Interview with Vanessa Vega Saenz, Director, Invest in Denmark

28 Nov Interview with Vanessa Vega Saenz, Director, Invest in Denmark

Denmark’s economy experienced one of the lowest declines during the COVID-19 pandemic, recording 3.8% growth in 2022. Given that exports account for around 60% of GDP, its largest trading partners play a significant role in its stable economy. The US is currently Denmark’s largest non-European trade partner, and more than 400 US companies are currently active in the local market. Can you tell us about Denmark’s current relations with the US? How significant has US investment and trade been in supporting the country’s economy since the pandemic?

Since 2022, the US is where Danish companies have placed most of their foreign direct investments (FDI), corresponding to approximately 17% of all outbound Danish investments. The US has also been Denmark’s biggest export market since 2020, accounting for 15% of all Danish exports of goods and services.

I also wish to highlight the trade relations going the other way. The US is the country with the largest share of FDI in Denmark – representing 20% of all inbound such investment – and is our third largest source of imports. In all these senses, the US is an important country to Denmark, and I see no reason why this should not continue to be the case.

There are many reasons to invest in Denmark, including competitive corporate tax rates, rebates for R&D activities, and other incentives. Additionally, the country has a highly educated and innovative workforce with some of the lowest employer costs in the EU. How would you assess the attractiveness of the Danish market in terms of foreign investment? What legislative support has the government set up for investors, and what more could the government do to further incentivize international participation?

If you look at international rankings, Denmark is often highlighted as one of the best and easiest countries to do business in. Recently, we were ranked first in the International Institute for Management Development’s World Competitiveness Ranking. When we ask the US companies that we have assisted why they have decided to invest in Denmark, they highlight exactly the ease of doing business. They also highlight access to innovative environments, the availability of highly skilled labor, and infrastructures. Those are some of the most important factors.

You mentioned also, and so do the US companies, the relatively low corporate tax, and good and flexible labor regulations. Political stability and quality of life are also important. On several occasions, Copenhagen has been ranked as the world’s most livable city. We are often ranked as the second happiest population in the world. Those are also contributing reasons. The framework conditions are in fact the most important reasons because we do not offer particular financial packages to foreign investors. As a point of departure, no foreign investor can gain access to support that a Danish company cannot get access to. However, the framework conditions do include incentives for both Danish and foreign companies.

Invest in Denmark works under Denmark’s Ministry of Foreign Affairs to promote and attract investment. In 2022, both Invest in Denmark and partner Copenhagen Capacity facilitated 86 investment projects. Can you give our readers an overview of the organization’s role and responsibilities? What current strategies is Invest in Denmark using to market the country as a prime investment location in international markets?

As Denmark’s national promotion agency for the attraction of FDI, our role and our target are to increase FDI that increases productivity and innovation, that support the green transition and that promote growth and development in all of Denmark. Invest in Denmark does not only work for Copenhagen, but for all parts of the country. We are part of the Ministry of Foreign Affairs and have sector expert colleagues based in different cities in Denmark, and investment managers based in 12 diplomatic representations around the world, including two representations in the US. They constantly stay on top of developments in Danish strongholds within life science, clean tech, and tech and they constantly seek to promote these strongholds and to identify companies that could potentially have an interest in Denmark. They are also available when foreign companies contact us proactively.

We offer an official perspective, a free-of-charge service, to introduce those companies to Denmark, and to explain to them the overall features of the framework conditions, and about the sector they are interested in investing in. We organize fact-finding missions here in Denmark so that they can meet the different knowledge communities, business clusters, and business associations. We do not promote particular Danish companies. It is for the foreign companies themselves to find out who or what to invest in, but we offer the first entry point, establishing contacts.

I have colleagues who are experts in these three focus areas, and their job is to maintain a very close relationship with the Danish communities within these sectors, and with foreign investors or investment funds that seek to invest in Denmark. It is important to highlight that we are not an obligatory channel for foreign investors. FDI into Denmark also happen without our assistance. We provide assistance to those who seek it, and we have provided quite a lot of assistance to US companies. Over the past three years, Invest in Denmark has assisted 40 US investments into Denmark, primarily in the area of life science, but also increasingly in the area of cleantech, that is, the green transition, and in the area of tech.

How is marketing investment in the US different from other markets, and what current efforts is Invest in Denmark making to broaden US investment participation in Denmark?

The fact that Denmark and the US have very close relations is a big help. Instinctively, the two countries and companies like each other; there is a great deal of confidence. That is an advantage compared to countries where investors may not know that much about Denmark. It is interesting, though, that even between countries that think they know each other, one of the most important areas where you have to make an effort as a company is the cultural aspects. We also help with that.

Just anecdotally, Americans might think in Denmark we do not work that much, because the rush hour starts at three o’clock in the afternoon when many go home to their kids. But what you do not see is that according to ranking after ranking, Denmark is one of the world’s most productive countries. We tend to work very productively in the hours that we work.

Another factor that promotes a strong relationship and the potential for strengthening our business relations even further are our mutual strengths and interests. For instance, in life science, which is a very important sector in Denmark, and where the US also has some very innovative experiences. If we take the tech area, Denmark has a stronghold in quantum technology, which is an area where there is a lot of US expertise and interest and where we are seeing an increased mutual interest in collaborating and investing. Our third focus area is clean tech. The US wishes to boost the green transition and attract foreign investments in this area, but we hope this desire can boost American investments into Denmark as we have decades of experience with the green transition and of being a leader in the green transition. I want to see it as an opportunity for win-wins.

Denmark is a world leader in green technology in many sectors, including offshore wind, energy efficiency, and life sciences. Denmark passed the Danish Climate Act in 2020 that targets a 70% reduction in greenhouse gas emissions by 2030 and become net-zero by 2050. What exciting opportunities do Denmark’s green tech and sustainability-linked sectors have for foreign investors?

There are several very interesting areas for foreign investors and for American investors in particular. I would like to mention three areas. One is green hydrogen, Power-to-X, and green fuels, that both countries are working intensively on, and where we already have examples of American investments into Denmark. Another very important area is green data centers that are more energy-efficient and that make it possible to deliver waste heat and battery capacity to the grid. There, we also have some very good examples of big American companies working closely with Danish firms. Then there is the area of carbon capture utilization and storage, or carbon removal, another area with a big potential.

One of the ways that our diplomatic missions in the US work is to invite trade delegations to Denmark to get acquainted with the Danish ecosystem, both to promote Danish exports to the US and American investments into Denmark.

Denmark is also leading the path in terms of growing a significant tech sector. In 2022, the US International Trade Administration valued the Danish ICT sector at $35 billion. Quite recently, atNorth announced an expansion in the market with a new 30MW data center just outside of Copenhagen. What factors have allowed for the creation of such a substantial digital tech industry in Denmark, and what benefits could new technology businesses gain from such a large local ecosystem?

Here, I would like to highlight the innovative characteristics of Danes and Denmark. Currently, we are ranked number one on the EU’s European Innovation scoreboard. You can explain that by strengths in human resources, the talent pool, the attractiveness of the research system, digitalization, environmental sustainability, intellectual assets, and the use of IT. Other factors that explain the innovative nature of the Danish ecosystem, including in tech, are the collaborative spirit that we have in Denmark, across disciplines and across sectors, as well as the high level of public and private collaboration and partnerships.

I can give you one example within the life sciences where an organization called Trial Nation acts as a single point of entry for companies that conduct clinical trials here. Trial Nation is a collaboration between several ministries, life science companies, and the five Danish regions that are responsible for operating the public hospitals in Denmark. They all fund Trial Nation.

Trial Nation assists foreign investors with identifying and getting in touch with the appropriate clinical researchers and coordinating quick and efficient feasibility processes for companies that wish to conduct clinical trials within different disease areas. An important share of the American-Danish collaboration and the American investments into Denmark, within life science, are centered around clinical trials. They are coming to Denmark, because of the talent, the possibility to do clinical trials, and the partnership between the public and the private sector. Denmark has the most clinical studies in Europe per million inhabitants. We have a life science cluster, Medicon Valley, which is one of Europe’s top three clusters for biotech innovation. This is an interesting area for American companies too, I believe.

Getting back to the tech and taking a point of departure in the quantum technology area, one of the reasons why this has become such a stronghold in Denmark is the long-standing experience with research in quantum physics, standing on the shoulders of Niels Bohr, and the establishment of the Institute for Theoretical Physics in Copenhagen back in 1920. There is a strong political commitment to continue to strengthen this particular area. In 2023, the government launched a quantum strategy in two parts, the first focusing on R&D, and the second prioritizing the commercial aspects of the Danish quantum ecosystem. We are seeing the difference that it means and the importance that such a political commitment matters also to foreign investors. It is an area where we see quite a lot of interest.

You just recently stepped up as Director of Invest in Denmark after a very successful career within the Ministry of Foreign Affairs, including being the ambassador to Algeria and Tunisia. What are your current top priorities as the new Director of Invest in Denmark? What vision do you have for the country in the next decade?

I am extremely excited about this opportunity and this position, which is all about bridging countries, communities, and companies. We are currently in the process of developing our new strategy for 2024-2027. It will continue to focus on the three overall thematic areas that we are working with now, which is attracting investments into life science, tech, and clean tech to benefit productivity and innovation in all of Denmark. It will stress also the need to look for investments from partners that strengthen our resilience, considering the geo-political context.

My priority is also that we as agency continue to be on top of developments within our strongholds, and of what foreign investors are looking for, so that we are always able to match what Denmark has to offer and what Denmark needs, with what foreign investors and American investors have to offer and what they need.

What would be your final message to the readers of USA Today?

Come see for yourself! Come visit us! We are here to assist you.