Denmark has long been a frontrunner in governmental digital solutions, known as govtech, but the dream of big international sales remains elusive. Now, the Danish Trade Council is introducing new export-boosting initiatives.
In November of 2018, 29 Danish companies travelled to Berlin with then Prime Minister Lars Løkke Rasmussen. Each one providers of forward-thinking govtech solutions for Danish public authorities, the purpose of the trip to the German Capital was to realise the solutions’ export potential in the German market.
This effort to export govtech to Germany hasn’t been the only attempt at internationalisation. However, despite the many initiatives govtech’s big economic breakthrough is yet to materialise.
“We can certainly see interest in Germany, and a long-term strategy is required when working with governments. In Germany, legislation differs at the federal, state and municipal levels, and we have received mixed political signals. In the past, it has seemed easier than it has actually been. Yet we are starting to see the beginning of Danish solutions gaining a foothold into the market,” State Secretary for Trade and Global Sustainability in the Danish Trade Council, Susanne Hyldelund, states.
Time for a different path
Together with her team, Hyldelund has now analysed these previous efforts and has, subsequently, adjusted the strategy.
Meeting with her to discuss these new measures, Towards no. 1 travelled to the third floor of the Ministry of Foreign Affairs’ yellow brick building on Asian Square in Copenhagen. Here, Hyldelund overlooks the new strategy as well as the Port of Copenhagen, the forefront of Danish export efforts.
“We have come to the realisation that it is difficult to sell the solutions. Hence why we have evaluated whether we have taken the right course of action, or if other initiatives are better suited,” Hyldelund says.
The conclusion was that pursuing new avenues was necessary, and that success would come from initiatives that target specific areas. Therefore, there are at least three things on the Council’s agenda. The first is about setting expectations.
“We need to set realistic expectations with Danish companies and establish that exporting their solutions will be a difficult task,” Hyldelund says.
Secondly, there needs to be a close examination of different and more viable ways of selling, other than direct sales.
“We see an opportunity for companies to enter into partnerships with German suppliers, who already act as ‘trusted partners’ in delivering solutions to German public institutions,” Hyldelund says, noting that aiming at smaller administrations, who share the Danish focus on optimisation may also be beneficial.
Where is the digital maturity the greatest?
The third item on the Danish Trade Council’s agenda is to help identify countries and regions that are digitally mature.
“Although the partners in these countries are ready, as an exporter you also have to look at whether the authorities are actually ready to make large tenders or purchases, or if they are just snooping around,” says Hyldelund.
Hyldelund points out that everything is developing at a rapid pace, and at some point, Germany will be ready.
Several export cases have signalled the vast potential. Danish companies such as cBrain and Systematic have successfully exported digital solutions to public authorities in Germany and Finland, respectively.
The key to concrete sales is to be clear on the business case, says Hyldelund. Solutions developed in close private-public interaction in Denmark are at the forefront of change because we have addressed regulatory challenges that other countries are just now facing.
“We have a high level of expenditure and salaries in Denmark, so over the years, we have created, in the name of efficiency, some ground-breaking products,” Hyldelund states.
Innovation can combat a changing demographic
The problems associated with an ageing population and increased difficulty in obtaining skilled labour are affecting many countries, and they can benefit from Danish solutions.
“With these solutions, countries can become more efficient, and at the same time deliver solutions that work 24/7, and you can save on large call centres and free a lot of hands,” Hyldelund says.
If successful in this challenging market, many established solutions such as e-Boks, a secure digital mailbox, and NemID, a secure digital identification, may become Denmark’s next export success. Hyldelund however, also emphasises how their long-term effort could benefit the entire growth segment.
And she wants to be even more involved in the ecosystem.
“We want to get a better grip on this ecosystem. Many within it would never intentionally walk into a commercial building, or ask the public authorities for advice, so we have to offer ourselves to them. We need to get even better at that,” Hyldelund explains.
Hyldelund emphasises that the challenge with sales to governments is typically most significant when it comes to IT systems, such as the aforementioned e-Boks and NemID, which become part of a country’s infrastructure.
When it comes to the sale of robotic arms and other leading Danish tech, the barriers are typically smaller. In these areas exports are moving at a rip-roaring pace, to the benefit of the Danish economy.