1887

OECD Economics Department Working Papers

Working papers from the Economics Department of the OECD that cover the full range of the Department’s work including the economic situation, policy analysis and projections; fiscal policy, public expenditure and taxation; and structural issues including ageing, growth and productivity, migration, environment, human capital, housing, trade and investment, labour markets, regulatory reform, competition, health, and other issues.

The views expressed in these papers are those of the author(s) and do not necessarily reflect those of the OECD or of the governments of its member countries.

English, French

Adapting business framework conditions to deal with disruptive technologies in Denmark

Danish firms are close to the technological frontier compared to other OECD countries,

making the introduction of new – potentially disruptive – technologies key to boost

productivity growth. Despite a high level of digitalisation and good framework conditions,

aggregate productivity growth in Denmark has been only average compared to other

advanced OECD countries and lags behind in less knowledge-intensive service industries.

Policy needs to embrace innovative technologies by leaning against attempts to discourage

or exclude them and by tackling unintended or outmoded obstacles in legislation and

regulation. Analysis based on Danish firm-level data suggests that digital adoption through

investment in ICT capital increases firm productivity and contributes to business dynamics

and firm growth. Improving economic incentives for such investment as well as facilitating

adoption of new business models require a shift of taxation away from capital and labour

income. Ensuring supply of the right skills and maintaining effective upskilling will help

workers cope with disruptive changes and ensure that economic growth benefits all.

English

Keywords: innovation, disruption, digitalisation, competition, productivity, taxation, skills
JEL: L50: Industrial Organization / Regulation and Industrial Policy / Regulation and Industrial Policy: General; E24: Macroeconomics and Monetary Economics / Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy / Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity; L40: Industrial Organization / Antitrust Issues and Policies / Antitrust Issues and Policies: General; O33: Economic Development, Innovation, Technological Change, and Growth / Innovation; Research and Development; Technological Change; Intellectual Property Rights / Technological Change: Choices and Consequences; Diffusion Processes; O38: Economic Development, Innovation, Technological Change, and Growth / Innovation; Research and Development; Technological Change; Intellectual Property Rights / Technological Change: Government Policy; H25: Public Economics / Taxation, Subsidies, and Revenue / Business Taxes and Subsidies including sales and value-added (VAT); O16: Economic Development, Innovation, Technological Change, and Growth / Economic Development / Economic Development: Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
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