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February 18 2016

Denmark: Globalization and the Welfare State

Denmark is the seventh wealthiest country in the world in terms of GDP per capita,
because of its ability to adapt rapidly to a global economy as a welfare state. Specifically,
Denmark was quick to embrace globalization and plan for the future of the labor market. As the
world became increasingly globalized, Denmark was quick to respond to the economic threats
posed by the global market. Through a combination of its welfare state and its quick responses to
economic threats, Denmarks welfare state encouraged forward propulsion of the countrys
development. For example, during the 80s and 90s, international competition and offshoring
strategies created a growing unemployment rate. The best example of Denmarks ability to adapt
to a growing unemployment rate is known as Flexicurity. Through this policy, the country
created jobs, protected current employees by allowing them wage insurance, avoided creating a
permanent class of welfare recipients, and attracted new industries with new education programs.
When new industries emerged and created unemployment, the labor unions, which were
supported by the flexicurity reforms, would push to educate and adapt these workers to an
emerging industry. Danes shed the idea that unions should demand lifelong employment and
retention of traditional industries- instead Danish unions focused on fostering employee
education, which subsequently resulted in employment stability and employee satisfaction. Since
more than half the population takes part in supplementary training (in addition to their daily jobs)
employees who lost their jobs felt that they could find new ones rather quickly. Additionally,
employees were happier knowing that they would be able to rather fluidly move to different jobs
if they were unsatisfied with their current one.

The case highlights two businesses that The Danish welfare state encouraged through its
pro-trade, pro-education and pro-union policies. LEGO and Novo Nordisk, were both successful
companies because they focused engaging their workers on global business strategy. LEGO
opened up its strategy to software games featuring its plastic brick toys when it saw that
competitors with cooler gadgets were slicing away sales. As soon as LEGO saw a shift in
consumer demands, it was quick to adapt. Meanwhile, Novo Nordisk established programs that
increased production competencies so that blue collar employees were generalists and adapted to
the evolution of the different manufacturing jobs.
In my opinion, Denmarks state faces issues like increased immigration, unemployment
but it was ultimately the welfare state that cultivated a competitive and forward looking culture
by education and bringing up the root of the unemployment problem, that makes Denmark
prosperous and successful.