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 COPENHAGEN – A LEADING METROPOLIS FOR SUSTAINABLE GROWTH, INNOVATION AND TALENT 3 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 COPENHAGEN – A LEADING METROPOLIS FOR SUSTAINABLE GROWTH, INNOVATION AND TALENT 4 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 COPENHAGEN – A LEADING METROPOLIS FOR SUSTAINABLE GROWTH, INNOVATION AND TALENT 5 COPENHAGEN – A LEADING METROPOLIS FOR SUSTAINABLE GROWTH, INNOVATION AND TALENT 6 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. COPENHAGEN – A LEADING METROPOLIS FOR SUSTAINABLE GROWTH, INNOVATION AND TALENT 7 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