Danish Industrial Policy: Persistent Liberalism

Abstract

Danish industrial policy reflects a ‘liberalistic’ paradigm, with industrial subsidies being general rather than selective, and based on profitability. There was an increase in the number of industrial policy instruments introduced in the second half of the 1970s, and in particular there seems to have been an increase in subsidies for technological innovation. The amount of money allocated for industrial subsidies has increased, especially during the economic recession. However, Danish industrial policy can only be conceived of as a crisis response policy in a relatively diffuse way, with only a few arrangements directly targetted at firms in difficulties, whereas most aim at making the surviving firms expand, innovate and increase their exports. Similarly, with few exceptions Danish industrial policy can be seen as anticipatory only in a very general way. The administration of industrial policy is characterised by close cooperation between state, industry and labour in tripartite boards and committees that take decisions about the administration of industrial policy or advise the government. The widespread use of such tripartite bodies hampers changes in industrial policy because all partners have to acquiesce in the changes. Innovation in Danish industrial policy is likely to be a gradual process, with most existing arrangements surviving, and a desultory increase in the use of more selective measures.