465.2. Offers to entrepreneurs and SMEs.................................................................................................................. 50Consultancy and sparring................................................................................................................................... 52Capital...................................................................................................................................................................... 56Development of employee skills....................................................................................................................... 60Globalisation.......................................................................................................................................................... 64Networks and cluster development................................................................................................................. 685.3. Development of player skills in the innovation system.............................................................................. 726. Measurement of results and evaluation.............................................................................. 76Appendix – Addresses/contact details for players in the innovation system......................... 77Development of entrepreneurial culture and skills............................................................................................. 77Basic Local guidance................................................................................................................................................... 78Specialised guidance................................................................................................................................................... 79Consultancy and dissemination of knowledge..................................................................................................... 80Accelerated development.......................................................................................................................................... 81Capital.............................................................................................................................................................................. 82| 5


1. ChallengesLike other regions in the western world, CentralDenmark Region is facing an accelerating globalcompetition. New high-growth countries areoffering such favourable terms for productionthat we must continually develop and improveour frame conditions in order to continue to becompetitive and enjoy a high level of welfare.Regional developments must be turned aroundin all areas if the Central Denmark Region is notto be overtaken in the inside lane, and lose jobsand production in competition with, for example,new high-growth countries like India and China.Viewed in a global perspective, the Central DenmarkRegion is in many ways well-equipped toface this global competition. We have excellenteducational institutions, a highly qualified workforce,high employment, numerous entrepreneurs,and many productive and value-creatingbusinesses.But if you scratch the surface, you find that thelast few years have seen stagnation in a numberof central areas in relation to developmentin productivity and in the workforce, which hascontributed to a weakening of the Region’srelative global competitiveness and thereby putexports under pressure.There is also potential for improvements inentrepreneurship, in particular in relation to entrepreneurialskills, entrepreneurs’ investmentin knowledge and technology, and the proportionof growth entrepreneurs.Facts about the Central Denmark RegionOf Denmark’s five regions, the Central Denmark Region is the biggest in terms of area (13,142 square km)and the second-biggest in terms of population (approx. 1.26 million).Nineteen of the 98 Danish municipalities are within the Region.The biggest municipality is Aarhus with approx. 300,000 inhabitants.The Region’s principal statistics are:- Population density: ...............................................................................................................................96 per km² (4th highest in DK)- Expected population in 2020: ................................................................................................................................................1.32 million- Regional GNP: ...............................................................................................................................€47,000 million (2nd biggest in DK)- Regional GNP per inhabitant: ................................................................................................................ €38,000 (2nd biggest in DK)- Activity rate: ........................................................................................................................................................... * 78% (biggest in DK)Occupational structure (proportion employed):- Agriculture, forestry, hunting and fishing: ................................................................................................................ 3% (DK av.: 2%)- Manufacturing, mining and other industry: ..........................................................................................................17% (DK av.: 14%)- Construction: .................................................................................................................................................................... 6% (DK av.: 6%)- Commerce and private service: ................................................................................................................................39% (DK av.: 44%)- Public services, education and health: ...................................................................................................................35% (DK av.: 34%)*Activity rates are calculated as the number of people in the labour force between theages of 16 and 64 as a percentage of all those between 16–64 years old.Challenges | 7


1.1. Competition and thechallenges it posesThe challenges faced by the Central DenmarkRegion especially relates to:> > Improvement of productivity> > Wage and salary levels and development ofthe workforce> > Development of exports> > The level of innovationDenmark fell from fifth place in 2009 to thirteenthplace in 2010 in competitiveness on theinternationally recognised scoreboard preparedannually by the Swiss business school IMB. Thisplacing is relatively respectable, but Denmarkis being overtaken by our neighbours Sweden(in fourth place) and Germany (tenth). It shouldalso be pointed out that Denmark’s ranking hasdropped a number of places in recent years. Thefall is attributable inter alia to the fact that overthe last decade, Denmark’s average increase inproductivity has been below 0.5 per cent, whichis less than half the EU average and less than athird of the OECD average. The figures for theCentral Denmark Region look even worse, asthe increase in the Region’s hourly productivityis below the national average, as illustrated inFigure 1. Productivity in the region is now belowFIGUR 1 - PRODUCTIVITYthe OECD average.Figure 1: Hourly productivity in the Central Denmark RegionFigure relative 1: to Hourly Denmark productivity as a whole in (100) the Central Denmark Region relativeto (Sourcs: Denmark Statistics as a Denmark) whole (100) (Source: Statistics Denmark)9594939291One situation which makes development in productivitymore problematic is the uncompetitivewage level in Denmark, which in the last decadehas seen an annual growth in wage costs consistentlyabove the average in both the EU andthe OECD. The result, as illustrated in Figure 2, isthat Denmark has the second highest wages inthe OECD, exceeded only by Norway.This high wage level means that Denmarkfinds it difficult to retain production jobs inparticular, and companies can often reduce theirwage costs significantly by, for example, movingproduction to China. Knowledge and innovationare central elements in relation to justifying andcompensating for the high Danish wage level.It is therefore also essential that Denmark iscompetitive in knowledge and innovation, and itis in this light that developments in productivityFIGUR 2 - LØNOMKOSTNINGERin particular are alarming.Figure 2: Wage and salary costs 2009Figure (Source: 2: Wage Government and salary review costs of competitiveness 20092011)(Source: Government review of competitiveness 2011)NORDNKNLDIREAUTDEUFINUSASWEITAOECDESPGRCSVKCZEHUNPOLM EX0 50 100 150 200 250 300Kr. per hourNote: average hourly w age costs converted to Danish kroner for allcountries included in the statistics. The costs cover the private sectorexcluding agriculture, forestry, hunting and fishing.Source: OECD ULC andDenmarks Statistics9089888719931994199519961997199819992000The weak development in productivity is aproblem per se because it reflects our ability tocompete on knowledge and innovation. If it isnot turned around, this development will thushave a negative effect in the longer term on thedevelopment of prosperity in the Region.20012002200320042005200620072008In the years leading up to the financial crisis, therise in Denmark’s wage level was caused interalia by very low unemployment and a consequentshortage of qualified manpower. Thefinancial crisis put a temporary damper on thisdemand, but as Figure 3 indicates, the projectionsshow that unemployment will stabilise ata relatively low level up to 2020. This will meancontinuing bottlenecks resulting in potentialnew wage increases. The situation will also beworsened because demand for employees witha higher education in particular will increasefaster than supply. See Figure 4.8 | Challenges


Figure 3: Developments in the workforce and number of jobs in theCentral Denmark Region, 1996-2024 (figures for 2010 and onward areprojections) (Source: Samkline)680.000Figure3 : Developments in the workforce and number of jobs in the Central Denmark Region,1996 - 2024 (figures for 2010 and onward are projections)(Source: Samkline)Figure 5: Exports as a percentage of gross national product(Source: World Bank)60%Figure 5: Exports as a percentage of gross national product( Source : World Bank)European Union OECD members Denmark660.000640.000620.000600.000WorkforceJobs50%40%30%580.00020%560.0001996199719981999200020012002200320042005200620072008200920102011201220132014201520162020202410%0%1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009In relation to exports, the relatively high Danishwage levels have been partly counterbalancedto date by the fact that in many cases, it hasbeen possible to gain a relatively high price forDenmark’s export goods.This is partly because Danish exports arelargely specialised within goods which are experiencinghigh growth on the world market. Apartfrom this, almost half of Danish exports consistof so-called up-market products, distinguished,for example, by very high quality or good design.This means that companies are able to obtaina premium price which is at least 15% higherrelative to the same types of products in the EUcountries. This compensating factor means thatDenmark has largely followed developments inthe EU and the OECD when exports are comparedas a percentage of GNP. See Figure 5. Thebig challenge here lies in retaining the relativelyhigh level of exports and the high proportion ofFigure 4: Actual vs. desired change in the workforce 2010 - 2020up-market products within total exports.(Source: AE Financial times April 2011)Figure 4: Actual vs. desired change in the workforce 2010-2020(Source: AE Financial times April 2011)Supply (actual)Demand (desired)Further education- Long coursesFurther education- Medium lenght coursesFurther education- Short coursesSkilledGrammar school levelThe level of innovation in companies is one ofthe factors which will secure continued developmentsin quality and design, and thereby helpDenmark to remain competitive in an internationalcontext.As illustrated in Figure 6, Denmark is relativelywell situated in a Scandinavian context in termsof the proportion of innovative companies. Butcompared to Germany, the proportion of innovativecompanies is relatively low. With the reservationthat six out of ten companies have notinnovated in the last three years, this situationmust be changed for several reasons.Firstly, an increased innovativeness is importantin relation to balancing the relative fallin the level of productivity caused by the lastdecade’s weak increase in productivity.Secondly, innovation is essential to remedysome of the organisational challenges existingand lying in wait because of developments in theworkforce.Finally, the competitive pressure on SMEswill undoubtedly increase in the years to come,further increasing the need for more Danishcompanies to innovate.FIGUR 6 - INNOVATIONFigure 6: Innovating companies(Source: Figure Regeringens 6: Innovating konkurrenceevneredegørelse companies2011)(The(Source: government’s Regeringens statement konkurrenceevneredegørelse competitiveness 2011)(The government’s statement on competitiveness 2011)Note: Number of companies with at least 10 employees who haveintroduced the kinds of innovation in the period 2006-2008-45% -30% -15% 0% 15% 30% 45%UnskilledThis challenge is substantial because ofthe increased global competition and competingproducts from low-wage countries whichare becoming better and better at developingproducts which can challenge Denmark’s competitiveadvantages with respect to quality anddesign. A very high level of innovation is thereforerequired in Danish companies to ensure thatwe remain competitive internationally.Product and/or process innovationOrganisations- and/or marketing innovationPercentage of all companies706050403020100DEUDNKSWEFINNORNote: number of companies with at least 10 employees who haveintroduced the kinds innovation in the period 2006-2008.Challenges | 9


1.2. Challenges relatedto entrepreneurshipEntrepreneurs and employees with entrepreneurialskills are important for turning aroundthe trend in competition because entrepreneurs,via innovation and the development ofnew areas of business, create increased competition,which challenges existing companies andstrengthens their competitiveness. The so-calledgrowth entrepreneurs in particular are alsoimportant for economic growth and new jobs.Why prioritise growth entrepreneurs?Studies of entrepreneurial companies with fiveor more employees show that growth entrepreneurstypically comprise around 10-15% ofthe companies, but that they are responsiblefor 50% of the companies’ total exports and40% of their total number of employees.Denmark and the Central Denmark Region arevery well placed to generate a high level ofentrepreneurial activity. The widely recognised»Global Entrepreneurship and DevelopmentIndex« of 2011 ranks Denmark as the strongestentrepreneurial country among the 71 mostdeveloped countries in the world. The explanationis that Denmark’s environment for entrepreneursis among the best in the world, whichis the result of a national policy in the area overmany years.Another result of these initiatives is thatthe administrative load for business start-up inDenmark is very low compared to other countries.Another result is a relatively good accessto start-up capital through i.a. the Danishinvestment fund »Vækstfonden«. More on this inSection 4.6. In addition, it is such factor as a highlevel of education, a positive view among theFigure 7: Denmark’s ranking in the »Global Entrepreneurship andDevelopment Index«(Source: Global Entrepreneurship and Development Index 2011)ATT = Entrepreneunial AttitudesACT = Entrepreneunial ActivityASP = Entrepreneunial Aspirations_____________________Figure 7: Denmark’s ranking in the “Global Entrepreneurship and Development Index”(Source: Global Entrepreneurship and Develop ment Index 2011)Denmark 33rd percentile 67th percentile71 countries1. Opportunity perception (ATT)14. Risk capital (ASP)2. Startup skills (ATT)13. Internationalization (ASP)3. Nonfear of failure (ATT)12. High grow th (ASP)4. Netw orking (ATT)11. New technology (ASP)5. Cultural support (ATT)10. New product (ASP)6. Opportunity startup (ACT)9. Competition (ACT)7. Tech sector (ACT)8. Quality of human resources (ACT)10 | Challenges


population on entrepreneurs, and a very highproportion »opportunity entrepreneurs« – entrepreneurswho are motivated by desire ratherthan need – which contribute to characterizeDenmark as a highly entrepreneurial country.The general result is that Denmark and theCentral Denmark Region have a relatively highrate of establishment and that a relatively largenumber of the entrepreneurs survive the difficultfirst years. But as Figure 7 illustrates, thereis still room for improvement especially in theareas of:> > Startup skills> > New technology> > Internationalisation> > High growthThe challenge in relation to startup skills isi.a. rooted in the fact that entrepreneurshiphad traditionally not been an area accorded apriority in the Danish education system. This isillustrated in Figure 8, which shows that under40 per cent of Danish adults think that theeducation system helped them develop a senseof initiative – a sort of entrepreneurial attitude.The proportion is the lowest in Scandinavia andbelow the EU average. In addition, it is interestingto compare the proportion with the resultsfor the U.S.FIGUR 8 – VURDERING AF UDDANNELSESSYSTEMETFigure Figure 8: Entrepreneurs’ 8: Entrepreneurs’ assessment assessment of the influence of the of the influence education of the system education(Source: EUsystemFlash Eurobarometer(Source: EU Flash283)Eurobarometer 283)’»My school education helped me to develop a sense of initiative - a"M y school education helped me to develop a sense of initiative- a sort sort of entrepreneurial of attitude" attitude«Share of adults, 2009Strongly agree Agree Disagree Strongly disagree DK/NA0% 20% 40% 60% 80% 100%Fortunately, something has happened in recentyears, and the education system has placedmore focus on entrepreneurship. This alsomeans that it is no longer only enthusiasts whoare moving developments forward. Managementhas also begun to assume some responsibility.This is evident inter alia in the businesscolleges, where teaching in entrepreneurship inparticular has been accorded significantly greateremphasis in commercial courses and in thecourses in secondary schools which specialise inbusiness education.But entrepreneurship is still not included asa natural compulsory element in the courses innumerous educational institutions.Apart from this, what teaching there has beenhas typically been »about« entrepreneurshipand not »in« entrepreneurship. Students havebecome good at preparing a business plan, butnot at realising it. There has been some developmentin this area in recent years, but there isstill a major challenge in developing and disseminatingbest practice in courses.The limited use of new knowledge and newtechnology typically results in companies developingto a level that is lower than if they hadbuilt the company up on the latest knowledgeand technology. This may affect the competitivenessof the company in several ways. A riskis that the companies are missing out on importantcompetitive advantages that they couldhave obtained if they had utilized the latesttechnology. Another risk is a lower productivitythan they could have had. Both factors have anegative affect on the competitiveness of thecompanies. The result is entrepreneurial companieswhich do not exploit their potential, and thisaffects growth and jobs.154227124Norway11443276Finland133631173Sweden133632172EU2773347112Denmark363715111USAShare of adults, 2009Challenges | 11


The challenges in relation to internationalisationare seen in the fact that the proportion of entrepreneurswith exports in their year of establishmenthas been falling over the last decade – asillustrated in figure 9. This is inter alia despitethe fact that technological developments in theinternet and communication have made it easierthan ever to sell goods on international markets.The development is especially alarming in relationto the general challenges related to exportintensity described in the previous section.Figure 10: New growth companies (+10 employees), 2007(Source: Regeringens konkurrenceevneredegørelse 2011)Note: New growth companies are companies which reach 10 or moreemployees within their first two years and have an average annualgrowth of 20% in the number of employees In the following threeFigure10 : New growth companies (+10 employees), 2007years. (Source The : Regeringens data for FIN konkurrenceevneredegørelse)is from 2005. The data for NOR and ESP arefrom 2006 and for other countries from 2007.Percentage of all companies1,41,210,8Figure 9: Proportion of entrepreneurs with exports in the year ofestablishment. FIGUR 9 – IVÆRKSÆTTERE (Source: Statistics MED EKSPORT Denmark)0,6Note: Companies in the Building and construction business areFigure 9: Proportion of entrepreneurs with exports in the year of establishmentnot included as they seldom export and the establishment of these0,4(Source: Statistics Denmark)companies are sensitive to economic cycle0,2Percentage of all entrepreneurs109,598,587,576,565,552001 2002 2003 2004 2005 2006 2007 2008DenmarkCentral Denmark RegionCompanies in the Building and construction business are not includedas they seldom export and the establishment of these companies aresensitive to economic cycleGrowth is the prerequisite for the creation ofnew jobs. But many new companies do not growbigger, and only a small number quickly find asolid and steady pace and become growth entrepreneurs1 . New growth companies comprised0.5 per cent of all companies in 2007, placingDenmark in the middle of the international fieldas shown in Figure 10.0SVKHUNESPESTFINSVNCZENote: new grow th companies are companies w hich reach 10 or moreemployees w ithin their first tw o years and have an average annual grow thof 20% in the number of employees In the follow ing three years. The datafor FIN is from 2005. The data for NOR and ESP are from 2006 and for othercountries from 2007.This ranking was achieved for several reasons.One considerable reason is probably that Danishentrepreneurs’ growth ambitions often sufferwhat in Denmark is popularly called the BMWsyndrome. The term is used to describe entrepreneurswho lose their growth ambitions whenthe first goals for material returns have beenreached, and where the next step will typicallybe the appointment of new managerial skills.Another reason for the low proportion ofgrowth entrepreneurs is the Danish home market,which is relatively small. This means thatentrepreneurs must quickly adapt themselves toexporting if they are to retain the pace of theirturnovers. Viewed in this light, the above developmentin relation to internationalisation isespecially problematic.DNKNLDITANORSWEUSAOECD1Denmark counts growth entrepreneurs in accordance with theOECD’s definition, meaning that such activities must have ten ormore employees within their first two years of existence and an averageannual growth of at least 20 per cent in the following three yearsA third barrier to growth which has becomemuch bigger during the financial crisis of thelast few years is entrepreneurs’ access to capital,both ordinary loan capital, where the banks’more stringent requirements regarding securityhave made it much more difficult for companiesto borrow money for e.g. new projects, but alsoin relation to more risk-oriented capital, wherebusiness angels and venture companies havealso suffered during the financial crisis.The situation is serious, as the lack of capitalis a direct barrier to entrepreneurs in relationto the realisation of their growth ambitions andpotential.As illustrated in Figure 11, Denmark as a wholeis otherwise relatively well placed in a compa-12 | Challenges


ison of e.g. venture capital investments as apercentage of GNP. But what the summary doesnot show is that over 80% of all venture capitalinvestments are made in the capital city area.The figure thus camouflages very substantialregional differences. These big differences areprimarily attributable to two factors. Firstly, alarge proportion of Denmark’s knowledge- andtechnology-intensive entrepreneurs start up inthe capital city area. Secondly, the great majorityof Danish business angels and venturecompanies are domiciled in the capital city area,creating a geographical distance and a barrier inrelation to knowledge- and technology-intensivecompanies in the Central Denmark Region.As will be evident, there are thus challengesin relation to both the availability of capital andthe matching between companies and investors.Figure 11: Venture investments as a percentage of GNP, 2008-2009(Source: Regeringens konkurrenceevneredegørelse 2011)Note: venture investments as percentage of GNP were calculatedas annual averages for the period 2008-2009. The leading country(SWE) Figure 11: is set Venture at 100. investments The investments as a percentage include of GNP, seed 2008-2009 capital, start-up(Source : Regeringens konkurrenceevneredegørelse 2011)investments, and expansionIndex (SWE=100)1009080706050403020100SWECHEUKDNKFINBELNORNLDPRTFRAESPDEUIRLAUTITAOECDNote: venture investments as percentage of GNP were calculated as annualaverages for the period 2008-2009. The leading country (SWE) is set at 100.The investments include seed capital, start-up investments, and expansionChallenges | 13


2. Business promotion in the Central DenmarkRegion – goals and principlesIn its business development strategy for 2010-2020, the Central Denmark Region’s vision is tobe a globally competitive region – among thebest in Europe. The Region will thus be distinguishedby a high level of productivity and valuecreation, and it will be a region where innovativeand competent businesses and employeesare the foundation for business growth anddevelopment. The strategy was prepared byVækstforum and approved by the regional council.In practice, this means that all central playersin the Region as well as the administration haveparticipated in the preparation of the strategy,which therefore enjoys very broad support.The vision encompasses four strategic goalswhich must be realised if the Central DenmarkRegion is also to enjoy a strong position in theglobal competition of the future. The goals areshown in the figure below, which also illustrateshow entrepreneurship is one of the four generaltactical areas of initiative which must generatethe development required for realisation of thestrategic goals.Apart from the tactical areas of initiative shownin the figure, four positions of business strengthare also in focus at the tactical level, and thesewill help to achieve the strategic goals. Thesepositions of strength are: Energy and the environment,Foods, Welfare innovation and Tourism.Specific tactical goals up to the year 2020have also been set in these areas.As will be evident from the figure, the businessrelatedgoals are centred primarily on busines-Figure 12 : Goals and tactical areas of initiatives in the business development strategyFigure 12: Goals and tactical areas of initiatives in the business development strategyStrategic goals for 2010 -2020Growth in gross value to increase by 2 % per year(2000 -2008: 1.3% per year)Productivity to increase by 1.5 % per year(2000- 2008: < 0.1 % per year)Employment to increase by 0.5 % per year(2000-2008: 1.3 % per year)Exports to increase by 4 % per year(2000 - 2008: 4 % per year) Tactical goals for 2020Education and skills developmentEntrepreneurshipInnovation and businessdevelopmentDigitalisation• The workforce to rise to700,000• Foreign citizens with residencefor business purposes to be1.5% of the population• The continuation rate fromsecondary school to furthereducation to rise to 65%• The proportion of a youth yeargroup completing an out-ofschooleducation to rise to 95%• The completion rate for basicvocational education courses tobe 65%• The proportion of growthentrepreneurs to rise to 20%• The proportion of exportentrepreneurs to rise to 10%• The establishment rate to riseto 12%• Venture capital investments perinhabitant to rise to DKK 350• The proportion innovativebusinesses to rise to 60%• The share of new goods andservices of total turnover to riseto 15%• The proportion of exportingSMEs to rise to 15%• Turnover in SMEs to rise by 6%per year• The proportion of employeesworking in foreign-ownedbusinesses to rise by 2% peryear• The proportion of companieswhich have developed newproducts or services using IT torise to 35%• The proportion of companiesintroducing new machinery andequipment using IT to rise to75%• The proportion of companiesusing IT systems in businessprocesses to rise to 30%• The number of students peryear in adult and furthereducation to rise to 8,00014 | Business promotion in the Central Denmark Region – goals and principles


ses’ development and growth. But there is noquestion of unconditional growth. The CentralDenmark Region endorses the Europa 2020strategy and intends growth to be sustainable,and built on a responsible use of resourceswhich ensures that future generations will alsobe able to enjoy growth and welfare. Sustainablegrowth is also inclusive and based on a highlevel of participation in business, where everybodymakes a contribution and gains a share ofthe resulting progress.The concrete initiatives which will realisethe tactical and strategic goals are describedin two-year action plans. Only initiatives whichcan be expected to have an effect in relation toachieving the goals will be initiated. This alsomeans that e.g. the business-oriented initiativesunder the programme »Entrepreneurship« willbe focused exclusively on those entrepreneurswho can help to achieve the tactical goals – thatis, growth and export entrepreneurs will be infocus.The above broad backup for the strategy isessential to make realisation of these goalspossible. But it is at least equally importantthat the group which will execute the individualinitiatives is qualified to perform the task. CentralDenmark has historically had a very strongtradition of business service and promotion incomparison with Denmark’s other regions. Thisis evident in the fact that the sum spent on businessservices per inhabitant by municipalities incentral Jutland is 40% higher than the nationalaverage and more than three times the level inthe capital city. This high prioritisation meansthat the Central Denmark Region has a strongfoundation on which to build the individualinitiatives in relation to the political support, thefunctioning innovation system and the existingbasic business promotion initiatives. The CentralDenmark Region has an ambition in this contextto further strengthen the innovation systemand create an absolutely world class system.This is necessary to ensure the full effect of theregional initiatives. More information on whatthis ambition specifically involves is provided inChapter 4 under »The Central Denmark Region’ssupport for and use of the system in its businesspromotion programme«.Business promotion in the Central Denmark Region – goals and principles | 15


3. The policy structureThe framework conditions for developing andrunning a business in the Central Denmark Regionwere created in an interplay between the EU,national, regional and local levels. Coherencebetween these four levels is critical for achievinga successful outcome for the entrepreneurshippolicy.In Denmark, the state, the regions and the municipalitieshave a formal responsibility for the businesspolicy. A number of interest organisationsand knowledge institutions also have an influenceon the framework conditions for business, forexample by serving on national or regional councilsand via their own initiatives within businessconsultancy or business-oriented centres ofknowledge in the educational institutions.The EU and the government levelThrough the Europe2020 Strategy and the SmallBusiness Act EU sets the overall direction for entrepreneurialefforts in member states. The goalsfor the EU’s 2020 strategy for green, inclusive andintelligent growth are converted into nationalgoals in each member state. In the same way, theSBA holds guidelines and objectives for how themember states should think entrepreneurs andSMEs into the national policies.EU structural funds - like the European RegionalDevelopment Fund (ERDF) and the EuropeanSocial Fund (ESF) - supports the effectuationof EU’s strategies into concrete developmentinitiatives that strengthen competitiveness andemployment in the single member states. In Denmarkthe five regions attend the allocation of 90%of the structural funds in the ERDF and ESF, whilethe remaining 10 % is allocated through »thecontestable pool«.In order to reach the goals for Denmark in theEurope 2020 strategy the Danish government hasset goals for 2020 within the areas of employment,climate, research and development, povertyand education. A number of agreements in theseareas are included in the reform package 2020,which includes the »Agreement on Denmark as agrowth nation«. The package is an ambitious attemptto continue recent years’ systematic workto strengthen the terms of growth for Danishentrepreneurs and businesses.In addition the Danish government has set arange of goals for economic policy, which also addressthe challenges within productivity, competitiveness,and investments in research and education.The state programmes for strengtheningthe conditions for growth and development forthe business sector are handled by a number ofdifferent ministries.The programme for The Ministry of Businessand Growth Denmark covers general entrepreneurshippolicy, including creation of frameworkconditions for entrepreneurs and businesses andthe design of and access to risk capital. There arealso various special business promotion initiativeswithin green and welfare technology. A numberof areas which will strengthen entrepreneurs’framework conditions and create increased focuson growth entrepreneurs are in focus.The Danish Enterprise Authority also operatesunder the Ministry of Business and Growth.The Authority ensures performance of initiativesincluding access to consultancy and capital, earlytesting of business ideas, improved saving andloan options and systematic education in conceptdevelopment and entrepreneurial skills in furthereducation courses.Vækstfonden (The Growth Fund) is a stateinvestment fund which invests equity in partnershipwith private investors and financiers withguarantees in cooperation with Danish financinginstitutions.The Ministry of Science, Innovation and HigherEducation sets the framework for the innovationpolicy initiatives and schemes and primarily addressesthe problems and challenges experiencedby the knowledge-intensive entrepreneurs in thecommercialisation of research results.The Danish Technology and Innovation Councilunder the above ministry is responsible forstrengthening future growth and innovation inthe business sector via policy initiatives withintechnology and innovation. The Council sets theframeworks for the initiatives offered by the DanishAgency for Science, Technology and Innovation,an agency under the Ministry, which performsduties within research and innovation policy. Theinteraction between businesses and knowledgeinstitutions is strengthened via a number of schemessuch as the national innovation networks,innovation agents etc.The Ministry of Foreign Affairs of Denmark implementsDenmark’s foreign policy, European policy,development policy, safety policy and trade policy,and undertakes duties under international civillaw. Apart from the Ministry of Foreign Affairs,there is a minister for Europe, a minister for Nor-16 | The policy structure


dic Cooperation, a minister for trade and investmentand a minister for development.The Trade Council is an arm of the Ministry ofForeign Affairs which is responsible for assistingprivate companies within exports, internationalisationand promotion of investment. The TradeCouncil is represented in over 60 countries and itpromotes Danish companies’ exports and internationalisation.The regional levelDenmark is divided into five regions. Promotingregional development is one of Central DenmarkRegion’s two main tasks – the other being theprovision of health and welfare services.The Regional Council is responsible for theregional development and for allocating regionalbusiness development funds for specific businessinitiatives. The Regional Council allocates fundsbased on recommendations made by the CentralDenmark Business Development Forum.The Business Development Forum is a regionalpartnership comprised of representatives ofcentral public and private players. The BusinessDevelopment Forum is responsible for preparingthe regional business development strategy andfor monitoring the conditions for growth. Besidesthe recommendations for the allocation ofthe regional business development funds CentralDenmark Business Development Forum alsomakes recommendations to the Danish EnterpriseAuthority regarding the allocation of the EUStructural funds.With the business development strategy2010-2020 – »A globally competitive region«, theBusiness Development Forum has set a long-termperspective for business policy in the whole ofthe Central Denmark Region. It is a strategic planwhich aims to ensure that by 2020 the CentralDenmark Region will be a globally competitive regionand amongst the best performers in Europe.The regional business development strategy isfollowed up by two-year action plans which specifywhich programmes are to be prioritised in theregional programmes. The regional programmesand projects are implemented by players on theoperator side, and result contracts and measurementsof effectiveness ensure ongoing follow-upon the programmes which have been initiated.Denmark has a Væksthus (Business Link) inevery region to provide a specialised businessservice for entrepreneurs and companies ingrowth. The Business Links offer mapping ofgrowth for ambitious entrepreneurs and businesses,and also play a prominent role as a linkbetween the business service operators in thesystem via a number of cooperation agreementswith central players for the entrepreneurs. TheBusiness Links are owned by the municipalitiesand established as commercial trusts.Viewed in interplay with the national programme,the regional programmes make a significantcontribution to supporting entrepreneurs andbusinesses’ terms of growth in a comprehensiveinnovation system. On the basis of the regionalstructural fund administration, the regions havebeen able to initiate major programme-basedbusiness promotion initiatives which, not leastin the Central Denmark Region, have helped tocreate content and critical mass in the local businessservice.The local levelThe local business policy in the individual municipalitiessupports the programme and the generalbusiness service which is offered to all entrepreneursand businesses. The municipalities play animportant role within both the financing and theimplementation of regional business development.A characteristic of the local business serviceis that the pivotal point is services and activities,where proximity and the knowledge of local conditionsplay a critical role. The services which areoffered locally are typically guidance of entrepreneursand businesses on the business planand start-up, courses and networking activities,and arranging of commercial land. There canalso be services of a more focused nature suchas company transfer, strategy and management,matchmaking with knowledge institutions, clusterdevelopment, and building up and running incubators/developmentparks etc.These tasks are normally performed eitherexternally by a local trade council (typicallymember-based) or by an independent unit in themunicipality. Recent decades have seen increasingfocus on business service and promotion in abroad sense in the municipalities. Together withthe Business Links, the local operators play a decisiverole in implementing many of the regionalprogrammes described below.The policy structure | 17


4. The innovation system in the Central Denmark RegionAn effective and well functioning innovationsystem is a central prerequisite for realizing theambitious regional policy goals up to the year2020 – described in chapter 2.The innovation system in Central Denmark Regionconsists of a number of different players,offering a range of related services. The differentservices are aimed at entrepreneurs andSMEs in different development phases. Thereare substantial individual differences betweenthe players in the system. For example, someof them are publicly financed, while others are(also) financed privately. Some players havebeen present for several decades – others foronly a few years. Some players have severalhundred employees – others only a handful.Some players’ primary concern is to servicethe Region’s businesses – others have severalobjectives, where business service is only oneamong many concerns. But a common featureof all players is that they are part of a coherentnetwork in which the individual players’ goalis to refer to – or include – other players instep with the businesses’ need for specialisedguidance or advice. The system is illustrated infigure 13.As the figure indicates, the educational coursesplay a basic role in the total innovation system.This applies to the development of creativeabilities, active minds and basic entrepreneurialskills.Some individuals elect to start a businessimmediately after their education has beencompleted. But the great majority of the newcompanies are started by people who have beenemployees for a number of years, and who havethereby gained a concrete business idea. Thebasic local guidance in this context is an offerrelating to the typical basic challenges which allentrepreneurs and businesses experience in thestart-up phase.Figure 13: The innovation system in Central Denmark RegionFigure 13: The innovation system in Central Denmark RegionBasic localguidanceSpecialisedguidanceConsultancy anddissemination ofknowledgeAccelerateddevelopmentCapital- Local business serviceunits- Development parks- Væksthus Midtjylland(Business Link CentralDenmark)- VEU centres(adult and furthereducation centres)- Research institutions andknowledge centres- Innovation networks- Private consultants- Connect Denmark- Spin-off Centre- The Danish Trade Council- Approved TechnologicalService Institutes- MedTech Innovation Center- Pre-seed ventureinvestors- Science parks- Accelerace- Central DenmarkEntrepreneurship Fund- Pre-seed ventureinvestors- Venture capitalcompanies- Business Angels- VækstfondenDevelopment of entrepreneurial culture and skillsEntrepreneurship Centres and student incubatorsInstitutes of further educationYouth education institutionsSchools18 | The innovation system in the Central Denmark Region


If the entrepreneur has growth ambitions andseeks guidance on more complicated matters,he or she can be sent on to players under thespecialised guidance scheme. For example,Business Link Central Denmark can help the entrepreneuridentify development potentials anddraw up a concrete plan. In the next stage, theplayers under the specialised guidance scheme– if deemed appropriate – refer the entrepreneurto one or more players in the illustrationoutlined groups of actors: »Consultancy andDissemination of knowledge«, »AcceleratedDevelopment« and »Capital«.The innovation system applies to many differenttypes of business, and how these businessesuse the system varies very greatly. For example,some businesses have experience in usingdevelopment services from the players in the system,and they are aware of their needs and theplayers they want to help them to develop theirbusinesses. These businesses will typically havea need for guidance, but they will make a directapproach to the player they want to provide theassistance. Other businesses will only have experienceda problem or a challenge, with whichthey need help, but they have difficulty definingand delimiting the problem, and they are unclearwith respect to how the problem is to be solvedor who will do so. These businesses will typicallyapproach (or be referred to) the local basicguidance service, which will help the business tofind its way, and refer the business further in thesystem as required as per the process describedabove.The system can thus be used in many differentways, and it is very flexible with respect to handlingthe different needs with which the businessesapproach the system.The high level of flexibility in the handling of thebusinesses is regularly strengthened by an ambitionthat there may be »no-wrong-door« forthe businesses. This means that the players inthe system operate with a goal that, irrespectiveof the player who may be approached, the entrepreneurmust always be referred to the playerwho is best able to meet the current needs.The »no wrong door« ambition makes majordemands on the individual players in the systemand, not least, on the individual player’sknowledge of the whole innovation system.In practice, an attempt is made to achieve theambition via comprehensive networking, wherethe players are bound together to a large extentby a set of cooperation agreements based inBusiness Link Central Denmark. These cooperationagreements contain general guidelinesfor target groups, allocation of duties androles, implementation of regional programmes,marketing, skills development, and a number ofspecific goals for the level of activity.The Central Denmark Region’s support forand use of the system in its business promotionprogrammeThe Central Denmark Region’s innovationsystem includes a large number of players whooffer advice, guidance and training for the businesssector. Together, the players possess a highlevel of expertise and knowledge. The CentralDenmark Region has attempted to use this bybuilding up the business development programmearound the existing players.The Region’s business promotion programmeis thus built on a strong foundation of local andspecialised advice and well-honed consultancyand development-generating expertise, ensuringa solid basis for a competent implementationof the Region’s initiatives for entrepreneursand SMEs.The fact that the Central Denmark Region prioritisesthe innovation system in the implementationof the business development programmealso means that the players in the system gainmore »goods on the shelves«, which is effectivelypromoted at the same time via variousrelevant marketing channels. The result is an innovationsystem with a high level of efficacy anda markedly strengthened and more attractiveprofile to the businesses.The innovation system in the Central Denmark Region | 19


Experience from the Central Denmark Regionand best practice studies from other regionshave shown that a number of factors are importantfor ensuring that the business promotionprogramme is effective and legitimate. The followingpoints apply to the innovation system:> > There must be a competent, easily accessibleand local business service which canundertake the introductory screening for thesystem.> > There must be expertise at a very high levelin providing guidance – in both breadth anddepth.> > The initiatives in the programme must be attractiveand effective for the target group.The Central Denmark Region ensures thesepoints in its business promotion programme by:> > Consistently ensuring that the players providingbasic local guidance – especially thelocal business service – are the main point ofentry to the innovation system with respect toaccess to the Region’s initiatives. This is doneamong other ways by supporting the »nowrong-door«referrals from the other playersin the system and consistent marketing with ajoint website and one telephone number, butalso by ensuring in-service training of employeesunder the basic local guidance scheme sothat their expertise in providing guidance is ata very high level, and they are thus an attractivepoint of entry.> > Ensuring that the specialised guidance– especially Business Link Central Denmark –is a central player in the innovation system interms of charting the businesses’ possibilitiesfor development and examining the initiativesin central Jutland. This is done among otherways by supporting the system’s cohesion,especially with respect to Business LinkCentral Denmark – e.g. via cooperation agreementsand the stationing of employees fromkey regional and national partners in BusinessLink Central Denmark, but also by ensuringthe in-service training of employees providingthe specialised guidance so that their knowledgeof the system and their skills in providingguidance are at a very high level in bothbreadth and depth.> > Developing the programme’s initiatives on thebasis of the target group’s needs and designingthe initiatives so that they support theclarification process which the target groupneeds to a major extent. Especially the specialisedguidance which contributes to this, whilestimulating the businesses to break downthe barriers and invest in the effective offersof development available under »Advice andcommunication of knowledge«, »Accelerateddevelopments« and »Capital«.The Central Denmark Region also sees it as absolutelyessential that the business promotionprogramme is designed to ensure the greatestpossible return to society for the public fundswhich were invested in the businesses. CentralDenmark Region ensures this, by using theinbuilt specialisation in the innovation system,to create a »growth accelerator«, where theweight in the offers is increased in step with theentrepreneurs’ growth potential – and therewithin step with potential economic return tosociety which can be realised by the individualbusiness. This means, that the »light« and moregeneral offers are available to all entrepreneurswith a growth potential. While the »heavy« oftenspecialised or long-term offers only are availableto entrepreneurs with an extraordinary growthand export potential.The following sections provide more in-depthdescription of the various players in the Region’sinnovation system.20 | The innovation system in the Central Denmark Region


4.1. Development of entrepreneurialculture and skillsWith respect to business development, theeducational institutions work within a long-termperspective to create the entrepreneurial cultureof the future by influencing the students of thepresent. This is a fundamental building block inthe total initiatives, where it is possible to influencestudents’ attitudes to entrepreneurship andstrengthen their entrepreneurial skills.Figure 14:Simplified illustration of the Danish education systemFigure 14 shows a simplified illustration of theDanish education system.Figure 14: Simplified illustration of the Danish education systemMasterprogrammesBachelorprogrammesProfessionalbachelorprogrammesAcademyprofessionprogrammesLong courses Medium courses Short coursesGeneral upper secondaryeducationFurther educationYouth education16-171513-14Commercial cources 10-13Lower secondary education 7-10Primary School 0-6Basic School LevelThe players’ promotion of entrepreneurshipconsists primarily of subjects and courses with abroad approach.The lower secondary education includes entrepreneurshipprimarily in established subjects inthe form of projects focusing on creativity andconcept development. The projects are typicallyof short duration and they most often involve afictional case, but they can also be based on aproblem posed by a local business. The object ofthe education at this level is to stimulate pupils’creativity and arouse their curiosity in relation toentrepreneurship.The education in entrepreneurship in theyouth education is more theoretical and basedon practice. It can consist of independent subjects,but also of modules included in establishedsubjects. The most ambitious schools havea dedicated innovation or entrepreneurship line,where the pupil studies all phases in theory andpractice, from invention and concept developmentto commercialisation and business development,to marketing and sale. But there aresubstantial differences between schools, andother schools have thus included innovation orentrepreneur ship exclusively in e.g. an optionalsubject. The object of the course at this levelis both to stimulate the pupils’ creativity andarouse their curiosity in relation to entrepreneurship,but also to give them some concretetools and strengthen their entrepreneurial skills.Education in innovation and entrepreneurshipin the further education courses is typically verycomprehensive, and the students are introducedto concepts and theories of innovation, designprocesses, growth, business development andmore. As with the other course levels, there arealso major differences in the further educationcourses in the extent to which innovation andentrepreneurship are included. Some places workintensively with entrepreneurship and developmentof enterprising behaviour. Other educationalinstitutions only include entrepreneurshipsporadically in established courses. In general,the further education courses also continue tostimulate students’ initiative, and educate themin what is called »entrepreneurial capacity«. Thetraining in entrepreneurship is, however, boundto a higher degree to a specific topic, and thetraining at a number of educational institutions issupplemented by student incubators where thestudents can work intensively on the establishmentof their own business and receive expertguidance and sparring. There are currently sevenstudent incubators in the Central Denmark Region.Individual players, Aarhus University and VIAUniversity College have also established entrepreneurshipcentres with responsibility for thedevelopment, coordination and dissemination ofwork which promotes entrepreneurship.Student incubators in the Central DenmarkRegion> > Ark:Idea (Aarhus School of Architecture)> > Business Factory (Aarhus University, Institute ofBusiness and Technology, Herning)> > IDEA House Aarhus (Erhvervsakademi Aarhus,Aarhus)> > Midtjysk AnimationsVæksthus (The AnimationWorkshop, Viborg)> > Student Entrepreneurship Centre (VIA UniversityCollege, Horsens)> > Studentervæksthus Aarhus (Aarhus University,Aarhus)> > Innofactory – the virtual student incubator(Erhvervsakademi Dania, Randers)The innovation system in the Central Denmark Region | 21


CASE EXAMPLEAcademic entrepreneursWhen the universities’ specialist knowledge is combined with the entrepreneurs’feeling for business, unique business opportunities arecreated.Aarhus University was the first institution of higher education in Jutland.Today, it is one of the world’s top hundred universities, and its objective isto be a strong partner for the business sector.With the Centre for Entrepreneurship and Innovation (CEI), graduates ofthe university gain an extra dimension in their educations. The underlyingvisions are about value creation and continuity between knowledge andbusiness.»As ‘Denmark’s Entrepreneurial University’, we place heavy emphasison developing the students’ entrepreneurial faculties, and we are constantlydeveloping a course structure where the entrepreneurial outlookis integrated into the existing disciplines,« explains Flemming K. Fink, whoheads the CEI.Students from all of the university’s disciplines, which cover, for example,the humanities, economics and natural sciences, gain the opportunity toestablish and develop businesses at various levels via the Student incubator,where concept development courses and guidance by professionalscreate optimal possibilities.»Specifically, we have an example of a theology student who, with theaid of the various possibilities available in the CEI, started an independentbusiness, and the product is ethical accounts for small and medium-sizecompanies,« Flemming Fink explains. The Centre has two strong areas offocus, each growing with a high level of success.»One part of the Centre is concerned with entrepreneurship, while theother is focused on establishing projects and partnerships between businessesand relevant researchers. We work on the basis that the knowledgepartnership must commence with the business’s needs, and we helpto describe and organise a tailor-made knowledge partnership,« says MrFink, noting that the CEI’s students have already given rise to about 50businesses – far exceeding the goals.»We’re satisfied with what we’ve achieved, but I hope that in time, we canbe the sustaining forces which can make Aarhus an entrepreneurial ecosystem.We have all the components in the university, the Business Link,Incuba Science Park and the many grass roots entrepreneurs, but we canachieve better coherence. The perspective is also to attract investmentcapital,« concludes Mr Fink on the visions for the CEI’s future.22 | The innovation system in the Central Denmark Region


Facts:Company name: Centre for Entrepreneurship and InnovationLocation: AarhusNumber of employees: 30 plus loosely affiliated employeesTarget group: Students and entrepreneursSector focus: University centre for entrepreneurship and innovationWebsite: www.cei.au.dkThe innovation system in the Central Denmark Region | 23


Figure 16: Simplified grouping of the players based onwhether they mainly are targeted towards knowledgeintensiveentrepreneurs, growth-orientated entrepreneurs,or a wider target group.4.2. Basic local guidanceThe basic local guidance is a basic businessservice consisting of general services for allentrepreneurs and businesses - whatever theirsector and educational background. The typicalservices are information (for instance about tax,establishment forms, laws and rules), problemresolution, guidance (for instance in developinga business plan) and referral to other relevantplayers. The basic content of the services varieslittle from one municipality to another. The objectis to ensure competent guidance for all entrepreneursand businesses on basic problemsconcerning the businesses’ development andoperation. The basic local guidance also aims toprovide an overview of the possibilities in thetotal innovation system, and to find and refergrowth-oriented entrepreneurs and businessestowards the more specialised guidance in BusinessLink Central Denmark.The local business service (LES) is the primarygroup for providing basic local guidance. TheLES is thus the main point of entry to the innovationsystem for all entrepreneurs and SMEsseeking guidance with respect to a specificproblem or development of the business. Thereare a local business service unit in all of the 19municipalities in the Central Denmark Region.The geographic distribution of these units givesentrepreneurs local access wherever they maybe. Users also have a common telephone number,7015 1618, for simple and easy access, andentrepreneurs are automatically redirected tothe nearest business service unit. Apart fromthe LES, there are various development parksproviding basic guidance, especially to establishedentrepreneurs – either by them self or incooperation with LES.LESs play an important role in screening andsending entrepreneurs with a potential forgrowth further in the innovationsystem. The fullsystem therefore depends on the LES’s actingas an effective point of entry to the completeinnovation system. »VækstHjulet« – the GrowthWheel – is the primary tool which LES units (andBusiness Link Central Denmark) use effectivelyto meet the individual entrepreneurs and SMEs.All players under both the basic local guidanceand the specialised guidance also use a commonCustomer Relationship Management system(CRM-system) for the sharing of knowledge andadministration of the customer contact.Figure 15: Simplified grouping of the players based on whether theymainly are targeted towards knowledge-intensive entrepreneurs,growth-orientated entrepreneurs, or a wider target group.ONLYgrowth-orientedentrepreneursAll entrepreneurs –BOTH growth-orientedAND non-growth-orientedGrowthDevelopment parksLESsAll entrepreneurs–BOTHknowledge-intensiveAND non-knowledge intensiveVækstHjulet (The Growth Wheel)Knowledge-intensiveentrepreneurs ONLYVækstHjulet is a simple, visual and practicaldialogue tool developed by Growth Companyspecially for the consultants working withentrepreneurs and growth companies.VækstHjulet is an alternative to the conventionalbusiness plan and a good tool to help entrepreneursgetting an overview and focus their efforts.The success with which the LES is able tomanage the major screening process is due toa high degree to the fact that there is a relativelystrong tradition of local business servicein the Central Denmark Region compared withthe other Danish regions. The players possessa relatively high level of expertise and they arewell integrated into their respective catchmentareas. This means that they have a good basisfor being able to provide competent and effectivebasic guidance to all types of entrepreneurs.This tradition is expressed inter alia in the numberof resources provided to the local businessservice. This is illustrated in Figure 16, whichindicates that the Central Denmark Region hasboth a much bigger average budget and moreaverage annual man-hours dedicated to businessservice than in the other Danish regions.It should, however, be noted that there are alsomajor differences between the Region’s municipalitiesin the prioritisation accorded to busi-24 | The innovation system in the Central Denmark Region


Figure 15:Comparison between average annual budgets and annual man-hours dedicated to business service,and communication budget (business offices ONLY)ness services. Some business service units thushave under two man-years dedicated to thisservice while others have over ten.Figure 16: Comparison between average annual budgets and annualman-hours dedicated to business service, and communication budget(local business offices ONLY)5Average number of annual man-hoursdedicated to business service432160.000182.667189.875200.000271.444Central DenmarkRegionCapital Region ofDenmarkRegion ZealandRegion of SouthernDenmarkNorth DenmarkRegion0500.000 1.000.000 1.500.000 2.000.000 2.500.000 3.000.000Average business service budget (Danish Kroner)The innovation system in the Central Denmark Region | 25


CASE EXAMPLEWe invite ourselves insideSkive business centre is focused on creating networks for both entrepreneursand owner-managers. They’re also ringing and inviting themselvesto visit businesses.It’s not the custom for guests to invite themselves, and definitely not inSkive in north-western Jutland. But at least once a year, 428 businessesare offered a visit by their business centre, which invites itself to coffeeand a discussion on challenges and possibilities.»We place very heavy emphasis on direct contact with the individualbusiness, and when we’re visiting, we use the screening tool »TheGrowth Wheel« to spot possibilities for development or areas where thebusiness could usefully use a helping hand. The personal talk helps us togain a precise overview of the business, from where we can sketch out allthe possibilities we find with respect to local, regional and national schemesand local networks and courses,« explains Jeanne Søgaard, managerof Skive and District’s Business and Tourist Centre.With a total of only four employees in the business department, it’s verymuch an art to keep abreast of the possibilities which the departmentcan offer, but in Skive we’ve mastered the challenge with the aid of networks.A total of seven networks are organised, structured and run bythe business centre.»We have networks for everything from owner-managers to women’sgroups, and it’s an entirely conscious choice because we focus on theenergy and natural sparring which is generated when businesses aregiven the opportunity to network. But at the same time, we’re also consciousof the need to use electronic communication, especially with thepotential entrepreneurs whom, in the nature of things, we can’t contact,«says Ms Søgaard, who explains that the office in Skive sends out weeklynews e-mails and press releases.»Apart from the actual guidance, one of our most important tasks is toconstantly remind businesses and entrepreneurs of what we can do andwhat we can help with – in a nutshell, to announce and make people awareof all the different things we can be used for,« Ms Søgaard concludes.26 | The innovation system in the Central Denmark Region


Facts:Company name: Skive and District Business and Tourist CentreLocation: SkiveNumber of employees: 14 employeesTarget group: Potential entrepreneurs, newly established and existing businessesSector focus: Business services/promotionWebsite: www.skiveet.dkThe innovation system in the Central Denmark Region | 27


4.3. Specialised guidanceNot all entrepreneurs have the same growth potentialand the same ambitions. And while someentrepreneurs are well placed in terms of LESservices, many growth-oriented entrepreneursneed more specialised guidance.The specialised guidance in this context is an extendedregionally-based business service whichfunctions as a superstructure for the local basicguidance. The object is to ensure competentguidance for growth-oriented entrepreneurson more complicated problems concerning thedevelopment and realisation of a growth potential.This guidance is typically introduced with amapping of the company’s growth potential andchallenges and it finishes with a concrete planfor the development activities to be initiatedand the players to be included in its execution ofthe development activities.In the Central Denmark Region, it is mainlyVæksthus Midtjylland (Business Link CentralDenmark) which provides the specialisedguidance from the main office in the IncubaScience Park in Aarhus and a branch in the developmentpark »Innovatorium« in Herning.Figure 18 : Simplified grouping of the players based on whetherFigure they 18: mainly Simplified are targeted grouping towards of the knowledge players - based intensive on whether theymainly entrepreneurs, are targeted growth towards - orientated knowledge-intensive entrepreneurs, entrepreneurs,or a wider target group.growth-orientated entrepreneurs, or a wider target group.ONLYgrowth-orientedentrepreneursAll entrepreneursBOTH growth-orientedAND non-growth-orientedGrowthBusiness Link CentralDenmarkVEU centresAll entrepreneurs –BOTH knowledgeintensiveAND nonknowledgeintensiveFigure 17: Business Link Central Denmark’s functionsKnowledge-intensiveentrepreneurs ONLYKnowledgeFigure 17: Business Link Central Denmark’s functionsOperator dutiese.g. regional programmes such as »STARTmidt«e.g. government programmes such as »early warning«Apart from the specialised guidance, the BusinessLink also performs a number of functionsin relation to network creation and communicationand a number of operator functions. TheBusiness Links functions can be described as ahouse with three storeys. This is illustrated inFigure 17. On the ground floor is the foundationwith the specialised guidance. The first floor isthe superstructure, where the Business Linkcan activate a number of services for and offersto the target group via a comprehensive net-SuperstructurePartnership with relevant playersmeeting place for all relevant playerscooperation agreements with relevant playerssharing accommodation with relevant playersBaseBusiness serviceSpecialised guidance28 | The innovation system in the Central Denmark Region


work of formal and informal partners. The topfloor is home to the operator functions, with arange of regional and national programmes. TheBusiness Link is thus operator on programmeswhich for instance can provide entrepreneursand businesses with access to external knowledgevia a private consultant, a GTS (ApprovedTechnological Service) Institute or a researcher.The VEU-centres represent the formalisedcooperation between all Labour Market TrainingCentres (AMU centres) and the generalAdult Education Centres (VUC). On this basis theVEU-centres object is to contribute to generatea higher focus on the quality and effect of thebasic vocationally orientated education and thegeneral adult education. This is to ensure thatthe companies and the workforce are offered aflexible and effective training. The specific servicesinclude free advice on training and help inplanning and implementing the training.Business Link Central Denmark differs fromthe other four Danish Business Links in havinga large supply of services on the upper twostoreys. The Business Link thus undertakes arelatively large number of operator functions atboth regional and national levels. Among otherreasons, this is because Business Link CentralDenmark has generated good results and hasdistinguished itself with highly positive evaluationsand a very good ranking in the benchmarkstudies of the five Business Links which areregularly made.The many operator functions also mean thatBusiness Link Central Denmark distinguishesitself in having a very strong connecting linkfunction and a comprehensive and close collaborationnetwork with the other players in thetotal innovation system. Business Link CentralDenmark has also worked strongly for a commonphysical localisation, which has resulted inmany central partners having employees stationedwith the Business Link. The result is thatthe individual entrepreneurs have direct andeasy access to a very broad range of relevantskills among both regional and national businessdevelopment players.Apart from Business Link Central Denmark,the Region’s three adult and further educationcentres (VEU centres) also provide specialisedguidance for the continuing and further educationof employees in SMEs.The innovation system in the Central Denmark Region | 29


CASE EXAMPLEOptimal nursing for growthIn many areas, the Central Denmark Region’s business developmentsystem is the first mover with the ambition to make a total coordinatedeffort – and a success with which over 1,000 businesses were in contactlast year.[BILLEDE 3 - Erik Krarup]Væksthus Midtjylland (Business Link Central Denmark) has two physicaladdresses in the Central Denmark Region, but it’s open 24 hours a day onthe internet, and accessibility is a keyword for the Business Link, whichsees the innovation system as a virtual house with a single point of entryto the many possibilities available to entrepreneurs and small and medium-sizebusinesses in the Region.»What we call ‘the single point of entry’ functions in practice via a closepartnership between all players in the business development system.This means that the local trade councils refer businesses with growthpotential to Business Link Central Denmark. When Business Link CentralDenmark takes over, the growth consultants’ task is to help them toprogress in their efforts to achieve growth. Specifically, a growth consultantvisits the business to ask, listen and resolve both challenges to andpossibilities for growth – the growth potential in 1,000 businesses in theCentral Denmark Region is identified each year, and 500 businesses gainco-financing to purchase external consultancy assistance via the regionalprogrammes«, explains Erik Krarup, Business Link Central Denmark’smanager.The 30 growth consultants collectively possess extensive business experience,and they can therefore provide optimal guidance in the manypossibilities offered by the regional and other programmes, the managerexplains, at the same time emphasising the electronic communication,and Business Link Central Denmark has therefore elected to gather allthe many possibilities on a special website – imidt.dk. The goal is openness,accessibility and a fast reaction to individual businesses’ needs atall times:»Our most important task is to constantly seek contact with the manybusinesses with growth potential – to take them under our wing andensure that they have the best possible sparring, and to refer them to thebest external consultants. Our close collaboration with the local businessservice operators is critical for success, and the vision is to extend andexploit the growth potential in the Region’s businesses,« says Mr Krarup.30 | The innovation system in the Central Denmark Region


Facts:Company name: Væksthus Midtjylland (Business Link Central Denmark)Location: Offices in Aarhus and HerningNumber of employees: 60 plus loosely affiliated partnersSector focus: Entrepreneurs and SMEs with a growth potentialWebsites: www.vhmidtjylland.dk and www.imidt.dkThe innovation system in the Central Denmark Region | 31


4.4. Consultancy anddissemination of knowledgeThe players concerned with consultancy anddissemination of knowledge are the primaryproblem solvers in the total innovation system.The individual players have different purposes.Some have business development as their principalobjective, while others (e.g. universities)have other primary objectives. Common to allplayers is that they, based on various regionaland national business development initiatives,are contributing to entrepreneurs’ application ofspecialised knowledge and consultancy.Research institutions and centres of knowledgeare typically sited in relation to educationalinstitutions, and they work with the building upand dissemination of specialist knowledge withina limited subject area. The Central DenmarkRegion has a wealth of these institutions andcentres, but a feature common to those of themin the innovation system is that they work topromote business by offering their knowledgeto the businesses and by working together withthem on innovation and development. Their servicescover a broad range from free collaborationand communication of knowledge to cooperativeprojects, to the purchasing of advice andresearch expertise. Aarhus University is verymuch the biggest single player, and by virtue ofits ranking in the top 100 in a number of recognisedglobal university ranking lists, is a majordevelopment dynamo for the entire Region.Approved Technological Service Institutes (GTSinstitutes) are non-profit institutions which areapproved by the Danish Agency for Science,Technology and Innovation. They are operatedas private companies whose object is to build upand communicate technological expertise in Danishbusinesses. The GTS institutes take part ina variety of innovation projects in close collaborationwith companies and leading research andeducational institutions in Denmark and abroad.Furthermore they offer specialised consultancyon market terms to entrepreneurs and others.Six of the nine Danish GTS institutes are locatedor have branches in the Central Danish Region.Figure 19: Simplified grouping of the players based on whether theyFigure 19: Simplified grouping of the players based onmainly are targeted towards knowledge-intensive entrepreneurs,whether they mainly are targeted towards knowledgeintensiveentrepreneurs, entrepreneurs, growth-orientated or a wider target entrepreneurs,group.growth-orientatedor a wider target group.ONLYgrowth-orientedentrepreneursAll entrepreneurs –BOTH growth-orientedAND non-growth-orientedGrowthThe Trade CouncilPrivate consultantsAll entrepreneurs –BOTH knowledge-intensiveAND non-knowledge intensiveSpin-off CentreInnovation networksMTICGTSsResearch institutionsAnd knowledge centresKnowledge-intensiveentrepreneurs ONLYGTS institutes in Central Denmark RegionKnowledge> > AgroTech – Institute for agriculture and foodprocessing> > The Alexandra Institute> > DELTA> > DHI> > FORCE Technology> > Danish Technological InstituteThe innovation networks are co-financed by theMinistry of Science, Technology and Innovationand their object is to strengthen the interplaybetween research institutions and companies.They help inter alia entrepreneurs and businessesfind partners among researchers, othercompanies and experts within their respectiveareas. The innovation networks also help to shareexperiences, develop new ideas and initiateand undertake specific innovation projects. Sixof the 22 Danish innovation networks are in theCentral Denmark Region. The innovation networksare typically established as commercialfoundations with both companies and researchinstitutions as owners.32 | The innovation system in the Central Denmark Region


Innovation networks in Central Denmark Region> > The Animation Hub> > Innonet Lifestyle – Interior & Clothing> > FoodNetwork> > Innovation network for Biomass> > The Renewable Energy Innovation Network(VE-net)> > Service Platform – AarhusMedTech Innovation Centre (MTIC) is a commercialfoundation which was established with supportfrom the Central Denmark Region and theEU. Its object is to promote development andgrowth in the Region’s bio- and medtech companies.This is done by offering the companiesmission-critical competencies. MTIC has built anetwork of specialists within IPR, business development,regulation and financing, which maybe coupled to the region’s businesses duringcritical development phases.The Spin-Off Centre is established in a cooperationbetween the five Danish Business Links,Symbion and Scion DTU Pre-seed ventureinvestors, CAT and others. Two spin-off centresare established in Denmark – one of theseis situated in Business Link Central Denmark.The object of the Centre is to help existingcompanies create growth through spin-offs.This is done by helping identify spin-off projectsand by assigning the projects an experiencedbusiness developer who can help maturing thebusiness idea. Furthermore the centre can helpraise investment capital – inter alia through thePre-seed venture investors (see chapter 4.5 and4.6), and recommend projects with significantgrowth potential for Accelerace (see chapter4.5).The Trade Council under the Ministry of ForeignAffairs assists private companies within exporting,internationalisation and promotion ofinvestment. The primary offer to entrepreneurscovers consultancy on the basis of the Ministry’snetwork of embassies, consuls-general andtrade offices in 64 countries. These services aresold at a fixed hourly rate. The Council also offersa number of consultancy services which arefree to entrepreneurs.New Best Pratice in DenmarkBusiness Link Central Denmarkwas the first – and to date isthe only – business link with anin-stationed employee from theTrade Council. This stationinghas meant considerably easieraccess for entrepreneurs’ tothe Council’s services, and hasresulted in a substantial increasein the demand for servicesin the Central Denmark Region.CONNECT Denmark is an independent, privatenon-profit organisation, which throughits extensive network of Danish companies,business people and research and innovationcommunities provide free advise and coachingto firms with a high growth potential. This istypically executed through the so-called »springboards«,where first the entrepreneur presentsthe company to 7-8 representatives from thenetwork and subsequently receives input fromthese individuals regarding the company’s development.Private consultants range from one-man businessesto the big internationally-orientedconsultancy houses. The players offer specialisedconsultancy on market terms within avery broad range of areas. A dedicated portal– »Rådgiverbørsen.dk« – is established in orderto provide entrepreneurs easy access to – andoverview of – the various consultants in theregion. Here, entrepreneurs can also invitetenders for concrete assignments or quickly findprivate consultants relevant for the problem inquestion.New Best Pratice in Denmark»Rådgiverbørsen.dk« wasdeveloped as a regional tool bybusiness link Central Denmark,but it was subsequently extendedto the entire country. BusinessLink Central Denmark stilladministers Rådgiverbørsen.dkThe innovation system in the Central Denmark Region | 33


[TEKSTBOKS 12 - CASE - MTIC]CASE EXAMPLEOnly the global market matters[BILLEDE 4 - Trine Winterø]It costs millions of kroner to make a breakthrough in the medical sector,and the risk of taking a wrong turn is considerable. MTIC helps medicaland biotech companies in Central Denmark, and is the professional sparringpartner with experience in the sector.It’s an experienced team at MTIC. All employees have commercial experiencein the medical/health sector, and according to the manager TrineWinterø, this is critical for MTIC’s success.»In the medical technology sector, expert knowledge is merely oneleg on which the business can stand. At least equally important is tounderstand how specialised, technical and commercially demanding andprotracted a process it can be to launch a product. It often takes aroundten years and costs well over 100 million kroner before a product reachesthe consumer,« Ms Winterø explains.The six employees use the network and their knowledge of the sector tocontact companies which need help, and MTIC is constantly seeking to bea network organisation for knowledge and those companies which interalia originate in universities and the hospitals’ research units.»It is only by sharing knowledge that we can create growth, and weseek via MTIC’s Masterclass and other avenues to create the forumwhere we ensure the businesses a network with a range of expertise.There are numerous possibilities to take a wrong turn when a new productis developed, including with respect to patenting and commercialand regulatory matters, where the businesses can use one another andthe knowledge they each have,« Ms Winterø explains, recognising thatlong-term thinking is required when the general lines are to be drawn forthe businesses which MTIC assists.»MTIC’s vision is to help more companies on to the market, and we can’tmeasure this on short horizons. But we can ensure that the individualbusiness receives the best advice, finds the right people on the Americanmarket, finds investors, and all in all receives help to take the next criticalcommercial step,« Ms Winterø concludes.34 | The innovation system in the Central Denmark Region


Facts:Company name: MTIC – MedTech Innovation CentreLocation: AarhusNumber of employees: 6Sector focus: Entrepreneurs within medtech, biotech, health technology and welfare technologyWebsite: www.mtic.dkThe innovation system in the Central Denmark Region | 35


4.5. Accelerated developmentThe object of the players offering accelerateddevelopment is to help entrepreneurs withgrowth ambitions and -potential to realise thecompany potential. The course is tailored tothe individual entrepreneur’s needs and it caninclude a combination of consultancy, coachingand mentor-sparring – and in some cases injectionof investment capital.Figure 21: Simplified grouping of the players based on whetherthey mainly are targeted towards knowledge - intensiveentrepreneurs, growth -orientated entrepreneurs, or a wider targetFigure group. 20: Simplified grouping of the players based on whether theymainly are targeted towards knowledge-intensive entrepreneurs,growth-orientated entrepreneurs, or a wider target group.ONLYgrowth-orientedentrepreneursGrowthAcceleracePre-seed venture investorsScience parks are typically targeted towards innovativeentrepreneurs and their primary objectis to offer an attractive incubation environmentwhere knowledge- and research-intensivecompanies can rent offices, receive consultancyand take part in events and networks. The parksare often also included in a close partnershipwith an Pre-seed venture investor which asmentioned can contribute with investment capitaland consultancy to relevant entrepreneurs.There are two science parks in the Central DenmarkRegion.Science parks in Central Denmark RegionAll entrepreneurs –BOTH growth-orientedAND non-growth-orientedAll entrepreneurs –BOTH knowledgeintensiveAND nonknowledgeintensivePre-seed venture investors inCentral Denmark Region> > Innovation MidtVest> > Østjysk InnovationScience parksKnowledge-intensiveentrepreneurs ONLYKnowledge> > Agro Business Park> > Incuba Science ParkPre-seed venture investors are approved bythe Danish Agency for Science, Technology andInnovation. Their object is to help promisingknowledge-based entrepreneurial businessesthrough the first difficult and risky developmentphases. This is achieved partly by investingrisk-oriented state and private capital and partlyby assisting with coaching, sparring and advisingduring the businesses course of development.The goal is to create and develop moreknowledge-intensive businesses with uniqueskills and clear growth potentials. The Pre-seedventure investors will typically be relinquishedby the company after three to five years whenit reaches the seed capital phase, and privateinvestors such as venture and capital funds areready to take over. Further details are givenin Section 4.6. Two of the six Danish Pre-seedventure investors are in the Central DenmarkRegion.Accelerace is a national program lead by SymbionScience Park in Copenhagen. The programoffers exclusive and internationally-orientedbusiness development targeted towards ambitiousentrepreneurial companies with a uniqueproduct, but without resources, specific skills ornetworks to bring the product on to the marketquickly. The development process proceedsunder a »stage-gate principle«, where the entrepreneursmust reach some defined milestonesin order to continue the development. Entrepreneurswho complete the full course of developmentare also frequently offered investmentcapital which can help to accelerate growth.New Best Pratice in DenmarkBusiness Link Central Denmarkwas the first business link tohave physically stationed anemployee from Accelerace. Thisstationing has meant considerablyeasier access forentrepreneurs to Accelerace’sservices, and it has resulted ina substantial increase in thedemand for services in theCentral Denmark Region.36 | The innovation system in the Central Denmark Region


Figure 20: Simplified grouping of the players based onthey relative demands and expectations on theFigure 21: Simplified grouping of the players based on they relativeentrepreneurs and whether the developmentdemands and expectations on the entrepreneurs and whether thedevelopment includes an includes incubation an incubation period. period.mHighRequirements and expectationsRegarding the entrepreneurAcceleracePre-seed ventureinvestorsLowScience parksNoYesIncubation periodThe innovation system in the Central Denmark Region | 37


CASE EXAMPLEWe take the business by the handAgro Business Park finds researchers with a talent for business andkeeps everything practical in focus in the critical start-up phase.»We’re the country’s international growth centre for knowledge entrepreneurshipwithin agriculture, food and bioenergy, and our object is tobuild bridges between research and the business sector. Lars VisbechSørensen, manager of Agro Business Park, is brief and to the point whenhe defines the research park’s vision and goal.With its location conveniently close to Foulum Research Centre, which, asa part of Aarhus University, is home to research within animal husbandryand plants as well as other areas, Agro Business Park is right next to theresearchers.»We’re constantly trying to find those researchers who have conceivedan extraordinary idea, among other ways via an annual innovationcompetition,« explains Mr Sørensen, who continues:»We help to launch all proposals, understood such that we take themin hand, help with the business plan and with finding capital, and offerthem premises here in Agro Business Park, where their rent also paysfor access to meeting rooms, IT and a telephone minding service. We alsoprovide advice and guidance, and our finest task is to have a finger on thepulse and constantly assess when the timing is right in relation to advisingthe businesses housed here with us.«Sixteen businesses are currently housed in Agro Business Park’s premises,and the partnership with some of the businesses is quite close.»The entrepreneur Webstech took part in our innovation competition andwon one of the three main prizes. We’ve been right behind the entrepreneurthroughout the start-up and operation of the business, and helpedhim through the challenges which naturally appear when a researchercomes to commercialise his research. Apart from advice and sparring,Webstech has also engaged Agro Business Park to manage its bookkeeping,«explains Mr Sørensen, who calls Webstech a typical example of thepartnership that develops between the knowledge entrepreneurs andAgro Business Park.»We have a safety net around them from where they themselves canbuild up the business.«38 | The innovation system in the Central Denmark Region


Facts:Company name: Agro Business ParkLocation: TjeleNumber of employees: 18Target group: Innovative scientists and students at further education centres, agro-businessesSector focus: Agriculture, bioenergy, environmental technologies and food processingWebsite: www.agropark.dkThe innovation system in the Central Denmark Region | 39


4.6. CapitalThe object of players offering risk capital is,among other things, to assist entrepreneursto finance the early stages of the company’sdevelopment. All players assess the projects andthe businesses on the basis of the possibilitiesfor their macro economic return. This meansthat they are very concerned with ensuring thatthe businesses develop and achieve their milestones,thus making them attractive to newinvestors. The various players are, however, distinguishedby the risk which they are willing toaccept and the phase in the business’s developmenton which they are focused.Pre-seed venture investors can, as mentioned inchapter 4.5, provide injections of up to DKK 6 millionin state support to their portfolio companies.The injections are in the form of loans or equityin the form of pre-see investments. The Pre-seedventure investors are often the entrepreneur’sfirst investor. The objective is to mature thecompany to the stage where e.g. venture funds,estimates that there are an acceptable relationbetween risk and return opportunities. The Preseedventure investors are therefore also veryactive in helping the entrepreneur to seek otherfinancing to assist him with the further course ofdevelopment.Midtjysk kapitalfond (the Central DenmarkCapital Fund) is a regional fund whose objectis to fill the gap which often appears betweenthe Pre-seed venture investors and the venturefunds when it comes to knowledge-intensivecompanies with long development phases. Thefollow-up investments are of the order of DKK4-6 million. The total fund is DKK 100 million andit is financed 50/50 by the EU Structural Fundsand other public and private investors.Business Angels are well-endowed privatepersons with business expertise and risk capital,and usually the time and interest to contributeto the development of a business without assumingan operating responsibility. Apart fromcapital, Business Angels contribute via the boardof directors by offering special knowledge, experienceand networks. Business Angels typicallyinvest in the early seed phase with the expectationthat a business can be created with positiveearnings or other notable achievement such thatthe company is saleable, or it can yield a returnon the investment within three to seven years.Figure 24:Simplified grouping of the players based on whetherthey mainly are targeted towards knowledge - intensiveentrepreneurs, growth - orientated entrepreneurs, or a wider targetFigure group. 22: Simplified grouping of the players based on whether theymainly are targeted towards knowledge-intensive entrepreneurs,growth-orientated entrepreneurs, or a wider target group.ONLYgrowth-orientedentrepreneursAll entrepreneurs –BOTH growth-orientedAND non-growth-orientedGrowthVenture capital companies Central Denmark Capital FundBusiness AngelsPre-seed venture investorsVækstfondenAll entrepreneurs –BOTH knowledge-intensiveAND non-knowledgeintensiveKnowledge-intensiveentrepreneurs ONLYKnowledgeSince Business Angels are private individuals,they can be difficult to identify for entrepreneurs.Many Business Angels therefore chose to participatein a Business Angel Network, which typicallyalso includes banks, accountants, lawyers, incubatorsand venture companies. Each network has itsown procedures for the assessment of incominginvestment cases.Venture companies often invest on the basis ofa clearly defined investment profile, and they arenot willing to accept the same risk as the Preseedventure investors. This means that they typicallyinvest in entrepreneurs in the seed, start-upor expansion phases, where there are strongerindicators of the business’s growth potential, andthus greater security for the possibility of financialgains. Venture companies function either asevergreens which reinvest realised investmentsin new companies and pay regular dividends toinvestors, or they consist of one or more timelimitedfunds which pay realised gains to theindividual investors in step with sales of the portfoliocompanies. The great majority of Denmark’sventure companies are situated in the capital cityarea. As noted in Chapter 1, this is a clear barrierto growth for entrepreneurs in Central Denmark.Vækstfonden is a state investment fund whichprovides guarantees and equity investments toentrepreneurs in partnership with private investors.The fund operates with four main productsas illustrated in Figure 23.40 | The innovation system in the Central Denmark Region


Figure 22: 23: Vækstfonden’s main main products productsCapital required(Million DKK)Vækstfonden product:75255Local growthcompaniesRegional growthcompanies25Internationalgrowth companiesGlobal growthcompanies100 500+Fund capitalGrowth capitalGrowth guaranteeStart-up loanPotential turnover(million DKK)»Start-up« and »Growth guarantee« are bothloans made via banks with a 75% guarantee fromVækstfonden. The Start-up loans are for up toDKK 1 million and they are targeted towardsentrepreneurs. Growth guarantees are for upto DKK 10 million and they are targeted towardsnew businesses with growth potential. »Growthcapital« consists of equity investments of DKK2-25 million. These amounts are typically investedin the Seed or Start-up phase. Vækstfonden isthus positioned between the Pre-seed ventureinvestors and the venture companies with thisFigure 23: Simplified grouping of the players based on which stage of development theyfocus product on and in the relation risk that to they the are willingness to accept to take in their investments.risks in the investments. »Fondskapital« is forthe gearing of venture companies which investin unlisted companies with growth potential. Theportfolio is about 20 funds, to which Vækstfondenhas given a full investment commitment of DKK3.7 billion for investment in companies within thefunds’ target groups.Figure 24: Simplified grouping of the players based on which stage of developmentthey focus on and the risk that they are willing to accept in their investments.RiskHighPre-seedventureinvestorssCentral DenmarkCapital fundBA’sVækstfondeninvestVenture companiesCapital fundsLowVækstfondenStart-up loansand growth suretyBanksDevelopmentstagePre-SeedSeed Start-up Expansion Replacement Buyout Bridge Stock exchangeVenture Capital Buyout Capital / Private EquityEarly stageLater stageThe innovation system in the Central Denmark Region | 41


CASE EXAMPLEWe’re close to the ideasEvery year, Innovation MidtVest sponsors around eight new businesses.The entrepreneurs come with their ideas, and Innovation MidtVest isready with its financial muscles to turn the project concepts into reality.Innovation MidtVest is a sought-after partner. Every year, the firm receivesfrom 120 to 140 inquiries from businesses or entrepreneurs whoeither have bright ideas for new undertakings or who want to expandexisting businesses into new areas.»We send around half of these inquiries on to other systems. We makepreliminary examinations of the other half and from these, we select anaverage of around eight ideas for investment,« explains Poul Arne Jensen,manager of Innovation MidtVest.A close partnership awaits the eight or so businesses which pass throughthe eye of the needle each year.»We’re typically a part of the development process for three to fiveyears, and we prepare concrete business and development plans in cooperationwith the entrepreneur or the business. We’re very close to thebusinesses we ourselves invest in. We’re sparring partners and we’re representedon their boards of directors, and we’ve elected to specialise inphysical products, especially within environment and energy and medicalaid products,« says Mr Jensen.According to its manager, the challenge for Innovation MidtVest is tosingle out the really good ideas, those ideas which stand up to thoroughpreliminary examination and which can genuinely be marketed within aforeseeable number of years. When the product has reached the salesphase, Innovation MidtVest usually retires from the scene:»We’re a private company and we must have a financial return on ouractivities, so we prefer to sell our shares at a profit. On the other hand,we’re also out there in the world to take a significant risk, and the figuresshow that the survival rate for the businesses we take on is around70%,« explains Mr Jensen, who can easily see the possibility of additionalinvestments:»We’d like to be bigger, and this is our clear goal. So we’re always lookingfor capital, and our ambition is to accept more and more businesses.«42 | The innovation system in the Central Denmark Region


Facts:Company name: Innovation MidtVestLocation: HerningNumber of employees: 8Target group: Innovative entrepreneurs with a growth potentialSector focus: physical products within greentech, energy and medicoWebsite: www.innovationmidtvest.dkThe innovation system in the Central Denmark Region | 43


44 |


5. Programmes within entrepreneurship and businessdevelopment in the Central Denmark RegionChapter 4 gave an overview of the various playersin the innovation system in Central DenmarkRegion. This chapter focuses on the region’soverall business development strategy and thecontent of the various regional programmes andinitiatives utilised by the various players in theinnovation system.Entrepreneurship and business developmentoccupy a central role in the regional businessdevelopment strategy, and the area is rankedhighly by both the regional council and CentralDenmark Business Development Forum.On the basis of the business development strategy,Central Denmark Region has commenceda range of related programmes. They are aimedto strengthen the entrepreneurial culture andthe entrepreneurial activity and to strengthendevelopment and growth among the Region’sentrepreneurs and SMEs. The initiatives relatesto three overall areas, which are outlined infigure 25.The programmes are generally structured withheavy emphasis on inclusion of significant andtargeted measures within all three main targetgroups. All elements in the programme buildfurther on cumulative experience, evaluationsof previous initiatives and national and internationalgood practice within the individual areas.This ensures that the range of measures underthe individual areas is optimised to the needs ofthe target group.The measures are also designed to use thestructure and expertise in the full Central Denmarkinnovation system. The considerable annualfinancial framework totalling around DKK 300million (€ 40 million/year) illustrates the strongwill underlying these programmes. This frameworkwas made possible by a comprehensivegearing of the regional funds with funds fromthe EU’s Regional and Social funds togetherwith funds from state and municipal players andprivate companies. The distribution of the fullfinancial framework across the various sourcesof finance is illustrated in Figure 26.Figure 26: Sources of financingFigure 26: Sources of financing6%11%20%30%13%20%European RegionalDevelopment FundEuropean Social FundState fundsRegional fundsMunicipal fundsPrivate fundsThe following sections provide a more in-depthdescription of the concrete measures and offersunder the three programmes.Figure 25: The overall focus areasAreaEntrepreneurship in educationDevelopment offers for entrepreneursand SMEsSkills development by players in theinnovation systemTarget groupEducational institutions,teachers/lecturers and studentsEntrepreneurs and SMEs with growthambitions and potentialPlayers and employees in the CentralDenmark innovation systemObjectDevelopment of pupils’ and students’entrepreneurial skills for long-termstrengthening of entrepreneurial activityand realise a growth potentialA boost to skills and quality in theCentral Denmark innovation system forbetter servicing of entrepreneurs andSMEsFinancialframeworkDKK 38 million/year(= DKK 30 per inhabitant in the Region)DKK 265 million/year(= DKK 210 per inhabitant in the Region)DKK 4 million/year(= DKK 3 per inhabitant in the Region)€5 million/year(= €4 per inhabitant in the Region)€36 million/year(= €28 inhabitant in the Region)€500,000 /year(= €0.4 per inhabitant in the Region)Financing• European Regional Development Fund• European Social Fund• State funds• Regional funds• Municipal funds• European Regional Development Fund• European Social Fund• State funds• Regional funds• Municipal funds• Private funds• European Regional Development Fund• European Social Fund• Regional fundsProgrammes within entrepreneurship and businessdevelopment in the Central Denmark Region |45


5.1. Entrepreneurship in coursesThe weak startup skills (described in Section 1)are among the areas to be improved if the CentralDenmark Region is also to be competitive onthe global market in the future.The workforce of the future must thus havemuch stronger entrepreneurial skills and possessan entrepreneurial outlook and a degreeof initiative which makes it natural for them toconvert creative ideas into value via concreteprojects. The result must be a workforce whichcreates both development and renewal withinthe framework of existing companies, andgrowth and development via the establishmentof innovative new businesses.Figure 27: The programmes are executed by the following groups inFigure 27: The programmes are executed by the following groups inthe innovation system.the system.Consultancy andBasic localSpecialisedAccelerateddissemination ofCapitalguidanceguidancedevelopmentknowledgeDevelopment of entrepreneurial culture and skillsA strengthening of entrepreneurship in coursesand a higher ranking of development ofstudents’ general skills in relation to creativity,innovation and enterprise is the most effectivemeans of creating a long-term impact on theentrepreneurial culture and strengthening entrepreneurialskills. The Central Denmark Regionhas therefore developed a coherent and ambitiousprogramme to strengthen and extend entrepreneurshipthroughout the Region’s educationsystem. The programmes are targeted towardsthe individual educational levels and they coverthe entire education system from primaryschool to the long further education courses.Figure 28: Programme tools under the individual educational levelsFigure 28: Programme tools under the individual educational levelsThe programmes are implemented at all levelsof education in close collaboration with Fondenfor Entreprenørskab – Young Enterprise 2 , whichworks at national level to promote young peoples’skills within independence, entrepreneurshipand innovation.Figure 28 gives an overview over the programmeand depicts the programme’s tools underthe individual educational levels. It should benoted that some tools are general and applied2Fonden for Entreprenørskab – Young Enterprise (FFE-YE) was establishedin 2010 under the inter-ministerial “Strategy for educationin entrepreneurship”, prepared in a partnership between the Ministryof Culture, the Ministry of Science, Innovation and Higher Education,the Ministry of Children and Education and the Ministry of Businessand Growth.The entrepreneurial primary andlower secondary schoolThe entrepreneurialout-of-school coursesThe entrepreneurialVIA University CollegeThe entrepreneurialuniversityPrimary school(Grades 0-10)The out-of-school courses(Grades 11-13)Short and medium-length furthereducation courses(Grades 14 -16)Long further education courses(Grades 14-19)• Development and dissemination of knowledge and didactics: development and dissemination of new entrepreneurial subjects, courses andteaching materials and methods• Entrepreneur competitions and camps : increased inclusion of national and international entrepreneur competitions and camps in the courses.• Partnerships with business : increased partnership between business and students – inter alia via creativity and innovation exercises• Skills development among teachers : training of teachers via skills development courses, inspirational events and teacher networks• Influencing managers : strengthening of managerial support and implementation skills at the individual educational institutions• Student incubators: establishment and further development of student incubators,where students can work with a concrete business concept and have coaching andadvice, and join mentoring schemes with experienced entrepreneurs• Research: Research intoentrepreneurship andentrepreneurial teaching46 | Programmes within entrepreneurship and businessdevelopment in the Central Denmark Region


at all levels, while others focus mainly on highereducation.As will be evident from the figure, the programmecontains initiatives targeted towards students,teachers and managers. The programmeis thus very broad, with a number of components.The development and distribution of newsubjects, courses, and teaching materials andmethods in entrepreneurship is a very importantpart of the programme because there havebeen a lot of developments in recent years inrelation to recognising how entrepreneurshipis best taught – including the leap from teaching»about« entrepreneurship to teachinin« entrepreneurship. The research initiativebehind the programme »The entrepreneurialuniversity« is an important element in relationto becoming even most astute with respect tohow the course is best put together.The increased inclusion of entrepreneur competitionsand camps together with the increasedpartnership between business and students isan important initiative in relation to includingpractical learning in the education. The maingoal of the initiative is of course to strengthenthe students’ entrepreneurial skills. But businessalso has much to gain in the form of creativeinput and proposed solutions for specificproblems.The establishment and further development ofstudent incubators is an extension of the initiativesin teaching, and its purpose is to create incubationenvironments where the students cantest their entrepreneurial abilities in practice.The student incubators offer physical office andmeeting facilities supplemented by concreteoffers such as coaching, consultancy, mentoringschemes and various expert and social arrangements.There are currently seven studentincubators in the Central Denmark Region.Student incubators in theCentral Denmark Region> > Ark:Idea (Aarhus School of Architecture)> > Business Factory (Aarhus University, Institute ofBusiness and Technology, Herning)> > IDEA House Aarhus (Erhvervsakademi Aarhus,Aarhus)> > Midtjysk AnimationsVæksthus (The AnimationWorkshop, Viborg)> > Student Entrepreneurship Centre (VIA UniversityCollege, Horsens)> > Studentervæksthus Aarhus (Aarhus University,Aarhus)> > Innofactory – the virtual student incubator (ErhvervsakademiDania, Randers)Skills development of teachers is an importantinitiative in the programme The teachers generallyneed to strengthen their skills, knowledgeand practical experience in entrepreneurshipbecause new teaching methods and teachinin« entrepreneurship are placing new requirementson the teachers, and also because entrepreneurshipis an area of teaching with whichmany teachers are unfamiliar. The initiative isthus focusing on both the further training ofteachers and attracting new teachers to thearea. Apart from the furthering of the teachers’special qualifications, the initiative also supportsnetwork formation, which is important inrelation to daily sparring and exchange of experiencesamong the teachers. Viewed as a whole,the initiative is important, as the teachers arethe primary implementers, and it is thereforeimportant that they are equipped as well as possibleto teach an inspiring and effective coursein entrepreneurship.The strengthening of the managerial backupand implementation skills is an initiative whichwill ensure that the individual educational institutionshave optimal conditions and backup inrelation to putting the programme’s other initiativesinto effect. The initiative is also importantin relation to ensuring that the programmedoes not become dominated by enthusiasts,but reaches out to all teachers at the individualeducational institutions. This will ensure therequired general improvement in the teaching inentrepreneurship.Programmes within entrepreneurship and businessdevelopment in the Central Denmark Region | 47


CASE EXAMPLECourses with entrepreneurship as a subsidiary subjectRasmus Hoeks is doing his degree in information science. He has alsogained a place in the Student Incubator, and he is now combining studieswith the three businesses which he has started up to date.»I had a little business where I constructed websites when I began mystudies. I hadn’t actually got very far with it. When I started post-graduatestudies, I looked around the Student Incubator, and in 18 months, I’vegained control of my own business while helping to start another twobusinesses.«In his own words, the 26-year-old Rasmus Hoeks has gone from owning alittle web bureau with a handful of customers to being the entrepreneurwho devises concepts and participates in the web universe.According to Rasmus, one of the explanations for the rapid developmentis the continual meetings he had over the past 18 months with one of theStudent Incubators business coaches:»From the very beginning, my coach based his approach on what mydreams and ambitions were, rather than merely following a standardisedform. I think this was optimal, and when he helped and advised mein finding concrete solutions, it definitely meant a very great deal for thedevelopment of my company that I have a place here in the Student Incubator,«explains Rasmus, who, apart from his discussions with the coachevery other week, also emphasises the interplay with the other students:»There’s feedback on my projects, and it comes entirely naturally becauseeverybody here is an entrepreneur who wants to move forward. I’malso close to people who have honed the skills I may be lacking. For as anentrepreneur, there will naturally be some holes in one’s knowledge, butthey’re plugged quite naturally here in the Student Incubator,« Rasmusexplains.His web bureau hoeks.dk is in a stage of positive growth, and the youngstudent must therefore take part in a project to clarify whether he hasthe qualities to remain one of the growth entrepreneurs in the StudentIncubator – a title which means additional help and support from thisorganisation.48 | Programmes within entrepreneurship and businessdevelopment in the Central Denmark Region


Facts:Name: Rasmus HoeksStudying: Master’s degree programme in Information StudiesStudent incubator: Entrepreneur with three companiesSector focus: IT-innovationWebsite: www.hoeks.dkProgrammes within entrepreneurship and businessdevelopment in the Central Denmark Region | 49


5.2. Offers toentrepreneurs and SMEsGrowth-oriented entrepreneurs and SMEs all gothrough a number of demanding developmentphases, each of which decisive for the realisationof the business’s growth potential. The phaseshave, for example, been described in LarryGreiner’s growth model from 1972 (Figure 29)areas is based on one or more of the region’smain challenges – cf. chapter 1.Figure Figure 30: 30: the the initiatives initiatives and their and weighting their weighting9%The model defines a series of developmentphases and critical jumps, which in the presentglobal knowledge economy do not suit allcompanies. But it is the case that all growthorientedentrepreneurs and SMEs encounter developmentphases, and face some critical steps,which determine the businesses future success.26%14%23%28%Consultancy and sparringCapitalDevelopment of employeeskillsGlobalisationNetworks and clusterdevelopmentCentral Denmark Region has developed a numberof measures on this basis among othersto strengthen the companies’ possibilities torealise their growth potential. The initiativeswere developed on the basis of the entrepreneurs’and the businesses’ needs, and they buildfurther on cumulative experiences and evaluationsof earlier initiatives and national andinternational good practice within the individualareas. Initiatives were also developed to makeuse of the structures and expertise in the innovationsystem – cf. chapter 4.Figure 30 illustrates the five focus areasto which the measures relate, and the fundsallocated to the individual areas from the totalannual pool of DKK 265 million. Each of the fiveFigure 29: The “Greiner Curve”A range of prioritising filters has also beendefined on the basis of the Central Denmark Region’sbusiness development strategy to ensurethe largest possible effect and a social dividendfrom the measures. In practice this means thatentrepreneurs’ and SMEs’ possibilities of accessto the individual measures depend on:> > the magnitude of the business’s growth potential.In practice this means that businesseswith a very high growth potential have accessto more intensive initiatives than businesseswith a smaller growth potential, e.g. acceleratorsequences or a possibility of gaining asubsidy to buy more specialised advice.Figure 29: The »Greiner Curve«PHASE 1”Growth ThroughCreativity”PHASE 2”Growth ThroughDirection”PHASE 3”Growth ThroughDelegation”PHASE 4”Growth ThroughCo-ordination”PHASE 5”Growth ThroughCollaboration”PHASE 6”Growth ThroughAliances”Organization SizeControl CrisisRed Tape CrisisGrowth CrisisLeadership CrisisAutonomy CrisisTime50 | Programmes within entrepreneurship and businessdevelopment in the Central Denmark Region


whether the business is contributing to astrengthening of the Region’s strategic areasof initiative within energy and the environment,foods, IT or welfare innovation. In practicethis means that businesses which meetthe criteria have access to a range of bonusinitiatives, e.g. targeted development sequencesdedicated to projects within innovation inwelfare.Programmes within entrepreneurship and businessdevelopment in the Central Denmark Region | 51


Consultancy and sparringThe programmes under »Consultancy and sparring«primarily address the challenges in connectionwith the startup skills and the limiteduse of new technology and new knowledge. Inaddition, the programmes also aim at strengtheningcorporate capacity to gererate growth.Figure 31: 31: The programmes The programmes are executed by the following are groups executed in by the following groups inthe innovation system.the system.Basic localSpecialisedConsultancy andAccelerateddissemination ofCapitalguidanceguidancedevelopmentknowledgeThe starting point for the programme is experiencesand analyses which document thatadvice and qualified sparring are importantfor entrepreneurs’ and businesses’ survival,development and growth. Entrepreneurs andSMEs are, however, generally reticent aboutinvesting in advice and outside expertise, evenif they could benefit greatly in the developmentof their business. This means inter aliathat the businesses develop more slowly thanthey would otherwise have done, which canimpair their competitiveness and result in lowergrowth. The programme must thus both help toprovide the businesses with the right skills andthereby promote their possibilities for realisingand exploiting a growth potential, and give themconcrete experiences with how external consultancyand sparring can promote the business’sdevelopment.Figure 32: Programme initiativesDevelopment of entrepreneurial culture and skillsFigure 32 below provides an overview of the initiativesin the programme. It is clear that someinitiatives are general and targeted towardseither individual businesses or a group of them,while other initiatives focus on special challengesor areas.For all initiatives, the businesses must havegrowth ambitions and potential at a minimum togain access.Figure 32: Programme initiativesIndividual initiatives Collective initiatives Specialised initiativesInitiatives for individualentrepreneurs or SMEsInitiatives for groups ofentrepreneurs or SMEsInitiatives focused on special challenges orareas• Advice on developmentSubsidy to purchase advice in connectionwith establishment or development of thebusiness.• AcceleratorDevelopment of expertise for participationin an Accelerace programme andconsequent realisation of an extraordinarygrowth potential• Growth sparring/MentoringDevelopment where a mentor orexperienced sparring partner is affiliatedwith the business to discuss developmentaland managerial challenges• Growth groups – PlatoCollective theme development where thegoal is to create growth and developmentvia development of expertise, sparring andformation of networks• NetworkingTargeted networking to promote exchangeof experiences and provide inspirationallearning via workshops and seminars• Spin-off entrepreneurshipDevelopment for spin-off entrepreneursand motivation of the management inpotential “parent companies” to supportspin-off entrepreneurship.• Development for businesses in researchand development parksIntensive development including andimplemented in cooperation withappropriate research and developmentparks in the KASK area (Norway andSweden)• Entrepreneurs outside big city areasGuidance and dissemination of knowledgeto entrepreneurs outside the big urbanareas• Focused business serviceSpecial initiative offered in cooperationwith the municipalities to strategicallyselected business groups, e.g. withinenvironment, foods etc.Financial framework:approx. DKK 50 million/yearFinancial framework:approx. DKK 5 million/yearFinancial framework:approx. DKK 18 million/year52 | Programmes within entrepreneurship and businessdevelopment in the Central Denmark Region


»Advice on development« is the principal initiativein the programme and a cornerstone inrelation to breaking down the barriers faced bybusinesses in relation to investing in externaladvice. The initiative gives entrepreneurs andSMEs a subsidy to purchase advice in connectionwith the establishment or development oftheir business. The advice can, for example, beconcerned with business development, technologicaldevelopment, internationalisation oranother area in relation to the business’s development.The initiative is effected via variousso-called »advisory packages« targeted towardsboth entrepreneurs and SMEs and varying degreesof growth potential – see the text box. Theassessment is made via Business Link CentralDenmark, which uses the tool »VækstHjulet«discussed above to chart the businesses’ growthpotential. Co-financing by the business is importantin ensuring that the business is motivated.Advice on development- The four main advisory packages> > STARTmidt Start-up Package for entrepreneurs inthe start-up phase.(85% subsidy to buy advice costing up to DKK 20,000 )> > STARTmidt Growth Package for entrepreneurs upto three years.(50% subsidy to buy advice costing up to DKK 60,000)> > VÆKSTmidt Little Growth Package for SMEs withexport potential or a significant indirect exportpotential(50% subsidy to buy advice costing up to DKK 135,000)> > VÆKSTmidt Big Growth Package for SMEs with asignificant direct or indirect export potential.(50% subsidy to buy advice costing up to DKK 270,000)A sequence typically extends over a year, wherethe mentor meets with the business a few timesa month. All mentors have been successful entrepreneursor managers of major companies inDenmark or abroad. The object is both to makethe mentor’s own experience available to thebusiness and to give the business access to thementor’s own network.The collective initiatives contain both thematiseddevelopment sequences and targetednetworks. A common point in the initiatives isthat the collective element plays a significantrole in relation to exchange of experiences andsparring.The specialised initiatives are focused on selectedchallenges and areas or special types ofbusinesses. The object of these initiatives is toaddress the special needs which are not optimallycovered via the more general initiatives.An example is »Spin-off entrepreneurship«,which is specially targeted towards spin-offentrepreneurs – i.e., entrepreneurs coming fromexisting businesses. The initiative is intendedto both motivate managers in existing businessesto support Spin-off entrepreneurship and tosupport the development of the spin-off businesswith offers of special consultancy.Figure 33 shows how much has been earmarkedfor the individual initiatives out of the programme’stotal annual financial framework of approximatelyDKK 73 million.Figure 33: The initiatives and their weightFigure 33: The initiatives and their weightThe other individual initiatives include »Acceleratorsequence« targeted towards thosebusinesses which possess an extraordinarilyhigh growth potential. The object of the initiativehere is to create a basis for an acceleratedgrowth sequence by developing the business’smanagerial expertise and gearing it to act strategically,specifically in relation to marketingpotentials. The initiative contains numerous elementswhich will develop the business in variousways with this end in mind.Advice on development 45%Focused business service 11%Entrepreneurs outside big city areas 3%Development for businesses inresearch and development parks 8%Spin-off entrepreneurship 3%Networking 1%Growth groups – Plato 5%Growth sparring/ Mentoring 6%Accelerator 18%»Growth sparring/Mentoring« enables businessesto be affiliated with an experienced mentor.Programmes within entrepreneurship and businessdevelopment in the Central Denmark Region | 53


CASE EXAMPLEThe strategy fell into placeElectricon, a consultancy firm to the wind turbine and other sectors, grewso quickly that a strategic plan and a professional board of directors werecritical for the company’s business basis.Electricon A/S is growing – and the Advice on development initiative helpedit to prepare a new strategic plan and to strengthen its professionalboard of directors. Electricon – a dynamic young company located in HI-Park in Herning – was started by Kim Bertelsen in early 2007 as a publiccompany. Electricon now has 11 permanent employees, who have thusexperienced a growth almost as explosive as that of the sector in whichthe company works.Electricon is an engineering and consultancy company focused on protectionagainst lightning strikes, and the quality of the power supply. Thecompany offers assistance and concrete solutions to Danish and internationalclients with focus on high reliability of operations in buildingsand electrical installations, IT, and signalling and processing systems, andwith such a portfolio of products, the company’s business basis must ofcourse be a hundred percent in order.»We had a need to work with our strategies while strengthening ourprofessional board of directors. The Advice on development initiativeprovided a subsidy to purchase assistance from a private consultant forsparring on the preparation of a new strategic plan, and the final resultwas that the private consultant joined our board. This has been a bighelp to our company – for with the new board, we gained a good sparringpartner,« says Kim Bertelsen, founder and manager of Electricon A/S.54 | Programmes within entrepreneurship and businessdevelopment in the Central Denmark Region


Facts:Company: Electricon A/SLocation: HerningNumber of employees: 11Sector focus: Technical consultancyProduct: Improved reliability of operation and working life for electrical and mechanical componentsTarget group: Wind turbine manufacturers, hospitals, railways, the oil and gas industry, the telecoms sectorWebsite: www.electricon.dkProgrammes within entrepreneurship and businessdevelopment in the Central Denmark Region | 55


CapitalThe programmes under the focus area »Capital«address the challenge in relation to entrepreneurs’difficulty getting access to risk capital tofinance business development and growth.The basis of the programme is the fact that it isgenerally difficult for entrepreneurs to procuredevelopment capital – a problem which has onlygrown during the financial crisis. For entrepreneurs,this generally means that the businessesdevelop significantly more slowly than their potentialwould otherwise permit. One area wherethe problem is evident is among the knowledgeintensiveentrepreneurs, where, for example, theentrepreneurs in the Pre-seed venture investorshave difficulty finding investors who will followup on the introductory pre-seed investmentsmade by the Pre-seed venture investors. In thebest case, this lack of financing means that thedevelopment activities are performed at a slowertempo. But in the worst case, the entrepreneuris forced to shut down the project. Naturallythis would be a major loss in a social perspectivebecause it means both lack of realisation ofa growth potential and loss of the initial publicinvestments.Figure 35 provides an overview of the initiativesin the programme. It is clear that the purpose ofsome initiatives is to increase the supply of riskcapital, while other initiatives are focused onincreasing the business’s qualifications in relationto attracting risk capital.Figure 35 : Programme initiativesFigure 35: Programme initiativesFigure 34: The programmes are executed by the following groups inFigure 34: The programmes are executed by the following groups inthe innovation system.system.Basic localguidanceSpecialisedguidanceConsultancy anddissemination ofknowledgeAccelerateddevelopmentDevelopment of entrepreneurial culture and skillsWith respect to increasing the supply of capital,the establishment of the Central Denmark CapitalFund has a special object in ensuring that theknowledge-intensive entrepreneurs, especiallyin the Pre-seed venture investor, have follow-upcapital to implement their introductory developmentactivities. The fund’s follow-up investmentswill typically be DKK 4-6 million. See alsoSection 4.6 for a description of the fund, which– together with the increased initiatives to supportVækstfonden’s products in the Central DenmarkRegion – will create a direct increase in theavailability of risk capital in the Region for thebenefit of all growth-oriented entrepreneurs.The object of the Business Angels network is toexercise a more indirect influence on the availabilityof risk capital. The initiative will help viafacilitation and development of the network toCapitalCapitalIncreasing businesses’ qualificationsInitiatives to increase the supply of risk capitalInitiatives to make businesses more competent in attracting risk capital• Establishment of CentralDenmark Capital FundThe fund’s capital will be prioritised as follow-up investments on theintroductory investments made by the Pre-seed venture investors.• Loan financing and investing via VækstfondenIncrease the range of Vækstfonden’s products in the CentralDenmark Region• Business Angel networkFacilitation and development of a regional Business Angel network(50+ investors) to improve matching and increase the number of BAinvestments• Capital coach - Investor Readiness consultancyFinancing up to DKK 30,000 by a capital coach to strengthen theentrepreneur’s knowledge and skills via consultancy in attracting riskcapital• Arrangements and events on capitalMaster classes, theme meetings, seminars, camps for entrepreneursseeking capital and implementation of Connect Denmark’sSpringboardsFinancial framework: approx. DKK 60 million/yearFinancial framework: approx. DKK 3 million/year56 | Programmes within entrepreneurship and businessdevelopment in the Central Denmark Region


create a framework for an improved matchingbetween entrepreneurs and Business Angels,partly by providing the entrepreneurs with easieraccess to the investors through the networkand enabling them to pitch their project to severalinvestors at a time, and partly in the investorsbuilding up relations and referring projectsfor investment to one another and seeingpossibilities for joint investments in projects inwhich they would not otherwise have invested.Figure 36 shows how much is earmarked for theindividual initiatives from the programme’s totalannual financial framework of approximatelyFigure 36: The initiatives and their weightDKK 63 million.Figure 36: The initiatives and their weightEstablishment of Central Denmark Capital Fund 54%Arrangements and events on capital 1%Capital coach - Investor Readiness consultancy 3%Business Angel network 1%Loan financing and investing via Vækstfonden 41%One of the initiatives aimed at making thebusinesses more competent in their attractionof risk capital, and a cornerstone in the programme,is »Capital coach – Investor ReadinessConsultancy«. The initiative provides subsidiesto couple entrepreneurs with one of 15 experiencedcapital coaches with extensive knowledgeand concrete experience with procuring capital.The capital coach will contribute a critical andconstructive review of the business’s plan withpotential investors’ questions and prioritisationin mind. The capital coach will also helpto identify and contact potential providers ofcapital and assist in meetings, negotiations andentering into agreements with investors. Thecapital coach will thus provide competent sparringthroughout the capital procurement procedureand, via his network, open doors which theentrepreneur himself finds it difficult to open.New Best Practice in DenmarkThe Central Denmark Regionwas the first region to offerInvestor Readiness consultancyto entrepreneurs. Thescheme has been a big success,and the Danish EnterpriseAuthority has subsequentlycopied the scheme and made itnational – with Business LinkCentral Denmark as operator– for the benefit of entrepreneursthroughout Denmark.Programmes within entrepreneurship and businessdevelopment in the Central Denmark Region | 57


CASE EXAMPLEThe art of finding capitalWith the aid of an external consultant, Kiermar Technology A/S has succeededin gaining a multi-million kroner injection from private investors.Six banks said »no« before Martin Hansen finally found one willing tohave his firm as a client. In sharp contrast is the fact that the first twoprivate investors he contacted said »yes« to co-financing his idea, andtogether, the investors provided a substantial multi-million kroner sum tohelp finance the start-up of Kiermar Technology A/S.The engineer Martin Hansen’s idea and the business basis is a hydraulicpress which, in contrast to the existing products on the market, is smaller,cheaper and more specialised.The challenge was to obtain capital to build a prototype of the machinebecause customers want to see evidence before they invest in the newdevelopment.Martin Hansen contacted Business Link Central Denmark via SkanderborgErhvervsudvikling, and thus learned of the Capital coach - InvestorReadiness consultancy initiative.The programme’s core asset is capital coaches who, acting as externalconsultants, help businesses to find private investors. The accountantLasse Nejsum was attached to Kiermar Technology.»Mr Nejsum accompanied us to meetings with potential investors, andthis meant that from the beginning, we were assured that all the technicaldetails concerning ownership and investment agreements were inplace,« Mr Hansen explains.The prototype is now completed and undergoing test runs, and Mr Hansenis still in contact with Lasse Nejsum.»Our participation in the Capital coach initiative has clearly made usaware of how contact with private investors is made, and this is usefulknowledge to have as ballast, including in relation to potential futuredevelopment possibilities,« Mr Hansen concludes.58 | Programmes within entrepreneurship and businessdevelopment in the Central Denmark Region


Facts:Company: Kiermar Technology A/SLocation: SkanderborgNumber of employees: 8Sector: The metal industryProduct: A patented hydraulic press developed by the companyTarget group: Companies which make steel items with the aid of drawing or stamping,such as car components, wheelbarrows, sinks, gas bottles, panel heat exchangers, radiators etc.Website: www.kiermar.dkProgrammes within entrepreneurship and businessdevelopment in the Central Denmark Region | 59


Development of employee skillsThe programmes under »Development of employeeskills« address the need to create a generalrise in skill level in the region’s workforce. In relationto the challenges described in Chapter 1,the program must contribute to strengtheningproductivity growth – and to creating a bettermatch between available skills and the businesses’demand for them.Figure 37: The programmes are executed by the following groups in37: The programmes are executed by the following groups inthe innovation system.the innovation systemBasic localSpecialisedConsultancy andAccelerateddissemination ofCapitalguidanceguidancedevelopmentknowledgeThe basis of the programme is inter alia thechallenge in the fact that every third wage-earnerin the Central Denmark Region is unskilled.The aim is thus to secure a significant upgradingof the qualifications of early school leavers,which will strengthen both productivity andcompetitiveness – and at the same time ensurethat the employees can undertake new andmore demanding duties.Figure 38 below provides an overview of theinitiatives in the programme. The initiatives arefocused on skills development in the workforceon the basis of the individual business’s needs.Figure 38: Programme initiativesFigure 38: Programme initiativesDevelopment of entrepreneurial culture and skillsThe initiatives aimed at developing the businessesare the primary programme initiatives. Herethe object of the »Strategic skill development«and the »Guidance and consultancy for SMEs oncontinuing and further education« is to inducethe businesses to think strategically to a higherdegree in relation to the planning of trainingand education, namely to include skills developmentof employees in their strategic developmentplans in order to increase their awarenessof those educational requirements they ex-Developing the businesses Developing the education centres Strengthening the co-operationInitiatives to develop the businessesInitiatives to develop the education centresInitiatives to strengthen the co-operationbetween businesses and education centres• Strategic skill developmentGuidance and consultancy for SMEs onimplementing development of employeeskills in the business strategy• Guidance and consultancy for SMEs oncontinuing and further educationThe guidance will help to determine theneeds. Also consultancy on strategic andconcrete planning.• Determination and assessment of skills ofemployees in SMEsIndividual analysis of skills and guidance foradults. Also assessment of actual skills• Pool for special initiatives and offers toSMEsPossible subsidies for initiatives includingmore flexible running of educationalactivities in the Region’s marginal areas,upgrading of qualifications of foreignemployees, retention of employees inconnection with falling activities orannouncement of layoffs, development ofdual skills etc.• Skill development for consultants in theeducation centresStrengthening the consultantsunderstanding and capabilities of handlingthe companies needs in relation to furthereducation• Development of dialog and mapping toolsDevelopment of tools for better analysis ofthe companies needs in relation to furthereducation• Establishing cooperating networksDevelopment of new models andcooperation platforms for strengthening thecooperation between education centresand businessesFinancial framework:approx. DKK 24 million/yearFinancial framework:approx. DKK 8 million/yearFinancial framework:approx. DKK 5 million/year60 | Programmes within entrepreneurship and businessdevelopment in the Central Denmark Region


pect to have for their employees in the future.»Clarification of skills and assessment of employeesin SMEs« complements by increasing theemployees’ knowledge of their own skills andpossibilities for in-service training. An importantelement here is the assessment of actual skills,that is, the actual skills which the employeepossesses without regard to how the skills wereacquired. Viewed as a whole, both the individualemployees and the businesses must becomebetter at thinking in terms of skills developmentas a strategic element in continuing growth anddevelopment.Figure 39 shows how much has been earmarkedfor the individual initiatives out of the total annualfinancial framework of approximately DKK37 million.Figure 39 : The initiatives and their weightFigure 39: The initiatives and their weightStrategic skill development 24%Establishing cooperating networks 14%Skill development for consultants andtools development 22%Pool for special initiatives 8%Determination and assessmentof employee skills 3%Guidance and consultancy onfurther education 29%The initiatives aimed at developing the educationcentres are to strengthen the centresunderstanding and management of the businessesneeds for skill development. Partly throughtraining courses for consultants and partlythrough the development of enhanced mappingtools for better analysis of the companies.Finally, the objective of »establishing cooperativenetworks« is to tie together the efforts andstrengthen cooperation between the businessesand the educational centres. This will increasethe parties’ understanding of each other’sneeds and opportunities and create a bettermatch between supply and demand. The resultwill be better targeted training and more effectivedevelopment of employee skills.The initiatives are organisationally bundled insix local consortiums (centres of expertise), allof them established by a broad circle of playersin the in-service training sector. Apart fromensuring implementation of the initiatives, thecentres will also help to strengthen the interplaybetween businesses and educational institutions.The centres will thus act as developmentdynamos and network centres.Programmes within entrepreneurship and businessdevelopment in the Central Denmark Region | 61


CASE EXAMPLEA very different type of businessAll employees from sweeping boy to manager at BM Silofabrik have takenin-service training. One of the results is increased efficiency.Twenty-eight employees at BM Silofabrik in Holstebro have taken coursesover the last six months in subjects including first aid, LEAN manufacturing,communication, and personal development. A clarification of skillshas led the way, explains Dorte Martinsen, manager of the family-ownedcompany:»A consultant from the programme on Development of employee skillscame to us and had a discussion with all our employees. The result was apersonal training folder with descriptions of each individual’s wishes andpotential,« Ms Martinsen explains, adding:»We discovered that it would be a good idea to have a number of commoncourses combined with some individual personal ones. We’re an oldfamily-owned company with many unskilled employees who have beenhere for ten, fifteen and twenty-five years without ever having taken anytraining,« says Ms Martinsen, who takes no pains to conceal her enthusiasmfor the new training initiatives.Ms Martinsen describes an increased flexibility and a much greater sharedfeeling for the company’s goals among all employees.»When everybody agrees on how the work is to be done from cleaning toadvising customers and how to treat one’s colleagues, it makes for a positiveworkday, which increases efficiency and therewith also earnings,«says Ms Martinsen.The courses at BM Silofabrik have been going for some months, and todate, courses have been agreed up to summer 2012, but the manager ofSilofabrikken in northwest Jutland envisages that the courses will continuelong thereafter:»It would go against the grain in me to stop the in-service courses, forif we are to become better at competing with other countries, in-servicetraining is the only war forward. We can’t compete on wages, so we haveto focus on flexibility, efficiency and specific solutions, and the coursesare thus essential,« Ms Martinsen concludes.62 | Programmes within entrepreneurship and businessdevelopment in the Central Denmark Region


Facts:Company name: BM Silofabrik ApSLocation: HolstebroNumber of employees: 28Sector: Production of metal constructionsTarget group: Agriculture, the plastics industry, biofuelsWebsite: www.bmsilo.comProgrammes within entrepreneurship and businessdevelopment in the Central Denmark Region | 63


GlobalisationThe programmes under »Globalisation« addressthe challenge in relation the entrepreneurs’s internationalisationand the proportion of companiesexporting.The programmes are created so they can helpcompanies overcome all the tasks and challengesassociated with implementing internationalactivities. Very few companies possess thenecessary insight and international expertise inthe managerial level. This means that they generallyhave a strong need for specialised guidanceand consultancy in connection with the planningand implementation of international activities.A lack of international competencies preventsmany companies from utilising growth in themarket beyond Denmark and outside the EU.The programme must help to break down thespecific barriers and prompt more internationalisationactivities in companies.Figure 41 provides an overview of the initiativesin the programme.Figure 41: Programme initiativesFigure 40: The programmes are executed by the following groups inFigure 40: The programmes are executed by the following groups inthe innovation system. systemBasic localguidanceSpecialisedguidanceConsultancy anddissemination ofknowledgeAccelerateddevelopmentDevelopment of entrepreneurial culture and skillsAs will be evident from the figure, both the individualand the collective initiatives are targetedsuch that there is something for all companiesirrespective of how far they have progressed inthe internationalisation process.The individual initiatives include »Free preparationfor exporting via the Danish Trade Council«,an offer to businesses which are seeking toexplore their options for internationalisation,and help to draw up a plan for how this is to beapproached. An extension of this is the »Subsidyfor the purchase of specialised advice«, targetedCapitalFigure 41: Programme initiativesIndividual initiatives Collective initiatives Initiatives directed towards employeesInitiatives for individualentrepreneurs or SMEsInitiatives for groups ofentrepreneurs or SMEsInitiatives targeted towards the employees inthe businesses• Free export preparation via the TradeCouncilUp to 35 hours of free consultancy todiscover internationalisation potentials andset up a plan of action• Subsidy for specialised consultancy50% subsidy to purchase consultancyconcerning preparation for exporting and itscommencement, and market development.The size of the subsidy depends on needsand growth potential.• International innovation and developmentpartnershipSupport for the screening of possiblepartnerships, active internationalprojects and financing of developmentactivities• Visit to the marketSubsidy for reconnaissance trip to give thecompany a good first-hand impression andinsight into the internationalisationpossibilities.• Growth groupsSubsidy for collective development todevelop the company’s expertise forconcrete internationalisation activities• Joint export push and business missionsCollective support for knowledge of themarket, potential charting, matchmaking,displays at trade fairs etc. with a view toentering into concrete businessagreements.• Strategic Network formation50% subsidy for up to 600 hours to establisha business network focusing on exportingand internationalisation• Education and skills developmentDevelopment of employees’ skills in SMEsto improve the organisation andimplementation of internationalisationactivities• Attracting, receiving and retaining foreignmanpowerStrengthening the reception facilities,support for networks and matchmakingbetween companies and foreign students inconnection with work experience visitsFinancial framework:approx. DKK 22 million/yearFinancial framework:approx. DKK 32 million/yearFinancial framework:approx. DKK 16 million/year64 | Programmes within entrepreneurship and businessdevelopment in the Central Denmark Region


towards businesses which have investigated theoptions for internationalisation, and which areseeking advice on the resolution of specific mattersconcerning the preparation or implementationof the internationalisation plan. This initiativeprovides subsidies of up to DKK 270,000 topurchase advice, depending on the company’sexport potential.New Best Practice in DenmarkThe programme also includesthe stationing of an employeefrom the Trade Council in BusinessLink Central Denmark. Thisstationing, the first of its kind inDenmark, has meant considerablyeasier physical access forentrepreneurs to the Council’sservices and has resulted ina substantial increase in thedemand for these services.»International innovation and developmentpartnership« is targeted towards companieswhich wish to build up international partner-ships in relation to innovation and developmentprojects. The initiative helps with the identificationof and matchmaking with potential partners,and provides a subsidy to establish andstart up the concrete development projects.here for advice on establishment and buildingup of the network.The concrete goal is to help 600 companies ayear start exporting. This is equivalent to increasingthe proportion of exporting companies inthe Central Denmark Region from about 11 toabout 12 per cent over a three-year period. Theprogrammes will also help 600 already-exportingcompanies to increase their exports by atleast 20 per cent in the programme period.Figure 42 shows how much has been earmarkedfor the individual initiatives out of the total annualfinancial framework of approximately DKK70 million.Figure 42 : The initiatives and their weightFigure 42: The initiatives and their weightSubsidy for specialised consultancy 17%Free export preparation via the Trade Council 3%Attracting, receiving and retaining foreignmanpower 21%Education and skills development 1%Strategic Network formation 4%Joint export push and business missions 40%Growth groups 2%Visit to the market 1%International innovation and developmentpartnership 11%Among the initiatives is »Visit to the market«,targeted towards businesses seeking clarificationin relation to their options for internationalisationon a specific market. The initiative givesthe businesses a subsidy to visit the marketin order to gain a first-hand impression and tostudy the possibilities.In extension of this initiative, »Growth groups«seek to improve a specific internationalisationactivity via collective development sequencestargeted towards the activity in question, whilethe object of »Joint export push and Businessmissions« is to help the businesses implementtheir internationalisation activities and obtaintheir first concrete business agreements.Finally, »Strategic Networking« is targetedtowards groups of businesses which are veryambitious in their internationalisation aims, andwhich want to form a strategic business networkwith the aim of exporting and internationalisation.The initiatives can provide subsidiesProgrammes within entrepreneurship and businessdevelopment in the Central Denmark Region | 65


CASE EXAMPLEFishing is the same throughout the worldHvide Sande Skibssmedie has developed special expertise in ice works –an expertise they are selling to South America with help from the DanishTrade Council.The company is situated at the edge of the wharf in Hvide Sande. Theoffice on the first floor has an unimpeded view of both fishing boats andthe North Sea. The company’s special expertise in fisheries, developedin cooperation with the fishermen themselves, means that the marineengineer has a sought-after product. In particular, the fully automaticice works made by the company has a market everywhere in the worldwhere there is fishing.Back in the beginning of 2009, the export consultant Poul Erik Bligaardfrom the Danish embassy in Chile was on a round trip in Denmark, wherehe also called in at Hvide Sande Skibssmedie.Mr Bligaard tipped the company about Central Denmark Regions Globalisationprogramme and shortly thereafter, the Danish embassy in Chilehelped Hvide Sande Skibssmedie to tend a stand at a trade fair in theSouth American country’s capital, Santiago.»We could see a market for ice works and hydraulic components in Chile,which is one of the world’s biggest fishing nations, but we naturallywanted to investigate the market beforehand. This was where we wereable to use the help provided by the Joint export push and business missioninitiative. It was a possibility we were not aware of« says Mr Petersen,a partner in Hvide Sande Skibssmedie.»The investigations showed that there is a potential market in Chile, sowe have already sent a quotation, and although it takes a long time topenetrate a new market, it’s going well now and the interest in us is definitelynot declining,« he adds.»There are fine opportunities for exporting to Spain, India and Bangladesh,and we will definitely seek to use the possibilities for help fromCentral Denmark Regions Globalisation programme in the future. Thepartnership has been very good« says Mr Pedersen.66 | Programmes within entrepreneurship and businessdevelopment in the Central Denmark Region


Facts:Company name: Hvide Sande SkibssmedieLocation: Hvide SandeNumber of employees: 18Sector: Marine industry and ice worksTarget group: Harbours and fishing businessesWebsite: www.hvidesandeskibssmedie.dkProgrammes within entrepreneurship and businessdevelopment in the Central Denmark Region | 67


Networks and cluster developmentThe programmes under »Network and clusterdevelopment« address the region’s challengesrelated to competition (productivity, export andinnovation).The basis of the programmes is the fact thatentrepreneurs and SMEs are generally reluctantto start a strategic partnership with othercompanies. The reason for this is inter alia lackof resources, but is also in many cases a resultof fear of revealing business secrets and losingmarket share. At the same time many smallercompanies are not aware of the opportunitiesfor development that lies in a strategic networkco-operation. In addition, companies often lackinformation about potential partners and aretherefore dependent on the existence of playerswho will conduct an initial matchmaking. Finally,companies often need help to handle the introductorynetwork construction phase where thefoundation for the future partnership is laid.Figure 44 provides an overview of the initiativesin the programme.As will be evident from the figure, the programmeboth supports the establishment of new networksand helps to promote the developmentof major business-based networks and incipientclusters which possess a significant developmentpotential.Figure 43: The programmes are executed by the following groups inthe innovation system.Figure 43: The programmes are executed by the following groups inthe innovation systemBasic localguidanceSpecialisedguidanceConsultancy anddissemination ofknowledgeAccelerateddevelopmentDevelopment of entrepreneurial culture and skillsThe concrete initiative »Establishment ofnetworks« builds on a major effort to establishcontacts and is being implemented by about15 designated so-called »network brokers«who are working to identify potential businessnetworks among 3-5 businesses, to develop andfacilitate the network, and to make the basis forpreparation of action plans more specific, all ofwhich is free to the businesses. When a networkis established, it can elect to continue with thepreparation of an action plan for the network, inwhich context the network can obtain a subsidyfor the purchase of external consultancy.»Further development of major business-basednetworks and incipient clusters« is targetedtowards already established networks whichwish to develop and further strengthen thepartnership in order to realise their potentialwithin specific sectors. Vækstforum supportsbusiness-oriented activities in the clusterinitiatives on the basis of an assessment of theCapitalFigure 44: Programme initiativesFigure 44: Programme initiativesEstablishment of network Further development of networkInitiative to establish new business - based networks Initiatives to further develop business based -networks• Network formation50% subsidy for purchase of external consultancy (200-600 hours) inthe form of project managers, process consultants or similar forpreparation of an action plan for the network and to ensure that thenetwork building up phase proceeds optimally.• Further development of bigger business networks and buddingclustersOfficially approved innovation networks and cluster organisationsare given a subsidy for implementation of development activitieswhich can help to strengthen the partnership and realise thepotentials within specific sectorsFinancial framework: approx. DKK 12 million/yearFinancial framework: approx. DKK 12 million/year68 | Programmes within entrepreneurship and businessdevelopment in the Central Denmark Region


network’s growth perspectives, whether or notthe network is an officially approved innovationnetwork, and whether or not the network iswithin the Central Denmark Region’s areas oninitiative.Figure 45 shows how much has been earmarkedfor the individual initiatives out of the total annualfinancial framework of approximately DKK24 million.Figure 45 : The initiatives and their weightFigure 45: The initiatives and their weightFurther development ofbigger business networks andbudding clusters 50%Network formation50%Programmes within entrepreneurship and businessdevelopment in the Central Denmark Region | 69


CASE EXAMPLENew type of bed makes life easier in hospitalsFour companies have joined forces to develop the intelligent hospitalbed of the future, which will both save the staff heavy lifting and provideimportant information on the patients’ condition.»In developing the intelligent bed, we started right from the base. All facetswere included, and we ensured that we made the entirely new hospitalbed to suit all needs,« explains Jens Bay of KR Hospital Equipment, onepart of the business network that also includes the companies DesignPartners, Cetrea and Zibo.During the first six months, the business cluster was in close dialoguewith the Central Denmark Region and Randers Regional Hospital, whichbought the first beds. »We discovered that it was a task with several components.The bed must be intelligent so it can help the nurses with suchtasks as reading the patient’s weight, sensing whether the bed is wet,and sending an alarm when necessary. This is where our diversity reallycame into play. Cetrea has extensive experience solving problems forhospitals, and it knows how we can send the information from the bed tothe nurses. Zibo has expertise within the development of mattresses, andwith Design Partners, we gained an entirely new design which also representsan optimal solution for the needs of the future«, says Mr Bay.Serious attention. To develop a ground-breaking product, the clusterpartnership conducted extensive research in Scandinavia, the targetgroup in the first instance, and interest in the new bed was considerable:»We’ve attracted attention from both Denmark and abroad, and we’vehad numerous contributions, not just from the Institute of Technology,the project’s consultant, but also from nurses who have told us of theirneeds. This confirms our belief that we’re heading in the right direction«,says Mr Bay. »The Network formation initiative has been an importantpartner in our project, which is a big financial investment. So withouttheir support, we would not have started. The collaboration in our businessnetwork has also been very good. We’re good in our separate ways,but when we put our skills together, we reach new heights«, says Mr Bay.The first intelligent hospital bed is expected to be on the market in 2012.70 | Programmes within entrepreneurship and businessdevelopment in the Central Denmark Region


Facts:Companies: The Intelligent Hospital Bed of the Future – a network project between the four companies KRHospitalsudstyr, Design Partners, Cetrea and Zibo – and Danish Technological Institute in Aarhus.Location: Hadsten, Aarhus og TørringNumber of employees: About 70 in the four production companiesSector: Production companies within the care and hospital sectorProduct: The intelligent hospital bed of the futureTarget group: Danish and foreign hospitalsWebsite: www.krbed.dk, www.designpartners.dk, www.cetrea.com, www.zibo.dk, www.teknologisk.dkProgrammes within entrepreneurship and businessdevelopment in the Central Denmark Region | 71


5.3. Development of player skillsin the innovation systemSeveral studies have shown that Central Denmark’sinnovation system is unique in a Danishcontext. Non of the other four Danish regions hasthe same degree of understanding of the systemand the partnerships among the players. But thisis far from synonymous with the belief that thereis no room for improvement – for example in relationto a continual upgrading of skills among the300 consultants, and the system’s cohesion.Midtjysk Erhvervsudviklings Akademi (MEA) – theCentral Denmark Business Development Academy– is a new regional initiative whose objectis to upgrade the qualifications and strengthencohesion in Central Denmark’s innovation system.This is being accomplished by offeringthe players in the system application-orientedfurther education, but with a highly specialistcontent which is tailor-made for the needs of thedifferent players.New Best Practice in DenmarkWith the MEA, the CentralDenmark Region was the firstto place strategic focus onskills development in thebusiness development system.The establishment of the MEAresulted in a marked advancein Danish best practice inthe area, and several otherDanish regions have sinceemulated the concept.Specifically, the MEA arranges free skills developmentmodules within various relevant areasseveral times a month. The modules are directedtowards all the employees and players in CentralDenmark’s innovation system – cf. chapter 4.Furthermore MEA regularly arrange study tripsto foreign regions and specific players which/who can provide inspiration for further developmentof the innovation system in the CentralDenmark Region.The MEA is governed by an academy consistingof 21 members all with a connection to the innovationsystem in the Central Denmark Region.The council consists of representatives from theDanish Enterprise Authority, the Central DenmarkRegion, Business Link Central Denmark, themunicipalities in the Region, the local businessservice, sector organisations, Pre-seed ventureinvestors, science parks, educational institutionsand development parks.The council’s primary duties are to manage thegeneral consultancy service for the MEA viaconcept development, sharing of knowledge, andevaluation. The council> > acts as a dialogue forum and source of inspirationin connection with the development ofactivities in the MEA,> > provides concrete ideas for the content of theMEA’s courses on the basis of observed needsin the members’ own organisations and practice,> > submits proposals to teachers of MEA courses,> > ensures that the latest research results findtheir way to the MEA,> > ensures dialogue between the various levels ofthe education system to achieve synergy,> > ensures communication and sharing of knowledgein connection with the MEA’s activities sothat they benefit the target group as much aspossible,> > monitors satisfaction surveys of the MEA’sactivities, and> > manages an external evaluation of the effectsof the MEA’s activities in relation to the Region’sbusinesses.The ambition is that the MEA will be a recognisedfurther education option in the area of businesspolicy, supporting the high ambitions and visionsin the Region’s business policy. The councilhas therefore initiated a process to enhance theMEA’s qualifications to certify the players andemployees in the total innovation system, whomust be able to have the equality of their servicesevaluated in relation to predefined standards.The certification will apply to the areas outlinedin figure 46.The certification scheme will help the players inan on-going endeavour to improve the quality ofthe services. A further goal is that users shouldfind that the business services are based on aseries of quality standards which can increasetransparency and contribute to a general improvementof the innovation system’s image as aprofessional and user-oriented system. Over time,the certification will also create a common languagein the innovation system and greater transparencyin relation to the consultants’ services.72 | Programmes within entrepreneurship and businessdevelopment in the Central Denmark Region


Figure 46: Central Denmark quality standardsFigure 46: Central Denmark quality standardsIn being visibleand reaching outIn employeecompetencesCentral Denmarkquality standardsIn common toolsand methodsIn serving theentrepreneursand SME’sProgrammes within entrepreneurship and businessdevelopment in the Central Denmark Region | 73


CASE EKSEMPELA strengthening of coordination and teamworkArrangements at Midtjysk Erhvervsudviklings Akademi (The Central DenmarkBusiness Development Academy) are creating shared understandingand knowledge among all persons working in the field of businessservices.The day is somewhat reminiscent of a good old-fashioned school day, andthat’s actually what it is, but with the twist that the courses at MidtjyskErhvervs Udviklings Akademi (MEA) are being held in various places in theCentral Denmark Region, and the students differ from class to class. Butthe 12 or so school days or MEA arrangements are the common platformfor all involved in the business promotion system, and on this day thecourse is being held in Aarhus.»If we use the arrangement in Aarhus as an example, we always havea theme, in this case spin-offs, and we have invited a number of peoplewith special knowledge of the topic. We typically have a researcher to talkabout the latest knowledge in the day’s topic. But in the case of the spinofftheme, one of the guests was the head of the Spin-off Centre Westin Aarhus, explains Henrik Lodberg, a consultant in MEA who helped toestablish the entire system which is creating a common language, knowledgeand guidance for the employees in the business service system.The participants in the MEA arrangement on this day have come from theentire Region. From Ringkøbing in the west to Horsens in the southeastand Holstebro in the northwest, the participants have gathered to gainnew input and knowledge on new things the system in which they workevery day has to offer.»The Spin-off centre was opened relatively recently, and it was thereforenatural to make it the theme for an MEA day«, Mr Lodberg explains,noting that both the head who will run the Spin-off Centre and thealmost 25 participants all took a lively part in the concluding debate andexchange of opinions on how the players could gain the greatest possiblebenefit from one another.»MEA’s goal is to arrange the sharing of knowledge among all players inthe system, irrespective of whether they are local trade councils, innovationagents, educational institutions or growth houses. Only in thisway can we ensure that everybody lives up to the intentions for a unifiedbusiness service system,« is Mr Lodberg’s judgment.74 | Programmes within entrepreneurship and businessdevelopment in the Central Denmark Region


Facts:Company name: Midtjysk Erhvervsudviklingsakademi (MEA)Location: Attached to Væksthus Midtjylland (Business Link Central Denmark)Number of employees: 3 in the secretariatTarget group: All employees in the regional innovation system working in the field and visiting companiesSector: Public knowledge serviceWebsite: www.meamidt.dkProgrammes within entrepreneurship and businessdevelopment in the Central Denmark Region | 75


6. Measurement of resultsand evaluationWith an annual economic framework of DKK 300million, the Central Denmark Region’s initiativeswithin entrepreneurship and business developmentare a major investment in business-relatedgrowth. The investment is being made on a solidbasis, and the Region sees it as important to followup on the investment in order to determinewhether the potential socioeconomic return isbeing realised.The follow-up must ensure an optimal use of thepublic financing and the greatest possible valuefor money for the citizens in the Central DenmarkRegion, Denmark and the EU.The Central Denmark Region uses a combinationof different tools to determine whether the potentialsocioeconomic return is being realised:> > Result contracts> > Advisory boards> > Evaluations> > Measurements of effectResult contracts are used during the term ofthe project to ensure that the initiatives in theproject are carried out to the extent and in thequality which was agreed with the individual participants.The contract is prepared in cooperationwith the operator so that all questions of doubtare eliminated before the initiatives are commenced.Half-year follow-ups on the contract arethen made, where the operator reports on theimplementation of the project and discusses anyadjustments which could be appropriate on thebasis of the preliminary experience with it.Advisory Boards are used as a supplement to theresult contracts in connection with the ongoingevaluation of whether adjustments and adaptationsare needed in the individual projects. Theadvisory board is typically comprised of expertswith first class expertise in the areas which theindividual projects concern. The panel has a highlevel or expertise to regularly contribute specificproposals for how the individual projects can beoptimised.Evaluations are generally made at the end of theterm of the projects by an external evaluator, butin some cases they are also made midway in connectionwith major initiatives.The midway evaluation functions primarily as acheck on whether there are major issues whichshould be revised in order to strengthen theproject’s potential return. This can concern boththe individual measures in the project and itsentire organisation.The final evaluation investigates whether theproject was performed as planned, and examinesboth quantitative and qualitative aspects andthe activities under the individual measures, usersatisfaction, and whether the milestones whichwere set were reached, but also qualitative goalsconcerning organisation, partnership relations,administrative burdens and other experienceswhich can be further built upon in any follow-up.Measurements of effect are used to measurewhether the potential socioeconomic return wasrealised, and how well the public financing wasused. The measurements are made by an externalevaluator, and as far as possible the method isbefore-and-after readings, on the basis of whichthe development can be calculated. This developmentis compared with that in a control group inorder to isolate the project’s effect and assess itssocioeconomic return. The development is measuredon the relevant indicators for the individualprogrammes. For programmes directed towardsentrepreneurs and SMEs, it will typically beindicators such as turnover, exports, employeesand similar. For programmes directed towardsstudents, it will typically be a tracking of civilregistration numbers with subsequent measurementof entrepreneurial behaviour on the labourmarket. Measurements of effect as above aretypically very difficult to perform because theyrequire use of a stringent method whose effectmust be isolated. The Central Denmark Regionhas therefore invested heavily in developmentof the method, which, compared with the experiencesaccumulated in previous measurements,mean that the Region is well equipped to ensurea valid measurement of the effect of the individualprogrammes.To ensure the greatest possible openness forthe project and its effect, the Region has electedto publish all follow-ups on result contracts,evaluations and measurements of effect, on theRegion’s website. All interested persons can followthe project, the experiences and the learningassociated with it, and the project’s results andeffects.76 | Measurement of result and evaluation


Appendix – Addresses/contact details forplayers in the innovation systemDevelopment of entrepreneurial culture and skillsEntrepreneurship Centres and student incubatorsAU Centre for Entrepreneurship & Innovation Address: Finlandsgade 27, 8200 Aarhus NTel: (+45) 8715 2102Web:www.cei.au.dkSEC -Student Entrepreneurship Centre Address: Chr. M. Østergaards Vej 4, 8700 HorsensTel: (+45) 8755 4013Web:www.viauc.dk/secArk:Idea Address: Nørreport 20, 8000 Aarhus CTel: (+45) 8936 0151Web:(www.aarch.dk)Business Factory Address: Birk Centerpark 15, 7400 HerningTel: (+45) 8716 6946Web:www.bf.au.dkIDEA House Aarhus Address: Sønderhøj 30, 8260 Viby J.Tel: (+45) 2712 6421Web:(www.aabc.dk)Innofactory – the Virtual Student Incubator Address: Minervavej 63, 8960 Randers SØTel: (+45) 8711 4400Web:www.innofactory.dkMiJAV – Midtjysk AnimationsVæksthus Address: Kasernevej 5, 8800 ViborgTel: (+45) 8755 4911Web:(www.animwork.dk)Studentervæksthus Aarhus Address: Møllevangs Allé 142, 8200 Århus NTel: (+45) 8715 2102Web:www.studentervæksthus.au.dkAppendix - Addresses/contact details for players in the innovation system | 77


Basic Local guidanceLocal business service unitsErhvervsCentret Ringkøbing Fjord Erhvervsråd Address: Bredgade 77, 6940 Lem StTel: (+45) 9975 2600Web:www.erhvervscentret.dkErhvervsrådet Herning, Ikast og Brande Address: Birk Centerpark 40, 7400 HerningTel: (+45) 9626 1111Web:www.erhvervsraadet.dkErhvervSilkeborg Address: Vejlsøvej 5, 8600 Silkeborg,Tel: (+45) 8720 4711Web:www.erhvervSilkeborg.dkFavrskov Erhvervsråd Address: Bogøvej 15, 8382 HinnerupTel: (+45) 8696 7711Web:www.favrskoverhverv.dkHedensted Erhverv Address: Niels Espes Vej 8, 8722 HedenstedTel: (+45) 7975 5287Web:www.hedenstederhverv.dkHorsens Erhvervsråd Address: Chr. M. Østergaardsvej 4, 8700 HorsensTel: (+45) 7561 1888Web:www.horsens-erhverv.dkNorddjurs Erhverv Address: Torvet 3, 8500 GrenåTel: (+45) 7015 1618Web:www.norddjurs.dkOdder Erhvervs- og udviklingsråd Address: Aabygade 10, 8300 OdderTel: (+45) 5137 7070Web:www.erhverv.odder.dkRanders Erhvervs- og Udviklingsråd Address: Hospitalsgade 10, 2. sal, 8900 Randers,Tel: (+45) 8640 1066Web:www.reu.dkSamsø Erhvervs- og Turistcenter Address: Langgade 32, 8305 SamsøTel: (+45) 8659 0005Web:www.samsoerhverv.dkSkanderborg Erhvervsudvikling Address: Adelgade 105 stuen, 8660 SkanderborgTel: (+45) 3035 2585Web:www.s-e-u.dkSkiveegnens Erhvervs- og Turistcenter Address: Østerbro 7, 7800 SkiveTel: (+45) 9614 7677Web:www.skivebiz.dkSTARTVÆKST Aarhus Address: Åbogade 15, 8200 Aarhus NTel: (+45) 7015 1618Web:www.STARTVÆKST-Aarhus.dkSTARTVÆKST Holstebro Address: Nupark 51, 7500 HolstebroTel: (+45) 7015 1618Web:www.STARTVÆKST-Holstebro.dkSTARTVÆKST Lemvig Address: Industrivej 53, 7620 LemvigTel: (+45) 7015 1618Web:www.STARTVÆKST-Lemvig.dkSTARTVÆKST Struer Address: Fælledvej 17, 7600 StruerTel: (+45) 7015 1618Web:www.STARTVÆKST-Struer.dkSyddjurs kommune / Syddjurs Udviklingspark Address: Sortevej 40, 8543 HornsletTel: (+45) 8880 9980Web:www.udviklingspark.com78 | Appendix - Addresses/contact details for players in the innovation system


Viborg-egnens Erhvervsråd Address: Skottenborg 12-14, 8800 ViborgTel: (+45) 8725 5151Web:www.ver.dkØstjysk Iværksættercenter Address: Ågade 99, 8370 HadstenTel: (+45) 8761 0123Web:www.startgodt.dkDevelopment parksBusiness Park Struer Adress: Fælledvej 17, 7600 StruerTel: (+45) 9684 0000Web:www.businessparkstruer.dkInnovatorium Adress: Birk Centerpark 40, 7400 HerningTel: (+45) 7020 8911Web:www.innovatorium.infoNuPark Adress: Nupark 51, 7500 HolstebroTel: (+45) 9612 7200Web:www.nupark.dkSparbank Væksthuset Adress: Resenvvej 85, 7800 SkiveTel: (+45) 2225 9302Web:www.sparbankvh.dkSyddjurs Udviklingspark Adress: Sortevej 40, 8543 HornsletTel: (+45) 8880 9989Web:www.syddjurserhverv.dkUdviklingspark Ferskvandscentret Adress: Vejlsøvej 51, 8600 SilkeborgTel: (+45) 8720 4711Web:www.erhvervsilkeborg.dkVitus Bering Innovation Park Adress: Christian M. Østergårdsvej 4a, 8700 HorsensTel: (+45) 8755 4343Web:www.vbipark.dkSpecialised guidanceVæksthus Midtjylland (Business Link Central Denmark)Væksthus Midtjylland - Headquarter Address: Åbogade 15, 8200 Aarhus NTel: (+45) 7022 0076Web:www.vhmidtjylland.dkVæksthus Midtjylland – Herning division Address: Birk Centerpark 40, 7400 HerningTel: (+45) 7022 0076Web:www.vhmidtjylland.dkVEU centresVEU-center Østjylland Address: co. AARHUS TECH, Hasselager Alle 2, 8260 Viby J.Tel: (+45) 7020 4020Web:www.veu-ostjylland.dkVEU-center MidtØstAddress:Tel: (+45) 8725 8700Web:(www.veu-center.dk)VEU-center MidtVest Address: Døesvej 76, 7500 HolstebroTel: (+45) 9912 2444Webwww.veu-centermidtvest.dk/Appendix - Addresses/contact details for players in the innovation system | 79


Consultancy and dissemination of knowledgeInnovation networksThe Animation Hub Address: Kasernevej 5, 8800 ViborgTel: (+45) 2850 9864Web:www.animwork.dkInnonet Lifestyle – Interior & Clothing Address: Birk Centerpark 40, 7400 HerningTel: (+45) 9616 6200Web:www.innonetlifestyle.comFoodNetwork Address: Nupark 51, 7500 HolstebroTel: (+45) 9612 7624Web:www.foodnetwork.dkInnovation network for Biomass Address: Niels Pedersens Alle 2, 8830 TjeleTel: (+45) 6171 8162Web:www.inbiom.dkThe Renewable Energy Innovation Network (VE-net) Address: Kongsvang Allé 29, 8000 Århus CTel: (+45) 7220 1113Web:www.ve-net.euService Platform - Aarhus Address: Abogade 34, 8200 Århus NTel: (+45) 2311 3719Web:www.serviceplatform.dkPrivate consultants(see Rådgiverbørsen for a complete list)Address:Tel:Web:www.raadgiverborsen.dkConnect DenmarkConnect Denmark – Midtjylland Address: Åbogade 15, 8200 Århus NTel: (+45) 2335 3599Web:www.connectdenmark.dkSpin-off centreAccelerace Spin-Off Address: Åbogade 15, 8200 Århus NTel: (+45) 1917 9410Web:www.acceleracespinoff.dkThe Danish Trade CounsilThe Danish Trade Counsil Address: Åbogade 15, 8200 Aarhus NTel: (+45) 7022 0076Web:www.eksportraadet.dk80 | Appendix - Addresses/contact details for players in the innovation system


Approved Technological Service InstitutesAgroTech – Institute for agriculture and food processing Address: Agro Food Park 15, 8200 Aarhus NTel: (+45) 8743 8400Web:www.agrotech.dkThe Alexandra Institute Address: Åbogade 34, 8200 Århus NTel: (+45) 7027 7012Web:www.alexandra.dkDELTA Address: Erhvervsvej 2A, 8653 ThemTel: (+45) 7219 4800Web:www.madebydelta.comDHI Address: Gustav Wieds Vej 10, 8000 Aarhus CTel: (+45) 8620 5100Web:www.dhi.dkFORCE Technology Address: Tueager 3, 8200 Århus NTel: (+45) 8734 0200Web:www.forcetechnology.comDanish Technological Institute Address: Kongsvang Allé 29, 8000 Aarhus CTel: (+45) 7220 1000Web:www.teknologisk.dkMedTech Innovation Center, MTICMedTech Innovation Center, MTIC Address: Tueager 1, 8200 Århus NTel: (+45) 8993 1500Web:www.mtic.dkAccelerated developmentPre-seed venture investorsInnovation MidtVest Address: Birk Centerpark 40, 7400 HerningTel: (+45) 9627 0100Web:www.innovationmidtvest.dkØstjysk Innovation Address: Åbogade 15, 8200 Århus NTel: (+45) 8734 5890Web:www.oei.dkScience parksAgro Business Park Address: Niels Pedersens Allé 2, 8830 TjeleTel: (+45) 8999 2500Web:www.agropark.dkINCUBA Science Park - Katrinebjerg Address: Åbogade 15, 8200 Århus NTel: (+45) 8734 5555Web:www.incuba-sp.dkINCUBA Science Park - Skejby Address: Brendstrupgårdsvej 102, 8200 Århus NTel: (+45) 8620 5000Web:www.incuba-sp.dkAcceleraceAccelerace Management Address: Åbogade 15, 8200 Århus NTel: (+45) 3917 9404Web:www.accelerace.dkAppendix - Addresses/contact details for players in the innovation system | 81


CapitalPre-seed venture investorsInnovation MidtVest Address: Birk Centerpark 40, 7400 HerningTel: (+45) 9627 0100Web:www.innovationmidtvest.dkØstjysk Innovation Address: Åbogade 15, 8200 Århus NTel: (+45) 8734 5890Web:www.oei.dkVækstfondenVækstfonden Address: Åbogade 15, 8200 Århus NTel: (+45) 3529 8600Web:www.vf.dkVenture capital companies(see StartVækst for a complete list)Address:Tel:Web:www.startvaekst.dk/ventureselskaberBusiness Angels(see StartVækst for a complete list)Address:Tel:Web:www.startvaekst.dk/business-angels182 | Appendix - Addresses/contact details for players in the innovation system


VækstforumSkottenborg 26Viborgwww.regionmidtjylland.dkGrafisk service, 0000000270a

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