Denmark may not be as technologically competitive as we think. This is the surprising conclusion of ATV's analysis of global research and patent activity in technology areas that are today considered to be Danish positions of strength.
In this report, ATV has analyzed 11 technology areas, which today are either directly included in current Danish business and innovation initiatives, or which are assessed to have strategic importance for Denmark's future competitiveness. The report's thought-provoking conclusion is that, in seven out of the 11 areas, Denmark falls behind in terms of research and patent activity compared to the world's currently strongest tech regions. This applies, among other things, to technology areas such as climate technology, water technology and medical and pharmaceutical technology, which have historically been regarded as areas of Danish strength. In addition, Denmark is lagging behind in digital and data transmitting technologies – which are the technological areas where patent activity is the greatest today – on a global scale.
Measured by patents per per capita, in these areas we therefore take only a quarter of what is done in otherwise populous regions such as London, Boston, Shanghai, Tokyo and others. This is worrying, because these are areas of technology which today are absolutely crucial ingredients in almost all other technological solutions. In total, the report identifies the 30 regions in the world where the research and patent activity within Denmark's strategic technology areas is greatest.
Three factors in particular give food for thought:
1. Denmark is not even among the 30 regions.
2. In seven of the areas, we take out fewer patents per capita than the average of the 30 regions.
3. We are being driven far behind in "future technologies", such as artificial intelligence.
The analysis is a wake-up call to tighten up Denmark's strategy for technology and globalization. Because if Denmark ceases to be attractive for global investment and talent within our strategic technology areas, it affects our economy and welfare. ATV recommends that the report be used as a guide to understand and develop Denmark's role in the future global division of labor within technology development. Including to organize an ambitious and coordinated research, innovation and business promotion effort.
A temperature measurement of Denmark's technological strength
This report is the most comprehensive analysis to date of research and patenting activity within technology areas that are strategically important for Denmark, set in an international perspective. The analysis provides a picture of Denmark's technological strength measured according to a global scale. The conclusion is clear: Denmark's technological strengths are under pressure. If we want to keep pace with the elite of tech regions in the world, there is a need for a rethink of Denmark's forward-looking strategy for technology and globalization.
The analysis, which is part of the Academy of Technical Sciences' 'Science & Engineering project', has been prepared in collaboration with the Danish Technological Institute, which has analyzed millions of patent and research publication data from around the world using techmining. The data is used to benchmark Denmark's ability to develop new knowledge and new products within selected technology areas. An ability that is absolutely crucial for Denmark's future competitiveness.
11 strategic technology areas
As a starting point for the analysis, ATV, together with the Technological Institute, has defined 11 strategic technology areas for Denmark: Advanced materials, Biotechnology, Pharmaceutical technology, Food technology, Climate technology, Artificial intelligence, Sound technology, Medical technology, Robotic technology, Water technology, Wind technology. The areas have been selected with strong inspiration from the technology initiatives around which Denmark's innovation and business promotion systems are currently built. These are technology areas where Denmark is assessed to have historical positions of strength, as well as the technology areas of artificial intelligence and robotics, which are assessed to be important for the development of virtually all types of technological solutions going forward.
30 leading tech regions
In order to have a benchmark to measure Denmark's technological strength against, the analysis identifies the 30 regions in the world that today have the greatest research and patent activity – both within the 11 strategic technology areas and within the areas that currently have the greatest patent activity globally . A thought-provoking conclusion that should give rise to a revision of Denmark's forward-looking technology strategy is that Denmark does not feature in the top 30 within the 11 strategic technology areas.
Guide to the global division of labor of the future
This report is a guide to maneuvering and understanding the future global division of labor in technology development. The report is made up of three main chapters:
Chapter 1 - "Denmark's technological strengths illuminated with big data" - analyzes research and patent trends in global tech development in the past 20 years.
Chapter 2 - "The world's strongest Science & Engineering regions" - offers an overview of today's 30 strongest regions as well as an in-depth description of the top 10 regions.
Chapter 3 - "A global perspective on 11 strategic technology areas" - lists the main players in the technology areas on a global level and systematically reviews Denmark's relative strength within the individual areas in relation to the top 30 regions.
New benchmark
The analysis introduces a completely new benchmark of Denmark's technological strength. Here, the patent activity per capita in Denmark with the patent activity per capita in the top 30 regions. If the so-called top 30 strength ratio is above 1, Denmark takes out relatively more patents per capita than the average of the top 30 regions, the strength ratio is below 1, we sample fewer.
Main observations and recommendations
Without the analysis precisely placing Denmark as a number on a ranking list of the world's leading Science & Engineering regions, it is clear that when we line up in the highest division and not only compare at national state level, but at regional level, we are - with with the exception of a few areas – a long way from realizing ATV's vision of being one of five leading Science & Engineering regions in the world. It gives food for thought and changes our self-perception. Action is needed if we are to continue to be a relevant Science & Engineering region, producing the knowledge and technology on which companies can base their business and which can ensure that we can maintain a high level of prosperity and a community model , as we know.
1. Denmark's competitiveness is under pressure. In seven of Denmark's 11 strategic technology areas, Denmark issues fewer patents per capita than the average of the top 30 regions. This indicates that there is relatively stronger development and commercial exploitation of these technology areas in the top 30 regions. Only in four of our strategic technology areas – biotechnology, food technology, sound technology and wind technology – is the strength ratio above 1. This puts Denmark's future competitiveness under pressure.
2. Top 30 regions patent 40 percent more than Denmark. Across Denmark's 11 strategic technology areas, the world's 30 strongest tech regions currently take out 40 percent more patents per per capita than Denmark does. The top 30 regions thus take out 3,61 patents per 1.000 inhabitants within the 11 areas, while Denmark issues only 2,57 patents per 1.000 inhabitants.
3. Denmark is particularly lagging behind in future technologies. Denmark's strength ratio is particularly weak in robotics (Top 30 strength ratio = 0,17) and artificial intelligence (Top 30 strength ratio = 0,22). We are also lagging behind when measured by the technologies that today have the absolute greatest patent activity globally: Digital and data-transmitting technologies. Here the power ratio is also just 0,22. This is worrying, as these "technologies of the future" must be assumed to have increasing importance for the development of most other areas of technology.
4. Technology is becoming an increasingly important competitive parameter. In general, the analysis documents that global research and patenting activity has exploded within the past 20 years. This indicates that technology is becoming an increasingly important competitive parameter. On a global level, the number of technology patents within this period has thus increased by around 350 percent. In the past three years in particular, the activity has exploded. In 2019 alone, the number of published patents reached six million. Twice as much as in 2016.
5. Denmark's relative patent activity has halved. While the number of patents on a global level has increased approximately 20 times in 3,5 years, patent activity here at home has only doubled in the same period. This means that Denmark - relatively speaking - is increasing its patent activity at half the rate compared to the global average. In other words, we have almost halved our relative patent activity in 20 years.
6. China has become the world's patent factory. The analysis reveals a tectonic shift from west to east in the global balance of power within technology development. In 20 years, China has gone from an almost negligible share of global patent activity to dominating virtually all of the areas analyzed by ATV. Measured as a snapshot of patents taken out globally in November 2019, Chinese patent owners accounted for as many as two out of three patents. Europe continues to be strong in scientific publications, but when it comes to patents, which are an expression of commercial exploitation of the technology, we get behind the wheel of the USA and China.
Recommendations
The results of the analysis give rise to surprise and concern. The Danish social model and level of welfare rests to a very large extent on our being good at Science & Engineering. It is hard to imagine that it will not only be even more important in the future. From ATV's analyzes of Science & Engineering's importance to the Danish economy, we know that 2.300 Science & Engineering companies alone employ more than 300.000 full-time employees, and that these companies together account for nearly 50 percent of Danish exports. The Science & Engineering companies are essential wealth generators in Denmark, and it is important that they can continue to be so. This requires them to be able to compete internationally with knowledge-intensive and innovative products and solutions. If we want to be in the top 5, we have to want it, it doesn't come by itself. It is necessary to have a clear strategic direction and ambition for what Denmark will live on in the future, a common understanding of what supports the realization of the ambition. This will require sustained high investments in Science & Engineering – both from the state and from private actors
ATV recommends to…
...sharpen Denmark's technological focus. There is a need to adapt Denmark's technology investment to a new global division of labor within technology development. ATV recommends that investigative work be launched to identify Denmark's role and opportunities in competition and cooperation with the world's top 30 tech regions, including an uncovering of niches and specializations where Denmark has particular strengths.
…develop an involving strategy. An ambitious strategy for technology and globalization must be formulated - based on a new recognition of Danish strengths and opportunities. The strategy must be based on a coordinated and involving dialogue that, in addition to the actors of the research and innovation ecosystem, also involves the labor market, the business world, the large private foundations and pension funds, as well as a higher degree of coordination between relevant ministries.
...invest in the technologies of the future. For a number of years, Denmark has underinvested in digital technologies, while investments have accelerated in the world's strongest Science & Engineering regions. Continued Danish positions of strength within application areas such as wind technology and sound technology also require strong competences within AI and other data-based technologies. It is necessary to make an ambitious investment in the digital technologies of the future – both in basic research, capacity building and in application areas in which we have strengths.
…build strong ties to the top 30 regions. In a globalized world, knowledge is produced jointly and solutions flow across borders. Therefore, it is important to build strong relationships with other leading tech regions. Specifically, ATV recommends that relations with the top 30 regions identified in this publication be strengthened through, among other things, university collaborations as well as the expansion and strengthening of innovation offices. Furthermore, Denmark should prioritize and influence pan-European strategic initiatives to make Europe competitive with China and the USA.
The background reports for the ATV analysis were prepared in spring 2020 by the Norwegian Technological Institute:
Institute of Technology 2020 A
Institute of Technology 2020 B
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