1. Bent Dalum 8/7-06, Syros1 Development and diffusion of ICT in a local context: The case of Denmark with focus on North Jutland Bent Dalum (bd@business.aau.dk)bd@business.aau.dk 8th July 2006, Syros Greece DRUID/IKE and Center for TeleInFrastructure Department of Business Studies Aalborg University, Denmark

2. Bent Dalum 8/7-06, Syros2 Part I The ’Danish model’: A few characteristics

3. Bent Dalum 8/7-06, Syros3 Conference on the Greek Industry Towards a Knowledge Based Economy Athens July 4-5, 2006 The Danish Economy: (1)Strong Macroeconomic Performance & Flexicurity (2) Is the Industrial Structure Sustainable for the Future Welfare Society? Bent Dalum IKE/DRUID and CTIF Head of Department of Business Studies Aalborg University, Denmark

4. Bent Dalum 8/7-06, Syros4 Unemployment in Denmark 1948-2004 Beskrivende dansk økonomi © HandelsVidenskab

5. Bent Dalum 8/7-06, Syros5 Current Account in Danmark, 1948-2004 (% of GDP) Beskrivende dansk økonomi © HandelsVidenskab

6. Bent Dalum 8/7-06, Syros6 Export Specialisation (Manufacturing exports) SwedenFinlandDenmark 199020031990200319902003 High-tech0.80.90.51.00.80.9 Pharma1.41.60.50.32.1 Cons el.+ tele1.01.10.92.30.6 Med-high0.9 0.70.6 0.7 Med-low1.1 1.40.9 Low1.31.22.11.72.0

7. Bent Dalum 8/7-06, Syros7 Low-Tech Export Specialisation Denmark is dominated by the low-tech industries in manufacturing exports. But that is – to a smaller extent - also an important feature for Sweden, Finland and the Netherlands (and Greece). [BUT in terms of multinationals: big diffences between Denmark versus Sweden, Finland and the Netherlands].

8. Bent Dalum 8/7-06, Syros8 The Danish Economy A low tech exporting economy? -To some extent the answer is a yes However, The Danish Paradox –DK ranked no. 4 in innovative activities in the EU –DK ranked among or close to the world leaders in user penetration of ICT –Quite strong macroeconomic performance

9. Bent Dalum 8/7-06, Syros9 Flexicurity Denmark is probably the country in Western Europe where it is most easy to sack an employee. The ’trick’ is high level of unemployment benefits and a rather flexible workforce.

10. Bent Dalum 8/7-06, Syros10 Part II The wireless sector: The C of ICT

11. Source: OECD Information Technology Outlook 2004

13. Regional Employment Specialisation – The ICT Sector 2001

14. Bent Dalum 8/7-06, Syros14 Wireless concentrations in DK North Jutland – NorCOM,….. Copenhagen region: –Nokia, Thrane & Thrane, …. Aarhus region: –Terma,…..

15. Bent Dalum 8/7-06, Syros15 Industry structure of North Jutland A classical textbook case until the 1980/90s: –Industrial structure dominated by the ’old’ industries: agriculture, food processing, fishery, cement, textiles, tobacco, tourism, etc…. –1990: structural catching-up –Specialisation in electronics: Emergence of a visible wireless communications industry: NorCOM, printed circuit boards and other ICT activities (some in their early stages) –The engineering industry: a somehow ’forgotten’ strong segment of manufacturing –’New’ and rather big service companies: KMD, Nykredit Data, Sonofon, Spar Nord Bank,….

16. Genealogy of NorCoM 2003 Copyright: Michael S. Dahl, Christian Ø. R. Pedersen, and Bent Dalum

17. Bent Dalum 8/7-06, Syros17 The university as an active player AAU founded in 1974 Based on two regional engineering schools, of which one was a DTU affiliate. Also based on an affiliate of Copenhagen Business School Second DK supplier of MSc’s in engineering from 1979. 40% market share in 1990; 50% in electronic engineering Computer science from the mid 1980s Strong electromedical research profile from the early 1990s Broad coverage of the social sciences and the humanities

18. Bent Dalum 8/7-06, Syros18 Emergence of other ICT fields IT service and software development –KMD, Nykredit Data, WM Data, Logimatic, Targit, Hugin, … –Nouhauz, IKT Forum Printed circuit boards –Mekoprint, GPV Group (Printca, Danprint,..), Nibe Electronikcenter,… Biomedical –Cortex, Judex, Cephalon, Neurodan, RTX Healthcare, Thomson Bioscience,….. –BioMed Community + HEALTHnTECH

19. Bent Dalum 8/7-06, Syros19 NorCOM (1) A technology based cluster The ‘inner’ Core: 45 telecommunications firms Knowledge institutions (AAU) Bridging institutions & venture capital (NOVI)

20. Bent Dalum 8/7-06, Syros20 NorCOM (2) 1997-99 a CLUB Firms and university researchers, Hosted by a science park, NOVI www.norcom.dk 2000- a BUSINESS ASSOCIATION 20-25 firms (75% of total employment) + AAU Hosted by NOVI Financed by member firms

21. Bent Dalum 8/7-06, Syros21 NorCOM (3) ‘Core’ technology focus Microwaves - Radiocommunications 1) Mobile and cordless communications (equipment) –2G: GSM, 2+ (GPRS, EDGE) –DECT –Bluetooth –3G: UMTS, CDMA2000, TD-SCDMA (China) –4G: ? 2) Components for mobile terminals 3) Mobile services 4) Maritime communications and navigation –communication (VHF, UHF & satellite) –navigation (satellite)

22. Bent Dalum 8/7-06, Syros22 Technological life cycles – Mobile Technology

23. - Center for Teleinfrastructure CTIF CTIF opened January 29 2004. Main purpose: (1) Research in ’Beyond 3G’ or 4G. (2) Research in the interaction or ’convergence’ between wireless and wired technologies: alternative models for the architecture of the future tele infrastructure. EU 6th Framework: MAGNET; local grants, Danish Government + Danish and international firms (Samsung, Siemens, Nokia, etc.) Local press gimmick: two messenger boys and the creators of the great vision------->

24. Bent Dalum 8/7-06, Syros24 Teleinfrastructure What is in the Cards? Convergence between wired (optical fibres) and wireless. All based on IP (v6) Local real life experiments: Fibre to The Home & wireless Internet access. Great vision but far from being implemented. What is ’4G’?

25. Bent Dalum 8/7-06, Syros25 Convergence is what 4G is about 4G Mobile Communication Systems Cellular phone systems, such as 2G, 3G, and 3.5G Wireless Internet access: WPANs, WLANs such as IEEE 802.11x, HIPERLAN/2, WiMax Broadcasting Satellite Communication Wired networks

26. Bent Dalum 8/7-06, Syros26 Future strategies for North Jutland (and Denmark) How to learn to cope with schizophrenia –At the one hand several industries are threatened by globalisation, not least in North Jutland –On the other hand, several opportunities have emerged in the high tech fields –These opportunities did not pop-up as mere results of market forces, and they are not results of very specific policies neither. –But some bold efforts in the region have paid off: establishment of a university (1974), CPK and CTIF, a science park (NOVI 1989), the thrust towards creating a university hospital-like insitutional framework,….

27. Bent Dalum 8/7-06, Syros27 Part III The IT software and service sector: The IT of ICT

28. Bent Dalum 8/7-06, Syros28 GROWTH AND EVOLUTION OF THE DANISH IT SECTOR: GEOGRAPHICAL CONCENTRATION, SPECIALISATION AND DIVERSITY Christian Ø. R. Pedersen and Bent Dalum IKE / DRUID and Center for TeleInFrastructure (CTIF) Department of Business Studies, Aalborg University Paper for the DRUID Summer Conference 2006 www.druid.dk

29. Bent Dalum 8/7-06, Syros29 The purpose of the paper is to analyse the growth and evolution of the Danish IT sector during the upswing of the 1990s Employment and the number of firms have more than doubled The evolution indicate a ‘non random’ clustering of the industry around the larger urban areas. The paper will focus on the dominant forces in shaping the growth and spatial evolution of the industry and analyse how industrial dynamics caused the industry to cluster in the two largest urban areas.

30. Bent Dalum 8/7-06, Syros30

31. Bent Dalum 8/7-06, Syros31 Characteristics of the IT sector that affect the evolution of the industry Low entry barriers –Some, but not prohibitive, physical capital requirements. Labour intensive –The right skills are decisive, but ‘general skills’ can do a lot. The education level of the employees –In 1997 17% of the employees had a long term tertiary education compared to 3.5% for the total private sector. 32% had a medium term tertiary education or higher, while the average was 9%. –24.3% of the entrepreneurs in 1998 had a medium term tertiary education or higher compared to 12.4% of the total.

32. Bent Dalum 8/7-06, Syros32 Employment Growth in the Danish IT sector 1992-2002

33. Bent Dalum 8/7-06, Syros33 Propositions Hypothesis 1: Regions with high employment specialisation will remain specialised and regions with low specialisation will stay at a low level. Hypothesis 2: Regions with a large town and a large and diverse labour market will benefit from Jacobs externalities leading to positive effects on regional IT employment growth. Hypothesis 3: Universities providing medium-term or long-term tertiary education in the technical or computer sciences will have positive effects on IT employment growth in a region.

34. Bent Dalum 8/7-06, Syros34 Regional Employment Specialisation – IT 1992

35. Bent Dalum 8/7-06, Syros35 Regional Employment Specialisation – IT 2003

36. Bent Dalum 8/7-06, Syros36

37. Bent Dalum 8/7-06, Syros37 Conclusions The leading regions in 1992 have kept their position, the ranking of the followers has changed moderately, while the remaining regions kept lagging behind. However, Aalborg became specialised. Self-augmenting processes sustain specialised regions at a high activity level The persistent employment and firm specialisation in the Copenhagen and Aarhus regions shows a specialisation effect and a diversity effect –the demise of Vejle points towards lack of a specialisation effect. –the lack of growth in Odense points towards lack of a specialisation effect –the supply of highly educated graduates in Aalborg compensates for lack of specialisation Factors behind the growth and evolution of the IT sector? Highly educated employees and initial size of the IT sector.