morten granzau nielsen, dansk industri

Global gateway to export2015

Morten Granzau 09. Juni 15

How does the future look for manufac-turing in Denmark?

Morten Granzau NielsenDirector of Business EconomicsConfederation of Danish Industry


09. Juni 15Morten Granzau

Challenges for doing business in Denmark - identified by DI-members

2

• Inadequate access to labour with the right skills

• Slow growth in productivity and innovation

• High level of cost in Denmark

• A challenged public sector

• Unused opportunities in a global world



Political agreements has improved the conditions of doing business…

• Tax Reform in 2012

• Labour Market reforms (Disability pension, cash benefit, students grants)

• Growth Plan DK (Vækstplan DK)

• Growth Package 2014

3

… but more needs to be done



Productivity is moving in slow motion

0,0 0,5 1,0 1,5 2,0 2,5 3,0 3,5 4,0 4,5

ItalyLuxembourg

MexicoBelgium

DenmarkSpain

NorwayNetherlandsSwitzerland

CanadaFrance

GermanyPortugal

New ZealandIsrael

United KingdomJapan

AustriaFinlandGreece

AustraliaSweden

USAHungaryIcelandCzechIrelandTurkey

ChileSlovak republic

PolandKorea

Labor productivityAverage growth in GDP per hour worked (1995-2013), per cent

Source: OECD

4



Denmark has a low growth-potential

5



Productivity on the political agenda and on DI’s agenda…

The Governments Productivity Commission

DI’s Productivity Panel

6



… and recently production or manufactu-ring has received well deserved attention

The Governments Productivity Commission

DI’s Productivity Panel

The Governments Production

Council

7



Danish manufacturing employment has declined significantly

8

60

65

70

75

80

85

90

95

100

105

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Denmark Germany Holland Finland Sweden Norway

Employment in manufacturing in selected countries

Index 2000=100

Source: Eurostat



The Production Council • Niels B. Christiansen, Danfoss A/S (chairman)

• Peder Holk Nielsen, Novozymes A/S

• Peder Tuborgh, Arla Foods

• Gitte P. Aabo, LEO Pharma A/S

• Helle Vingolf Larsen, FiberVisions A/S

• Jesper Kryhlmand, KMD A/S

• Jacob Himmelstrup, Linimatic A/S

• Birthe Skands, Bryggeriet Skands A/S

• Anne-Lise Høg Lejre, Teknologisk Institut

• Claus Jensen, CO-industri

• Mads Andersen, CO-industri

9



The Production Council • Niels B. Christiansen, Danfoss A/S (chairman)

• Peder Holk Nielsen, Novozymes A/S

• Peder Tuborgh, Arla Foods

• Gitte P. Aabo, LEO Pharma A/S

• Helle Vingolf Larsen, FiberVisions A/S

• Jesper Kryhlmand, KMD A/S

• Jacob Himmelstrup, Linimatic A/S

• Birthe Skands, Bryggeriet Skands A/S

• Anne-Lise Høg Lejre, Teknologisk Institut

• Claus Jensen, CO-industri

• Mads Andersen, CO-industri

10



The Production Council had three objectives:• Ensure that it continues to be attractive to invest in Denmark.

• Ensure good conditions for development and competitive production.

• Ensure more competent employees for production.

11



Motivation: Manufacturing is important for the Danish Economy

12

• Jobs with high value-added

• High level of growth in productivity

• A driver for jobs in other sectors

• A main contributor of R&D and Danish exports



The Production Councils recommend-dations from May the 13’th

13



My favorites

• Lower and uniform capital gains tax and equity income tax

• Continued competitive corporate tax

• Increased public investments in technological research as well as business-oriented natural science and health science

• Continued reduction of administrative and economic burdens on businesses

• Increased focus on production, technology and natural science in primary and lower secondary school

• Better framework for the recruitment of highly qualified or specialised foreign labour

14



Better conditions are needed for manufacturing in Denmark

15



Denmark has a stronghold in advanced manufacturing

16

0 10 20 30 40 50 60 70 80

Greece

Spain

Portugal

Belgium

Italy

Netherlands

UK

Finland

Austria

France

Sweden

Germany

Denmark

Luxembourg

Ireland

Per centNote: Export of goods excl. mineral productsSoruce: Eurostat Comext and DI

Up market products share of total export of goods (note), 2013



Diversity is a strength

17

Manufacture of food products, beverages and tobacco

13%

Pharmaceuticals10%

Manufacture of plastic, glass and concrete

5%

Basic metals and fabricated metal products

6%

Manufacture of electronic components and electrical equipment

12%

Manufacture of machinery

16%

Other manufacturing23%

Other sectors15%

High quality in all parts of Danish manufacturing Danish up.market export in different sectors, 2013

Source: DI and Statistics Denmark.



Diversity is a strength

Top 10 danish up-market products in 2014Billion DKK

1Medicaments consisting of mixed or unmixed products for therapeutic or

prophylactic purposes, put up in measured doses15,8

2 Haemoglobin, blood globulins and serum globulins 9,1

3 Raw furskins of mink, whole, with or without heads, tails or paws 7,7

4 Frozen boneless meat of domestic swine (excl. bellies and cuts thereof) 5,9

5 Insulin and its salts, used primarily as hormones 3,6

6 Hearing aids (excl. parts and accessories) 3,4

7 Waste and scrap of iron or steel, not fragmentised "shredded", not in bundles 2,5

8 Articles of plastics etc. 2,3

9Diagnostic or laboratory reagents on a backing, prepared, and certified reference

materials2,3

10 Cultures of micro-organisms (excl. yeasts) 2,2

Eurostat and DI calculations

18



And a bettering of companies competitiveness will help

19

-35

-30

-25

-20

-15

-10

-5

0

5

10

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Per cent

Wages Productivity Exchange rate Relative unit labor costs

Relative unit labor costs, manufacturing

Unit labor costs relative to abroad, changes since 2000

Note: Abroad consists of: Belgium, Czech, Germany, Ireland, Greece, Spain, France, Italy, Hungary, Netherlands, Austria, Poland, Portugal, Finland, Sweden, UK, Norway, USA and Japan. * 2015 only contains changes in the exchange rate.Source: Eurostat, BEA, Macrobond, CAO, Danmarks Nationalbank and DI

*



However - Bottlenecks in the Labour-market is not far away

20



Conclusion: So how does the future look for manufacturing in Denmark?

• A little better

• But important to maintain focus – especially if things really are improving

• A lot still needs to be done - from recommendations to policy

• And initiatives to increase the supply of labour with the right skills

21



22

DI’s 2020-plan “The Road to Higher Wealth and Prosperity”

An open and prosperous society with growth and in balance

Increase sales and investments in Denmark and abroad

Danish companies among the most productive and innovative in the World

Adequate access to world class labour

A public sector in balance, which is smaller and more productive

Vision

A competitive level of cost


Morten Granzau 09. Juni 15

How does the future look for manufac-turing in Denmark?

Morten Granzau NielsenDirector of Business Economics Confederation of Danish Industry

morten granzau nielsen, dansk industri

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