07 Jan Building a better society through sustainability
Lars Sandahl Sørensen, CEO and Spokesperson, Danish Confederation of Industry, discusses Denmark’s strong economic resilience throughout the COVID-19 pandemic and efforts the country is making to be a leader in sustainability and digitization.
How has Denmark been so successful in shrugging off the effects of the COVID-19 crisis?
When you enter an unprecedented global situation, you do not know what to expect. In times of crisis all different decision-making parties either come together and cooperate in a smart manner to provide solutions or stop cooperating and move in all directions. Denmark managed to bring together its health authorities, the government and industry. These parties understood each other and worked together, even when it came to making difficult decisions. One party alone cannot achieve what we achieved; public-private partnerships were very important.
While Denmark may have made some wrong decisions, we made a row of good decisions that allowed us to manage the crisis better than most countries. There is a high level of trust in our society; we trust each other, and we trust the authorities. This enabled us to be rather disciplined. In turn, this put a lot of pressure on decision makers as trust disappears if authorities continue making wrong or selfish decisions. Another strength was our high degree of digitalization. Even in the smallest cities, communication through digital means was seamless from the beginning. This allowed us to move a lot faster and be more effective in providing research and testing and getting people vaccinated. We have been able to set aside all restrictions on our society and enjoy a strong development of our gross domestic product in the post-pandemic paradigm. In some areas there is a global boom. As an exporting nation, Denmark is experiencing this as well. Domestically we are also doing very well; everything has come back strong. We predict continuous growth of around 3 percent.
What are some of Denmark’s current challenges in the post-COVID context?
We are limited by not having enough hands as we have very low unemployment levels. We are in a deficit of labor, which has both negative and positive aspects. Unemployment is low, but companies cannot grow to their potential. All the way through this crisis we have been able to continue working as there was no lockdown for companies. Every company set up a protocol to continue operating despite restrictions, which helped us significantly.
For a small country it is extremely important that we maintain a focus on our motivation to build and develop businesses. We are very dependent on this as a small economy. We need to be able to interact and sell our solutions to the world. We are dependent on attractive and competitive legislation to build new businesses and develop existing ones. We require a lot of income from companies to reach our ambitions as a society. We need to be aware of how important it is to attract and raise businesses in Denmark.
As we saw with COVID-19, there are very few things that can be handled by the private or public sectors alone. Denmark partners on many projects, which has allowed us continued success. We are a strong welfare-based country, which gives us a lot of flexibility. If our private investments and public spending on welfare tips, we will see too much spending compared to what we earn and too much labor moving to the public sector that would prevent Danish companies from growing. There is a very fine balance. We are currently discussing this balance with our government. There are signs that the government will go a little too far in letting the public sector grow. We need to be efficient and use new technologies to make sure the public sector is modernized.
What present challenges require collaboration between regional players in Denmark and the EU?
Europe needs to step up its cooperation on several issues and provide EU-level solutions. In between China and the U.S., the EU needs to maintain an active role in the new global reality. We have one of the largest markets in the world and need to work closely on issues such as data management, digitalization and climate change. We also must increase our common market. We believe that the green transition is extremely important, and we need to be active and ambitious on this agenda. In Denmark we live up to that and work towards ambitious targets. We must advance our societies collectively while making sure we use technologies in a fitting manner. Artificial intelligence and automated processes need to be incorporated where necessary. Denmark already has advanced solutions in renewable energy, energy efficiency and life science.
What efforts is Denmark’s industry making to decarbonize and combat climate change?
We as an industry chose to strongly support the world’s most ambitious green transformation plan, with a 70 percent reduction of carbon dioxide emissions by 2030. To meet this goal, massive transformation is required from different parts of society. We believe we can do it, and we want to be an example to the world. The global climate crisis is serious; we cannot push it down the road. We need to act now, and we need to do so smartly without destabilizing society. If we act immediately and intelligently, we can transform our society into a greener one while developing attractive solutions in water efficiency and wind and solar energy. If we create the right legislation and incentives that drive society and businesses towards this change, we can be among the world leaders in sustainability.
From small to large companies, we are evolving and developing technologies for a much greener and less environmentally heavy footprint. We are now using energy in a smarter way and being efficient in production, building and transportation. Many countries around the world are losing valuable resources like water due to spillage. Energy efficient solutions are high on the agenda for us. We are interested in promoting renewable energy and providing new fuel alternatives. There are digital solutions that can help our society excel. Denmark is at the forefront of this effort. While the country has well-known brands and companies, the areas I mentioned have not been as publicized yet have significant potential.