Denmark - Country Commercial Guide
Digital Economy
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Overview

In 2023, Denmark announced its Digital Growth Strategy, which serves as a comprehensive national plan to accelerate digitalization across various sectors, enhancing growth, innovation, and competitiveness. Backed by a $138 million investment through 2027, the strategy focuses on key areas, such as: Strengthening cyber and information security, providing seamless digital services for citizens and businesses, fostering digital growth among SMEs, promoting green transitions through digital solutions, and improving digital skills across the population.

The European Commission recognizes Denmark as one of the EU’s most digital economy and society, with 94% of citizens actively using online services. The country also boasts some of the highest global penetration rates for mobile phones, broadband, and computers. Danish businesses are quick to adopt new technologies, utilizing tools like cloud computing, e-invoicing, and social media to stay competitive.

The 2022 Digital Economy and Society Index (DESI) demonstrated that Denmark has firmly establishing itself as a digital frontrunner in the EU. It ranks first for connectivity, with 95% of households covered by very-high-capacity networks (VHCN) and 98% of populated areas covered by 5G. Denmark also leads in the integration of digital technology, with its SMEs surpassing EU averages in adopting advanced tools like AI and cloud computing.

DESI ranks Denmark fifth in the EU for digital skills, with a strong emphasis on lifelong learning and professional development and Denmark ranks eighth for digital public services.

The country’s robust tech ecosystem, marked by high levels of R&D collaboration and a tradition of producing globally recognized startups, reinforces its commitment to maintaining digital leadership. The country’s supportive environment for tech innovation makes it an attractive destination for international companies to test and deploy new IT solutions.

Most laws are set at the EU level. The Digital Economy Chapter of our Country Commercial Guide for the European Union provides a more comprehensive overview.

Market Challenges

Denmark’s regulatory environment is tightly aligned with the EU’s GDPR, enforcing stringent data protection and privacy standards.  The Danish Data Protection Authority (DPA) has increased scrutiny of U.S.-based cloud service providers, particularly regarding GDPR compliance and data transfers to third countries that may not meet EU privacy standards. Sectors like finance, healthcare, and government might therefore require local data storage or compliance with strict privacy rules.

Denmark also adheres to the upcoming EU Artificial Intelligence Act, which introduces a risk-based regulatory framework for AI. The country’s National Strategy for Digitalization prioritizes the security of digital infrastructure and public sector data, consistent with the EU Cybersecurity Act and NIS2 Directive. These frameworks support a robust cybersecurity posture, enhancing protections for critical infrastructure.

U.S. companies might face market entry challenges due to competition from established local and European providers and a preference for vendors familiar with local regulations and business culture. Public sector procurement sometimes favors suppliers with a local presence or partnerships, perceived as better aligned with local needs and requirements.

Denmark however generally faces few technological barriers due to strong government support for digital innovation, equitable access remains a challenge in certain regions. Denmark maintains neutrality by adhering to EU regulations and standards without favoring specific third countries.

Digital Trade Opportunities

Denmark presents significant opportunities across various digital technologies. In artificial intelligence, there is strong demand for AI applications in healthcare, including medical imaging, predictive analytics, telemedicine, and personalized medicine, driven by investments in the healthcare sector. Additionally, AI solutions are in demand across other sectors such as fintech, manufacturing, cybersecurity, and renewable energy.

Denmark’s robust ICT infrastructure is underpinned by investments in 5G and advanced computing, supported by public, private, national, and EU initiatives. Notable projects include the Novo Nordisk Foundation’s $200 million commitment to quantum research, fostering opportunities for U.S. providers in collaboration with entities like the Deep Tech Lab - Quantum, BioInnovation Institute (BII), and NATO’s Defense Innovation Accelerator for the North Atlantic (DIANA).

For U.S. fintech companies, Denmark is a promising market, particularly in digital payment solutions and open banking. High digital payment penetration and decreasing cash usage create opportunities for fintech firms to develop new financial products and services using bank data. U.S. fintech companies with expertise in APIs, data analytics, or customer experience could benefit from partnerships with Danish banks or other financial institutions.

The cybersecurity sector is expanding due to rising cyber threats, driving demand for advanced solutions in cloud security, data protection, and infrastructure protection. Denmark’s focus on digital transformation includes initiatives to enhance public sector cybersecurity, presenting opportunities for U.S. companies in consulting, security assessments, monitoring, and incident response services.

Additionally, Denmark’s commitment to sustainability and smart cities creates opportunities for IoT solutions and smart urban development technologies. The goal to become carbon neutral by 2045 has increased demand for digital solutions relating to smart grids, waste management, and water conservation, offering potential for U.S. companies to contribute.

The demand for software and digital services is growing, with opportunities for U.S. companies specializing in digital services, cloud computing, AI, machine learning, and SaaS applications to benefit from Denmark’s commitment to digital innovation.

Digital Economy-Related Trade Events

  • TechBBQ 2024: One of the largest startup and innovation summits in Scandinavia, held on September 11-12, 2024, in Copenhagen. The event brings together startups, scaleups, investors, and key players from the Nordic startup ecosystem for two days of networking, inspiration, and growth.

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