Economic Context

The Danish population has increased during the past two decades. It was approximately 5.8 million in the beginning of 2019. The population is projected to grow with 4.4% in the coming decade due to immigration and an increase in fertility rates. In August 2019, the Danish workforce was approx. 3,05 million according to the Labour Force Survey (from 15-74 years). Labour market reforms are projected to increase the supply of labour with close to 350.000 people up to 2040. The Danish labour market is characterized by a high female participation. In 2018, the employment rate for women was 73,0 pct. and 78,3 pct. for men. The Danish economy is highly service intense. In 2013, about 80 % were employed in services out of which 32% were employed in the public sector. Employment has picked up after the crisis, but there is a growing disparity between rural and urban parts of Denmark, which the government aims to address in a new growth plan and by moving public jobs from Copenhagen to Danish provincial cities.

The unemployment rate is 5,0 pct in 2019. In the third quarter of 2018, the youth unemployment rate (15-24 years old) was at 8,2 %, one of the lowest in the EU. Up to 2020, projections indicate that there will be growing skills mismatches with a lack of professionals with a tertiary qualification, as well as skilled workers, whereas there will be an oversupply of unskilled labour and persons with a general upper secondary qualification as their highest qualification level. At present there are reports about bottlenecks regarding the supply of skilled labour – particularly in manufacturing. The recent reforms of the entire upper secondary education system, including the VET reform, should be seen in that context.

There are few large companies in Denmark with more than 1000 employees, and they are mainly found in pharmaceuticals, manufacturing and in financial services. These companies constitute 0,04% of the total number of  private firms, but they employ 19% of  the workforce in the private sector. SMEs with less than 250 employees represent 99,8% of the companies in Denmark, and they employ 66% of the workforce in the private sector. Approx. 32% of the workforce is employed in the public sector and 68 % are employed in the private sector, the majority in services. A growing digitalization of the economy, combined with that Denmark as a small open economy is highly dependent upon trade implies that there is a strong interdependency between manufacturing and services.