How Denmark is losing its competitive advantage on knowledge & innovation

Politiken - one of Denmark's largest newspaper - published an interesting article about how in my eyes Denmark is losing its competitive edge on knowledge. The article is about a new decision that is made by the Danish tax office. This decision is about that it becomes only more expensive - thus more difficult - to buy magazines that are being published from outside the EU (such as The New Yorker and Foreign Policy).

The authors of the article argue that magazines from outside the EU will only become more expensive due to an extra tax. While reading the title that magazines become extremely expensive ('blade bliver ekstremt dyre') I was triggered, because non-EU magazines in Denmark are already expensive.

Six times a year I enjoy reading the magazine 'Foreign Policy'. When I should be buying a hard-copy version of the magazine, I should pay around €10 in the Netherlands and €15 in Denmark. This is already a bit more expensive than its original price of around €5, but that's something you take for granted if you think about shipping & admin costs. The reason why it is already more expensive in Denmark than in the Netherlands is because of the higher VAT rate of 25%. So, 'foreign' magazines are already expensive, but what makes it now extremely expensive?

If you for example buy a magazine for €5 you need to pay €1,25 extra for VAT. This is a relatively small extra amount that let's you absorb new information and knowledge from sources which are relatively non-Danish and non-European. However, it will look like that you need to pay €20 more for sending and receiving the magazine. The extra €20 is due to the fact that these magazines should be send through the post office who then can charge you for import rights.

So who is going to import a magazine that normally costs €5 but in Denmark around € 26,25? That's crazy! It is not only because it is so expensive, but also because this new decision will stop the flow of knowledge from outside Denmark.

Denmark sees itself as a knowledge economy. It is a small country with only 5,5 million people and without a very big asset of natural resources. Denmark earns money by selling knowledge. But looking at the future of each European country, it seems like that there will be only be fewer who carry knowledge - the people - due to for example an ageing workforce. This means that Denmark is in need of the latest knowledge that is necessarily not being produced in Denmark self. It therefore becomes crucial for countries such as Denmark to create a system through which it can easily absorb new knowledge.

I am sure that the rising of the costs on foreign magazines is not improving the process of absorbing new 'foreign' knowledge. It's a decision to try to earn money on the short term (which I don't believe will work, but perhaps the Danish tax does) but - on the other hand - will result in losing a competitive advantage in the long run!

Luckily I have an iPad through which I can subscribe to digital issues of Foreign Policy for only €4 per issue.

Getting Danish politics into the open

Increasingly, businesses move to new business models in order to adapt to the needs and requirements of the 21st century. One of the these needs is to be ‘open’. Some businesses have already proven to be very successful in showing the power of open standards, open content and open data as a business model. Just think about Google and TED. This article will look into how Denmark prepares businesses to embrace open standards, open content and open data

One of the topics when talking about ‘open’ is open standards. A good example of an initiative that embraces open standards is the Internet. In the 1960s the Internet started off as an initiative between universities. These universities collaborated on standards in order to connect all the different university networks. Due to the increase of, among other things, computer power in 1980s, it became possible to use this Internet globally in order to connect a large collection of documents and applications. One of the applications that helped sharing these documents and application was the World Wide Web (WWW). From the beginning of the WWW in the 1990s, Tim Berners-Lee, one of the founders of the WWW, simultaneously started with the World Wide Web Consortium (W3C). W3C’s objective is to guarantee the access to all the information on the WWW by developing international standards for the WWW.

Even though the WWW functions on open standards until today, it does not automatically suggest that the WWW is a place where access and content is open. While the WWW runs on open-standards there is increasingly a development that content on WWW - the actual information - is being closed down (as discussed in the article ‘a virtual counter-revolution’ published on 2 September 2010 in the Economist). 

As a result, when talking about open standards, it is equal relevant to talk about open content and open access. This is also the reason why concepts like open standards, open content and open access are being used interchangeable. That’s why there is still a need to discuss the similarities and differences of open content, open access and open standards. Such a discussion will hopefully result in a broader acceptance of open content, open access and open standards. 

Martin von Haller Grønbæk, IT-lawyer in Denmark 

So, what is the current state of open content, open access and open standards in Denmark. With this question I met with Martin von Haller Grønbæk. Martin is a Danish IT lawyer who is considered the Scandinavian expert on legal and business strategic issues related to, among other things, open content, open data and open standards. He is also the co-founder of Creative Commons in Denmark, the Danish Open Source Business Association and the Danish Chapter of Internet Society.

Open standards in Denmark

 On the question what the current state is of open standards in Denmark, Martin answered: “today there is no doubt that there is an increase of business models which embrace various concepts of the open movement. In general, open source is well accepted in Denmark. PHP (ed. script to create dynamic content on web servers) is a open source initiative developed by the Dane Rasmus Lerdorf. Nevertheless, within the public sector the recognition and adaptation of open concepts is far behind”.

Martin states that the public sector in Denmark has a difficult time in understanding the benefits of the open movement and that this impedes the acceptation and adaptation of open standards. “Although Denmark has compared the closed document type which is made available by Microsoft Office and the open document type from Open Office in the last ten years, this has not resulted in embracing open standards within the public sector”. According to Martin this certainly has to do with the fact that Denmark has a long history in using Microsoft. “Both the public sector and the private sector are heavy users of Microsoft Office and because politicians and experts cannot agree on which document type is most preferable, the public sector just continues with the standard they already use: the closed document type from Microsoft Office”. Martin argues that “this has created a situation in which Denmark has not moved forward within the domain of open standards”.

Open content and open access in Denmark

In the domain of open content and open access Denmark should also advance more. “The public sector talks about freeing public content under open licenses, because there is a general consensus that the tax payer paid for this content”. However, this discussion is not advancing into concrete agreements, because there are still too many industries who earn their money on content. “There is no single business that can make the decision to undermine the market by offering content for free”. Let’s take Danish Radio (DR) as an example. DR aims at opening access to all content related to Danish radio and television. If DR makes this decision, they would embrace the principles of open access and open content. However, the trade unions are the biggest problem in moving forward the principles. Martin says that “the Danish trade unions do not approve open access and open content. The trade unions believe that for example a journalist, producer or other artist creates a product with one objective. If the same product is being used in a different context, DR should give more money for the content of the product”.

Consequently, there is a big challenge in Denmark when looking at the discussion in favour of open access and open content. Martin argues that Denmark should look “for a political-cultural solution so that people become more aware that it is a opportunity rather than a threat when there is a better access to content”. Martin believes that the discussion has not moved forward into the 21st century because traditional institutions, like the Danish trade unions, obstruct these discussions. There is the desire among individuals, but it lacks the decisive power which currently is in the hands of the Danish trade unions. 

How to move forward?

Denmark should suit the action to the word! Discussion about the benefits of open standards, open access and open content should be changed into decisions. According to Martin politicians should make these decision, but unfortunately each Danish political party  lacks this decisive power.

“Denmark has a Ministry for Innovation and Science. This Ministry should have a leading role in the discussion but experiences have shown that the Ministry has hardly power. As a result, the government does not make a decision and thus does not direct Denmark into the 21st century in which the principles of open standards, open access and open content are being implemented”.

At the level of a political party we can see that there is no single party that has included the issues related to open standards, open access and open content on their political agenda. “Sometimes they talk about it, but there is not the desire to open up the topic”.

“The people who sympathise with open standards are just like in many other European countries often supporters from liberal parties - like Venstre in Denmark. However, the good things that are being done in relation to open standards  are oddly enough done by curious collaborations. It is a person from the right wing populist Danish People’s Party (Dansk Folkeparti) and a person from the Danish Social Liberal Party (Radikale) who receive support from the socialists from Socialist People Part (SF) and the Red-Green Alliance (Enhedslisten). These are the stakeholders in some limited discussions about open standards, open content and open access. One of the reasons why the Danish People’s Party and the Danish Social Liberal Party talk about the issues related to open is that these are the only ones who have limited knowledge of IT”.

The paradox of Danish politics regarding open standard, open content and open access is that it should be the key issues of liberal parties, because the ideas behind open stimulate a common infrastructure and therefore a common playing field where people can compete.

This is not being understood in Denmark! It is even so bad that the liberal party Venste labels open standard and open content as an activity done by socialists. But according to Martin “open is hard-core capitalism”. The Danish decision makers should therefore prioritise ‘open’ more in their economic agendas. Perhaps then Denmark can move forward by designing the framework for businesses to work in the 21st century.

The state of 'open' in Danish innovation strategy: an opportunity

I am currently working out the interview I had with Martin von Haller yesterday. Martin is a Danish IT-lawyer with Bender · Von Haller · Dragsted - a leading Scandinavian IT law firm.

One of the objectives of this interview was to get a current state of how Denmark adapt to open-access, open-content, open-data and open-standards. I asked him: 

in light of the current Danish election, which political party did mention something about 'open' in their manifest?"

His answer was none

And still the current Prime Minister - Lars Løkke Rasmussen - makes it to today's front page of Politiken by arguing that innovation and the development of ideas should be a high priority for High School students. I know, election time is about just saying what people want to hear in order to get as many votes as possible, but perhaps this could be an important moment to introduce and include 'open' as part of the Danish innovation strategy for the 21st century