Bent Dalum 8/7-06, Syros1 Development and diffusion of ICT in a local context: The case of Denmark with focus on North Jutland Bent Dalum ([email protected])[email protected]

Bent Dalum 8/7-06, Syros 1

Development and diffusion of ICT in a local context:

The case of Denmark with focus on North Jutland

Bent Dalum([email protected])

8th July 2006, Syros GreeceDRUID/IKE and Center for TeleInFrastructure

Department of Business StudiesAalborg University, Denmark

mailto:[email protected]


Part I

The ’Danish model’:

A few characteristics


Conference on the Greek Industry Towards a Knowledge Based Economy

Athens July 4-5, 2006

The Danish Economy:(1) Strong Macroeconomic Performance &

Flexicurity (2) Is the Industrial Structure Sustainable for

the Future Welfare Society?

Bent DalumIKE/DRUID and CTIF

Head of Department of Business StudiesAalborg University, Denmark


Unemployment in Denmark 1948-2004

0

2

4

6

8

10

12

14

1948 1952 1956 1960 1964 1968 1972 1976 1980 1984 1988 1992 1996 2000 2004

%

Beskrivende dansk økonomi © HandelsVidenskab


Current Account in Danmark, 1948-2004 (% of GDP)

-6-5-4-3-2-101234

1953 1958 1963 1968 1973 1978 1983 1988 1993 1998 2003

%

Beskrivende dansk økonomi © HandelsVidenskab


Export Specialisation(Manufacturing exports)

Sweden Finland Denmark

1990 2003 1990 2003 1990 2003

High-tech 0.8 0.9 0.5 1.0 0.8 0.9Pharma 1.4 1.6 0.5 0.3 2.1 2.1

Cons el.+ tele 1.0 1.1 0.9 2.3 0.6 0.6

Med-high 0.9 0.9 0.7 0.6 0.6 0.7

Med-low 1.1 1.1 1.1 1.4 0.9 0.9

Low 1.3 1.2 2.1 1.7 2.0 2.0


Low-Tech Export Specialisation

• Denmark is dominated by the low-tech industries in manufacturing exports.

• But that is – to a smaller extent - also an important feature for Sweden, Finland and the Netherlands (and Greece).

• [BUT in terms of multinationals: big diffences between Denmark versus Sweden, Finland and the Netherlands].


The Danish Economy

• A low tech exporting economy?

-To some extent the answer is a yes• However, The Danish Paradox

– DK ranked no. 4 in innovative activities in the EU

– DK ranked among or close to the world leaders in user penetration of ICT

– Quite strong macroeconomic performance


Flexicurity

• Denmark is probably the country in Western Europe where it is most easy to sack an employee.

• The ’trick’ is high level of unemployment benefits and a rather flexible workforce.


Part II

The wireless sector:

The C of ICT

Source: OECD Information Technology Outlook 2004

Regional Employment Specialisation – The ICT Sector 2001


Wireless concentrations in DK

• North Jutland – NorCOM,…..

• Copenhagen region:– Nokia, Thrane & Thrane, ….

• Aarhus region:– Terma,…..


Industry structureof North Jutland

• A classical textbook case until the 1980/90s:– Industrial structure dominated by the ’old’ industries:

agriculture, food processing, fishery, cement, textiles, tobacco, tourism, etc….

– 1990: structural catching-up– Specialisation in electronics: Emergence of a visible wireless

communications industry: NorCOM, printed circuit boards and other ICT activities (some in their early stages)

– The engineering industry: a somehow ’forgotten’ strong segment of manufacturing

– ’New’ and rather big service companies: KMD, Nykredit Data, Sonofon, Spar Nord Bank,….

Genealogy of NorCoM 2003

Copyright: Michael S. Dahl, Christian Ø. R. Pedersen, and Bent Dalum


The university as an active player

• AAU founded in 1974• Based on two regional engineering schools, of which

one was a DTU affiliate. Also based on an affiliate of Copenhagen Business School

• Second DK supplier of MSc’s in engineering from 1979. 40% market share in 1990; 50% in electronic engineering

• Computer science from the mid 1980s• Strong electromedical research profile from the early

1990s• Broad coverage of the social sciences and the

humanities


Emergence of other ICT fields

• IT service and software development– KMD, Nykredit Data, WM Data, Logimatic, Targit,

Hugin, …– Nouhauz, IKT Forum

• Printed circuit boards– Mekoprint, GPV Group (Printca, Danprint,..), Nibe

Electronikcenter,…

• Biomedical – Cortex, Judex, Cephalon, Neurodan, RTX

Healthcare, Thomson Bioscience,…..– BioMed Community + HEALTHnTECH


NorCOM (1) A technology based cluster

The ‘inner’ Core:

• 45 telecommunications firms • Knowledge institutions (AAU)• Bridging institutions & venture capital

(NOVI)


NorCOM (2)

• 1997-99 a CLUB• Firms and university researchers,• Hosted by a science park, NOVI• www.norcom.dk

• 2000- a BUSINESS ASSOCIATION• 20-25 firms (75% of total employment) + AAU • Hosted by NOVI • Financed by member firms


NorCOM (3)‘Core’ technology focus

• Microwaves - Radiocommunications• 1) Mobile and cordless communications (equipment)

– 2G: GSM, 2+ (GPRS, EDGE)

– DECT

– Bluetooth

– 3G: UMTS, CDMA2000, TD-SCDMA (China)

– 4G: ?

• 2) Components for mobile terminals

• 3) Mobile services

• 4) Maritime communications and navigation

– communication (VHF, UHF & satellite)

– navigation (satellite)


Technological life cycles – Mobile Technology

NMT (1G)

GSM (2G)

UMTS (3G)

Performance

Time

Industry

- Center for Teleinfrastructure

CTIFCTIF opened January 29 2004.

Main purpose: (1) Research in ’Beyond 3G’ or 4G. (2) Research in the interaction or ’convergence’ between wireless and wired technologies: alternative models for the architecture of the future tele infrastructure.

EU 6th Framework: MAGNET; local grants, Danish Government + Danish and international firms (Samsung, Siemens, Nokia, etc.)

Local press gimmick: two messenger boys and the creators of the great vision------->


TeleinfrastructureWhat is in the Cards?

• Convergence between wired (optical fibres) and wireless.

• All based on IP (v6)• Local real life experiments: Fibre to The Home &

wireless Internet access. Great vision but far from being implemented.

• What is ’4G’?


Convergence is what 4G is about

4G Mobile Communication Systems

Cellular phone systems, such as 2G, 3G, and 3.5G

Wireless Internet access: WPANs, WLANs such as IEEE 802.11x, HIPERLAN/2, WiMax

Broadcasting Satellite Communication

Wired networks


Future strategies for North Jutland (and Denmark)

• How to learn to cope with schizophrenia– At the one hand several industries are threatened by

globalisation, not least in North Jutland– On the other hand, several opportunities have emerged in

the high tech fields– These opportunities did not pop-up as mere results of

market forces, and they are not results of very specific policies neither.

– But some bold efforts in the region have paid off: establishment of a university (1974), CPK and CTIF, a science park (NOVI 1989), the thrust towards creating a university hospital-like insitutional framework,….


Part III

The IT software and service sector:

The IT of ICT


GROWTH AND EVOLUTION OF THE DANISH IT SECTOR:

GEOGRAPHICAL CONCENTRATION, SPECIALISATION AND DIVERSITY

Christian Ø. R. Pedersen and Bent DalumIKE / DRUID and Center for TeleInFrastructure (CTIF)Department of Business Studies, Aalborg University

Paper for the DRUID Summer Conference 2006www.druid.dk


• The purpose of the paper is to analyse the growth and evolution of the Danish IT sector during the upswing of the 1990s

• Employment and the number of firms have more than doubled

• The evolution indicate a ‘non random’ clustering of the industry around the larger urban areas.

• The paper will focus on the dominant forces in shaping the growth and spatial evolution of the industry and analyse how industrial dynamics caused the industry to cluster in the two largest urban areas.



Characteristics of the IT sector that affect the evolution of the industry

• Low entry barriers– Some, but not prohibitive, physical capital requirements.

• Labour intensive– The right skills are decisive, but ‘general skills’ can do a lot.

• The education level of the employees – In 1997 17% of the employees had a long term tertiary education

compared to 3.5% for the total private sector. 32% had a medium term tertiary education or higher, while the average was 9%.

– 24.3% of the entrepreneurs in 1998 had a medium term tertiary education or higher compared to 12.4% of the total.


Employment Growth in the Danish IT sector1992-2002


Propositions

• Hypothesis 1: Regions with high employment specialisation will remain specialised and regions with low specialisation will stay at a low level.

• Hypothesis 2: Regions with a large town and a large and diverse labour market will benefit from Jacobs externalities leading to positive effects on regional IT employment growth.

• Hypothesis 3: Universities providing medium-term or long-term tertiary education in the technical or computer sciences will have positive effects on IT employment growth in a region.


Regional Employment Specialisation – IT 1992


Regional Employment Specialisation – IT 2003



Conclusions• The leading regions in 1992 have kept their position, the ranking of

the followers has changed moderately, while the remaining regions kept lagging behind. However, Aalborg became specialised.

• Self-augmenting processes sustain specialised regions at a high activity level

• The persistent employment and firm specialisation in the Copenhagen and Aarhus regions shows a specialisation effect and a diversity effect– the demise of Vejle points towards lack of a specialisation effect.– the lack of growth in Odense points towards lack of a

specialisation effect– the supply of highly educated graduates in Aalborg compensates

for lack of specialisation• Factors behind the growth and evolution of the IT sector? Highly

educated employees and initial size of the IT sector.

Documents

Bent Dalum 8/7-06, Syros1 Development and diffusion of ICT in a local context: The case of Denmark with focus on North Jutland Bent Dalum ([email protected])[email protected]