Interview with Morten Bødskov, Minister for Industry, Business and Financial Affairs, Denmark

28 Nov Interview with Morten Bødskov, Minister for Industry, Business and Financial Affairs, Denmark

What factors have led to Denmark’s robust and growing economy?

We are an open and heavily digitalized country. Our economy is doing extremely well. While small, Denmark has a handful of world-leading industries including bio solutions, life sciences and renewables, particularly wind energy. We have many world-leading companies. These segments play a significant role in the status of the current Danish economy. For years the government has had a very close relationship with the local industry, which has been crucial in building our current industrial strengths. Uncertainty due to nearby conflicts and global tensions between the USA and China lead us to a single conclusion; we need to create competitive green solutions to transform societies for a more sustainable future. We must invest in the next generation by increasing cooperation and investments in key strengths.

When you look at the Danish economy in terms of business and industry, including our significant green energy and life sciences sectors, we have been doing for generations what other markets are now looking to do. For example, Biden’s Inflation Reduction Act (IRA) is putting a focus on green transformation and job creation. The United States administration wants to move skilled and unskilled workers into new green jobs, which is something we have done for a generation in Denmark. Our success is the result of the Danish model, cooperation with unions, and clear political targets and investments in key areas such as education and the green economy.

What does Denmark need to do to overcome current local and macroeconomic challenges?

Our main challenge lies in strengthening our labor market. We are making reforms to in education to push our youth through the system faster and making changes so that more people stay longer. The government is heavily investing and working in close cooperation with the labor market and its organization such as workers’ unions and employers’ unions to reform the economy. To sustain the speed of Denmark’s current economy, we need to continue our long-standing work on creating attractive policies for industry, particularly those focused on the green transition. We want to raise investments and work in even closer cooperation with the public sector. We now have a majority coalition, which means we can better prepare, negotiate and solve structural problems inherent in a swiftly moving economy.

There’s no doubt that the world we are living in now is a different world than the one we grew up in. The new world is a challenge. We are seeing global tension between the USA and China, war in Europe, unsecure productions lines and fluctuating energy prices. These challenges are not good for a small competitive country with thousands of jobs linked to globalization. We are currently witnessing a regionalization of the world economy, and we must learn to compete within this new framework. Having a global economy that closes its markets will make it difficult for Danish companies to compete and apply our new technologies all over the world. However, we are still ahead, especially when it comes to our green industry. Competition for green technology is high and will be even more so in the future. We need to speed up investment, education and cooperation, create an ecosystem for new ideas and startups and make sure we have intact value chains associated with our key industries.

How significant is the Declaration on Zero Emission Shipping by 2050 for Denmark?

In the light of what’s happening in the world right now, reaching a global agreement on net zero emissions for shipping for 2050 is extremely positive. The shipping industry has been one of the more noble industries and is now fully committed, which is extremely positive. Denmark is home to global leaders in shipping such as Maersk. The International Maritime Organization has set a 2050 target for reaching net zero carbon emissions, but Maersk has gone further and set an internal goal to have net-zero emissions by 2040. Maersk is one of the leading companies in their field. They are competitive like almost no one else, and they are setting even higher standards. Secondly, they are also a picture that if we want to reach the highest standards by 2050, we need to make investments right now. In September 2023, they presented their first green ships. Maersk has ordered around 20 new ships that run on green fuel, and we played a central role in ensuring this positive agreement happened.

Agreements such as these set ambitious goals for an industry that for years has been discussing whether to be green or not. And, as said, we had with us, hand in hand, Maersk, a world-leading company, as a showcase for setting even the highest standards and showing that it is possible to have ships that can run on green fuel.

How important of a partner is the USA in terms of advancing Denmark’s R&D capabilities, and what support can Denmark provide in advancing the USA’S recent commitment to cut emissions by 50% by 2030?

For generations, the USA has been Denmark’s most crucial ally. Denmark maintains a close defense relationship with the US, as evidenced by my previous ministerial portfolio. Amidst the evolving global landscape, marked by new forms of globalization, geopolitical conflicts, and the war in Europe, our collaboration has intensified. Our commitment to green industrial policies is viewed as an integral part of our security strategy. Without ensuring stable energy prices and reliable energy access for our industry, we risk generating insecurity throughout Danish society.

Partnering with the USA entails engaging in discussions on enhancing cooperation between Denmark and the US, particularly in implementing opportunities for green industries. The Memorandum of Understanding (MOU) signed during the SelectUSA conference is a tangible outcome of this dialogue. Notably, Texas stands out as the US state with the highest Danish investments.

Danish investments in the US have achieved a new record this year, mirroring the upward trend in US investments in Denmark. The focus of Danish investment in the US lies predominantly in green technologies and solutions. Companies like Vestas, with thousands of employees in the US, exemplify this trend. Beyond employment, there is potential for support through investments and financing. These developments underscore the deepening ties, enhanced cooperation, and increased investments that prompted the signing of the MOU during the SelectUSA conference, where Denmark boasted the largest delegation of companies.

The transformation of American society into a more sustainable economy holds paramount importance and carries significant implications for the global green transition. The Biden administration’s IRA plays a pivotal role in safeguarding job security for the American workforce and ensuring a stable energy supply for industries. Moreover, it presents opportunities for Danish businesses. Numerous Danish companies actively participate in the US, particularly in segments such as onshore and offshore wind and green fuels. Collaboratively, we are supporting these companies, working hand in hand with the USA to ensure the green transition happens.

How strong is the “Made in Denmark” brand internationally, and what are its strengths or perceived strengths?

We take pride in our country and the transformative journey witnessed within the Danish industry. This shift is a deliberate political choice aimed at establishing a green economy that sets robust political standards. Our goal has been to enable the production side of our industry to invest, thereby creating a Danish European market and using it as a gateway to other parts of the world. This deliberate choice has brought us to a position of strength in renewables, bio-solutions, and life sciences.

This strategic decision is an integral part of what you refer to as “Made in Denmark.” As a small country, we take immense pride in playing a significant role in the global green transition of the economy. Our nation possesses many solutions that are currently sought after by others. This is why we view the IRA positively as an opportunity for our green, highly competitive Danish industries and companies to produce products and solutions for a new market that actively embraces sustainability. This is not only beneficial for our companies and industries; it is also advantageous for American companies, American society, and the world at large. The positivity inherent in this alignment is something we embrace, and if we can affix the label of “Made in Denmark” to it, it will only amplify our sense of pride.

What are your top priorities as Minister for Industry, Business, and Financial Affairs? What vision do you have for the country in the next decade?

My top priority is to make sure that Danish industries, especially within the green industrial segment, can play a key role in the world amid these changing times. Even though Denmark is a small country, we know that we can support the world and big economies like the USA in making the green transformation happen. For Denmark, to reiterate, this will make sure that we ensure future stability for our society. We are similarly working toward clear and stable frameworks to build strong societies and dynamic economies. I’m convinced that one of the main ways to do this is investing in the green transition and doing so alongside our main allies like the USA. Bringing this to the attention of all stakeholders is my most important job right now.

You recently traveled to the US to promote the inclusion of Danish industry in North America. Can you tell us about the trip and its highlights?

I went to Nebraska and Colorado, which were new places for me to visit in the US. Colorado has a big focus on onshore wind projects. Nebraska has a huge farming industry and needs stability when it comes to energy — they need solutions when it comes to reintegrating the raw materials that come out of farming and bringing them back into the energy system for farming. They have a great focus on bio-solutions there. Both governors are putting a big emphasis on the importance of investing in the green transition and sustainable solutions. What connects the two governors and the two states is a focus on the importance of stability when it comes to energy — energy prices and energy solutions — and on finding solutions that can go into scale very quickly.

That’s where we come in because we already have many of the solutions in place in Denmark, and we’ve shown that we were able to scale them. Denmark is a farming country. We have generations of experience and we are leading the way in bio-solutions, where we have positions of strength. There’s a good connection to Nebraska there. Onshore wind is also a strong area for Danish industry in which we have many solutions ready. Vestas is already there and has grown its factory and facility around Denver. Novozymes, our bio-solutions company is also there.

During my visit, we had direct discussions on how we can help each other to find the relevant solutions for green transitions and where the projects are that can go into scale rather quickly.

Are there any other companies considering coming over from Denmark to set up in the US?

There is a huge interest from Danish companies about going to the US right now, because of the Inflation Reduction Act, of course, and also because the Biden administration’s agenda is as clear as it is: it wants a green transition and it wants to subsidize it. There’s no question about the road that it is on right now. During my visit to the US, we discussed with the two governors the possibility of their coming to Denmark and I expect they will visit us so they can see our solutions at firsthand.

The US has signed into law the Inflation Reduction Act, which contains $500 billion in new spending and tax breaks to boost clean energy and reduce healthcare costs. What does this bill represent for Denmark in terms of increased economic activity and solidifying ties with its largest export market outside of Europe?

My visit to Nebraska and Colorado is a good illustration to answer your question. We have a strong Danish industry settled in Nebraska and Colorado and it is growing. Vestas is employing between 20 and 30 new employees every week. The US is the market where Vestas is expanding the most right now.

Danish companies see huge interest in the US at the moment, because of the clear agenda that the Biden administration has set. Of course, also, because of the tools that are contained within the IRA. It gives Danish companies an advantage when it comes to showing that we have the solutions that the administration and the states need to fulfill the goals that they have set together when it comes to green transition.

Within farming, onshore offshore wind, bio-solutions, green fuels and alternative fuels, we’ll see several Danish companies growing their investments in the US, which is the place where the Danish business sector is investing the most now. It’s not Germany, it’s not Sweden, it’s the US. That’s a function of the interest that has come with the IRA and with the Biden administration’s agenda. We have many solutions that have shown that they work.

You can see the flow of Danish knowledge going over into the US. What about the other way around? What opportunities are there in Denmark for US players to aid the government in its efforts?

I led a delegation to the SelectUSA conference in May. Before we went there, we made an agreement with the US government, a memorandum of understanding, on how we can help each other in expanding Danish investments in the US and US investments in Denmark. We are close allies in many ways: when it comes to defense, but also now on finding new ways of delivering when it comes to the green transition. Investments in the green side of the economy are growing in both directions.