• The widespread use of PCs and other IT hardware, including local networks and multi-user computers.
  As evidenced by the PC penetration, 85% of all office employees use a computer at work, compared to an average of 55% in the rest of the European Union countries. Further, 26% of all households have a computer, compared to 29% in the United States, 12% in the United Kingdom, 10% in Germany and 7% in France.
• The extensive use of IT in the private sector and at public authorities.
  Essential evidence of such are the number of basic registers, which connect data via various public organizations. In particular are the CPR and CVR codes, which provides data connections to central registers containing personal data and business data, respectively. It should also be noted that such extensive use of IT includes not only the hardware and software of IT, but also includes the smooth interaction between public and private actors advocating such connectivity.
• There is a well-developed IT Action Plan developed and supported by the Danish government.
  The Danish government has established very clear, strategic goals with regard to the development of IT within Denmark. Further, government officials seem to understand the importance of IT and its increasing role with regard to the development of global economies and country competitiveness. Such recognition is not merely a "vision" on paper, but there have been numerous projects and research concerning IT--tangible evidence that Information Society 2000 is not just a publication, but that which must become reality. Finally, evidence of support of the IT plan includes legislation protecting personal data. By setting policies against the improper use and distribution of personal data, Denmark will be prepared to more fully apply IT to government services, including the health care and welfare.
• A well-developed telecommunication infrastructure.
  Denmark's telecommunication infrastructure is very extensive with a fibre-optical cable network that extends to 265 of the 275 municipalities (AKA kommuner) in the country. Additionally, Denmark is in the forefront with the implementation of the common European systems of mobile communication.
• Relatively low telecommunication prices.
  Danish telecom prices are among the lowest in the world. In the OECD rating, Denmark is consistently among the top ranks with regard to affordability. Such low prices are especially applicable to tariffs for broadband connections.
• Widespread user's knowledge about information technology.
  Compared to other countries, there is widespread user's knowledge about information technology. Generally, the labor force is well educated, and the educational system provides children and teenagers with the opportunity to develop curiosity, independence and initiative. Such characteristics are vital to the continued innovation of information technology. Also, computers are widespread in the workplace compared to other industrialized countries.
• A well-advanced liberalization of the Danish telecommunications sector relative to European standards.
  Denmark is well ahead of the January 1, 1998 deadline imposed by the EC to deregulate the telecommunications market. Such liberalization hastens the process of creating a market-based industry, which historically provides the environment to foster innovation and drive competitive pricing.
• A few strong environments of knowledge and enterprises within advanced IT serves, telecommunications and software in general.
  DENet, the network for research and education in Denmark, is an excellent example of a virtual environment of knowledge, with multiple parties connected to this network of research and study. Increasingly, business organizations are getting online and establishing networks with suppliers, buyers, and partners.
• Denmark is regarded an attractive, but demanding market.
  For example, the Danes often emphasize otherwise neglected matters such as design and ergonomics. Such characteristics, at least from an international perspective, lends to the perception of being relatively sensitive to the end-users.

• Denmark has a small market and a small language area.
  The relatively small market translates into high costs in connection with the introduction of new products. Contributing factors to such high costs are translation costs, documentation and approval procedures. Primary and Secondary Schools are still characterized as a lack of knowledge about and use of computers and IT. Also, Danish is different from all other languages in the world, and programs and related literature almost always need to be translated into Danish in order to achieve sales of any substance. It should be noted that the market almost always insists on a Danish Version of imported software.
• The Danish market for IT services is far less developed compared to that of other countries.
  IT services such as e-mail, database searches, voice-response and on-line services are not as widespread as in other countries. As the number of units sold on a comparative basis is decreased, the unit cost increases.
• Lack of widespread use of the broadband services.
  Despite the fact that Denmark has a well-established fiber-optic trunk, there still remains widespread application of such infrastructure.
• Only relatively few Danish companies use computers as a strategic tool today.
  Although one in three companies use electronic data interchange, there still remains a lag in strategic use of information systems such as decision support systems, expert systems, and computer-aided design systems. Also, there was no evidence or discussion regarding corporate use of intranets--internal networks fostering the transfer of information and communication within an organization.
• Continued Existence of Software Piracy
  Despite the fact that Denmark is not identified as a priority Foreign Country by the Business Software Alliance, software piracy is estimated at more than $100 million annually. Increased efforts in hedging the illegal copy and distribution of software is a must in order to foster innovation and creativity. Such efforts may be the key to Denmark regaining its competitive advantage of application development.
• Denmark is increasingly losing its competitive advantage in the applications software market.
  Once upon a time, Denmark was known for its expertise in application development. Although there are a couple applications which have considerable export potential, there is strong evidence showing that the U.S. has capitalized on country's software market.

Investment Analysis

Although the opportunity exists for native Danes to develop software at a lower price than their U.S. counterparts, I would not invest in a software development company in Denmark. Combining piracy with the country population of just over 5 million, the market is too limited for a large number of players (evidence shown in next section entitled Key Markets for Computer Software. Further, the companies that do hold a significant portion of the market are U.S. firms that have what seems to be unlimited financing. To attract and maintain the best application developers in the world takes "deep pockets"--pockets that Danish firms do not seem to have. There is however, one exception to this declaration, and this pertains to financial software applications. Denmark seems to have an excellent reputation with regard to financial packages, and the largest end-user of such packages in Denmark is the private sector.

In recent years, the main stimulus for growth in IT has been fueled by some underlying values that are widespread throughout Denmark. For example, government policy is established to use IT to strengthen the welfare system, to support the "weak ones" in society, to facilitate the delivery of better government services (health care, education, etc.), and to support democracy and individual access to influence. Certainly, such humanitarian efforts are to be applauded; however, in order to compete globally, the paradigm in which the Danish government governs must extend beyond its own domestic borders. More specifically, greater focus on underdeveloped IT markets in foreign regions must be recognized and acted upon if Denmark is going to be a true leader in shaping the global information infrastructure. And, with Danes traditionally taking great pride in their welfare state and internal "safety-net," I do not see this country developing the true global perspective needed to become a major global player in information technology.

The following data are compiled using local sources and reflect the best estimates of US&FCS commercial officers abroad. Statistical accuracy and comparability to other sources (e.g., "USDOC, Bureau of the Census") are affected by a number of factors, including lack of published figures in certain markets, variances in data collection techniques, sources of data, and industry definitions (Market Reports, March 21, 1995).

TOP 10 US $ Mil

Japan 38,000.0

France 15,863.0

Germany 9,419.0

U.Kingdom 6,700.0

Netherlands 4,100.0

Sweden 3,800.0

Italy 2,995.0

Austria 2,548.0

Switzerland 2,350.0

Belgium 1,622.0

TOP 10 US$ Mil

Germany 7,057.0

France 4,789.0

Sweden 2,300.0

Netherlands 1,600.0

Austria 1,529.0

U.Kingdom 1,325.0

Belgium 1,100.0

Switzerland 933.0

Denmark 930.0

Australia 697.0

TOP 10 US$ Mil

Germany 3,120.0

France 2,465.0

U.Kingdom 1,180.0

Denmark 805.0

Switzerland 765.0

Netherlands 640.0

Australia 621.0

Belgium 537.0

Canada 490.0

Spain 470.0

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