Adapting business framework conditions to deal with disruptive technologies in Denmark

Mikkel Hermansen and Valentine Millot

No 1545, OECD Economics Department Working Papers from OECD Publishing

Abstract: Danish firms are close to the technological frontier compared to other OECD countries,making the introduction of new – potentially disruptive – technologies key to boostproductivity growth. Despite a high level of digitalisation and good framework conditions,aggregate productivity growth in Denmark has been only average compared to otheradvanced OECD countries and lags behind in less knowledge-intensive service industries.Policy needs to embrace innovative technologies by leaning against attempts to discourageor exclude them and by tackling unintended or outmoded obstacles in legislation andregulation. Analysis based on Danish firm-level data suggests that digital adoption throughinvestment in ICT capital increases firm productivity and contributes to business dynamicsand firm growth. Improving economic incentives for such investment as well as facilitatingadoption of new business models require a shift of taxation away from capital and labourincome. Ensuring supply of the right skills and maintaining effective upskilling will helpworkers cope with disruptive changes and ensure that economic growth benefits all.

Keywords: competition; digitalisation; disruption; innovation; productivity; skills; taxation (search for similar items in EconPapers)
JEL-codes: E24 H25 L40 L50 O16 O33 O38 (search for similar items in EconPapers)
Date: 2019-04-02
New Economics Papers: this item is included in nep-cse, nep-eff, nep-ict, nep-mac and nep-sbm
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