Michigan State University

Flexibility in Denmark

Benjamin Hall

Every year, The World Bank publishes a report on the ease of doing business. In late 2018, The World Bank published its 16th Edition, comparing business regulation and scoring countries in 190 economies around the world.

Coming in third place for ease of doing business was the Nordic country of Denmark (population 5.8 million), where starting a business (allegedly) requires just five procedures and 3.5 days startup time. 

In 2018, Denmark made enforcing contracts easier by adopting an e-filing system "that allows users to file the initial complaint electronically and judges and lawyers to manage cases electronically."

More importantly, Denmark exemplifies a business-friendly environment and a flexicurity model that has been widely studied. Here are the pillars of that model:

  • Businesses can hire and fire employees according to relative trends in their industry, however, individual workers receive sufficient income should they lose their job - most receiving over 80% of their previous salary for two years.
  • Although there is no official minimum wage, employers and unions in each industry reach agreement on wages based on competitiveness and inflation. Collective bargaining helps to keep salary differentials in check.
  • Denmark devotes more $$$ than double the average for OECD countries on active job training and labor market policies. This support-based approach includes programs such as public and private job training, classroom training/education, and job search assistance.

Like the job market, the classroom education approach in Denmark is also highly flexible with the average course only three-and-a-half days in length. Some 3,000 courses are constantly updated to match the skills demanded by employers. Also noteworthy: The unemployed are entitled to six weeks of education free of charge.

In Denmark, where roughly 25% of the workforce changes job each year, being flexible and adaptive to change is simply a part of the culture. 


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