Denmark

Labour shortages are a key economic and political issue in Denmark, both in terms of ensuring the necessary labour is available to avoid short-term loss of growth, and ensuring employers can access the skills needed to adapt to longer-term megatrends such as the green transition and digitalisation (Bak et al. 2022). With its small open economy, Denmark has generally performed well according to key economic indicators. Growth levels have bounced back following the Covid-19 crisis, driven in particular by strong international exports although over the past year or so this element has mostly been down to a handful of large corporations in the pharmaceutical (notably Novo Nordisk) and transport (notably Mærsk) industries.While the growth of these large companies has prevented Denmark’s economyfrom entering recession (DØRS 2024), it has increased economic vulnerability toshifts in regulation or demand (OECD 2024). Unemployment, meanwhile, hasgenerally remained low, indicating the capacity of the Danish ‘lexicurity’ modelcharacterised by high levels of lexibility for employers, high levels of security foremployees, and high levels of support in inding new roles (Ilsøe & Larsen 2023: 3)when it comes to maintaining labour force competitiveness. The most importantlexicurity mechanisms are activation and upskilling; low hiring and iring costs; and a lexible wage-bargaining system. The latter involves negotiating wages through collective agreements that nevertheless leave room for firm-level discussions, thereby providing scope for responding to changing economic circumstances (Bredgaard & Madsen 2018).