Danish companies benefit most from research funding in the Nordic countries

Danish companies are among the best in the EU at investing in research and development, from a GDP perspective. Since 2008, Danish companies’ annual investment in R&D translates to at least 2 per cent of Denmark’s GDP – and it is paying off.

A new analysis shows that Danish companies benefit the most from their investments in R&D when compared with companies in other Nordic countries. Danish companies see a 34 per cent return on every extra krone they invest in R&D, while companies in Finland and Norway see a return of 23 per cent and those in Sweden see one of about 16 per cent.

Denmark is reliant on strong companies that contribute significantly to our growth and welfare, according to Minister for Higher Education and Science Sofie Carsten Nielsen.

- Investing in research and development is investing in growth and prosperity. It leads to new knowledge, which in turn leads to new technology and products, and help ensure jobs and welfare for all of us. Danish companies are doing really well, and also on a Nordic level. My aim is to see Denmark among the top 5 OECD countries for private investment in R&D, says Sofie Carsten Nielsen.

The analysis examines the business return on investment in R&D during the period 2005-2010. During this time, the Danish companies collectively increased their investment in R&D by 23 per cent.

New Nordic comparison

Previous analyses have shown that Danish companies achieve positive investment returns but until now it has been difficult to compare the levels to that of other countries.

The Ministry of Higher Education and Science, together with the other Nordic countries and the Nordic Council of Ministers, has taken the initiative to analyse the returns on R&D for companies in Denmark, Norway, Sweden and Finland.

The analysis has some of the most thorough data and methods in its field. This is the first time the R&D investment returns have been calculated across the Nordic countries based on data for active research companies in the period 1999-2010.

About the analysis and results

• Danish companies saw a rate of return of 34 per cent for every extra krone they invested in R&D. Therefore when Danish companies invest one more krone in R&D, their added value increased by DKK 1.34. In comparison, Finnish and Norwegian companies have a rate of return about 23 per cent, while the rate of return for Swedish companies is about 16 per cent.
• The rate of return for R&D investments is greatest for companies in the business and other services sectors and for companies with more than 250 employees.
• Danish companies in the green tech and welfare technology areas have positive returns on investment. The rate of return in these areas is greatest in Denmark and Finland, and less so in Norway and Sweden.
• Despite the setbacks of the financial crisis, Danish companies have increased their investments in R&D. Between 2005 and 2010, overall investments from Danish companies increased from EUR 3.9 billion to EUR 4.9 billion (an increase of 23 per cent). Swedish companies had the highest overall investment in R&D, followed by Danish and Finnish companies, and lastly Norwegian companies.
• Despite Danish companies increasing their total R&D investments from 2005 to 2010, there has been a slight fall in investments since 2009. This trend is seen in other Nordic countries, such as Sweden and Finland which saw decreases in private R&D investment since 2007 and 2008 respectively.

For further information please contact:

Head of Division Thomas Alslev Christensen, tel: +45 2089 7226, e-mail: tac@fi.dk

Press and communications officer Steen Bruun Jensen, tel: +45 4132 6030,
e-mail: sbj@fi.dk