45 Denmark
Schwartz
Danish industrial policy with regard to pharmaceuticals illustrates the tensions around both Mark I and Mark II types of innovation strategy. Recent Danish governments have promoted Denmark as an “innovation country” and formed a “Disruption Council” intended to preserve the country’s economic position. Danish R&D is highly concentrated in the pharmaceutical and biomedical sector (Vestas’ windmill production and servicing provides a side bet on alternative energy, but Chinese competition squeezes profitability). A government-run public goods strategy supports the emergence of Mark I type firms in biotechnology, thus providing a “feedstock” for Mark II oriented Novo Nordisk. This strategy continues a long tradition of “extension” type services designed to bring new technology and best practices from universities and high performing firms to more traditional firms including manufacturing SMEs. It is supplemented with venture capital from the Danish Growth Fund (Vækstfonden). The policy has helped keep Danish firms largely at the technology frontier, producing a narrower gap between leading and lagging firms than in the rest of the OECD. But the challenge in pharmaceuticals is anticipating the bio-genomics revolution rather than adapting to it.
In cooperation with Novo Nordisk, the Danish government runs a cluster of data collection and dissemination organizations: the Danish National Genome Center (Nationalt Genom Center), the National Biobank (Danmarks Nationale Biobank under the State Serum Institute), and the overarching Royal Bio and Genome Bank. These centers leverage the comprehensive and diachronic data the state collects from all hospitals and practitioners on a large range of conditions and patient variables.
The databanks also enable smaller biotech firms to access large volumes of data on relatively smaller (in terms of incidence) diseases and thus help them overcome one major research hurdle. Put simply, they generate and hold the data that machine-learning and AI driven R&D projects need to function.
Novo Nordisk meanwhile acts as a central contractor with many smaller research-oriented firms—though these contracts generally choke off growth from Mark I innovation in favor of pre-emption by the lead firm. Overall, however, Denmark lacks indigenous AI and ML firms that might supply expertise to the entire sector, as compared with either Israel or Sweden.