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October 24th, 2012

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Denmark has a productivity problem. This is the first finding of a commission established by the government this spring to find ways to make the nation more competitive.

Known as the Productivity Commission, its first report also found that if productivity had been the same as Sweden’s since 1996, the government would have had enough money to offer free public transport or hire twice the number of public school teachers in grades 1-5.

“Productivity affects us all,” the commission’s chairman, Peter Birch Sørensen, told the Ritzau news bureau. “If Danish productivity had kept pace with Swedish productivity over the past 20 years, the average Dane would be earning 20 percent more without having any effect on Denmark’s competitiveness. That would have also increased public income considerably.”

Sørensen added that if Denmark were doing as well as Sweden there would be and additional 30 billion kroner available for tax relief or for increased public spending that we actually do.

“There are many factors that affect productivity so the commission has a broad agenda. We will critically examine the general conditions for the public sector and critically examine the private sector but we also want to examine specific fields more closely. The commission also wants to look at whether we are giving young people the education they need and how we could be better at using the experience people, businesses and institutions have.”

The commission has several specific questions to answer, including whether the size of the Danish market or legislation is at fault in the relatively low number of foreign companies investing in the country.

They nine-member panel is also charged with understanding whether Denmark has too few entrepreneurs, and whether consumers not seeking the best deals are the reason for the nation's high price level, rather than a lack of competition.

The final report is due next spring.