Executive summary This report will analyze and interpret the question of how the Danish government can induce growth through investments in construction and research and development. The assignment will start with a problem field that will explain the initial thoughts and considerations of the authoring group of this project, which has led to the discussion of the problem formulation stated below. Why are governmental investments in construction prioritized more than investments in research and development in Denmark? In order to increase the validity of the problem formulation, and to aid the reader’s understanding throughout the report, the following sub questions have been developed. • Why is growth important? • What categorizes a governmental investment? • How do governmental investments induce growth, in relation to construction and to research and development? • Is it possible to determine which of the two categories of investment that is the most adequate solution to growth, and if so, how should this be done? The analysis is based on two case studies, each of which representing the two different categories of governmental investment. More specifically, the cases will revolve around the Femern Bælt tunnel and the Danish windmill industry. A background analysis of the two investment types will be conducted, in order to create a fundamental understanding of the forces that influence these investments on a theoretic level. This will create a basic platform, from which an analysis of the two case studies will be derived. By conducting a multiple case study, it allows this report to cross reference the two analyses and thereby creating an indication of how the theoretic frameworks related to the different types of investment, corresponds to each other. For the comprehension of the analyses, the theories of John Maynard Keynes and Michael Eugene Porter will be used. Keynes theory of the multiplier effect will support the case of governmental investments in construction, since such an investment can be utilized as an economically cyclical regulation tool. As a contrast to this, Porters theory of the diamond-model emphasizes how a government can strengthen the international competitiveness of a country, by imposing the governmental as well as the private sector, a set of framework conditions that focuses on innovation through research and development. The result of the two analyses shows that both case studies correspond with the previously theoretic background analysis, on several issues. In other words, this confirms the validity of the case study analysis. Furthermore, it can be revealed from the project that governmental investments hold a set of multi-causal relations that is dictated by mechanisms that cannot be determined on advance. From this, it is concluded that the ramifications of governmental investments can be somewhat unpredictable. In conclusion, the Danish government prioritizes investments in construction rather than in research and development, due to a higher degree of growth generated by investments in construction, over a short period of time, and because the effect of this is more easily measured. However, it is important to bear in mind, that the growth generated by investments in research and development hold the potential of creating a larger amount of growth, though because it holds a higher amount of risk and because return on investment happens over a longer period of time, it is more adequate for the Danish government to invest in construction, because of the situation Danish economy suffered under the financial crisis.
|Uddannelser||Erhvervsøkonomi, (Bachelor/kandidatuddannelse) Bachelor el. kandidat|
|Udgivelsesdato||19 dec. 2013|
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