Denmark wooing SMEs

Denmark is looking to promote collaborative research, says Shanker Subramaniam, Senior Investment Manager, Invest In Denmark

Thiruvananthapuram: Denmark, home to just 5.5 million people, could open up new business opportunities for Small and Medium Enterprises (SMEs) in Kerala willing to invest in areas such as Information Technology (IT), life sciences, clean technology and solid waste management.

Known for its cluster-level approach to industrial development, Denmark is scouting for opportunities to forge business partnerships with SMEs in other countries. With a large number of small firms in the IT sector, Kerala offers a matching ecosystem for investment and collaborative research, says Shanker Subramaniam, Senior Investment Manager for India and Singapore for ‘Invest In Denmark,' a federal investment promotion agency responsible for attracting investments and helping Danish companies create international partnerships.

Small firms

Almost half the GDP of Denmark is contributed by small companies, mostly family-owned businesses with 15 to 30 employees. “It is a challenge for such firms to deal with large Indian companies operating from the metros. These firms would feel more comfortable working with small companies in Kerala,” Mr. Subramaniam said during an interaction with The Hindu.

Invest in Denmark is working closely with the Group of Technology Companies (GTech), a strategic grouping of software companies in Kerala, to help companies in either country identify business partners.

“The Danish government does not discriminate between domestic and foreign companies. By promoting the interplay between the government, academia and business, we have created an ecosystem to foster research and innovation. There is good potential for small companies based in Kerala to partner with Danish counterparts in areas such as IT, life sciences, renewable energy and clean technology.”

Clean Tech initiatives

Following the oil crisis in 1973, Denmark switched its focus to renewable energy options. Today, the country is self- sufficient in energy. Almost 20 per cent of Denmark's energy needs are supplied by renewable sources and most citizens use bicycles or public transport. Ownership of cars is discouraged by heavy taxation. The Danes have set themselves the target to reduce dependence on fossil fuels by 30 per cent in 2020 and to zero in 2050.

The emphasis on multiple power sources, including wind energy and biomass gasification, has necessitated heavy investment in Smart Grids. Excess power is stored or diverted to neighbouring countries. “Smart Grid technology and energy storage are areas for possible collaboration. Waste- to- Energy technology is another area. We could offer our expertise to Kerala in user-driven innovation,” Mr.Subramaniam said.

There are no tax incentives for foreign companies willing to set up shop in Denmark. Instead, the government offers a secure, friendly environment with the option to hire and fire employees. Labour laws are flexible enough for investors to enter and exit without hassles. “Denmark is wooing foreign companies to strengthen the industrial clusters and promote collaborative research. Our focus is on Asian countries, namely India, China, Japan and Taiwan,” says Mr. Subramaniam.

He feels that the Danes would welcome the opportunity to mix business with pleasure if Kerala could offer a ‘business tourism' initiative.

A business delegation from Kerala led by Ishita Roy, Director, State IT Mission, and comprising Binu Sankar, Chief Executive Officer, GTech, and Mervin Alexander, Chief Executive Officer, Technopark, had visited Denmark earlier this year as part of a ‘Market Connect' strategy devised by the Kerala Government and GTech to help small and medium enterprises to identify fresh business opportunities.

Preliminary steps to forge partnerships between GTech and the Danish companies were initiated following the visit.