Copenhagen – a leading metropolis for sustainable growth, innovation and talent

Recommendations from the Task Force for better business conditions in Copenhagen

COPENHAGEN – A LEADING METROPOLIS FOR SUSTAINABLE GROWTH, INNOVATION AND TALENT 2

Preface

It is a pleasure for me to present the completed recommendations from the Task Force for better business conditions in Copenhagen.

It has been crucial for the task force’s members that the recommendations are based on dialogue with the world around them, which is why we have involved trade associations and their knowledge in our work. We have asked the seven administrations to contribute with challenges in their areas of expertise and received input from other municipalities, universities and the many knowledge clusters in Copenhagen.

The task force has emphasised that the recommendations be based on analytically strong arguments with focus on evidence and high quality data. The recommendations build further on the City of Copenhagen’s business and growth policy 2015-2020 and are drawn up with the 2018 Growth Report as starting point, which provides a status for Copenhagen on parameters such as growth, wealth, inequality etc. from both a national and international perspective.

The overall picture is that Copenhagen is doing very well. There is a solid foundation to build upon. The challenge is in bucking the development trend in Europe, in which metropolises are dividing into one group of high-growth cities and one with lower or even negative growth. This means that Copenhagen, as a city and a region, must constantly strive to be an attractive commercial city for existing and new businesses and place itself at the forefront in the race to attract international investments and talents.

The task force has looked closer at the municipality’s challenges based on the potential which the municipality has to support growth via good business conditions for companies in Copenhagen. This has led to special focus on those areas where the municipality has some leverage, both with consideration for opportunities and respect for limitations such as the municipality’s management form, for example.

The overall themes in the recommendations are a focus on developing a modern and ambitious service culture in collaboration with companies, to support recruitment of workforce, and to raise the ambition level within digitalisation and infrastructure. We have drawn on the advantages of being a metropolitan area in terms of attracting talents and investments from abroad for the benefit of the capital and Denmark as a whole.

The first section of the report presents the task force’s 37 recommendations, followed by the analytical considerations and arguments behind the recommendations.

The working papers, analyses, sources, underlying documentation etc. that form the foundation for the recommendations are publicly available and can be found at www.kk.dk/taskforce2018.

Happy reading, and we look forward to a committed and constructive dialogue!

Torben Möger Pedersen

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Background for establishing a task force The task force for better business conditions in Copenhagen was established on the basis of the following declaration of intent in the City of Copenhagen’s budget agreement 2018:

“The parties agree to establish, under the auspices of Copenhagen Business Council, a task force to review the companies’ business conditions, including synergy with the local authorities, and present specific proposals for initiatives and improvements prior to negotiations on the 2019 budget.”

Members of the task force for better business conditions in Denmark

• Chairman: Torben Möger Pedersen, CEO, PensionDanmark • Allan Agerholm, CEO, BC Hospitality Group • Anne-Marie Levy Rasmussen, Chief of Staff, GlaxoSmithKline • Christoffer Susé, CEO, Haandværkerforeningen i Kjøbenhavn/Association of Craftsmen in Copenhagen • Thomas Bjørnholm, Director of Science, The Velux Foundation • Thomas Madsen-Mygdal, CEO, Twenty Three All are members of Copenhagen Business Council

Secretariat for the task force (City of Copenhagen, Finance Administration) Executive Secretary Annemarie Munk Riis Chief Economist Claus Andersen Anna Hesseldahl Larsen Anne-Mette Felby Madsen Anne Rosendal Vejen Mathiassen Henrik Doensig Bernstein Nicoline Kieler Samantha Hoffmann Sune Clausen

Published by The City of Copenhagen 2018 www.kk.dk/taskforce 2018

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Contents

Chapter 1. Summary 6 Chapter 2. Copenhagen – a good basis for growth 15 Chapter 3. The need for significant improvement of the fundamental framework conditions 21 3.1 The City of Copenhagen must provide a better service 21 3.2 Copenhagen must improve passability 26 3.3 The framework conditions for investments must be improved 30 Chapter 4. Businesses need better access to manpower with the correct expertise 34 4.1 More people into education and training and more opting for a STEM education 34 4.2 Greater focus on businesses in employment initiatives 39 4.3 Greater Copenhagen must be more cohesive 45 Chapter 5 Making better use of the City of Copenhagen’s framework for the promotion of innovation 49 5.1 More effective solutions through collaboration with private companies 49 5.2 Increased digitalisation, which is more efficient and gives increased welfare 54 5.3 The City of Copenhagen must focus on its innovation and growth policy 58 Chapter 6 Better international attraction 64 6.1 Generate growth by attracting and retaining more international specialists and investments 64 6.2 Copenhagen must improve international accessibility to the capital 71 Bibliography 75

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Chapter 1 Summary

Copenhagen is an attractive city to live, study and work in – something that the city has won numerous international prizes for. In Copenhagen, you can live a life well balanced between work and leisure. It’s a great place to live: workplaces of high quality, strong welfare provisions, world class cultural offers and a good environment. The city encourages a healthy lifestyle in balance with the environment, and city life here bears the mark of prosperity and equality.

A good, prosperous life should not be taken for granted, however. Up until the start of the 1990s Copenhagen was in crisis and people were leaving the city in droves. In recent years we have witnessed a polarisation between cities in Europe, where places such as Helsinki and Brussels have stagnated since the financial crisis, and an otherwise flourishing city like Milano has experienced a drop in its economy of a whole 10 percent since 2011. In contrast, the economy in cities like London and Stockholm has grown by 3 percent annually since 2001. Copenhagen has kept up nicely and enjoyed a growth of 2.6 percent annually over the period 2011-2015.

The increased polarisation between the big cities is due not least to increased global competition and increased digitalisation. This offers potential while also placing entirely new demands on Copenhagen and its businesses, if the city is to continue being an attractive place to live and run a business in.

The keywords for the companies are continual adaptation and adjustment. The same applies politically, in order to ensure that the framework which the companies work within is adapted to the new competitive situation. Not only for the sake of the businesses – but because local residents are dependent on a strong commercial life with good jobs, economic growth and high productivity in order to be able to maintain the high level of prosperity. The commercial sphere has its own responsibility to think long-term and make contributions, for example within education, traineeships, employment etc. The UN’s 17 global goals provide a political and commercial platform in terms of solving society’s challenges while also developing new business ideas and generating new opportunities for growth. For companies in Copenhagen (the Capital Region of Denmark, RH), tax revenue is generated corresponding to DKK 125 billion annually.

Despite the Copenhagen area as a region being an attractive location to place investments, paradoxically enough, business conditions in the City of Copenhagen do not rank highly when you ask the companies. The City of Copenhagen comes last in both the Confederation of Danish Industry and the Danish Construction Associations’ studies of business climate, and is criticised among other things for poor dialogue with the companies, slow case handling and high costs.

In general the bigger municipalities find it harder to offer the same business-friendly service as smaller municipalities. This is not set in stone however, as in many other areas the bigger municipalities have succeeded in coming in at the top.

This report offers both challenges and proposals for solutions.

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The foundation is good After years with relatively low growth there is now high economic growth in Copenhagen, both in a Danish and European context. With a growth of 2.6 percent in 2016 Copenhagen can compare itself with cities such as Hamburg, Amsterdam, Berlin and Stockholm. Copenhagen’s prosperity level measured in net salary is ranked at the top of the scale - surpassed only by Stockholm.

Copenhagen is Denmark’s only metropolis and must live up to its obligations as the country’s capital and growth engine. Growth in Copenhagen helps to raise prosperity and the standard of living across the entire country. It is therefore vital that the framework for productivity and growth in Copenhagen is excellent.

In many ways Copenhagen has a great starting point. If Copenhagen does not stay on its toes however then we risk this growth moving to other big cities, that the economy will go into reverse and that prosperity will deteriorate, with negative consequences for both Copenhagen and all of Denmark. It means that we need both to exploit our excellent starting point to keep Copenhagen at the front in the race to retain, develop and attract Danish and foreign companies and workforce, and to be the best place to start and develop new businesses.

Five reference points for Copenhagen as growth metropolis The task force has 37 specific recommendations – big as well as small. Some are focused on the short- term, while others have a longer implementation horizon.

The various individual proposals can be summarised under five points of reference, which the task force urges the political decision-makers in the City of Copenhagen to take ownership of – in a shared ambition to make Copenhagen one of Europe’s best metropolises – for the benefit of local residents, businesses, Denmark and the world:

1. NEW MUNICIPAL SERVICE CULTURE Politicians and senior management in the City of Copenhagen shall lead the way in implementing a clear and distinct transformation of the culture in the municipality’s administrations. The City of Copenhagen is one of the country’s best large municipalities to offer new and existing businesses the best business service. The businesses are regarded as the municipality’s customers and are given the best municipal customer service. There are short processing times and time is set aside for preliminary dialogue – which increases the chances that your case will be approved. There are many services for businesses at Business House Copenhagen’s “single entrance”. As a business, you can get your own key account manager. Dialogue rather than checks. High level of customer satisfaction.

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2. DENMARK’S BEST LABOUR MARKET Copenhagen – and Greater Copenhagen – has Denmark’s biggest labour market. The City of Copenhagen ensures that the companies’ needs for a qualified workforce are accommodated and think across municipal boundaries. The route to a job for unemployed Copenhageners is through a programme with businesses. Graduates consider job opportunities before they have finished their studies – ideally in the private sector. The municipal primary and lower secondary schools are modernised so that pupils receive an education where they can test their skills on the daily challenges in businesses. Many students are fascinated to see how much maths, science and IT can be used for and choose a program of continuing education in that direction.

3. WORLD-CLASS DIGITAL INNOVATION The City of Copenhagen is the municipality – not just in Denmark but globally – which has the most efficient digital service facilities for the municipality’s businesses. Internationally, Copenhagen is placed on the national map as an advanced hub for digital development and implementation. One-stop-shop. 24- 7. Innovative solutions.

4. EFFICIENT, SUSTAINABLE INFRASTRUCTURE Copenhagen leads the way in terms of green infrastructure, but we are en route to something more than that: an end to the desire for growth inhibitors and other chemical enhancers. We wish to be the metropolis in the world that has the best sustainable infrastructure, for the benefit of local residents, businesses and growth. This means more cycle routes as well as more car sharing and cycle sharing schemes. More parking spaces for those who really need them in order to perform their job. More metro – a metro route to Malmø and an extension of the Copenhagen Airport line, with many more routes out into the world from Copenhagen.

5. COPENHAGEN – GREATER COPENHAGEN Greater Copenhagen is a global hub for international companies and international talent. The world knows what we stand for. The City of Copenhagen makes it even more attractive and speedy for international companies and international talent to settle here. We also consider the opportunities for the accompanying families. Companies and talent are taken by the hand and met with websites and forms in English. More foreign students feel like staying. The municipality develops close partnerships with the region’s prominent universities and global businesses on attractiveness.

Great potential for increased growth and welfare development The task force has identified four areas with need for improvement, if we are to realise the big potential for sustainable, inclusive growth in Copenhagen.

The four overall challenges are:

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• The basic framework conditions are not optimal. Copenhagen is not among the most attractive municipalities to operate a business in. The framework for running efficient, innovative and growth- oriented companies is challenging and inadequate. • The companies lack manpower. The companies do not have access to the qualified workforce which they need. At the same time, many Copenhageners are out of work. This is a paradox that requires a solution. • The framework for innovation is not being properly exploited. Copenhagen can do much more to be a centre for companies that develop new, smart products and solutions. • Not attractive enough internationally. Copenhagen does not attract enough investments, international companies and international talent.

The ten most important recommendations for better business conditions The task force has analysed how these challenges limit growth and welfare in Copenhagen, assessed the consequences and causes and investigated what other cities do to overcome similar challenges.

Based on this analysis the task force has drawn up 37 specific recommendations that are considered as necessary – as well as politically and economically realistic – to ensure growth and welfare. Here are the ten most important proposals:

Marked improvement of the fundamental framework conditions • Strong political ownership of a new service culture. Mayors and senior management in the relevant administrations in the City of Copenhagen must take a strong ownership of a targeted changeover to a service culture when dealing with businesses. Businesses shall be treated as customers. A comprehensive external study of the culture is put into motion, the necessary initiatives implemented and regular progress reports given to mayors, political committees and Copenhagen Business Council (recommendation no. 1). • More “single entrance” offers for businesses. The companies shall be offered more cross departmental “single entrance” service offers at Business House Copenhagen. Key account employees shall be hired who, on the basis of a well-functioning IT system (“CRM”) can help the companies navigate their cases across the entire municipality. The municipality’s website for businesses shall be made far more user- friendly – as must forms etc. (recommendation no. 2). • Swifter case processing and regular polling of company satisfaction with building cases. Clear targets must be established for case processing times and ambitious goals for company satisfaction with all stages of building permit cases and local plans. The polls shall be published regularly and presented for discussion in the Technical and Environmental Committee (recommendation no. 3).

Businesses must have better access to a workforce with the right skills • Rapid follow-up on companies’ enquiries on the need for manpower from the entire job market in the Danish part of Greater Copenhagen. If a company has not gained access to a relevant candidate eight working days after having enquired at the job centre, then Business House Copenhagen shall look into the matter and work towards a solution. In enquiring to job centres across the entire region, businesses gain access to all jobseekers. The regional cooperation on municipal job placement must therefore be expanded considerably (recommendations no. 17 and 18). • More business cooperation and increased focus on science, technology and IT in the municipal primary and lower secondary school. A strategy must be adopted that places increased focus on science, technology and IT in the municipal primary and lower secondary school and in day care and afterschool institutions. Lower secondary school pupils must have better access to elective subjects within the so-called STEM skills (science, technology, engineering and mathematics), so that more

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young people choose to take a STEM-related education after lower secondary school. From 2022, all municipal primary and lower secondary school pupils will, at some point in their school career, have participated in a business project under the auspices of Åben Skole (‘the Open School’). At least 20 percent of municipal primary and lower secondary school pupils shall collaborate each year on projects with business (recommendations no. 14 and 15). • Establishment of an Øresund metro network (‘Øresundsmetro’). The City of Copenhagen, Greater Copenhagen, the City of Malmö and the Danish and Swedish state shall work together to establish a process plan for the construction of an Øresund metro network from Copenhagen Central Station to Malmø Central Station. An Øresundsmetro can contribute directly to greater cohesion in the region and create positive agglomeration advantages in Greater Copenhagen, while also exploiting the region’s potential to the fullest (recommendation no. 21).

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Better utilisation of the City of Copenhagen’s framework for the promotion of innovation • Increase exposure to competition and gather all offers together onto one platform. Each year, the City of Copenhagen shall increase exposure to competition for the municipality’s contracts. In particular, companies shall have better opportunities for bidding on contracts within city development, transport, healthcare, construction and infrastructure. The City of Copenhagen’s administrations shall establish a joint digital platform containing all the municipality’s tenders (recommendations no. 22 and 23). • Strategy for digital innovation. The City of Copenhagen must adopt an ambitious digital strategy focusing on implementing large-scale digital solutions across the municipality with an increased service level and lower costs as a result. One department in the Finance Administration shall be responsible for implementing the strategy (recommendation no. 26).

To be more attractive internationally • Increased international knowledge of Greater Copenhagen. Greater Copenhagen shall be strengthened as a brand via campaigns which clearly illustrate the region’s values and offers – and which can also be made available to businesses in terms of recruitment (recommendation no. 34). • Partnerships on how to attract international skills and research environments. Establish a formal cooperation with the established knowledge institutions in Greater Copenhagen to attract core researchers/research departments and innovation and entrepreneurial environments from abroad (recommendation no. 35). The full list of the 37 recommendations appears as a summary on page 12 and is described in more detail throughout the rest of the report. It is primarily recommendations that can be decided and implemented immediately by the City of Copenhagen in connection with the 2019 budget. Individual recommendations will require more years of planning and/or implementation and presuppose agreements with other municipalities, the Capital Region of Denmark and the State.

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Overview of recommendations

1 Secure a strong political ownership of the new service culture, see page X. 2 More “single entrance” offers for businesses, see page X. 3 Welcome letter for new businesses and increased business dialogue, see page

X.

4 Swifter case processing of - and regular polling of - company satisfaction with building cases, see page X. 5 Digitalisation of building permit case handling, see page X. 6 Expand preliminary dialogue in building permit cases, see page X. 7 Provide the Technical and Environmental Committee with an audience for

larger construction projects, see page X. 8 Review of the City’s visions and rules, see page X. 9 Establish an eastern ring road, see page X. 10 Expand ‘park and ride’ facilities, see page X. 11 Strengthen bike sharing programs and car sharing schemes, see page X.

ed improvement of the fundamental the of improvement ed 12 Improve business parking in Copenhagen, see page X. framework conditions framework Mark 13 Reduce the reimbursement duty on public and private properties, see page X.

14 More focus on science and technology in the municipal primary and lower secondary school, see page X. 15 Collaborate more with businesses in the municipal primary and lower secondary school, see page X.

the right skills right the 16 Better guidance for lower secondary school pupils on choice of education, see page X. 17 Follow up more rapidly on companies’ manpower needs, see page X. 18 Create a complete job market in Greater Copenhagen (DK), see page X. 19 Place businesses in the centre in employment initiatives, see page X.

20 Increase graduates’ focus on starting their job search early, see page X. to a workforce with with workforce a to Businesses must have better access better have must Businesses 21 Establishment of an Øresund metro network, see page X. 22 Increase exposure to competition, see page X.

23 Gather together all municipal tenders onto one digital platform, see page X. 24 More collaboration between the municipality and companies on new

solutions, see page X. innovation

25 Help companies with new solutions and business models, see page X. 26 Adopt a strategy for digital innovation, see page X. 27 Offer companies courses in digital business models, see page X. 28 Create a good physical framework for innovation and growth environments,

see page X.

Copenhagen’s framework for for framework Copenhagen’s of promotion the Better utilisation of the City of City the of utilisation Better 29 Clear criteria for the City of Copenhagen’s efforts with industry, see page X. 30 More offers from International House, see page X. 31 English language policy in the City of Copenhagen, see page X.

32 Get more foreign students into part-time study jobs, see page X. 33 Better guidance for foreign and ex-pat residents on housing, see page X. 34 Increase international knowledge of Greater Copenhagen, see page X.

35 Establish partnerships on how to attract international expertise and research internationally To be more attractive attractive more be To environments, see page X.

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36 Extend and expand efforts to attract new air routes to Copenhagen Airport, see page X. 37 Improve the infrastructure around Copenhagen Airport, see page X.

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Chapter 2 Copenhagen – a good basis for growth

On many occasions, Copenhagen has been heralded as one of the world’s best cities to live in1. The city offers attractive workplaces, good schools and day care institutions, has recreational opportunities and world class cultural offers. The majority of the city’s residents cycle, take public transport or walk. Copenhagen has a goal of being the world’s first carbon neutral capital by 2025. It has already succeeded in reducing carbon emissions by around 40 percent since 2007 while welcoming 75,000 more residents over the same period.

Denmark ranks highly in terms of values such as satisfaction with life, work/life balance, equality, tolerance and trust, see table 1.

Table 1. Satisfaction with life, trust, tolerance etc. in Denmark

Rank Life satisfaction 2 Work/life-balance 2 Trust in others 1 Tolerance 10 Equality (gender) 7 Safety 6

Source: OECD

Among the cities Copenhagen is normally compared with, Copenhagen is the city with the most satisfied residents, see figure 1. In fact, Copenhagen is surpassed only by one city (Sydney) and thus has the second-most satisfied residents – in the world.

1 Monocle Magazine and Telegraph

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Figure 1. Index for ”satisfaction with life”, 2014

Indeks Indeks

10 10

8 8

6 6

4 4

2 2

0 0 København Oslo Amsterdam Stockholm Hamborg Berlin

Source: OECD Note: Self-evaluation of life-satisfaction

Besides being one of the world’s best cities to live in, Copenhagen (RH) is also a rather unique example of how high welfare and a high degree of equality can go hand in hand, see figure 1.

Figure 2. Value creation per resident and equality, 2014

Lighed Lighed

0,74 0,74

Luxembourg

0,71 Berlin 0,71 København (RH) Oslo Prag Milano Amsterdam Stockholm 0,68 0,68 Barcelona

Madrid Wien 0,65 Rom 0,65 Athen Bruxelles

0,62 0,62 50 100 150 200 250 300 350 400

Indkomst pr. indbygger (1.000 kr.)

Source: OECD, Eurostat and own calculations Anm.: Primary net income in 2015. For Berlin and Copenhagen the equality indicator is for 2013. (defined as 1 - Gini coefficient)

Growth is high in Copenhagen (RH) – it is among the very highest in the European metropolises, see figure 3. Copenhagen has seen a noticeable increase in growth in recent years, while the other cities have only

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experienced moderate advances – or even seen populations drop. Moreover, the differences in the growth rates across the European metropolises have doubled during the period.

Figure 3. Average annual GDP growth

Pct. Mio.

5 15 4 12 3 9 2 6 1 3 0 0 -1 -3 -2 -6 -3 -9 -4 -12

2001-2016 2011-2016 Indbyggertal (mio) h. akse

Source: OECD Note: Fixed prices

A large proportion of Copenhageners are highly qualified, a level which is only surpassed by the other Nordic cities and by London and Zürich, see figure 4. This excellent ranking is achieved alongside the fact that Copenhagen is a diverse city with an ambition of being a city for everyone.

Figure 4. Share of population who are highly qualified, 2016

Pct. Pct. 60 60

50 45 40 EU-15

30 30

20 15 10

0 0

Source: Eurostat Note: A high qualification level is defined as a higher education and/or employment within research and technology

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Investments in research and development are notably higher in Copenhagen (RH) than in Stockholm, Oslo and Helsinki, see figure 5.

Figure 5. Investment in research and development as a share of GDP, 2015

Pct. Pct.

5 5

4 4

3 3

2 2

1 1

0 0 København Stockholm Helsinki Berlin Oslo Hamborg Amsterdam

Source: Eurostat

There is a noticeably good framework for entrepreneurship in Copenhagen (RH), which is ranked number two out of 125 on the EU’s regional entrepreneurship and development index (REDI), see figure 6. Copenhagen scores high on parameters such as qualification level, lifelong learning and investments in research and development in both the public and private sector.

Figure 6. EU’s regional index for framework conditions for entrepreneurship and development, 2017

REDI-score REDI-score

100 100

80 80

60 60

40 40

20 20

0 0 Stockholm København Hamborg Berlin Amsterdam

Source: REDI index (EU)

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The high qualification level and the excellent framework for entrepreneurship are some of the explanations for how Copenhagen (RH) can combine a high degree of equality with high growth and welfare. Recent years’ developments testify to Copenhagen drawing from many European cities, and that Copenhagen looks set to establish itself as one of the European metropolises with the highest growth rates.

The figures also show how costly it could be if Copenhagen (RH) loses ground to the other metropolises. Much points towards an elimination race being underway, where the major European cities are dividing into two groups: one with high growth and the other with low or even negative growth.

This development has happened within the past few years. The competition for international investments and talent is tough, and the development testifies to the fact that Copenhagen has succeeded in a great many areas in recent years. Copenhagen thus has an excellent springboard for continuing the positive development. It demands a strong input from many parties: businesses, trade associations, the City of Copenhagen and the region’s other municipalities, as well as the Capital Region of Denmark and the State.

Since 2015, the City of Copenhagen has focused on the development in the companies’ business conditions based on a number of politically determined goals in the municipality’s business and growth policy. Based on the task force’s recommendations and the analysis underlying them, the City of Copenhagen is urged to revise the goals so that they are more accurate and ambitious.

You can read more on the status of Copenhagen in the 2018 Growth Report, which is also published on www.kk.dk/taskforce2018.

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Chapter 3 The need for significant improvement of the fundamental framework conditions

The fundamental framework conditions for commercial activities in the City of Copenhagen can be improved. Copenhagen scores low in many studies of which Danish municipalities are most attractive to run a business in. There is therefore good potential for improving the framework for running efficient, innovative and growth-oriented businesses in Copenhagen.

3.1 The City of Copenhagen must provide a better service The City of Copenhagen’s service mentality towards businesses is challenged on several fronts. It is generally seen as hard to get in contact with the municipality and that dialogue is poor. Some 37 percent of businesses do not believe at all, or to a limited extent only, that it is easy to get in touch with the correct person in the City of Copenhagen.2

Within the specific remits there is especially high dissatisfaction with the service relating to the processing of building permits and local plans. A customer satisfaction survey from 2017 showed that four out of ten companies were dissatisfied with the processing of building permits. Dissatisfaction is greatest in the application process, in the processing of the case itself and in preliminary dialogue, see figure 7.

2 Megafon (2017)

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Figure 7.The companies’ satisfaction with phases in the processing of building permits (2015-2017) (1=extremely dissatisfied, 5= very satisfied)

Score Score

5 5

4 4

3 3

2 2

1 1

0 0

2015 2016 2017

Source: Epinion for the City of Copenhagen (2017)

The preliminary dialogue is important because it forms the clear basis for what one can expect in regard to the construction project. But there is too little preliminary dialogue – and what there is, is too poor. Some 45 percent of companies, for example, do not feel that the expected case processing time was made clear to them beforehand.3

The City of Copenhagen has laid down clear service goals for the processing of building permits, which follow the national service goals, and these have been met. In comparison with the case processing times of other Danish municipalities, however, the City of Copenhagen ranks poorly: a building permit takes 54 days to process in Copenhagen compared with 26 days in Aarhus and 27 days in Odense. On a national level, a building permit takes an average of 22 days to process.

Companies and contractors also request a clearer framework when working with local plans, which are perceived as lacking in transparency and moving too slow. Here, too, a clear balance of expectations is desired by the company as to what is required and when local plans are expected to be finished.

The challenges in the service culture are recognised and a number of initiatives have been put into motion. Examples are the work with a “single entrance” to the municipality at Business House Copenhagen, work on improving dialogue, training a large number of employees in service culture and the introduction of regular polls of service levels. There has been special focus on construction projects and the processing of building permits, where the municipality has introduced e.g. case screening in both simple and complex cases. This has increased the number of building permits which are processed within three days from 20 percent to 68 percent. There is thus a good basis on which to make an even greater effort.

3 Epinion (2017)

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Recommendations for a better service culture in Copenhagen As part of the City of Copenhagen’s business and growth policy for 2015-2020 the City Council has determined that Copenhagen shall be a business-friendly city where it is attractive to run a business. If Copenhagen is to live up to this decision then it is vital that companies are met by a far stronger service culture. Initiatives are required that can change the mentality at all levels in the municipality – from the political level to the individual caseworker, and for initiatives which work targeted to improve routines – and where results are measured regularly. Specifically, the task force has eight recommendations that can support the City of Copenhagen’s move from a ‘silo’ culture to a service culture.

Recommendation 1: Secure strong political ownership of a new service culture Mayors and senior management in the relevant administrations in the City of Copenhagen must take a strong ownership of a targeted changeover to a service culture when dealing with businesses. A comprehensive external survey of the culture is put into motion, the necessary initiatives implemented and regular progress reports sent to mayors, political committees and Copenhagen Business Council.

It is recommended that politicians and senior management in the City of Copenhagen take a much stronger ownership of and communicate much more clearly that they prioritise commercial enterprises and a good service culture, and that businesses are especially important for prosperity and growth in the municipality. If this culture is to become widespread, then it is absolutely critical that the administrations convey what the mayors and senior management stand behind; that they push for a change in the direction of service culture – and reward progress in these efforts.

Good business service must be addressed across all the relevant administrations, and must not be thought of in ’silos’. It is therefore recommended that the Lord Mayor, the Technical and Environmental Mayor, the Employment and Integration Mayor and the Culture and Leisure Mayor opt to prioritise a common roll-out of the service culture with a joint strategy and action plan for what specific initiatives it will require to achieve a noticeable effect. The four mayors shall follow the developments closely and report on the results as a fixed point at meetings of Copenhagen Business Council.

In recent years, the City of Copenhagen has launched several initiatives in the various administrations with a view to strengthening service culture in the business area, but the results have been slow in coming. This can be explained by the fact that it takes time to carry out major cultural changes, but there is also something to suggest that the municipality does not have adequate knowledge of how or where inexpedient structures, a shortage of skills or a lack of prioritisation present obstacles.

It is therefore proposed that a comprehensive study of the service culture be put into motion across the municipality, the necessary efforts implemented and regular reports on the work sent to mayors, political committees and Copenhagen Business Council. The study shall be carried out by external consultants, and it shall identify very specific challenges in the current working culture and organisation. In addition, it shall present proposals for solutions and tools for improvements.

Recommendation 2: More “single entrance” offers to companies Customers shall be offered more cross departmental “single entrance” service offers in Business House Copenhagen. The City’s administrations shall also ensure: • That more companies in Copenhagen are aware of the Business Service offer. • That “key account” employees are hired to ensure a cohesive and efficient service, including assisting companies in navigating their cases across the entire municipality.

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• That all relevant information in a company’s pending case with the municipality can be presented in one place. • That the municipality’s website and digital forms are made more user-friendly for the businesses.

Business House Copenhagen is the companies’ physical, telephone and digital access to the municipality. Business House Copenhagen currently resolves around 60 percent of all enquiries on the spot and directs the remaining ones to the correct department/ employee in the municipality. Business House Copenhagen can also help companies fill out digital forms and self-service solutions over the telephone.

The service from Business House Copenhagen is presently limited by the fact that the City of Copenhagen (due to its management form) is divided up into silos. In addition, only a third of businesses in Copenhagen are aware of its services.

It is recommended that Business House Copenhagen is given responsibility for handling more service offers across the administrations, so that even more enquiries can be dealt with right away at the point of the companies’ first enquiry.

In order to offer a cohesive service to businesses it is also recommended that: • Specific efforts are implemented to increase companies’ knowledge of the offers at Business House Copenhagen. • An interdepartmental key account unit is established, which is given the responsibility and mandate to ensure that businesses are walked properly through building permit cases, recruitment cases, licensing cases and similar. The key account function will not let the company go until the case has been closed. • It must be possible for the municipality’s employees to look up all relevant information about a com- pany’s pending case with the City in one place, so the company’s experience is one of a cohesive ser- vice – regardless of which administration/ department they are in contact with. • The municipality launches a noticeably more user-friendly website, which can help to guide companies along their way. • The municipality simplifies all the forms, application forms etc. which businesses need to fill out. The municipalities in Greater Copenhagen can benefit from a collaboration and using the same forms across municipal boundaries and to exert influence on the State to make changes to the forms which are established at national level.

Recommendation 3: Welcome letter for new businesses and increased business dialogue The City of Copenhagen sends out a friendly welcome letter to all new businesses with information about the services on offer in the municipality. The mayors shall meet regularly with prominent representatives from Copenhagen’s most important business sectors.

Good service and the entire basis for a positive collaboration starts with a good first impression. Presently, the first thing which businesses meet in the City of Copenhagen is a letter demanding waste management fees.

It is recommended that all new businesses first receive a welcome package from the Lord Mayor, the Technical and Environmental Mayor, the Employment and Integration Mayor and the Culture and Leisure Mayor. In the welcome letter, the businesses are introduced to the offer from Business House Copenhagen of guiding the companies through cases in all administrations, and the letter clearly states what the company can expect from the City of Copenhagen. The companies will also be offered the

COPENHAGEN – A LEADING METROPOLIS FOR SUSTAINABLE GROWTH, INNOVATION AND TALENT 25

chance to sign up for the City of Copenhagen’s newsletter on business-related topics. Foreign businesses will receive the welcome letter in English.

It is recommended that prominent representatives from well-established businesses and industries/clusters are regularly invited to meet with relevant mayors with a view to identifying the specific industry or cluster’s potential and challenges and to discuss how the City of Copenhagen can improve the framework conditions.

Recommendation 4: Swifter case processing of - and regular polling of - company satisfaction with building permit cases Clear targets must be established for case processing times for the companies’ satisfaction with all stages of building permit cases and local plans. The polls shall be published regularly and presented for discussion in the Technical and Environmental Committee.

It is recommended that the City of Copenhagen establish clear KPIs which measure company satisfaction on a monthly basis with different types of building permit cases, local plans and different links in the processing of building cases. The number of companies which respond that it has been easy to obtain a quick and clear answer of what is needed to obtain a permit must be at least 90 percent.

The Technical and Environmental Administration are in the process of introducing spot polls of company satisfaction with the various phases in the processing of building permits. It is recommended that this work is strengthened with a “direct response” text messaging service, and that the results are published monthly on the City of Copenhagen’s website. It is recommended that all businesses are provided with easy access to download anonymised reports on different dimensions of the processing of building permits and cases – ideally broken down on a fairly detailed level.

Recommendation 5: Digitalisation of building permit case handling The first link in the processing of building permit cases (screening) shall be made digital with a view to being less arbitrary and enabling more resources for e.g. preliminary dialogue.

Trade associations have highlighted that many companies experience the case handling as slow and arbitrary. In order to make the case handling process faster and less arbitrary it is recommended that the municipality looks into the possibility of using robots for the first screening of applications and annexes. In the long term this will free up resources for more complex aspects of building permit case handling and make the caseworker’s job more value-creating. It will also mean that the municipality is able to offer fast track building permit processing which complies with certain standards of preapproved models such as those currently used on balconies, for example. Studies need doing into which other areas can be standardised.

Recommendation 6: Expand preliminary dialogue in building permit cases The offer of preliminary dialogue shall be expanded based on the companies’ needs.

In many municipalities, a good preliminary dialogue has been shown to make a big difference to company satisfaction. A preliminary dialogue provides the opportunity to clear up any discrepancies and materials in regard to an upcoming building case. There is also a balance of expectations about the procedure, and it typically cuts down the case handling time. It is therefore recommended that the City of Copenhagen offers more preliminary dialogue with the companies before the building permit application itself.

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Recommendation 7: Provide the Technical and Environmental Committee with an audience for larger construction projects Larger construction projects should have the opportunity to be presented before the Technical and Environmental Committee before a final application is submitted to the administration.

It is recommended that - after the Norwegian model - contractors are given the opportunity for an audience with the Technical and Environmental Committee (TMU) with a view to presenting a major project before it is submitted to the administration. This enables politicians to gain an insight early in the process into exciting projects in the city. It is already possible to get an audience once the building project is being handled, but it is proposed that these audiences can be given already on submission of the project application. This means that audiences can happen early in the process, and clarification in the cases can obtained earlier. It is recommended that part of TMU meetings be reserved for these audiences, which may imply a slight risk that contractors will have to wait a couple of weeks. Should one not wish to wait, it is of course always possible to turn down the initial audience and allow the case to progress as it does today. Criteria shall be determined as to when a case can be placed on the agenda.

Recommendation 8: Review of the City’s visions and rules The municipality shall review all policies, strategies and visions with a view to identifying any rules which might stand in the way of the companies’ growth – in order to remove the biggest barriers. In addition, an overview shall be made of the rules which companies must be aware of so that they can bear them in mind e.g. in connection with building permit cases and local plans.

The City of Copenhagen regularly adopts new policies and strategies, for example for the beautification of the city. This is of a great value to the city, but can at times be a significant obstacle for businesses’ potential to flourish. It is a balancing act to get the considerations of residents and businesses to go hand in hand, but it is important that the business sphere is seen as a vital player in developing the city’s prosperity. It is therefore recommended that a systematic review of policies and strategies in the municipality be carried out with a view to identifying obstacles for businesses. It is recommended that the worst of these obstacles are reconsidered and evaluated in relation to the total benefits and losses for the city’s stakeholders. It is also proposed that an overview is drawn up for businesses of what considerations they need to have as a result of the various policies, so that businesses can take them into consideration in connection with building cases etc.

3.2 Copenhagen must improve passability Companies as well as citizens choose to settle down in urban areas because there are opportunities for high productivity, prosperity and a good quality of life. There is better access to a workforce in the city, more innovation and shorter distances to travel and thus lower production costs. Living in cities does however often have a number of costs that can reduce the rewards, for example pollution, social challenges and congestion. These costs must be tackled if one is to realise the full growth potential of urbanisation. Congestion is one of the absolute biggest obstacles.

Research has documented that congestion has significant negative effects on economic growth4, especially via three channels:

1. It increases the travel time to and from work, which can mean that people want to work less hours or not look for a job so far from their home. This reduces the labour supply and lowers the chances of a good match.

4 DTU (2017) and Trængselskommissionen ’The Committee on Congestion’ (2013)

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2. It increases companies’ transport costs, so productivity is reduced and the cost level for products and services increased. 3. It makes the city a less attractive place to live in and thus also less attractive for investments and workforce.

Copenhagen and the Capital Region has a high level of mobility in general and limited congestion problems compared to other European urban areas.5 This relates especially to the fact that around six out of 10 Copenhageners cycle to and from work and study. Copenhagen has thus also been proclaimed the world’s best bicycle friendly city on several occasions.6

Over a number of years, the problems with congestion on roads in the capital region have however increased. The number of vehicles which cross Copenhagen’s municipal boundary has for example risen by 4 percent from 2015-2016.7

Many businesses experience that the transport of goods takes longer than previously. It is difficult for example for builders or consultants who have jobs in the city, to find parking spaces. This means higher costs, which the customers ultimately end up paying – or it can lead to cancelled orders. Many businesses therefore try to use alternative transport forms in the city such as cycling window cleaners or locksmiths.

The total traffic in the municipalities of Copenhagen and Frederiksberg will increase by approx. 50 percent from 2015 to 2050.8 This is due to an increase in the population in Copenhagen and the region. Over the next ten years alone the population in the City of Copenhagen is expected to rise by around 100,000, and this, together with economic growth, will place considerable pressure on passability.

Trængselskommissionen (Danish Transport Ministry’s ‘Committee on Congestion’) anticipates a doubling of wasted time as a result of congestion from 2012 to 2025, see figure 8.

Figure 8. The expected development of delays among car drivers in the Capital Region of Denmark.

1.000 timer 1.000 timer 100 100

75 75

50 50

25 25

0 0 2012 2025

5 TOMTOM (2017) 6 Copenhagenize Bicycle Friendly Cities Index (2017) 7 City of Copenhagen (2016) 8 City of Copenhagen, KIK2 study

COPENHAGEN – A LEADING METROPOLIS FOR SUSTAINABLE GROWTH, INNOVATION AND TALENT 28

Source: Trængselskommissionen (2013)

Recommendations to improve passability in Copenhagen If Copenhagen is to retain its strong international position as a passable city and have an internationally leading cycle culture, then it is crucial that there continues to be investments made in traffic solutions: solutions, which can accommodate the increasing pressure on the infrastructure while at the same time looking toward the future with sustainable approaches within collective transport, cycling and car traffic. Specifically, it highlights four recommendations for reducing congestion in Copenhagen.

Recommendation 9: Establish an eastern ring road The construction of an eastern ring road (harbour tunnel) from Nordhavn to the Amager motorway.

Today, a large part of the traffic towards Amager and Zealand drives through the centre of Copenhagen. This means unnecessary traffic in the city, with the obvious solution being for it be led around the centre. It is therefore proposed that the plans to establish an eastern ring road, also called a harbour tunnel, be implemented.

The establishment of an eastern ring road will ease the heavy traffic in particular in the city and car traffic on parts of the state highway network, in addition to serving new, major urban development areas close to the centre. In this way unnecessary traffic is led away from the inner city. It can reduce congestion, but also give more room for drivers who need to take their vehicle into the centre, for example tradespeople. An eastern ring road would also improve access to Copenhagen Airport and supplement road connections between Zealand and Amager, which in the long term lacks adequate capacity. It is proposed that the City of Copenhagen and the State find a speedy solution for the remaining financing and initiate the project management and construction work.

Recommendation 10: Expand “park and ride” facilities The expansion of park and ride facilities with a total of 5,000 parking spaces at stations outside of Copenhagen financed with regional co-financing of 50 percent.

Many residents who live outside of Copenhagen but have jobs in the city take the car to work. Very few - at an estimate about 5 percent - park the car at a station and take the train into Copenhagen*.9 Commuting to work by car leads to unnecessary congestion in the city.

On this basis it is recommended that more parking spaces be established at park and ride facilities at stations in North, South and West Zealand. To start with, those stations with the best conditions for getting more people to combine their car with the train on trips into Copenhagen should be chosen. This will also contribute towards a better utilisation of the existing traffic system.

In the report “Traffic in Copenhagen 2016” the Danish State Railways, DSB notes that the potential is greatest for commuters with long and medium-length journeys. They should be large stations, which have both a wide local catchment area and are also attractive for car drivers from further away. Finally, it should be stations on the main lines that are chosen. It is expected that an increase in capacity will lead to more people opting to drive to a station and take the train to Copenhagen rather than taking the car the whole way.

The State has previously set aside DKK 1 billion towards a 50 percent co-financing of the park and ride facilities. The interest from towns which could be the potential hosts for these facilities has however been

9 Ministry of Transport (2015)

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very sparse. It is therefore recommended that Copenhagen works towards the allocation over 2019-2022 of a regional pool that could increase incentives for these towns to build park and ride facilities in Region Zealand and the Capital Region of Denmark. The pool must be able to cover the city’s co-financing of a least 5,000 parking places.

Recommendation 11: Strengthen bike sharing programs and car sharing schemes From 2020 the market for car sharing shall be opened up so that everyone who can document positive congestion effects can enter the Copenhagen car sharing market, and that private city bike concepts are allowed use of the municipality’s bike stands as permanent parking spaces.

Establishment of more cycle parking spaces, including for shared bikes.

The majority of Copenhageners cycle, walk or use collective traffic, but many also feel the need for a car, for example for family excursions out of the city and big shopping trips.

Cycling effectively limits congestion in Copenhagen; but if more commuting is to be done by bike, then it requires far more commuters from the neighbouring municipalities getting on their bikes in connection with their daily commute. It must also be easier to arrive and to leave by cycle. Copenhagen has a shortage of cycle parking spaces and the users are far from satisfied with the present cycle parking opportunities.

Car sharing provides the opportunity to drive in a car while the user payment element ensures that car sharing is not prioritised higher than public transport or cycling. An analysis shows that car sharing schemes reduce the number of car owners. Car sharing can thus be a good tool for reducing congestion.10

In addition, better utilisation of the vehicle fleet will mean that the need for parking spaces drops and that it reduces the congestion that results from the search for parking spaces.

The current car sharing scheme with reduced parking fees in Copenhagen was designed at a time when car sharing had not yet gained a foothold. This was an insecure market, and in order to make the scheme attractive to car sharing providers, the scheme was offered with an exclusive agreement to one company. This one company has therefore, up until 2020, the sole rights to provide car sharing with reduced parking fees. This gives the company time to obtain the costs which are connected with developing a new market.

Such a monopoly can be expedient when dealing with a new area with great uncertainty and to promote innovation for a period. The task force is overall supportive of this approach.

It is however also important that the market is opened up once it has matured. On this basis it is proposed that from 2020 there is a free market. It is however crucial that we are dealing with genuine car sharing schemes which actually reduce congestion. It is therefore proposed that reduced parking fees will only continue to be given to those schemes that can document that they are helping to reduce congestion and which do not contribute to air pollution.

Recommendation 12. Improve business parking in Copenhagen The establishment of 500 business parking spaces in Copenhagen.

Besides the waiting time in the traffic, increased costs - and thus the prices of products and services - it can be costly to look for a parking space. You can also risk having to park very far away, and this makes

10 DTU (2015)

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the task even more expensive to complete. Many skilled trade businesses and service companies have noted this as being a major problem in Copenhagen.

It is therefore proposed that the opportunities for business parking are improved. The City of Copenhagen has just under 50,000 paid parking spaces.

More specifically it is proposed that 500 parking spaces be earmarked for commercial use on street corners where there is presently no parking permitted. This is legal if the pavement can be moved out as a ‘bulge’ for the first five metres, and this is possible on many streets.

As it cannot be taken for granted that this will provide an adequate number of parking spaces, then the town’s roads must be carefully looked at to find a way of optimising the space and thus creating some of the earmarked parking spaces. If 500 spaces cannot be found in this way, then the rest must be found by converting existing parking spaces.

3.3 The framework conditions for investments must be improved Investments, as a share of the GDP, have fallen drastically in Copenhagen since the finance crisis, and are continuing to drop, see figure 9. The investment level in Copenhagen has typically been higher than the national average, but is now lagging behind, and has done for the past few years. While investments in the rest of the country have been on their way up since 2010, there continues to be a trend towards a falling investment level in Copenhagen.

Figure 9. Investments as a share of the GDP

Pct. Pct.

25 25

23 23

21 21

19 19

17 17

15 15 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

København Øvrige Danmark

Source: Statistics Denmark and own calculations Note: Copenhagen here covers the Capital Region of Denmark

In an international context as well, Copenhagen has a relatively low investment level. In contrast to Copenhagen, both Stockholm and Hamburg have a higher investment level than their national average, see figure 10.

COPENHAGEN – A LEADING METROPOLIS FOR SUSTAINABLE GROWTH, INNOVATION AND TALENT 31

Figure 10. Gross investments as a share of the GDP, 2014

Pct. Pct.

30 30

25 25

20 20

15 15

10 10

5 5

0 0 Stockholm Hamborg Berlin København Oslo Amsterdam

Investeringskvote Landsgennemsnit

Source: Statistics Denmark, Statistics Netherlands and own calculations

There is a close correlation between the level of investment and productivity, see figure 11. Industries with a high investment level per hour worked also have a relatively high gross value added (GVA) per hour worked.

Figure 11. GVA and investments per hour worked for industries, Copenhagen (RH), 2013

GVA per hour worked (DKK)

1200

R² = 0,5928 Finansiering og forsikring Industri 800 Information og komm.

Erhvervsservice Handel og transport 400 Offentlig mv.

Kultur, fritid mv. Bygge og anlæg

0 0 50 100 150 200 250 300 350 Investments per hour worked (DKK)

Source: Statistics Denmark and own calculations

Despite the falling investment level in Copenhagen (RH) growth has been high, especially in recent years, compared with the other European metropolises11.

11 The Growth Report (2018)

COPENHAGEN – A LEADING METROPOLIS FOR SUSTAINABLE GROWTH, INNOVATION AND TALENT 32

As a high investment level is one of the preconditions for growth and prosperity, a low investment level can in the slightly longer term have consequences on growth. There is thus a need for making it as attractive as possible for businesses to make investments. This is absolutely crucial if Copenhagen is to continue to be one of Europe’s leading growth metropolises. It is necessary for the framework for the companies’ investments to be supported so that the development can be turned around.

Investments, and thus the investment level, are influenced by a number of factors. This applies for example to the opportunities for running a competitive company and access to risk capital. The government has recently adopted a tax deduction scheme for investors, which shall improve the opportunities for unlisted small and medium-sized enterprises to raise capital and thus support the investments. The municipality’s service level towards businesses can also have an influence on the cost level, and thus how attractive it is to operate a business and make investments in the municipality.

Recommendation to support investments in Copenhagen Copenhagen has experienced high growth in recent years but also a low investment level. If Copenhagen is to continue to be a metropolis with high growth in the future, then it will be necessary to make it more attractive for companies to invest. Specifically it points towards a reduction of the reimbursement duty on public and private properties to make it more attractive to make capital investments in Copenhagen.

Recommendation 13: Reduce the reimbursement duty on public and private properties The reimbursement duty on public and private properties shall be reduced in the long term by 9.8 per mille to 5.75 per mille, which is the same level as the reimbursement duty in Aarhus. Alternatively, one could consider earmarking DKK 250 million of the proceeds from the reimbursement duty for financing the task force’s proposals.

Income tax in the City of Copenhagen is one of the lowest in Denmark, which pleases both residents and local businesses. On the other hand, the land tax in the City of Copenhagen is set at the maximum level of 34 per mille, which is paid on the taxable land value. The City of Copenhagen also has a reimbursement duty on public and private properties of 9.8 per mille, which is one of the highest in the country. The reimbursement duty may constitute a maximum of 10 per mille. The reimbursement duty is paid as a part per thousand of the difference between the property value and the land value according to the public property evaluation. To put it rather crudely, it is a tax on private capital investments.

The reimbursement duty affects the investment level negatively. Businesses can either opt to make their investments outside of Copenhagen, or they can choose to avoid making otherwise profitable investments completely. This applies not least to international companies, which choose their location based on a number of parameters. For a company that is considering making an investment, the incentive to do so will be considerably greater if the reimbursement duty were to be abolished – corresponding to reducing it by just under 1 percentage point – than if corporation tax were reduced by 1 percentage point from 22 to 21 percent.12

Traditionally, the reimbursement duty has not attracted a great deal of attention – but perhaps it should.

The City of Copenhagen ought to look into whether a reimbursement duty on public and private properties of 9.8 per mille is actually the correct level. Economic theory and research both document that there is a close correlation between the investment level and tax on investments13. It is thus well- supported that a reduction of the reimbursement duty would support companies’ incentives to invest, and thus also improve business conditions in the City of Copenhagen.

12 Background analysis 4 13 Katholieke Universiteit (KU) Leuven (2010)

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Each year the City of Copenhagen demands just under DKK 1 billion in reimbursement duty on public and private properties from companies in the municipality. This corresponds to around 3 percent of the municipality’s total revenue. It also corresponds to 40 percent of the total proceeds from the reimbursement duty on a national level, where the trend has been for more and more municipalities to reduce the duty or do away with it completely.

In 2018 39 out of 98 municipalities are demanding reimbursement duty. This applies primarily to municipalities in the capital region and in and around the other major cities, but also here there has been a trend for lowering the level of reimbursement duty.

In order to make Copenhagen a more attractive and business-friendly municipality it is therefore proposed that the reimbursement duty on public and private properties be reduced from the current level of 9.8 to 5.75 per mille, which is the same level as the reimbursement duty in Aarhus Municipality. Such a reduction would immediately result in less income for the City of Copenhagen of just under DKK 400 million annually, see table 2.

Table 2. Economic consequences

Less income Businesses GDP impact Dynamic effects -390 50 165

A reduction of the reimbursement duty on public and private properties would have a positive effect on investments, partly by making conditions more attractive for new businesses, and partly by supporting investments among existing businesses.

Based on available research it is possible to make an estimate of the effects on attracting businesses by lowering the reimbursement duty on public and private properties from 9.8 to 5.75 per mille. Based on this it is expected that the number of businesses structurally will climb by just under 0.2 percent, or the equivalent of around 50 businesses. This corresponds to a structural increase of the GDP of approx. DKK 165 million.14

In addition there is the effect on the investment level for the existing companies, which would be positive. As an alternative to reducing the reimbursement duty, one could consider earmarking one quarter of the proceeds from the reimbursement duty, corresponding to around DKK 250 million annually, for financing the recommendations from the task force.

14 Background analysis 4

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Chapter 4. Businesses need better access to manpower with the correct expertise

Companies must have better access to a qualified workforce. In the short term this can be supported by specific initiatives involving those out of work in Copenhagen, while focused efforts in municipal primary and lower secondary schools together with a more cohesive infrastructure in Greater Copenhagen can contribute in the longer term.

4.1 More people into education and training and more opting for a STEM education Companies’ access to a qualified workforce is one of the central framework conditions in terms of ensuring high productivity, a high employment rate and economic growth. It is crucial that children and young people obtain the correct competencies through the entire educational system and are motivated in the direction of those educations which private and public sector companies are asking for.

It is well-documented that it is advantageous if: • more young people choose a professional education, • more choose an education within science, technology, IT, engineering and mathematics (also called the STEM competencies). The municipality has particular influence on the choice of education through efforts in the primary and lower secondary school and by ensuring an active cooperation between school and vocational and tertiary education. The City of Copenhagen has a large proportion of people with a long-term higher education (LVU) compared with the rest of Denmark. It is especially newcomers to the city who contribute to the higher than average educational level, see figure 12.

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Figure 12. Education level of 25-30 year-olds in the City of Copenhagen broken down by address at 18 years of age, early 2017, percent.

Pct. Pct.

50 50

40 40

30 30

20 20

10 10

0 0 Grundskole Gymnasial Faglærte KVU MVU LVU

25-30 årige der ikke boede i KK da de var 18 år 25-30 årige der boede i KK da de var 18 år Hele landet, 25-30 år

Note: Vocational education is abbreviated to EUD, while short, medium and long-term higher educational programs are shortened to KVU, MVU and LVU respectively. If a person is not currently enrolled on an education then the highest completed education is selected. If a person is currently on a course of study, then this education is selected Source: Statistics Denmark and own calculations

One fourth of the 25-30 year-olds who also lived in the City of Copenhagen when they were 18 have completed an LVU or are currently studying on one, which is slightly higher than for the rest of the country. Among newcomers to the municipality the figure is just under half.

A large proportion of the 25-30 year-olds who also lived in the City of Copenhagen when they were 18 have not completed or are currently studying on a professional education, and the proportion of skilled workers is lower than in the rest of the country.

There is great potential in educating the many people without a professional education. Skilled workers have an average 13 percent higher productivity than unskilled workers, while a higher education improves productivity still further, see figure 13.

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Figure 13. Contribution from increasing educational level to individual hourly productivity, 2012

Pct. Pct.

60 60

50 50

40 40

30 30

20 20

10 10

0 0 Ufaglært til EUD EUD til KVU eller MVU KVU eller MVU til LVU

Source: Economic analysis: Education and the labour market, Ministry of Finance 2016

There is however a big difference in the individual field of study’s contribution to productivity – and thus value to society. This can be seen in the salary.

A study from the Rockwool Foundation shows for example that humanities graduates with an LVU generally receive a relatively lower salary, while MA graduates from the technical, scientific and social educations generally have a relatively high income, see figure 14.

Figure 14. Hourly wage in relation to all unskilled 35-39 year-olds, 2016

Indeks Indeks

2,0 2,0

1,5 1,5

1,0 1,0

0,5 0,5

0,0 0,0 EUD KVU MVU LVU

SUND HUM NAT SAMF

Source: The Rockwool Foundation (2018): “Return on education”

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Deloitte has made a projection of the gross value added (GVA) for different industries.15 Common to all industries that are expected to have a high GVA growth is that they primarily employ people with expertise in mathematics, science and technology (STEM educations). This applies both for people with a vocational education as much as those with a higher education.

There are thus considerable societal rewards to reap by encouraging more people to take a professional education and more to choose a STEM education. Calculations show that it would provide an additional contribution to the Danish GDP of DKK 1 billion a year if 10,000 unskilled citizens took an education, or if 10,000 people with a long-term higher education in the humanities – e.g. Danish, history or philosophy – had instead taken a more technically-oriented education, e.g. trained as engineers.16

Recommendations to ensure more take an education and that more opt for a STEM education A broad-based initiative is required to lift the level of science and technology in the municipal primary and lower secondary school.

Åben Skole (’open school’) collaborations between school classes and businesses are a central tool in strengthening students’ motivation, results and determining choice of career. Furthermore, it supports bridge-building and career guidance counselling in the lower secondary school, which is crucial in terms of strengthening the students’ choice of study and employment perspectives.

Recommendation 14: More focus on science and technology in the municipal primary and lower secondary school A politically adopted initiative shall be developed for science and technology in the municipal primary and lower secondary school and in day care institutions. Clear goals shall be drawn up for the initiative, which are monitored in the quality reports for the schools.

Experience from other municipalities shows that the development of a science and technology strategy is crucial for creating and retaining a long-term positive development of students. The strategy must have clear goals and a strong political and managerial anchoring.

On this basis it is proposed that the City of Copenhagen develop a long-term initiative for promoting science and technology in the municipal primary and lower secondary school and in day care and afterschool institutions with clear goals, which shall be adopted politically and monitored in the quality reports for the schools. In order to follow up on the implementation of the science and technology initiative as well as to offer good advice, an advisory panel made up of established businesses, entrepreneurs and scientists shall be established.

It is critical that the initiative is coupled to the fields of study and vocational and tertiary education courses, which the initiative shall lead more young people into. Studies show that ‘hands-on’ activities which can give students an insight into the daily routine at a potential place of education are especially useful in relation to deciding the choice of education. Collaboration with vocational and tertiary education courses on STEM electives for lower secondary school students shall therefore be strengthened.

Recommendation 15: Collaborate more with businesses in the municipal primary and lower secondary school From 2022, a minimum of 20 percent of municipal primary and lower secondary school pupils will participate annually in business collaborations under the auspices of Åben Skole (’the open school’), and all municipal primary and lower secondary school pupils must have taken part in a business collaboration

15 Deloitte (2017) 16 The Rockwool Foundation (2018)

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before leaving lower secondary school.

Children and young people’s interest in science diminishes generally throughout their school career, and this impacts the young people’s choice of education. Studies show that teaching which is based on actual problems to solve in private companies, for example (Åben Skole), can increase the students’ motivation and learning in science and also strengthen the students’ skills in innovation and IT, for example. This is especially true for those students who are hard to motivate through traditional teaching. Åben Skole collaborations with businesses also help by presenting the students to role models on their future career path.

Today only 7 percent of Copenhagen municipal primary and lower secondary school classes take part in Åben Skole collaborations with private companies. It is proposed that the Åben Skole collaboration is expanded in the form of more collaborations with private companies, specifically that by 2022, a minimum of 20 percent of school students will take part in projects with companies each year, and that all municipal primary and lower secondary school pupils will have taken part in a project with a company during their school career. This requires businesses in Copenhagen to take joint responsibility for the initiative.

In order to ensure a high professional and specialist level there should be focus on establishing lengthy partnerships between schools and companies (1-2 weeks) rather than brief visits to a company.

It will be necessary to develop generic collaboration models, which are familiar for example from the Coding Class model, where all business collaborations follow the same model. This reduces the resources required for developing a course program for both companies and schools.

Recommendation 16: Better guidance for secondary school pupils on choice of education Municipal Youth Guidance centres (‘UU’) must strengthen partnerships with parents on the guidance effort. There must also be resources set aside so that education ambassadors can support better educational guidance in the individual schools.

Denmark’s 2015 vocational education reform removed the option of UU guidance counsellors (Municipal Youth Guidance centres) offering individual guidance to students who have been declared as ‘ready for education’. This places huge weight on teachers’ and parents’ knowledge of tertiary education in determining which tertiary education programs the young people are presented with, and means that relatively many young people choose a general upper secondary education. Only 12 percent of teachers consider themselves to have extensive knowledge of the vocational and professional education courses and 7 percent of the ‘eux’ (vocational education combined with an upper secondary leaving exam). Some 8 percent of parents expect to guide their children towards a vocational education and 2 percent to guide them in the direction of an eux.17

All schools have ‘education ambassadors’ with extensive knowledge of educational choices, and they must support the teachers’ education guidance. With a view to strengthening the guidance efforts for lower secondary school pupils it is proposed that resources be set aside for UU to strengthen partnerships with parents on guidance efforts. It is also proposed that resources be set aside so that the education ambassadors can support better educational guidance in the individual schools.

17 Astra (2017a)

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4.2 Greater focus on businesses in employment initiatives An available and qualified workforce is an intrinsic prerequisite for growth, increased productivity and prosperity. It is thus a challenge that the region has difficulty recruiting qualified candidates combined with employment trends that are lagging behind compared to the cities which Copenhagen normally competes with.

Unemployment in the region is however relatively low. The recruitment challenges in the region have increased in recent years, not least in the building and construction trades.

Employment levels in Copenhagen (RH) were ranked at the top before the crisis together with Oslo, see figure 15. ln 2015 Copenhagen (RH) was ranked fourth. Unlike Copenhagen (RH), those cities, Hamburg and Berlin, which have a lower employment rate have witnessed extremely rapid employment growth in the period.

Figure 15. Employment rates, 15-64 years

Pct. Pct.

85 85

80 80

75 75

70 70

65 65

60 60

København Berlin Hamborg Stockholm Amsterdam Oslo

Source: Eurostat Note: Copenhagen covers here the whole Capital Region of Denmark

Besides the fact that employment levels were weak in general, there is a particular challenge in relation to graduates. Graduate unemployment is double as high in Denmark as in those countries we normally compare ourselves with, see figure 16. This cannot be explained away by saying that we generally have significantly more completing a university education.

In Copenhagen over 12 percent of those people who have graduated over the past three years are out of work. In comparison this figure is around 8 percent in Sweden and 5 percent in Norway. This is a considerable loss of resources, both for the Danish graduates and for those companies that need the workforce.

In Denmark graduates are entitled to special graduate unemployment benefits. The financial incentive to direct one’s attention towards the labour market before completing one’s studies is therefore less than in other countries.

This necessitates then that graduates direct their attention earlier and with more focus towards companies – and that companies are more flexible when they recruit manpower. Unemployment has

COPENHAGEN – A LEADING METROPOLIS FOR SUSTAINABLE GROWTH, INNOVATION AND TALENT 40

consequences on both income and employment – also in the long term. It is therefore essential that students direct their focus towards the labour market before completing their education.

Figure 16. Graduate unemployment, 2016

Pct. Pct.

14 14

12 12

10 10

8 8

6 6

4 4

2 2

0 0 Denmark Tyskland Holland Sverige Norge

Dimittender Alle

Source: Eurostat Note: 15-34 year-olds, who have completed their studies within the last three years

Besides the fact that graduate unemployment is presently high in Denmark, there are also other trends that suggest that the focus of these efforts should be directed primarily towards the private sector.

In accordance with 2006’s globalisation agreement, more and more people are taking a higher education. In 1980, more than 60 percent of highly educated individuals were employed in the public sector. Today this applies to about half these individuals, a proportion that is expected to drop even more over the years to come, see figure 17.

The demand for a highly educated workforce in the public sector is thus rising less than the supply. There will thus be a growing need for graduates to direct their attention towards private businesses in order for their skills and resources to be exploited to the full and contribute towards the creation of growth. The government’s objective is for 60 percent of new graduates to be employed in the private sector.

COPENHAGEN – A LEADING METROPOLIS FOR SUSTAINABLE GROWTH, INNOVATION AND TALENT 41

Figure 17. Supply and public sector demand for highly educated candidates

1.000 personer 1.000 personer

2.000 2.000

1.500 1.500

1.000 1.000

500 500

0 0

Udbud af arbejdskraft med lang videregående uddannelse i alt Fremskrivning af offentlig efterspørgsel efter arbejdskraft med lang videregående uddannelse

Source: UFM (2016) ”Økonomisk Analyse: Uddannelse og arbejdsmarked” (Economic Analysis: Education and the labour market) Note: Calculation technique projection

Businesses – and not least private businesses – should be the central point, not only in terms of graduates but in all efforts to get the unemployed into work.

Research shows that a period spent at a company, with actual jobs and colleagues, is the most effective method of getting the unemployed into work and hence to ensure that the companies have access to the workforce that they need. This applies especially to private companies, and regardless of whether it is highly educated individuals or vulnerable jobseekers on the margins of the labour market.

Precisely those jobseekers on the margins of the labour market – unemployed in the cash benefits system – do not get the company contact which they should and far less than the national average, see figure 18. This often proves fatal for their chances of getting a job and supporting themselves.

COPENHAGEN – A LEADING METROPOLIS FOR SUSTAINABLE GROWTH, INNOVATION AND TALENT 42

Figure 18. Proportion in enterprise-oriented offers, October 2017

Pct. Pct.

12 12

9 9

6 6

3 3

0 0 Dagpenge Kontakthjælp

Københavns Kommune Danmark Source: jobindsats.dk plus own calculations and seasonal corrections Note: Enterprise-oriented efforts covers wage subsidy schemes, apprenticeship schemes and ’nyttejob’ (work in return for benefits). Degree of activation is the amount of time measured in full time workers corresponding to 37 hours a week for the individual groups in the offer in question

The capital region also has a mismatch problem. i.e. that unemployment among unskilled jobseekers is relatively low in the City of Copenhagen but high in the rest of the Capital Region of Denmark, see figure 19. The reverse applies for people with an education, where the City of Copenhagen has relatively many who are out of work, while the rest of the Capital Region of Denmark has relatively few.

This indicates that there will be significant synergistic effects to be gained by establishing a broader regional cooperation. More academics resident in the City of Copenhagen should be placed in jobs in other municipalities, while more unskilled jobseekers from other municipalities need to be placed in jobs in Copenhagen. it is necessary for the companies to gain access to the right skills, quickly and smoothly – regardless of whether this concerns waiters, carpenters or IT specialists. The need for a workforce will increase, which will in turn mean an increased pressure on getting the unemployed onto the labour market, making it a key task for job centres to ensure that the unemployed are always available and ready for the job they are offered. This applies to all unemployed persons regardless of educational background and professional experience.

COPENHAGEN – A LEADING METROPOLIS FOR SUSTAINABLE GROWTH, INNOVATION AND TALENT 43

Figure 19. Unemployment broken down by education, 2016

Pct. Pct.

1,0 1,0

0,5 0,5

0,0 0,0

-0,5 -0,5

-1,0 -1,0 København Region Hovedstaden ekskl. København

Ufaglærte Personer med kompetencegivende uddannelse

Source: Statistics Denmark and own calculations Note: Unemployment is indicated in terms of an average of the two groups

Recommendations Companies are finding it harder and harder to recruit the workforce they need, while at the same time there continues to be unemployed manpower, and not least, a high rate of graduate unemployment. This shows that it is necessary to try out new strategies in order to ensure that unemployed jobseekers are available for work, and that they can quickly and effectively be directed towards the vacant positions which the companies offer.

Copenhagen has far too many highly educated unemployed, while unemployment among unskilled jobseekers is comparatively low, The reverse applies for the rest of the region. A broader regional cooperation will make it easier for companies to fill vacant positions.

In addition there is a need for efforts to get the unemployed into work to be made far more enterprise- oriented. For the long-term unemployed in particular it is necessary to increase focus on the private sector job market – not least for graduates.

Recommendation 17: Follow up more rapidly on companies’ manpower needs If a company has not obtained access to a relevant candidate eight working days after they have submitted a job order, then Business House Copenhagen shall look into the case and work towards a solution.

It is recommended that Business House Copenhagen continues to take job orders from companies, while it is the job centres’ task to match the unemployed with these job orders, as is the case today. This ensures that both job centres and job consultants focus on the companies. Those job orders which went through Business House Copenhagen in 2017 constituted around 5 percent of all job matches made between unemployed and businesses.

Should a company that has submitted a job order not receive any CVs from relevant candidates within eight working days, it is presently the job centre’s task to follow up on this. It is proposed that the case is

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instead handed over to Business House Copenhagen, which is then obliged to make contact with the company that same day, and, to the extent possible, to find a match.

Recommendation 18: Create a complete job market in the Danish part of Greater Copenhagen. Companies shall have access to all unemployed jobseekers upon enquiry to job centres across the entire region. The regional cooperation on the municipal job placement must therefore be significantly expanded.

The capital region must be one unified labour market in order to expand the companies’ recruitment base. A bigger recruitment base can be supported by increasing regional cooperation in regard to the municipalities’ job placement efforts. this shall happen through an expansion and streamlining of the regional cooperation across the municipalities in the region. This outreach work shall cover all areas with a shortage of manpower18 within Greater Copenhagen, which also includes Malmø and Skåne in Sweden, as well as areas where an innovation cluster effort has been initiated.

The establishment of one unified labour market can happen gradually through agreements between the individual municipalities, but the goal is for the cooperation to be expanded over time to include all municipalities in Greater Copenhagen.

Recommendation 19: Place businesses in the centre in employment initiatives The City of Copenhagen shall be the municipality in Denmark, where the highest number of unemployed are in wage subsidy or apprenticeship schemes in a private or public sector workplace.

In order to place businesses at the centre in employment initiatives it is recommended that Copenhagen sets its sights on being the municipality in Denmark where the highest number of unemployed are in wage subsidy or apprenticeship schemes at either a private or a public sector workplace. This corresponds to 16 percent of all temporary provisions being in an enterprise-oriented, full-time job offer all year round. If this is to succeed, then it places great demands on the businesses.

In order to support companies in recruiting manpower with the right skills it is recommended that the effort is supplemented with a shorter training period close to the company, for example in transport or service.

Recommendation 20: Increase graduate’s focus on starting their job search early Employment efforts in regard to students and graduates shall be targeted towards private companies, with focus on starting their job search early and making information about the opportunities and potential available to both graduates and companies. The efforts shall be done in cooperation with the universities.

It is necessary for companies to take advantage of new graduates and their skills faster than they do today. The employment effort in regard to graduates must thus be directed far more towards the private job market and support starting the job search earlier. It is recommended that three parallel initiatives be set in motion, targeted at graduates from educational fields with higher than average unemployment: 1. Strengthen the guidance provided by job centres for graduates towards private companies in the first term of unemployment, with focus on actual job applications targeted to private companies.

18 A shortage of manpower should as a starting point follow the definition in the Arbejdsmarkedsbalancen (Labour Market Balance), which is drawn up biannually and published on the arbejdsmarkedsbalancen’s website. The balance can be supplemented with several areas where specific analyses on e.g. unemployment and productivity point towards a need.

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2. Knowledge about the value of hiring and being hired as a graduate in private companies shall be improved, partly to increase the companies’ demand for an academic workforce, and partly to increase graduates’ awareness of the job opportunities. 3. A formal cooperation shall be established between job centres, universities and trade organisations to establish a broad, job-oriented effort in fields of study with above average unemployment. This effort shall support and motivate students to apply for jobs already in the final months of their study program or while writing their thesis.

4.3 Greater Copenhagen must be more cohesive There is great potential in making Greater Copenhagen more cohesive, which has a current population of around 4 million. There are presently just under 15,000 people who commute between Denmark and Sweden, see figure 20. Moreover, the number of commuters has dropped by 25 percent since 2008. In comparison, four times as many commute the same distance from Zealand into Copenhagen, so it is not the distance which is the primary reason19.

Figure 20. Number of commuters between Denmark and Sweden

Antal pendlere Antal pendlere

20.000 20.000

16.000 16.000

12.000 12.000

8.000 8.000

4.000 4.000

0 0

1997 1999 2001 2003 2005 2007 2009 2011 2013 2015

Source: Ørestat

Greater cohesion in Greater Copenhagen can generate ‘agglomeration advantages’, which can increase productivity and growth for the entire region. The positive effects occur when people and businesses get closer to each other. This can occur for example when local businesses find it easier to obtain the right workforce, or when better opportunities arise for offering specialised products to more people.

The size of the metropolis is important in terms of generating agglomeration advantages that can increase productivity and growth, see figure 21. For example, productivity per employee is on average around 10 percent higher in metropolises with 1-2 million residents compared with metropolises with 0.5-1 million residents. In general there is also a trend for productivity to increase by around 10 percent when the number of residents doubles.

19 Copenhagen, Frederiksberg, Tårnby and Dragør municipalities.

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Figure 21. Workforce productivity broken down by size of metropolis

USD pr. ansat USD pr. ansat

120.000 120.000

100.000 100.000

80.000 80.000

60.000 60.000

40.000 40.000

20.000 20.000

0 0 0,5-1 mio. 1-2 mio. 2-5 mio. 5+ mio.

Source: OECD (2015), The Metropolitan Century: Understanding Urbanisation and its Consequences

This means that if you created a genuine unified labour market through the entire Greater Copenhagen region, then the region would be expanded from 2.7 million residents on the Danish side to 4 million residents on the Danish and Swedish sides combined. The Greater Copenhagen region could potentially experience an increase in productivity in the region of 7-8 percent.

Pressure on capacity over Øresund Research has documented that shorter travel times increase mobility on the labour market and that travel time contributes towards attracting a qualified workforce.20

Shorter travel times over the Øresund in particular would mean that virtually the entire capital region - and correspondingly on the Skåne side up to Lund - would be accessible within a normal commuting distance from both Malmø Central and Copenhagen Central stations. This would mean a more cohesive labour market and therefore also increase the potential for growth across the entire region.

Today, the Øresund Bridge is the only effective transport option between Copenhagen Malmø, where the population density is greatest. The stretch of railway over the Øresund is currently one of the most used in Denmark, see figure 22.

20 The Danish Productivity Commission (2014)

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Figure 22. Number of travellers per week day on the Danish state railways, 2015 and 2032

Antal rejser Antal rejser

50.000 50.000

40.000 40.000

30.000 30.000

20.000 20.000

10.000 10.000

0 0

2015 2032

Source: Traffic plan for the Danish state railways 2017-2032, Danish Transport, Construction and Housing Authority

In the future the capacity on the railway line over the over Øresund Bridge will be even more challenged and hinder mobility across Greater Copenhagen. This is due to: • The population in the Capital Region of Denmark and Skåne County is expected to rise by just under 10 percent over the next 10 years, corresponding to almost 300,000 new residents. • The Fehmarn Belt Fixed Link will presumably double the number of goods trains over the Øresund and put pressure on passenger transport on the railway over Øresund, with room for fewer departures. • Sweden is planning to bring in high speed trains from 2035. They will connect Stockholm with Goteborg and Malmø, as well as an onward connection to Copenhagen Airport and potentially Hamburg. The Danish Transport, Construction and Housing Authority predicts an increase of almost 50 percent of people travelling over the Øresund forward to 2032. There will be just under 50,000 journeys made on this line every week day – which is double the number made between Aarhus and Skanderborg, which is expected to be the busiest railway stretch in Jutland in 2032.

Recommendations for a more cohesive Greater Copenhagen In order to ensure a cohesiveness across the Øresund there is a need for further investments in infrastructure, which can ease railway capacity over the Øresund and shorten travel times.

Recommendation 21: Process plan for the establishment of an Øresund metro network The City of Copenhagen, Greater Copenhagen, the City of Malmö and the Danish and Swedish states shall work together on a process plan for the construction of an Øresund metro network.

It is proposed that an Øresund metro line be established from Copenhagen Central Station to Malmø Central Station. An Øresund metro can contribute directly towards greater cohesion in the region and generate positive agglomeration advantages in Greater Copenhagen, while also exploiting the region’s potential to its fullest. In addition, an Øresund metro line will generate the necessary capacity, so that the Øresund Bridge can handle the many goods trains, which are expected as a result of the Fehmarn Belt Fixed Link and the planned high speed train between Stockholm, Malmø, Copenhagen and Hamburg.

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The Øresundsmetro between Copenhagen and Malmø would be a direct line under the Øresund, with the possibility of departures every 1.5 minutes and a travel time of around 20 minutes. The travel time would be halved between Copenhagen Central Station and Malmø Central Station, including stops at five other stations. The travel time would correspond to the travel time between Copenhagen Central Station and Nørrebro Station today.

As a Copenhagen Metro line, the Øresundsmetro would be driverless and run at high frequency all times of the day and night and with marginal delays compared with the present Øresund train connection.

The metro would therefore alter mobility across the Øresund radically.

If we assume that the 15,000 commuters will take the Øresundsmetro and use just 20 percent of the saved commuting time on working more, then this alone would lead to companies gaining access to 300 more potential employees, corresponding to approx. DKK 260 million in increased GNP annually.

According to preliminary calculations, construction of the Øresundsmetro would amount to just under DKK 28 billion, see table 3.

Table 3. NPV of Øresundsmetro, DKK billion

DKK billion NPV of construction price -27,8 NPV of passenger revenue 19,3 Total NPV -8,6

Source: Results and assessments in the preliminary project on the Øresundsmetro and Incentive Partners (2013)

Passenger revenue is expected as NPV to be approx DKK 19 billion and there is therefore a net financing need of DKK 8.6 billion. Secondary gains, such as the aforementioned time savings and agglomeration advantages, are not included in the calculation.

The socio-economic returns for an Øresundsmetro, where in addition to construction and operation takes into account, among other factors, the number of accidents, noise, congestion and other travel time effects, is on a level with the Metro Cityringen (‘City Circle line’) and higher, for example, than Aarhus and Odense light rail networks.

An Øresundsmetro would thus be of benefit to Greater Copenhagen in the form of increased growth and accessibility and also offers high socio-economic returns that are comparable with the Metro Cityringen.

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Chapter 5 Making better use of the City of Copenhagen’s framework for the promotion of innovation

Copenhagen can be a centre for businesses that develop new products and solutions. The potential can be released through more innovative procurement, stronger cooperation between the municipality and private companies and through increased digitalisation.

5.1 More effective solutions through collaboration with private companies It is necessary for the City of Copenhagen to be constantly focused on efficiency, so that the taxpayer’s money can be administered as best possible.

Competition and innovation are essential driving forces for productivity.21 Competition ensures that the most efficient companies can win the market share from those less efficient. Competition also encourages companies to constantly look for new solutions that can make things smarter and cheaper – for example by introducing new technology. It thus benefits residents, the commercial sphere and the municipal coffers when the municipality exposes its procurements to competition; and that the municipality’s procurement is organised to that the municipality and the companies work together to find the most innovative solutions with optimal efficiency for the price.

Companies and the City of Copenhagen can also make use of the UN’s global goals in relation to solving society’s challenges while also developing new business ideas and creating new opportunities for growth.

Private companies are important collaborative partners when the municipality requires everything from toys and paving slabs to new innovative solutions. For example, there are innovative solutions in the fields of climate adaptation, digital rehabilitation or robots and larger installations. Streamlining in the municipality and access to new solutions can be strengthened through:

21 OECD (2010)

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1. Optimisation of municipal procurement. 2. Closer collaboration with companies.

Optimisiation of municipal procurement The City of Copenhagen makes purchases for almost DKK 12 billion annually. Of these, construction purchases constitute around one quarter.

The City of Copenhagen’s procurement policy emphasises that the purchases, as the top priority, must be effective, understood as the municipality must have the greatest possible effect for the money.22

Numerous analyses (including the Danish Productivity Commission, 2014) suggest that increased competition on products and solutions for the municipalities has clear streamlining rewards in that: • the municipality does not pay too much for goods and services, and thus gets the most possible for the taxpayer’s money. • the municipality gains access to products and services of a higher quality, which results in a better service for its residents. • the companies’ innovation of better solutions and business models strengthens the companies’ competitive position, thereby increasing Denmark’s competitiveness.

Closer collaboration with companies The City of Copenhagen has many collaborations with private companies on solutions to challenges and tasks.

According to the Danish Productivity Commission, public-private collaborations (PPC) can improve the municipality’s performance. Together with private companies, the municipality can develop new solutions through the development of new technology or use of existing technology for new purposes. These type of partnerships can be shaped in different ways, e.g. as public-private innovation partnerships (PPIP).

In some cases it can be beneficial for the municipality’s procurement to be organised as a public-private partnership (PPP), e.g. for larger building and construction assignments. Here, the municipality will place a long-term contract up for tender, which both covers the construction and the subsequent operations and maintenance.23

Another route to more efficient and innovative solutions goes through a more active use of functional requirements in tenders, dialogue-based tendering procedure and the use of total economic considerations.24

Functional requirements rather than detailed activity specifications in the tender material can create room for more efficient solutions and leading standards to the City of Copenhagen. Rather than simple price competition, functional requirements also shift the focus onto content, quality and form.25

By assessing solutions on the basis of total costs or total cost of ownership (TCO) - rather than the purchase price alone - the municipality can find its way towards more effective solutions. In other words, the municipality can assess a solution on the sum of the purchase price of a product plus the cost of using

22 The City of Copenhagen (2014) 23 The Danish Productivity Commission (2014) 24 Struensee (2016) 25 Udbudsrådet (2010)

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the product during its lifetime. A special focus on TCO motivates the suppliers towards innovation, e.g. by developing new energy and labour-saving solutions.26

An analysis from the Rådet for Offentlig-Privat Samarbejde (‘The Council for Public-Private Collaboration’) shows that public sector contracting entities (including municipalities) and suppliers do not share the same impression of the opportunities to bid in with innovative solutions. The contracting entities indicate that they open up for innovative solutions in just under half of the offers analysed. The choice of not to open up more for innovation is justified by saying that the contracting entity does not find it relevant; that they already know, what they want; and that they possess the knowledge as to how the job needs to be done. Besides this is the fact that around 70 pct. of tenderers experience that they rarely, or never get the opportunity to bid in with innovative solutions. The majority of the tenderers believe that they could have bid in with new and smarter solutions if the tender material had allowed it.27

Analysis shows that we in Denmark use functional requirements half as much in tenders as in Sweden. Just 18 percent of the Danish purchasers have made use of functional requirements in connection with services of a technical nature, while this applies to 45 percent of Swedish purchasers.28

The City of Copenhagen uses all the different forms of tender procedure to a certain extent, but this does not happen in a structured or systematic manner across the municipality. In terms of the partnership with companies on the development of new and efficient solutions, the City of Copenhagen is also helping to make the city and its running available to companies through various forms of partnerships. For example, companies can test welfare technology solutions targeted to the elderly living at nursing homes at Living Lab Strandvejen, while climate-related products can be tested e.g. in the municipality’s Street Lab and sustainable urban technologies at Energy Lab Nordhavn.

Based on the experiences which the municipality has gathered, there is potential for sharpening and improving the collaboration with private companies. There appears to be particular potential for implementing and scaling the developed solutions in the municipality, as well as across the municipality. Too many collaborative projects end as individual solutions.

Recommendations for more effective solutions through collaboration with private companies The task force points towards a number of recommendations, which can support the development of new, efficient solutions through municipal procurement and collaboration with private companies.

Recommendation 22: Increase exposure to competition Every year, the City of Copenhagen must increase exposure to competition for municipal contracts. In particular, businesses must have better opportunities to bid on contracts in urban development, transport, healthcare, construction and infrastructure.

Exposure to competition in the City of Copenhagen has fallen in recent years. In comparison with other municipalities, the City of Copenhagen has unused potential for additional exposure to competition, in particular in urban development, transport and infrastructure as well as in healthcare, see figure 23.

26 The Danish Productivity Commission (2014) 27 Struensee (2016) 28 Rådet for Offentlig-Privat Samarbejde (2013a)

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Figure 23. Exposure to competition in the City of Copenhagen in terms of best practice, 2016

Pct. Pct.

100 100

75 75

50 50

25 25

0 0 Byudvikling Trafik og Undervisning og Sundhed Sociale opgaver Administration infrastruktur kultur og it

Best practice Københavns Kommune 2016

Source: DI, 2016 Note: Best practice is the average of the 10 Danish municipalities with most exposure to competition

If the City of Copenhagen, on average, exposes just as big a share of its contracts to competition as the top 10 municipalities, an analysis from DI shows that the City can achieve streamlining of around DKK 0.5 billion annually.29

It is recommended that the City of Copenhagen exposes more of its procurement and contracts to competition and sets clear targets in the area. Targets for further exposure to competition can contribute to the streamlining of the municipality and act as an internal management mechanism. The goals shall also signal to the private suppliers that there is a political will to expose more contracts to competition.

It is recommended that the quantitative targets are revised at minimum every other year and published with a technically sound reasoning.

Recommendation 23: Gather together all municipal tenders onto one digital platform The City of Copenhagen’s administrations must establish a joint digital platform with all the municipality’s tenders.

Besides putting more contracts up for tender, competition can be increased by getting as many potential suppliers as possible to bid on the contracts.

Companies presently find out about tenders offered by the City of Copenhagen in a number of different ways. The Centre for Procurement is in charge of the municipality’s collective purchasing agreements, but the department only handles around one-sixth of the municipality’s total purchases. The remaining procurements are handled by the individual administrations themselves. It can therefore be difficult for a potential supplier to find their way to the relevant tender.

29 DI (2016)

COPENHAGEN – A LEADING METROPOLIS FOR SUSTAINABLE GROWTH, INNOVATION AND TALENT 53

Recommendation 24: More collaboration with private companies on new solutions More tenders focused on functional requirements, dialogue and quality as well as greater transparency in the municipality’s accounts by including total costs.

It will therefore be expedient if all of the City of Copenhagen’s tenders were to be gathered and made visible in one place, so that more companies – including the small and medium-sized – will find it easier to spot the municipality’s tenders and bid in.

It is recommended that the municipality launch a user-friendly, joint digital platform where all of the City of Copenhagen’s tenders are published, and that there is a “single entrance” for company enquiries established in regard to tenders under the auspices of the municipality’s collective purchasing department, the Centre for Procurement.

It is recommended that the City of Copenhagen tests out the model initially by gathering all the tenders from the Finance Administration’s various departments on the shared portal. This would for example include common obligatory purchasing agreements, contracts in construction, property maintenance and IT. Once the model has been tested and optimised, then access should be expanded to include all tenders across the municipality, and the companies should be able to get relevant news of tenders sent to them.

It has been assessed that there will be considerable efficiency gains to reap if the City of Copenhagen can perform more of its tasks in collaboration with private companies - through more functional tenders, more dialogue prior to procurement, more PPIPs and through more focus on total cost of ownership (TCO).

The collaboration shall be made more widespread by the City of Copenhagen ensuring transparency in the tendering process and acting proactively in terms of opening up for new suppliers - including smaller businesses, which can among other things be encouraged to form a consortium. This could be done through contact to cluster associations and networks, see recommendation 29.

It is well-documented that the use of PPP models provides a higher degree of security for meeting schedules and budgets with larger building and construction projects. The City of Copenhagen should, prior to the commissioning of such projects, assess whether they ought to be carried out via PPP.

In general the municipality should, where possible, make use of effects-based tenders. Functional requirements shall, as a starting point, be used in all tenders which include measurable conditions for functional fulfilment.

Work must be done internally in the municipality towards making easily accessible guidelines more widespread, which encourage the individual operational departments in the municipality to make better use of dialogue-based tender procedures. The City of Copenhagen’s employees should e.g. have tools so that they will take better advantage of identifying requirements, innovation partnerships and market dialogues prior to the tender.

At Karolinska University Hospital in Stockholm a large functional tender has been carried out on technical hospital equipment. Here, a large contract has been entered into a with a supplier that shall both ensure streamlining and innovations in the new procurement. The City of Copenhagen can, with inspiration from e.g. the Karolinska model, become better at large-scale development and implementation of effective solutions, see recommendation 26.

Initially, the City of Copenhagen must undertake an interdepartmental survey of the extent of effects- based tenders. With this baseline it will be possible in the future to follow up on whether there has been a positive development in the individual administration’s use of the new tender procedures.

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5.2 Increased digitalisation, which is more efficient and gives increased welfare The City of Copenhagen shall offer digital service and digital welfare solutions of the highest standards.

Digitalisation can make the working day easier for both companies and residents by contributing towards increased quality in public services. Digitalisation shall help to make a more cohesive and efficient municipality.

Copenhagen’s public digital infrastructure is relatively good, and the city was ranked no. 15 out of 100 cities in a digital city index from 2017, see figure 24. Copenhagen’s digital infrastructure lags behind both Stockholm and Amsterdam however, which indicates that while Copenhagen performs well overall, there is still room for improvement if the city is to be among the leading in the world. The study has for example measured the spread of data traffic on official public websites seen in relation to the size of the population.

Figure 24. Top 15 cities in terms of digital public sector infrastructure

Score Score

10 10

9 9

8 8

7 7

6 6

5 5

Source: Smart Cities Index 2017

In addition to becoming more digital itself, the City of Copenhagen can contribute towards creating an optimal framework for increased digitalisation in private companies.

Over a number of years, new technology and digitalisation in companies has helped to raise productivity and prosperity in Copenhagen. New technology has contributed to improved working conditions, automation and fewer running costs. The rapid development within new technologies makes it important that a good framework is secured for increased digitalisation so that the companies’ competitiveness can be improved.

Danish companies are presently among the most digital in Europe. There is however a trend towards the larger Danish companies being far more digital than smaller companies.

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The effects of digitalisation are pretty clear. The most digital companies (with more than ten employees) in Denmark had a work productivity over 20 percent higher on average in 2014 than the least digital companies. There is thus a big growth potential in lifting the least digital companies.30

As mentioned in 9. background analysis, it is a fundamental problem for the City of Copenhagen to get new solutions scaled and implemented to a greater extent.

In line with the development of more digital solutions and new solutions, cities all over the world are competing to be able to offer the best testing facilities and attract innovative companies. In the City of Copenhagen, Copenhagen Solution Lab and Københavns Innovationshus, among other places, help companies to navigate regulations and the many departments in the municipality. The companies can find it hard to see their way through the opportunities and barriers in their work with testing and hopefully implementing new solutions.

Recommendations for increased digitalisation Across the report a number of initiatives are recommended which support, in a variety of ways, an increased digitalisation in Copenhagen, see table 4.

Table 4. Other recommendations which address the need for increased digitalisation

Subject Recommendation Better service 2. More “single entrance” offers 5. Digitalisation of parts of building permit case processing More people into education 14. More focus on science and technology in the municipal primary and and more choosing a STEM lower secondary schools education

23. All tenders gathered onto one platform More effective solutions 25. Remove administrative barriers for innovative solutions International attraction 31. English language policy

Furthermore the City of Copenhagen shall work to ensure that companies’ new business models are not halted by rigid regulations. This will be done by drawing up an interdepartmental digitalisation strategy and by the municipality offering processes that support increased digitalisation in companies.

Recommendation 25: Help companies with new solutions and business models Establish a “single entrance” in the municipality for company enquiries on new business models and technologies, which place demands on more agile regulations, including a partnership with the State on inexpedient regulation.

Companies that wish to test out new solutions and business models in the City of Copenhagen can find the processes and administrative requirements hard to navigate around. The municipality’s regulations and administration is not generally built with an eye to how new solutions, including digital technologies and new business models in particular, can create value for the individual business and for society. It could for example be new business models of a sharing economy nature, or solutions which require that one finds passable routes in terms of the regulation of data ownership,

30 Ministry of Industry, Business and Financial Affairs (2017)

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or solutions which are attached to the Internet of Things. The focus is therefore not on public-private innovation collaboration or procurements, which is dealt with under recommendation 24, but on the administrative and regulatory framework for business models and technologies.

The City of Copenhagen receives regular enquiries from companies wishing for dialogue and guidance in relation to navigating within the current legislative framework in the municipality with their new solutions. The departments in the municipality that receive the enquiries presently attempt to help as best they can, for example by referring to individual people with a particular insight into specific areas or to innovation units such as Copenhagen Solution Lab, Innovationshuset, Sund Vækst Huset, Living Lab Strandvejen, Business House Copenhagen etc. The City of Copenhagen has no clear point of entry for companies with this type of question, and the handling of enquiries is uncoordinated across the municipality. With these rapid technological developments it is expected that the companies will increasingly find that national and/or municipal administration stands in the way of their testing of a new business model or solution. It could also be that companies are unable to find the correct information on special permits for example, or that complex regulations hinder clear answers and the necessary approvals from the municipality.

In the worst case scenario, administrative barriers can create delays and financial loss for the companies, which can be forced to give up using new innovative technologies and business models completely. This can mean both that Copenhagen misses out on innovative solutions and that potential growth companies are slowed down or stopped in their development31.32

In order to better implement an internal organisation with one clear point of entry, it must be ensured that all companies experiencing regulatory challenges can reach the relevant departments in the municipality, and if there is a specific need that the City of Copenhagen identifies the scope and the nature of the companies’ enquiries. Through a formal network in the municipality the companies are guided to the relevant departments, which can assist with legal or professional coaching regarding the opportunities and barriers for the individual company. In general, the companies shall be met in a positive spirit with a goal of reducing the administrative barriers. Politically, a more coordinated effort in relation to the companies shall be documented through the interdepartmental Business and Growth Policy with annual reports to the Finance Committee.

The City of Copenhagen must ensure that the companies are provided with swift clarification as to whether they can use new technologies and business models within the existing legislative framework. The answer must be given as quickly as possible and no later than three months after the company’s initial enquiry. The time that is spent processing cases in the municipality must be reasonable, and it must be possible in more complicated vases to offer the companies the possibility of further processing of the case within an agreed framework.

Recommendation 26: Strategy for digital innovation The City of Copenhagen must adopt an ambitious digital strategy with a focus on implementing large- scale digital solutions throughout all areas of the municipality. The digital solutions shall ensure regular streamlining while also facilitating as well as generating a permanently high service level in regard to both businesses and residents. The strategy must be politically anchored in the City’s Finance Committee.

At the same time, the City of Copenhagen shall enter into a partnership with the government’s inter- ministerial working group that has been set up to look at promoting a more agile governing approach that can offer better opportunities for new business models and technologies. The Danish Business Authority

31 Danish Business Authority (2018) 32 Iværksætterpanelet (2017)

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highlights the value of using the municipality as a test laboratory, for example in regard to peri-urban solutions or testing driverless cars. It can build upon the City of Copenhagen’s positive experiences in the urban laboratory Street Lab, where the city is made available for the testing and development of new technology in partnership with businesses.

Over the past 20 years, the digital development has picked up momentum and globalised innovation. This places increasing demands on the innovation level in the municipality and to the companies which must constantly innovate so as not to lose their market share.

It shall be ensured that the City of Copenhagen reaps the rewards of the digital development and uses it to streamline its operations and create better solutions for companies and residents. It is therefore recommended that the municipality draw up a digitalisation strategy with four tracks:

1. Prioritisation and political anchoring. 2. Organisation. 3. Interaction with suppliers. 4. Finance.

Overall, the digitalisation strategy shall ensure that more solutions are implemented on a large scale. This has several objectives:

• Better experience of quality in the municipal performance for both companies and residents. • Increased efficiency internally in the municipality. • Better cohesion in the digital solutions across the municipality. • Increased innovation in the municipality and in the companies it collaborates with.

A. Prioritisation and political anchoring An annual digitalisation presentation shall be made to the Finance Committee, in which the following is stated: • Overviews of investments in the IT area with: • Pinpointing special areas of expertise which ought to be prioritised. • Pinpointing technologies which ought to be prioritised. • Pinpointing interdepartmental initiatives. • Regular monitoring of “IT maintenance debt” and investment needs related to this. Mapping should take as a starting point 1) areas where digitalisation can lift the service for residents and/or 2) areas where digitalisation can help streamline operations. On the basis of the mapping, the municipality’s Finance Committee shall, every other year, nominate 2-3 areas in which digitalisation can be rolled out on a full scale. B. Organisation The municipality’s seven administrative directors shall be jointly responsible for approving the selection of interdepartmental projects that are suitable for large-scale implementation. This shall take place on the recommendation of the relevant departments (IT, efficiency, finance and HR groups), which are also responsible for following up on and implementing the project. Quarterly reports shall be made to the Finance Committee regarding the status of the roll-out.

Each roll-out project is anchored in the respective administrations, but the Finance Administration and Koncern IT are responsible for coordination and the overall transfer for the group of directors.

C. Interaction with suppliers The municipal shall offer bigger contracts with specialised suppliers on the general digitalisation projects, whether they are to deliver part of the solution or advise the municipality. As a part of this consultancy

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the suppliers shall assist in the procurement of the remaining services from other suppliers on the market. The consulting supplier shall also be obliged to enter into development collaborations in this area together with the municipality.

D. Finance In the collaboration agreements, the responsibility and the rewards in the project shall be divided equally with the suppliers. The suppliers’ payment depends among other things on the delivery of a number of specified results and goals.

Since 2016, the City of Copenhagen has set aside approx. DKK 500 million annually to make “smart investments”. The administrations can obtain funds to make investments if they can document a business case with efficiency measures that can pay for itself within six years or earlier.

It is proposed that the municipality shall use part of the pool for “smart investments” for the politically anchored digitalisation projects. The administrations shall be able to apply for the funds to implement and roll-out full automation of case processing or other service areas.

Recommendation 27: Establish courses which help companies to digitalise their operations Together with private stakeholders, the City of Copenhagen shall establish courses that will help at least 1500 companies annually to draw up business cases for the digitalisation of their operations.

Business House Copenhagen supports entrepreneurs and SMEs’ access to courses to develop their digital competencies (e.g. sales and marketing). This will take place in a collaboration with private stakeholders. Approx. 400 companies take part annually in these kind of courses.

In order to strengthen the digital capabilities of Copenhagen entrepreneurs and SMEs it is proposed that the City of Copenhagen, in collaboration with private stakeholders, trade associations and similar expand the offer. There would be advantages to also including courses that help companies to draw up business cases for the digitalisation of back-end business activities, such as the digitalisation of the company’s supply chain, production and administration and operations. On the basis of these courses the companies can assess whether they wish to consult with private advisers in regard to implementing the digitalisation.

5.3 The City of Copenhagen must focus on its innovation and growth policy It is essential for productivity and growth in Copenhagen that more companies get onto a growth track. International analysis highlights significant growth potential in getting more growth companies (scale- ups).33 34 Growth companies are often defined as internationally competing companies with more than ten employees, which over three annual accounts can show an average growth in turnover or profits of over 20 percent.

In comparison with the rest of Europe, Denmark has the highest level for new business start-ups. When it comes to growth companies however, then Denmark is ranked in the middle of the field and after countries such as the UK, the Netherlands and Belgium, see figure 25.

33 Deloitte (2017) 34 Danish Business Authority (2016)

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Figure 25. Growth companies’ share of the total employment in industry, 2015

Pct. Pct.

20 20

15 15

10 10

5 5

0 0

Source: Deloitte (2017), Small Great Nation Note: Growth companies are defined here as companies with a minimum of ten employees, which have increased employment by a minimum of 10 percent annually for three consecutive years

A study from the weekly business and politics magazine Mandag Morgen35 shows that the capital region is far and away the region in Denmark with the most growth companies. In terms of our potential, however, we have relatively few growth companies.

There is great potential in getting more Danish and Copenhagen companies onto a growth track, particularly in light of Copenhagen’s relatively strong framework conditions in the form of its many knowledge institutions, a relatively high share of foreign workforce and great opportunities for starting a new business.36

The challenge then is not to get more people to become entrepreneurs, but to offer a framework that encourages the companies to grow – regardless of whether this is an entrepreneur or an established company with ten years behind it.

Research shows that growth companies need a strong overall ecosystem , that is access to a critical mass of talent, ideas, investors, network out into the world and cluster organisations etc.

A study from the Ministry of Education and Science37 shows that participation in networks and clusters is an important factor in developing more growth companies. Companies that participate in network and cluster activities are thus: • Four times as likely to be innovative compared to companies that don’t participate. • Have a production growth that is 3.6 percentage points higher than for comparable companies.

35 Mandag Morgen (2016) 36 IRIS Group (2016) 37 Ministry of Higher Education and Science (2017)

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It is primarily a national role to support strong clusters and ecosystems, but the City of Copenhagen can help to lower the barriers and optimise the ecosystem in areas where the private market cannot do the task itself.

It is clear from the State Klyngestrategi 2.038 that the municipalities’ lever in developing strong clusters is to ensure infrastructural frameworks and environments which the local area can offer, e.g. test centres, research parks etc.

The City of Copenhagen’s focus on industries and clusters is presently directed more towards enterprise policy efforts to ensure a good framework for strengthening green, healthy and creative growth – additionally, Copenhagen is involved in an initiative with the Fintech sector. This happens primarily through active participation in cluster organisations and by building up entrepreneurial communities. There is however a need for clearer criteria for when the City of Copenhagen should in the future take an proactive role in strengthening ecosystems and clusters. There must be some excellent arguments put forward for how the City’s involvement will create growth and not simply keep unproductive companies or industries alive on public funds.

Recommendations for a focused innovation and growth effort A number of the task force’s recommendations will help solve the challenges in terms of strengthening the ecosystem and creating more growth companies, see table 5.

38 Ministry of Higher Education and Science (2016)

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Table 5. Other recommendations which address growth companies’ challenges

Subject Recommendation More into education and 14. More focus on science and technology in the municipal primary and more choosing a STEM edu- lower secondary schools cation 15. More collaboration with businesses in the municipal primary and lower secondary schools 16. Strengthened guidance efforts

22. Increased exposure to competition More effective solutions 23. All tenders gathered on one platform 24. Collaborate with private companies on new solutions

Increased digitalisaiton 25. Remove administrative barriers for new solutions 26. Digitalisation strategy

International attraction 30. International House is strengthened 31. English language policy 33. Guidance on housing 34. Recruitment via digital platform 35. Increase international awareness of Greater Copenhagen

In addition, the City of Copenhagen can support the development of good ecosystems through the physical planning and an active business policy based on clear selection criteria.

Recommendation 28: Create a good physical framework for innovation and growth environments The City of Copenhagen shall create a good physical framework so that businesses can establish themselves in the immediate vicinity of universities and other knowledge institutions, and so that private stakeholders can establish new concepts for entrepreneurial environments (e.g. co-working – co-living), which can attract entrepreneurs to the city, e.g. through the 2019 Municipal Plan.

Internationally you can see that cities create good physical frameworks for innovation and growth environments in two ways:

1. Development of innovation districts 2. Support for entrepreneurial communities.

Research suggests that cities can be benefit from identifying and supporting innovation districts.39 Innovation districts are clearly defined geographical urban areas where knowledge institutions, businesses, entrepreneurs, investors and incubators can gather and collaborate. We see this in cities such as Boston, Stockholm, Barcelona and so on. The city’s primary role will typically consist of creating a physical plan basis that maps out a framework for establishing an innovation and knowledge environment that can attract and retain businesses .

Copenhagen’s central innovation district is Copenhagen Science City, where the City of Copenhagen, in partnership with research and education institutions, Rigshospitalet, research parks and business environments supports the development of an innovation district in the fields of medicine, health and the

39 Katz et.al. (2014)

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natural sciences. Copenhagen Capacity uses the area as a value proposition in terms of attracting international companies.

Many cities support the establishment and operation of entrepreneur communities (e.g. research parks, incubators, accelerators and co-working spaces). Entrepreneur communities combine the leasing of office spaces with offers for entrepreneurs, for example access to investors, advice, network and knowledge sharing events.

Several international studies point directly towards many of the publicly supported entrepreneur communities not creating more growth companies. In some cases they actually produce businesses with a lower survival rate than average, or keep the wrong ones alive. On the other hand, positive effects are seen from private incubators, university incubators and incubators with focus on basic research.40

Copenhagen has a well-functioning private market for entrepreneur communities. Four out of five entrepreneur communities are maintained without being subsidised by public funding41. This means that the City of Copenhagen does not need to offer these kind of communities itself, but rather support the private market through flexible regulation and a good physical framework for establishing entrepreneur communities on market terms.

Wholly new, private offers for entrepreneurs have also begun to show up on the private market, for example environments which combine co-working and co-living spaces, and which offer entrepreneurs both a working and residential community with access to a number of shared facilities.

This appeals to many entrepreneurs, who typically spend many hours in the workplace, have limited time for a social life and are dependent on finding low rent housing for their international employees who will live in Copenhagen. Hybrid concepts (i.e. concepts which are on the interface between commercial and residential building) can be hard to manage within existing planning and building legislation and municipal regulations on the size of buildings etc.

If the City of Copenhagen wishes to be able to continue offering the latest and most attractive innovation and growth environments, then it is recommended that the municipality, for example in the 2019 Municipal Plan, investigates how opportunities can be created for developing a good physical framework for: • Innovation districts, where knowledge intensive companies can place themselves in the immediate vicinity of universities and other knowledge environments such as Science City. • That private stakeholders can establish new concepts for entrepreneur environments (e.g. co-working co-living concepts), e.g. in connection with the 2019 Municipal Plan. • The City of Copenhagen shall, including via the 2019 Municipal Plan, ensure the continuous presence of creative zones and potential areas, which shall ensure an ongoing supply of new areas with lower rents, which can support new businesses in the start-up phase. Recommendation 29: Clear criteria for the City of Copenhagen’s efforts with industry In areas where there are national industry/cluster efforts, the City of Copenhagen shall, looking forward, work from the following criteria when it needs to be determined whether the municipality shall supplement the existing work with growth industry/ cluster efforts: • Identification of existing or potential positions of strength, which are identified by:

40 Nesta (2013) 41 Oxford Research and TechBBQ (2018)

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• Adequate size • An expected high demand in the future • High productivity or a probable secondary effect on attracting manpower or capital The City of Copenhagen must be able to make a difference in lowering the barriers, which can only be overcome in an municipal context.

The City of Copenhagen has a number of general levers for creating a good framework for growth companies, which are described in this report and in table 6. In certain situations it has been necessary to target efforts towards specific industries. This is true for example in regard to the recruitment of international manpower, where Copenhagen Capacity has been successful in recruiting workforce for the Fintech sector.

It is recommended that the municipality focuses and professionalizes its efforts to improve the more specific frameworks for selected industries and clusters. It is essential here that the City works with a clear set of guidelines for when it shall consider putting its tools into play. Beyond the fact that the City of Copenhagen must never act alone but must do things in collaboration with the national strategy for the different industries, it is recommended that the municipality ensures:

1. That this involves an existing or potential position of strength in Copenhagen, assessed in terms of: a. Is the industry/cluster of an adequate size as measured either by employees, number of businesses or value added? b. Are there expectations of a high future demand based on high quality projections? c. Does the industry have a high productivity, understood as value added per hour worked? 2. That the City of Copenhagen can make an important difference in terms of lowering a specific barrier – and that the costs match the reward. The typical barriers concern a lack of knowledge, dissemination of knowledge and asymmetric information.

One of the municipality’s important tools in supporting growth in industries and clusters goes through putting the municipality’s challenges into play in regard to the businesses. Many analyses suggest that the solution to society’s big challenges is one of the keys to driving innovation (Danish government, 2012). The world’s countries have signed under the 17 Global goals, and the City of Copenhagen has ambitious plans to have Copenhagen lead the way in implementing solutions within sustainable energy supplies, reduction of environmental and climate burden, healthy and safe food supplies, ensuring clean water, cheaper and better healthcare and welfare solutions etc.

It demands close collaboration with businesses and knowledge institutions and can take place e.g. by the municipality taking an active role in the national cluster organisations and international city partnerships, where, in partnership with companies, one attempts to find solutions for the world’s challenges.

The municipality can contribute to national cluster collaborations such as CLEAN and Welfare Tech with important expert knowledge about the city’s very specific challenges and needs. This is essential input for companies within the cleantech sector and welfare technology field, which build their innovation of new solutions on these insights.

Correspondingly, it is of benefit to residents in the City of Copenhagen, the climate and businesses for Copenhagen to be heavily involved in the city’s climate organisation, C40 and in the government’s new sustainability initiative P4G.

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Chapter 6 Better international attraction

Copenhagen can improve its international accessibility while also being better at attracting and retaining more international specialists and bringing more foreign capital into the city.

6.1 Generate growth by attracting and retaining more international specialists and investments In order for Copenhagen to have high productivity, innovation and growth - and so that Copenhagen’s businesses can compete internationally - it is critical that companies manage to attract the latest knowledge and technology. There are even bigger reasons for opening up to the outside world, if we are to continue being competitive.

An increased internationalisation of businesses can be supported through:

1. Attraction and retention of a specialised international workforce. 2. Attracting international investments 3. Increased international branding.

Attraction and retention of a specialised international workforce A specialised international workforce is a reward for both businesses and society. The international specialists contribute with new expertise, new methods and knowledge of new markets.

International specialists benefit growth in Copenhagen in part because they increase the individual company’s productivity and partly because they are an important precondition for Copenhagen being able to retain and attract new businesses.

Research shows that companies which hire international specialists have higher productivity. The salaries among the company’s other employees are also positively affected, and exports increase – this applies both to the scope of the export and the inclination to export, see figure 26.42

42 IZA (2011)

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Figure 26. Effects of hiring international specialists

Pct. Pct.

3,0 3,0

2,5 2,5

2,0 2,0

1,5 1,5

1,0 1,0

0,5 0,5

0,0 0,0 Gennemsnitlig løneffekt Eksport (Tilbøjelighed) Eksport (volumen)

Source: IZA (2011): “Do Foreign Experts Increase the Productivity of Domestic Firms?”

Copenhagen is lagging behind those cities which we normally compare ourselves with when it comes to the recruitment of an international workforce.

The salaries for the international employees who come to Denmark are rising and are over the average for Denmark. This indicates that a large proportion of the workforce that has arrived in the City of Copenhagen in recent years is highly specialised, see figure 27.

It thus continues to be a challenge to attract an international workforce compared to other major cities, but the workforce that is attracted, is – measured by salary – more productive than previously.

Figure 27. Average business income, the City of Copenhagen

1.000 kr. 1.000 kr. 500 500

400 400

300 300

200 200

100 100

2007 2008 2001 2002 2003 2004 2005 2006 2009 2010 2011 2012 2013 2014 2015

Indvandrede Tilflyttede Udvandrede Bosiddende primo og ultimo Fraflyttede

Source: Own calculations, based on Statistics Denmark Note: Fully taxable adults aged 18+ with a business income (For newcomers the amounts are set at an annual level)

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Despite Copenhagen ranking relatively poorly in the competition for international specialists, a number of polls indicate that the city has good framework conditions for attracting and retaining an international workforce. According to a study of 90 major cities, Copenhagen, Stockholm and Oslo are among the most attractive cities in the world to work in. Copenhagen ranks highly in areas such as quality of life, educational level and opportunities for an international career.43

It is a paradox that Copenhagen has good framework conditions while also being less international than other metropolises in the Nordic region. This indicates a need to increase familiarity with Copenhagen as an attractive career destination if the specialised workforce in Copenhagen is to be made more international.

Copenhagen must compete with cities all over the world when it comes to attracting international specialists. This type of workforce is happy to relocate if the right job appears and to settle down where it is most attractive.44

Besides increasing the visibility of Copenhagen, it is obvious to strive towards retaining the international specialists who have already opted to settle in the city.

This applies to the international graduates who have taken an education in Denmark. This group has an education which the companies can easily decode, and also have a basic knowledge of Denmark and would be relatively easy to integrate into a Danish workplace. Furthermore it can benefit growth if the international specialists who already work in Copenhagen can be retained for longer. Studies have shown that if a spouse is also working then the likelihood for this becomes greater. For the international students there are particular parameters such as internships and job offers that may be decisive.

Attracting international investments It is critical for the internationalisation of Copenhagen that foreign investments are also attracted. The international companies do not only contribute with foreign capital but in many cases also with new technology, increased competition and an international network for the commercial sphere in Copenhagen. Furthermore, research shows that foreign companies are more productive than Danish companies and that these productivity effects rub off on the local Danish companies, thereby benefiting the local economy.45

The international competition to attract foreign investments has increased in recent years. The international race to reduce corporation tax as much as humanly possible bears witness to this. Tax- friendly regions, such as Amsterdam and Dublin, attract far more investments, for obvious reasons, than Greater Copenhagen and other comparable regions, see figure 28.

43 The Global Cities Talent Competitiveness Index (2018) 44 Lubanski et al. (2017) 45 Pedersen and Skaksen (2011)

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Figure 28. Number of foreign investment projects in the period 2009-2014 in selected European metropolises

Antal Antal

1.000 1.000

800 800

600 600

400 400

200 200

0 0 Amsterdam Dublin Helsinki Berlin Hamborg GC Ekskl. Stockholm skåne

Source: Insight into Greater Copenhagen

It must however be noted that, taking into account population size, Greater Copenhagen attracts international investments to the same extent as other metropolises which we normally compare with.

In terms of foreign investments then Copenhagen has, according to the World Bank, the European Commission and OECD et. al. some of the best framework conditions - measured on conditions such as infrastructure, educational level, ease of doing business, flexicurity, research and development, cheap commercial leases and high liveability.

When a foreign company looks at Copenhagen as a possible location, then there are also conditions that drag it down compared with other metropolises. These include for example a relatively small market that a business can gain access to, a relatively high corporation tax, a low proportion of foreign talent and a low degree of specialisation.

Need for increased branding There appears to be unrealised potential in terms of strengthening international awareness of Greater Copenhagen’s strengths as an investment hub. Attractive framework conditions are the primary driver for attracting foreign investments, but branding is also important. If foreign companies are to consider investing in Copenhagen and Denmark it requires that they are familiar with the value proposition Copenhagen is offering.

For a long time, branding efforts in the capital region were relatively fragmented. It was not until 2016 that municipalities and regions in Zealand and Skåne in Sweden teamed up to harmonise the branding effort under the name ‘Greater Copenhagen’. At this point Stockholm and Amsterdam had been working with focused and highly prioritised branding efforts for many years.

There is estimated to be great potential in increasing international awareness of the business areas and positions of strength where Greater Copenhagen ranks among the very best internationally and is thus highly competitive. In relation to the branding efforts, the investment promotion organisation Copenhagen Capacity has been successful in hosting more specific, digital Greater Copenhagen campaigns focusing on attracting talent to selected industries.

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Recommendations for increased internationalisation Overall, Copenhagen has good framework conditions for retaining and attracting a highly-qualified international workforce as well as foreign capital. Despite this promising starting point Copenhagen ranks relatively poorly in the competition for both international specialists and investments. On this basis a number of specific initiatives are recommended that shall support Copenhagen utilising, to a far greater degree, the potential found in increased internationalisation and thereby increased growth.

Recommendation 30: Strengthen the efforts at International House International House is strengthened with a view to making the reception and service provided to an international workforce even better, including by making successful initiatives permanent. Efforts shall also be made for the State Administration’s presence to be increased to its previous level.

The City of Copenhagen’s International House has a number of effective “arrival” offers which make it easier for international citizens to live and work in Copenhagen. Here, international employees and students can have help with everything from tax cards to choice of GP and obtain information on international schools, local leisure associations and a job for their spouse.

Many of the offers in International House are however project-financed and the grants are determined, among other factors, on how many municipalities can encourage new citizens to make use of the offers. it is therefore recommended that reception services with good results are, firstly made permanent, and secondly made accessible to all citizens in Greater Copenhagen. One example that can be mentioned is “Copenhagen Career Program”, which assists both spouses and students in finding a career in Denmark.

In order to make relocation in Copenhagen as smooth as possible it is strongly recommended that once again, there is easy access to the State Administration in International House. This will ensure that all international citizens have an easy arrival and drop in on International House, where the other services are visible and accessible.

Recommendation 31: English language policy An ambitious language policy shall be implemented in the City of Copenhagen, where all websites, forms etc. of relevance to businesses, foreign students, families and employees are accessible in English.

The City of Copenhagen shall implement a systematic English language policy focusing on those areas where international newcomers experience language barriers in their contact with the municipality, for example in connection with registering for day care institutions or choosing a GP. . In addition, the City of Copenhagen shall work towards influencing other authorities to follow suit.

Recommendation 32: International study jobs and internships A unit shall be established in International House that shall work towards helping more international students to find relevant study jobs and internships, and a portal shall be set up where all international study jobs are gathered.

International students with study jobs are more inclined to stay and work in Denmark after completing their education. With a view to retaining more of the international students via study jobs in Copenhagen, a unit shall be set up alongside International House and Business House Copenhagen focusing on assisting international full-degree students in terms of study jobs and internships.

The initiative shall support both companies in the capital region offering more English-speaking study jobs than they currently do and international students having easier access to relevant jobs. It is expected that

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the companies in Greater Copenhagen will contribute actively to this initiative; inspiration can be found in Copenhagen Capacity’s talent strategy.

Recommendation 33: Advice about housing Increased regional cooperation on guiding international newcomers and other interested parties on the housing opportunities in Greater Copenhagen (through trade fairs etc.)

International workers can find it hard to find a place to live in Copenhagen. This applies both to newcomers but also to international students who have completed their education and can no longer live on campus.

International House and the Danish Confederation of Industries, DI have seen huge interest in “housing fairs” in Copenhagen in recent years, where different public sector and private stakeholders on the housing market are represented. The huge interest testifies to the demand for expanding these efforts, which is why a regional cooperation shall be established to inform house hunters more systematically on housing opportunities, both in central Copenhagen and in the rest of Greater Copenhagen (trade fairs etc.) The efforts shall ensure more guidance and advice in the housing area so that more people are aware that there are houses in different price classes, qualities and sizes in different places in Greater Copenhagen. As a supplement, a simplified version of the Danish Rent Act will be published on International House’s website, so that international newcomers are well prepared for dealing with the housing market.

Recommendation 34: Increase international knowledge of Greater Copenhagen Greater Copenhagen must sharpen its international identity in the form of: • a more well-defined identity, • strengthening targeted marketing, • using selected events/congresses to attract highly qualified manpower from abroad, • supporting internationally-oriented entrepreneur events.

As a supplement to the successful, targeted digital marketing campaigns directed for example towards recruitment for specific industries, it is proposed that efforts are strengthened for Greater Copenhagen to clearly define its brand and identity in a broader sense in an international context. The efforts to make Greater Copenhagen a “top-of-mind destination” must not happen at the expense of Copenhagen Capacity’s more industry-oriented digital marketing campaigns, however. Additional financing must thus be set aside for the broader efforts. In other words, an increased branding effort shall stand ‘on two legs’.

E. Focused identity: Greater Copenhagen’s existing branding bases itself on a diverse identity narrative on the shared (historic and current) Nordic values such as equality, democracy, sustainability, liberty, liveability etc. Stockholm, meanwhile, has already branded itself as the Capital of Scandinavia. This means that they will always be seen as “the capital for these values” and thus the main carrier of them. It is therefore proposed that the identity is sharpened in Greater Copenhagen along the lines of a clear message as to what it is that Greater Copenhagen is a “world champion” in, and why you should choose Copenhagen rather than e.g. Stockholm, Amsterdam and Berlin to settle down in or make investments in. This should build partly on data on the city and partly through the coverage and involvement of stakeholders (residents, companies newcomers, potential newcomers and businesses etc.).

It is further proposed that the clear identity is made even more visible than Greater Copenhagen’s tagline “A Way of Life” is today. The clearly-defined identity must have a direction and a specific attraction value in terms of attracting investments, talent and tourists. The effort to increase familiarity with the Greater

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Copenhagen brand and the identity narrative can be increased and made far more offensive by supporting the specific awareness to the region’s positions of strength.

F. Strengthen specific marketing of the region’s unique value propositions: It is proposed that more resources be set aside for the pool under Greater Copenhagen, which will be used to carry out targeted digital marketing campaigns for the purpose of finding candidates for “open job” investment opportunities etc. in specific target groups within especially promising positions of strength and growth industries, possibly coupled with specific investor/talent attraction summits. In order to reflect a genuine market need, the campaigns should – as they are today – be co-financed by private stakeholders.

G. Selected congresses and other events shall be enriched with side-events for the purposes of recruiting international specialists: Attracting international specialists shall be more actively considered as a part of the foreign congresses and events that are held in Copenhagen. This is done by Copenhagen Capacity, cluster organisations and others holding side-events, and by considering these side-events already in the awards process, targeting those candidates that are naturally attracted by the main event. This can be regarded as an additional offer to the specific congress or event.

H. Support entrepreneur events that brand Copenhagen as an entrepreneurial hub: The City of Copenhagen shall co-finance two substantial entrepreneur events with international impact, which will help to brand Copenhagen as an entrepreneurial hub and to attract talent, investors and new knowledge.

Many cities which Copenhagen compares itself with work targeted to market their entrepreneur environments towards foreign investors, entrepreneurs and talent. This helps to place the cities on the international stakeholders’ mental map. If we do the same in Copenhagen, it can help build a stronger ecosystem, sharpen competition and further professionalization of the Danish investor and entrepreneur environments.46 Copenhagen can benefit from collaborating with the state on this kind of marketing.

These kind of events shall be selected on the basis of a solid assessment of the branding effect as well as the ability to attract talent, investments and new knowledge to Copenhagen. The selected events must focus on areas that are assessed as having special perspectives in regard to the rest of the commercial sphere, see recommendation 29.

Recommendation 35: Establish partnerships on how to attract international expertise and research environments Establish a formal cooperation with the major knowledge institutes in Greater Copenhagen to attract core researchers/research departments from abroad.

In collaboration with the leading knowledge institutes in Greater Copenhagen, the City of Copenhagen shall actively assist in attracting leading knowledge in the form of core researchers or research groups to Copenhagen within the region’s positions of strength. Such an initiative can draw on experiences from the efforts to get the European Medicines Agency (EMA) to locate in Copenhagen. Cooperation here was done across state, regional, municipal and private stakeholders towards a joint offer.

A formal cooperation would enable for example directing the focus on researchers in the United Kingdom, who as a consequence of Brexit wish to strengthen their ties to research environments in a fully-fledged EU country such as Denmark. The City of Copenhagen is able to support the universities for example in

46 Iværksætterpanelet (2017)

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making Greater Copenhagen’s positions of strength visible, and the reception services which the City can make available to international newcomers.

6.2 Copenhagen must improve international accessibility to the capital Companies highlight international accessibility as among the five most important parameters when choosing where to locate an investment.47 This is supported by research that shows that international accessibility is critical, not least in a time of growing trade and mobility, for capital, technology and workforce. In a nutshell, accessibility impacts Copenhagen’s and Denmark’s opportunities for globalisation and the secondary opportunities for increased productivity and growth. Added to this is the tourism income from those who visit Denmark.

According to an analysis from Copenhagen Economics, Copenhagen Airport delivers 74 percent of the international accessibility in Denmark. The airport is estimated to have delivered a value of between DKK 30 and 57 billion across all of Denmark over the past 20 years.48 The remaining share of international accessibility comes from train, car and bus traffic. The Fehmarn Belt Fixed Link will strengthen the international accessibility of these forms of transport. They will however continue to constitute a smaller share of the total international accessibility and the potential for investments in Copenhagen Airport is far greater.

With slightly over 29 million passengers annually, Copenhagen Airport continues to be the largest airport in Scandinavia, see figure 29.

From 2007-2017, passenger growth at Copenhagen Airport was around 36 percent and thus slightly lower than Stockholm Arlanda, Oslo Airport Gardermoen and Helsinki Airport, all of which experienced growths of between 44 and 49 pct.

Figure 29. Number of passengers and passenger growth 2007-2017 in selected European airports

Mio. passagerer Pct.

75 75

60 60

45 45

30 30

15 15

0 0 Hamborg Helsinki Bruxelles Stockholm Oslo CPH Amsterdam Paris CDG

2017 Vækst 2007-2017 (højre akse)

Source: Aero European traffic data

47 Kraks Fond (2016) 48 Copenhagen Economics (2016)

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Crucial for the airport in relation to international accessibility and economic growth are 1) Copenhagen’s role as a hub-destination and 2) the number of destinations which can be reached from the airport. That Copenhagen is a “hub” means that the airport connects other airports with each other and can therefore offer more routes and flights with higher frequencies than other airports.

The number of routes to Copenhagen is crucial The airport is especially important for leisure tourism, which constitutes an entire 60 percent of airline companies’ passengers at Copenhagen Airport. Leisure tourism is expected to grow considerably over the next few years, and is critical for ensuring that new routes are economically sustainable for the companies.

New routes will also benefit business passengers as well however, just as increased tourism can make Copenhagen more visible, for example in attracting businesses and a highly qualified workforce.

Intercontinental routes contribute especially to growth. A new intercontinental route with five to seven weekly departures operated by a network company is estimated to potentially contribute to growth with between DKK 250 and 750 million. If the same intercontinental destination is operated by a company without a hub in the destination airport (for example a low-cost airline), then the accessibility contribution will be considerably lower, around DKK 10-40 million.

From 2016 to 2017, the number of intercontinental operations from Copenhagen Airport increased by 1.4 percent to approx. 15,90049. It is important for the economic growth that more intercontinental routes are established – especially routes that are operated by network companies.

Recommendations for improving international accessibility to Copenhagen Copenhagen Airport is already in the process of expanding to double its size so that it can service 40 million passengers annually. The airport invests around DKK 1 billion a year on renovations and expansions that include increasing the number of gates by 50 percent.

Furthermore, the Danish government’s aviation strategy sets the stage for investments in, for example, the expansion of infrastructure to the airport and a relaxation of the rules for what the areas in the airport can be used for.

The task force is very positive towards the initiatives, which will strengthen the airport and hence international accessibility to Copenhagen.

With a view to the City of Copenhagen assisting in developing and strengthening Copenhagen Airport still further, two specific recommendations can be pinpointed.

Recommendation 36: Extend and expand efforts to attract new air routes to Copenhagen Airport The City of Copenhagen must prioritise the expansion/extension of efforts to attract new air routes to Copenhagen Airport financially.

All over the world, cities and countries help attract routes to their airports through ‘route attraction programs’.

The Greater Copenhagen Connected program is run by Wonderful Copenhagen and supported with DKK 2 million from the City of Copenhagen. The program also receives state support and offers airline companies that are considering opening a route supplementary marketing of Copenhagen as a

49 CPH, (2018)

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destination in the respective cities/countries so as to increase interest from potential travellers. The support for the program therefore comprises a parameter in the airline’s overall business case when making the decision on route locations and route expansions.

Over the period 2010-2017, Greater Copenhagen Connected has contributed to 31 new routes or route expansions, 957,000 additional passengers and DKK 7.1 billion in tourism-economic turnover. In the period 2016-17 alone the program has contributed to eight new routes or route expansions, of which six were intercontinental and two European routes.

The relatively humble public investment in the program has thus given a high socio-economic return for both Copenhagen and Denmark as a whole. The City of Copenhagen should therefore continue and increase its support to the program in order to support the development in international accessibility.

Recommendation 37: Improve the infrastructure around Copenhagen Airport Expansion of the southern ring road (Ring Syd), including prioritising funds for the expansion of Kastrup Station.

Increased accessibility to the airport leads to more passengers who need transporting to and from the airport. There are already capacity challenges on the railway line to the airport, both from the Danish and Swedish side.50 This prolongs the travel time and reduces accessibility to the airport.

The capacity challenges will increase when the Fehmarn Belt Fixed Link is expected to open in 2029, and more goods trains run on the line. Furthermore, a high speed train is planned between Stockholm and Malmø, which would potentially stop at Copenhagen Airport and possibly continue onwards to Hamburg. The high speed trains would expand the airport’s coverage area but demand that capacity be increased around Kastrup Station.

More room must thus be created for the Øresund line train, more goods trains and a future high speed train, without however these changes being done at the expense of commuters and residents who travel between the cities in Greater Copenhagen.

Analyses of the Ring Syd project have been initiated which, besides the capacity expansion of Kastrup Station, also comprises expanding Ørestad and Glostrup stations and a ‘flyover’ at Ny Ellebjerg51.

The project gives significant travel time savings for travellers. The travel time between Roskilde Station and the airport is expected to be reduced from 38 to 26 minutes, and travellers from other parts of Denmark, e.g. West Zealand, Funen and Jutland can thus save approx. 12 minutes on their journeys to Copenhagen Airport. It will also relieve the pressure on Copenhagen Central Station, which contributes to greater robustness and punctuality for the entire railway network.

The state has set aside money for development for parts of the project, including the development around Ny Ellebjerg Station, but it still remains to be seen whether the state will decide to set aside funds for the expansion of the station.

The total savings on travel time will not be realised until all the subprojects have been completed, and it is therefore important that all parts of the project are prioritised. The Ring Syd project has the backing of a total of 29 municipalities and the Capital Region of Denmark.

50 Danish Transport, Construction and Housing Authority, 2017 51 Decision basis (2017)

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The task force supports the expansion of the complete Ring Syd project, including the expansion of Kastrup Station.

This recommendation is linked to recommendation 21 on establishing an Øresundsmetro, which would also support increased accessibility.

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