Published 06 May 2015

The interplay between innovation and trade promotion

– Denmark at home and in the field

In Denmark promotion for innovation and trade are based on two strategies, one strategy on innovation and one on trade and export. In addition, there is a strategy for trade with emerging economies.

In Denmark promotion for innovation and trade are based on two strategies, one strategy on innovation and one on trade and export. In addition, there is a strategy for trade with emerging economies. Ministry of Foreign Affairs, Ministry of Research, Innovation and Higher Education and the Ministry of Industry are all active in the context of these strategies, which allows a certain degree of coordination of the implementation. A large part of the promoting responsibilities lies on the Danish Trade Council, which is part of the Ministry of Foreign Affairs.

To bridge the gap between innovation and trade promotion, Danish Innovation Centres has been established. The responsibilities for these are shared between Ministry of Foreign Affairs and the Ministry for Research, Innovation and Higher Education to help create a seamless transition between the various actors in the promoting system, from research and innovation to exports. Denmark has also made a priority of its promotion focus based on strong Danish sectors, but it varies also depending on the need of countries.

The Danish promotion model has several interesting parts, a policy framework that combines innovation and trade, a clear focus on promoting activities to nurture growth in Denmark, organisational solutions that facilitate the promotion work and a number of initiatives to develop long-term relationships as the basis for Denmark’s continued promoting activities.

Growth and job creation in Denmark are the principles that should guide relations with the outside world. Denmark’s policy framework therefore highlights and prioritises sectors for promotion. The joint ownership of the strategies is considered to create a better opportunity for coordination of efforts across ministries. The policies clearly states that the promotion in other countries should reflect, reinforce and develop Danish strengths. All promotion activities should also involve economic diplomacy, which gives that trade issues have a prominent role in international relations. Denmark also developed specific strategies for a number of emerging countries and more volume-oriented markets.

At the organizational level Denmark exhibit a number of measures to control their promotion activities effectively, yet in an adaptable way. Denmark’s Innovation Centres is the clearest example of coordination between innovation and trade promotion. There is a clear link between the two promotion areas on the organizational level and they are well aware of the synergies that can be obtained by creating a coherent support to researchers and businesses through the innovation chain, from development to sales. Companies with finished products will be passed on seamlessly to the Danish Trade Council. By partnering with companies in an early phase of development it’s believed that the Danish products become better adapted to the foreign markets and ease the market entry.

In the USA, Denmark uses sector teams that can put together a package consisting of an export promoting component, an innovation promoting component and an investment promoting component. The organisation of these teams is led by Denmark’s Trade Council US, created in 2010, which includes all five public actors present in the United States. Responsible for the Trade Council US is the Danish ambassador in Washington DC which is considered to facilitate a cohesive work in the field.

Denmark's Innovation Centres are not always co-located with the embassies, but located in regions where they are most useful. Regions with a high level of innovation, excellence in science and research and market opportunities are used to justify their locations combined with where Danish industries could get the most out of being present.

Looking at the initiatives done, the promotion agencies abroad have largely been able to create self-initiated projects. At the Innovation Centre in Seoul, the majority of the projects are initiated locally and based on local opportunities and challenges rather than being instigated by the home organization. What is clear though, is that the projects needs a receiving part at ministry level and that it also needs to be rooted in the Danish industries strengths, for example Denmark conducts an innovation project on robotics in South Korea which is strongly anchored in a Danish robotics cluster.

In India, Denmark emphasizes the importance that Danish companies can offer solutions to the societal challenges that India is facing, such as energy supply and access to clean water. Cooperation between an energy company in India and Invest in Denmark has made the Indian company to expand its research and development in Denmark, linked to Denmark’s strength in renewable energy. Within the clean water challenge, Danish companies and research institutions created a consortium that collaborates with the Indian government. The consortium was established with the support of the Danish Environmental Protection Agency.

The sustainability and the building of relationships are seen as success factors in the promotion activities with other countries. Not least important are having competent people who know research, innovation and business. For example, to develop relationships an incubator is established in São Paolo that serves as an important meeting place between research and business, a central feature is also to generate projects. Denmark emphasizes that deeper inter-relationships must be based on practical cooperation. In several countries, Denmark invests in long-term partnerships in research and education for example by validation of academic degrees to facilitate the exchange with China.

Denmark's work in other countries

Denmark’s innovation efforts in Japan were strengthened in 2014 by the recruitment of a locally employed Innovation Officer. Previously, efforts to strengthen Danish companies’ contacts with research in Japan were made by the Trade Council. The employment of an Innovation Officer does not imply a formal Innovation Center, which is available in six other places in the world, but can be seen as a “satellite office”. The main aim is to discover and utilize valuable knowledge in Japan, which is not yet fully commercialized, to benefit Danish industry. Life Science and Food, together with energy and ICT are focus areas.

South Korea has in recent years emerged as one of Denmark’s priority countries in terms of growth and innovation efforts, largely thanks to rising imports and exports between the countries. Seoul is the location of one of the Innovation Centre Denmark. The embassy also holds an export promotion function. The Innovation Centre have chosen to focus mainly on IT, climate, energy and environmental technologies for strategically linking South Korea’s strengths in IT with Denmark’s expertise in renewable energy. The Innovation Centre in Seoul has a high degree of autonomy; a majority of all the projects are based on local opportunities and challenges rather than project initiated from the home organization.

Denmark’s trade and research policies in India are carried out by the Trade Council and Innovation Centre Denmark. Promotion activities are conducted without closer coordination between the two. Some overlap exists in that the Innovation Centre Denmark also has a trade promotion mission given the presence of a research or technology component. Innovation Centre Denmark can be described as the carrier of Denmark’s trade and research policy priorities to India. The centre’s focus areas are made up by environmental technologies, ICT and life sciences. Promotion activities have given rise to a consortium, with support from the Danish Environmental Protection Agency, consisting of companies and research institutions active in water treatment, an area that India has great needs.

Denmark’s work in the United States is governed by a specific strategy. The United States is considered a mature exporting country why the measures to a lesser extent are about trade barriers and more on marketing and export promotion. In the United States, Denmark has established the Trade Council US, where five promotion organisations are included. The council is headed by the Ambassador of Denmark. Denmark appears to be strategic with its trade and innovation promotion using economic diplomacy in the diplomatic dialogue. A model that is used to increase its presence in more cities is “sector teams”. The teams are put together based on industry and need, and may consist of an export component, an innovation component and an investment component. An Innovation Centre Denmark is established in Silicon Valley, where innovation promoters are collocated with export promoters which facilitates coordination between these areas.

In Brazil, Denmark focuses on three sectors, “Health and Welfare”, the agriculture and food sector and the energy sector. In order to influence Brazil’s protectionist policies, Denmark has the ambition to improve the conditions for Danish exports. Denmark has an Innovation Centre in São Paulo. The reason for the location is a combination of a strong commercial centre with significant research and a significant potential for growth. Denmark’s innovation and trade promotion in Brazil has a regional focus that also serves as a base for expansion. Higher education and research are expected to play a central role in trade cooperation, for example through the Science Without Borders exchange program. The Innovation Centre and an incubator, also in São Paulo, have an explorative approach with the ability to initiate their own projects.

Denmark conducts an active and coordinated promotion of both trade and innovation in China. The work is based on the strategies for emerging markets and a number of Memorandum of Understanding (MOU). The political dimension is an important element in the promotion of both trade and innovation in China. The strategic partnership through MoUs and other agreements between Denmark and China is a clear example. A central part of the Danish innovation efforts linked to exports and internationalization takes place in the Innovation Centre Denmark in Shanghai, which aims on the internationalization of technology driven small and medium sized companies and investments in strong education and research. The goal is to create cooperation in R & D and innovation that both countries can benefit from and exchange in research and development. For example, since 2009 the Danish Council for Strategic Research and the Chinese Ministry of Science and Technology has a joint research program with a focus on renewable energy, where Denmark and China each allocates equivalent to 10-19 million DKK per year.

Title
The interplay between innovation and trade promotion – Denmark at home and in the field

Serial number
Direct response 2015:09

Reference number
2015/033

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