Denmark’s Leadership & the Outlook for Europe’s Startup Scene
Jonathan Ortmans @jortmans
Nov 15, 2012
A recent article in The Economist titled “Les miserables” discussed Europe’s “chronic failure to encourage ambitious entrepreneurs” and called its culture “deeply inhospitable to entrepreneurs.” While this has been historically the case in both the regulatory and cultural arenas, every day that I spend in Europe during GEW 2012 I am getting less pessimistic about Europe’s entrepreneurship ecosystem.
While most European executives are very risk-averse, those in the young startup scene seem to be managing just fine without them and recruiting similar-minded partners and talent. The problem is that these startups are too few in number. According to the Global Entrepreneurship Monitor 2011 Global Report, “early-stage” entrepreneurs make up just 4.6% of Denmark’s workforce (compare that to China’s 24% and Brazil’s 14.9%). And the OECD data on new starts here in Denmark does not look much better – showing a decline. Given the gloomy financial outlook for the Euro, it is valid to question whether it will be possible to expand this base of entrepreneurial role models. Yet the vibe in Copenhagen, where I spent the day, is much more upbeat.
Where European economic leaders need to focus to get the attention of investors is building strong entrepreneurial ecosystems. Denmark seems to be ahead of the game here in Europe. Danish politicians have vowed to make the country a leading nation of innovative businesses by 2020. In terms of real action to break the shackles holding entrepreneurship down, there is a strong focus on education here. Along with Estonia, Lithuania, the Netherlands, Sweden, Norway, Wales and Flemish Belgium, Denmark was recognized by the European Commission as having implemented specific strategies to promote entrepreneurship education. For example, at the University of Southern Denmark, the IDEA Entrepreneurship Centre is gaining recognition for its cross-campus and cross-faculty education and training. This week here, the results from these and other efforts were shown at the Danish Entrepreneurship Awards ceremony in Fredericia, where more than 5,000 visitors from all educational systems participated.
I told organizer Christian Vintergaard over lunch that relative to the size of Denmark’s population, he had probably built the largest awareness and motivational event for nascent entrepreneurs in Europe. The Danish Foundation for Entrepreneurship – Young Enterprise has measured first results: 95% of students see entrepreneurship as something positive and 53% see it as a potential career choice. And this year a record-setting 1.000 companies have qualified for the Ernst & Young Danish Entrepreneur of the Year award.
And there was more for me to see here. For example, I travelled on the Startup Bus where new startups travel the country sharing their experience in small towns. I met with a host of leaders and organizations anxious to help those Danes that do want to start businesses to succeed such as Marlene Haugaard from Vaeksthus’s Business Link Greater Copenhagen, Henrik Brorsen with Connect Denmark and, of course, Anders Hoffman with the Danish Business Authority himself who is known by many to be at the epicenter of the nation’s efforts to be globally competitive in advancing high-growth entrepreneurship. There are also young leaders such as Tine Thygesen who I met years ago when she created the Venture Cup but who now runs an innovative startup hub called Founders House. Nokia, whose interest in startups I am familiar with from my trip to Africa last month, is in the game here too. I was told that through its Bridge Incubator, it has helped 100 former employees transition to startups.
Denmark is really an excellent example of a nation building bridges with other economies to improve their own entrepreneurship ecosystem. For example, the Danish Foundation for Entrepreneurship launched an entrepreneur’s abroad program in Shanghai and Silicon Valley. During this 12 week program, selected students get hands on experience of what it means to be a Chinese or a Silicon-Valley startup. Another clear example of cross-border interaction for entrepreneurship is the Creative Business Cup pitch contest at Denmark’s Center for Culture and Experience, where I serving as a judge watching startup teams from 15 countries face off for who was the most creative. The teams presented business ideas in various industries such as design, architecture, music, film, and gastronomy. It was an extraordinary feat to develop an international competition and assemble startup teams from so many countries. I loved too many of the entries to detail any one, but information on our winner and more see www.creativebusinesscup.com.
The scene at this event, for me, contrasted the reality so far of high-potential entrepreneurs from Denmark leaving to other more startup-friendly places, such as Silicon Valley, where funding and mentorship are easier to obtain. The lack of a strong investor pool though should no longer daunt a country’s entrepreneurial dreams. With Silicon Valley groups such as Geeks on a Plane and the Nordic Vikings, investors will come if they see strong concepts being thoroughly tested. That is the idea behind the SCALEit program, which takes Danish startups to gain insights into Silicon Valley culture for a 3-month period, Fablab, a movement started at the Massachusetts Institute of Technology (MIT) which has arrived in Copenhagen and other European cities to assist entrepreneurs in developing prototypes.
According to the European Commission's Regional Innovation Scoreboard 2012, Sweden, Denmark and Germany are Europe’s most innovative economies, and there is no doubt the EU still leads India, Russia and Brazil when it comes to innovation. It is time the EU punches its innovative weight in the global entrepreneurship scene and nurtures more successful innovative firms by removing regulatory roadblocks. Despite the difficulties ahead, I put my chips on Denmark as a regional leader in this regard. Small is beautiful!
Next report – Rotterdam and The Hague!