The Danish model: Inspiring growth

They hope to show other European countries there is a path to increased growth to be inspired by.

”We’ve had such a long experience with co-operation and negotiation, and it’s built on respect and equality between employees and employers. That has to be the main point of the Danish model which can inspire other countries”, says Hans Jensen, President of the Danish Confederation of Trade Unions, LO.

Jørn Neergaard Larsen, CEO at the Confederation of Danish Employers (DA), agrees that it is negotiations and agreements, rather than conflict and labour right battles, which have given good results in Denmark.

”Respect for each other’s roles is imperative. We can’t have flexibility without security, nor can we have security without flexibility. Many countries have realised that. But I notice that some authorities still perceive the parties to be in conflict with each other when we discuss these questions”, says Jørn Neergaard Larsen. 

The idea is important 

The Danish model has developed over many years, and is targeted at a Danish reality. It probably can’t be implemented in other European countries overnight, but it is important to convey the thinking behind it.

That’s why LO and DA decided to work together to stage a conference in Brussels on 14 September. Their main message is that the Danish model works extremely well, and that it is the way to go for decision makers when they consider the future strategy in Europe. 

”Denmark is the one country which has done best in the face of competition with other countries and globalisation. Danish workers, a broad group of people, show an impressive ability of adapting. You don’t see much of that elsewhere”, says Jørn Neergaard Larsen. 

”When it comes to flexibility we’re equal to England, and the price for that flexibility has been the safety and security of the workers. It’s in our very structure that no one shall be left alone,” says Hans Jensen. 

Basic education is crucial 

There is room for improvement, however, when considering the future. The Danish model must be developed further. 

”For instance, the reading and writing level for Danish primary school students is low, and it is crucial that this problem is solved”, says Jørn Neergaard Larsen.

”The same goes for adult education and in-service training, where we see some instances where employers don’t provide employees with the necessary training”, says Hans Jensen. 

The Danish labour market is also tough with a degree of stress. A considerable group of workers are dependent on social security. 

”It is, of course, demanding to be part of the labour market in one of the best and richest countries in the world. But stress has nothing to do with flexicurity. It’s a problem in many other countries too today. 30 per cent of the Danish labour force moves jobs in one year. That means a mobility and flexibility which offers big opportunities for the individual worker and for the businesses. I’m sure there are still challenges to be met, but I can’t see any drawbacks as such with flexicurity, says Jørn Neergaard Larsen. 

Hans Jensen agrees, and says one of the causes of stress is that the Danish workers’ role has changed from that of being an expense to that of being a resource for the businesses. What is in demand now are completely different qualities such as innovation, creativity and contributing new ideas. 

”Earlier you typically had a middle manager who told the individual worker what he or she should do. But today the individual has more responsibility for doing the work, and the businesses demand a bigger involvement in the entire business. When you can make your own decisions and carry the responsibility, job satisfaction increases a lot. But the drawback can be that the responsibility becomes too much. That leads to stress. But that’s not because of the Danish labour market. It is more because of external demands from globalisation, which requires that we adapt,” says Hans Jensen. 

The road to growth 

Both agree that from a bird’s-eye view the Danish model is a success with very tangible results. Denmark enjoys the highest number of satisfied workers in the world, low unemployment and the highest job security in the EU.

At the same time Demark spends more of its BNP than any other country on its welfare and safety system.

”Many delegations have visited Denmark and we’ve explained the system to them. Some are surprised when they realise that it is all founded on a long historical development. But our joint conference was an important signal to other countries in Europe – it is possible to take into consideration the interests of both businesses and workers,” says Hans Jensen. 

Jørn Neergaard Larsen also realised they now have the chance to show how it is possible to move on, during a time when many European countries struggle to increase growth. 

”EU is in a terrible situation. The creation of a more flexible labour market in Europe has come completely unstuck because of legislation which is far too detailed. Many countries cannot find a road to growth, and here we can show a way out which could inspire many. If, as a side effect, businesses want to settle down in Denmark, so much the better, says Jørn Neergaard Larsen.