Horizon Scan

OECD Horizon Scan
August 2007
This horizon scan is the outcome of a scan of a large number of recent investigations carried out by international think
tanks, expert groups and organisations etc. that has been examined and summarized into an unprioritized series of short
briefs describing a whole range of important societal challenges. The horizon scan has been commissioned by The
Danish Agency for Science, Technology and Innovation (DASTI) and has been carried out by the OECD International
Futures Programme Unit with support from DASTI. Since the content of the horizon scan briefs origin from third party
sources, the literature study does not reflect the views of neither the OECD nor the Danish Government.
Source: OECD Horizon Scan
Table of content
Culture ...............................................................................................................................................................................5
Cultural poverty?.............................................................................................................................................................6
Elitism in sports...............................................................................................................................................................7
Language conservation....................................................................................................................................................8
Media convergence..........................................................................................................................................................9
New forms of family .....................................................................................................................................................10
Non-national identities ..................................................................................................................................................11
Performance enhancement?...........................................................................................................................................12
Private art ......................................................................................................................................................................13
Religious fundamentalism .............................................................................................................................................14
The cheating culture ......................................................................................................................................................15
Weakening religious establishments..............................................................................................................................16
Development ....................................................................................................................................................................17
Declining bio-innovation...............................................................................................................................................18
Designer babies?............................................................................................................................................................19
Entrepreneur survival ....................................................................................................................................................20
Functional foods ............................................................................................................................................................21
Genetic discrimination...................................................................................................................................................22
Industrial clusters...........................................................................................................................................................23
Long-term societal planning..........................................................................................................................................24
New global sourcing......................................................................................................................................................25
Regulating Technology?................................................................................................................................................26
Scientific illiteracy.........................................................................................................................................................27
Sunrise industries ..........................................................................................................................................................28
The GMO battlefield .....................................................................................................................................................29
The knowledge gap........................................................................................................................................................30
The sanctity of life? .......................................................................................................................................................31
Transport for an ageing population ...............................................................................................................................32
Transport-technological lock-in ....................................................................................................................................33
Economy...........................................................................................................................................................................34
Advertisement exposure ................................................................................................................................................35
Bubbles and financial instability ...................................................................................................................................36
Cheapskate consumers...................................................................................................................................................37
Corporate social responsibility ......................................................................................................................................38
Declining national currencies ........................................................................................................................................39
E7 rising ........................................................................................................................................................................40
E-consumer trust............................................................................................................................................................41
Externalities of wealth...................................................................................................................................................42
Financing welfare ..........................................................................................................................................................43
Flexicurity under pressure .............................................................................................................................................44
Good corporate governance...........................................................................................................................................45
Infrastructure planning ..................................................................................................................................................46
Open economy governance ...........................................................................................................................................47
Political consumption ....................................................................................................................................................48
Price transparency .........................................................................................................................................................49
Productivity ...................................................................................................................................................................50
Public sector efficiency .................................................................................................................................................51
Replacing taxation .........................................................................................................................................................52
Tackling counterfeit.......................................................................................................................................................53
The consumer child .......................................................................................................................................................54
The economics of climate change .................................................................................................................................55
Working welfare............................................................................................................................................................56
Global ...............................................................................................................................................................................57
Catastrophe management...............................................................................................................................................58
Close cultural relations ..................................................................................................................................................59
Global issues, global solutions ......................................................................................................................................60
More countries...............................................................................................................................................................61
Source: OECD Horizon Scan 2

Shifting alliances ...........................................................................................................................................................62

Supranational lawmaking ..............................................................................................................................................63
Taxing the international economy .................................................................................................................................64
Tough global priorities ..................................................................................................................................................65
Nature ..............................................................................................................................................................................66
Acidity ...........................................................................................................................................................................67
Chemical side effects.....................................................................................................................................................68
Clear waters...................................................................................................................................................................69
Climate change ..............................................................................................................................................................70
Environmental refugees.................................................................................................................................................71
Noise pollution ..............................................................................................................................................................72
Oxygen depletion ..........................................................................................................................................................73
Particle pollution ...........................................................................................................................................................74
Retreating wildlife .........................................................................................................................................................75
Rising waters .................................................................................................................................................................76
People ...............................................................................................................................................................................77
Alternative medicines....................................................................................................................................................78
Burdened Families.........................................................................................................................................................79
Changing patterns of disease .........................................................................................................................................80
Competencies or general education? .............................................................................................................................81
Competitive health care.................................................................................................................................................82
Declining populations....................................................................................................................................................83
Disabled opportunities...................................................................................................................................................84
Distributed health services.............................................................................................................................................85
Domestic violence .........................................................................................................................................................86
Education as resource ....................................................................................................................................................87
Food as cure and cause ..................................................................................................................................................88
Gendered education .......................................................................................................................................................89
Increasing health care costs ...........................................................................................................................................90
Lifestyle as illness .........................................................................................................................................................91
Male trouble ..................................................................................................................................................................92
Medicalisation of social problems .................................................................................................................................93
Outcast?.........................................................................................................................................................................94
Redefining old age.........................................................................................................................................................95
Road safety ....................................................................................................................................................................96
Social mobility ..............................................................................................................................................................97
Suicide...........................................................................................................................................................................98
The ageing patient .........................................................................................................................................................99
Trafficking...................................................................................................................................................................100
Transport anarchy........................................................................................................................................................101
Resources .......................................................................................................................................................................102
Bio resistance ..............................................................................................................................................................103
Bycatch........................................................................................................................................................................104
Congested traffic .........................................................................................................................................................105
Declining fish stocks ...................................................................................................................................................106
Energy efficiency.........................................................................................................................................................107
Energy system flexibility.............................................................................................................................................108
Feeding 8 billion people ..............................................................................................................................................109
Food safety ..................................................................................................................................................................110
Harvesting climate change...........................................................................................................................................111
Intensifying animal production....................................................................................................................................112
Non-food rising ...........................................................................................................................................................113
Organic food................................................................................................................................................................114
Reducing greenhouse gasses .......................................................................................................................................115
Security of gas supplies ...............................................................................................................................................116
Security of oil supplies ................................................................................................................................................117
Stagnating public transport..........................................................................................................................................118
Waste production.........................................................................................................................................................119
State................................................................................................................................................................................120

Coherency....................................................................................................................................................................121
Competitive cities........................................................................................................................................................122
Conflicting freedoms ...................................................................................................................................................123
Judicialisation of society .............................................................................................................................................124
Proliferation of WMD .................................................................................................................................................125
Regional development .................................................................................................................................................126
Rethinking punishment?..............................................................................................................................................127
Risk management ........................................................................................................................................................128
Secularism ...................................................................................................................................................................129
Terrorism .....................................................................................................................................................................130
Underage crime ...........................................................................................................................................................131
Work life ........................................................................................................................................................................132

Equal opportunity ........................................................................................................................................................133
Labour market integration ...........................................................................................................................................134
Labour mobility ...........................................................................................................................................................135
Lifelong learning .........................................................................................................................................................136
Sources of sick leave ...................................................................................................................................................137
The ageing employee...................................................................................................................................................138

Culture
Culture enriches life and carries enormous potential. The encounter between different cultures can create new
opportunities as well as problems. This category includes challenges related to cultural matters, such as religion, art and
sports.

Cultural poverty?
Despite the sizeable economic support, the proportion of the population aged 15 or more who do participate in
these cultural activities has remained stable at some 20 per cent since the end of the 1980s. The numbers indicate
that knowledge about how to increase cultural participation is an important challenge in a Danish context.
There are few technical or financial barriers to participating in most cultural activities, yet many people's cultural
horizons are limited to passive consumption of a small fraction of what is on offer. This true even for activities that cost
little or nothing and includes children. Surveys from a number of OECD countries showing similar, unsurprising
patterns, despite the range of programmes and resources considered, with education, social class and income largely
determining which cultural products are experienced.
Efforts to improve participation in culture include investigations into what stops people participating in culture, and
what motivates them to participate. For example, A Eurobarometer panel identified a number of objective factors such
as lack of time and money, unsuitable information, travel distance, education that does not prepare children for culture
or even puts them off, and a social environment with little interest in culture. Opinions concerning information were
perhaps the most surprising, with many participants stating that there was too much information, making choice
difficult and leading to discouragement. This is linked to a number of important psychological obstacles, invisible
barriers such as a lack of confidence and a feeling of inferiority when faced with complex productions that intimidate
the uninitiated. These can create, both in reality and in people s minds, a cultural structure comprising an exclusive high
culture for an elite, and a so-called popular culture that includes the mass media (mainly television), entertainment and
sport aimed at ordinary people.
A US study took the opposite approach, examining what motivated people participate in cultural events. The results
imply that those seeking to increase cultural participation too often neglect the wide variety of motivations,
circumstances, experiences and expectations associated with different types of cultural participation. The survey
likewise indicated that efforts to enlarge attendance cannot be based on why people attend culture in general but must
be rooted in information about why people attend a particular type of event, where they attend, who they attend with,
what experiences they have, and critically, whether people are getting the experiences from attendance that they seek.
For example, only a third of the people attending arts and crafts fairs agreed that the artistic quality was high, the lowest
in any area, suggesting that improving quality should be a prime goal. However, these fairs scored much higher than
anything else as an enjoyable social experience (45 per cent of respondents), and most attendants were neither
disappointed nor surprised by the quality. Given that 60 per cent of respondents went to these fairs for social reasons,
efforts to improve this aspect rather than quality would seem to be more promising. In fact, socialising was the main
motivation for attending generally while celebrating one's heritage was the least important. High-quality art was in
between.
Relevance to Denmark
In Denmark culture is subsidised to ease access to a variety of activities. In 2005, cultural activities received subsidies
equivalent to DKK 11.3 billion not counting lottery money (tipsmidlerne). The greater part of these funds, some DDK
7 billion, is earmarked for public libraries, museums, music events and theatres. Yet, despite the sizeable economic
support, the proportion of the population aged 15 or more who do participate in these cultural activities has remained
stable at some 20 per cent since the end of the 1980s. A recent study showed that this figure covers significant variation.
Women participate in cultural events more than men, city dwellers participate more than country dwellers, and the
higher one s education, the more likely one is to go to the opera, a musical, the ballet, the theatre, a classical concert,
museums or public libraries. The numbers indicate that knowledge of how to increase cultural participation is an
important challenge in a Danish context.

Elitism in sports
In Denmark, the distance between the professional elite sportsmen and women and the part-time amateur
continues to grow. Spanning the organisational, financial and political gap between the best and the rest will thus
continue to be a challenge in years to come.
A lot is expected of sport beyond amusing people. It is called on to help create and reinforce national identity;
contribute to public health; teach young people the value of effort, respect for rules, and team work or personal
achievement; reinforce social inclusion and cohesion; signal social position; and even send diplomatic signals. For the
mass media, it is both a major source of revenue and one of the most important topics.
Sport is also big business, both as regards audiences and spin-offs. Consultants PWC expect that in the US gate
revenues will total around $21 billion in 2010, up 6.6 per cent compounded annually from around $15 billion in 2005,
while in Europe, the Middle East and Africa sponsorships, merchandising, and other revenue will rise to over $10
billion in 2010, an 9 per cent compound annual gain from $6.6 billion in 2005. The money is distributed very unevenly
among sports and within sports. Even in sports with large numbers of participants, most of the revenues go to a few top
clubs and a small number of players, due to the growing influence of television rights (some sports have even changed
their rules to try to make themselves more attractive to television audiences). In football, for example, UEFA estimates
gross budgeted income for the Champions' League at around 600 million, with the 32 clubs that reach the group stage
sharing around 450 million. Conversely, an English club that is relegated from the Premiership will get only 1.5
million in television rights the following season compared with around 45 million for a Premiership club. Public
expenditure on sport is likewise often imbalanced, with countries prepared to spend massively on prestige projects such
as hosting the Olympic Games or other major events, while small associations have to survive on the goodwill of their
members or gifts from local sponsors.
This dichotomy between sports as big business and sport for the masses is likely to grow in the future, which could put
values such as fairplay, joy of participation and coherency, etc. under pressure. The desire to produce champions can
place children under enormous pressure from ambitious parents and elite selection and training programmes. The
emphasis on performance rather than participation encouraged by such programmes can also reinforce the idea that the
role of most people in sport is to pay or watch. A feeling of inadequacy may be part of the explanation of why so few
people continue to participate in sports after childhood. National surveys of physical activity in a number of countries
suggest that up to three-quarters of adults do some sport, a closer look usually shows that almost half of this is
accounted for by walking, with cycling also very popular, while physically undemanding sports such as playing pool are
also included in the statistics.
In Denmark, the distance between the professional elite sportsmen and women and the part-time amateur continues to
grow. The continued professionalisation of sports and the extreme dedication and sacrifice needed to compete
internationally, attract viewers and sponsors, and to bring home medals continues to widen the gap between the best and
the rest. This has lead to widespread debate about the balance and mutual dependence of the elite and amateur-levels.
The cornerstone of the Danish amateur level consists of some 14,000 sports clubs with about 2 million active members.
These clubs are run primarily on a voluntary basis and they absorb the major part of public grants. The amateur level is
also the major recruitment ground for the elite level, as broader participation in sports for fun, exercise and social life
has been growing for years. The elite level attracts money and media attention, pushes the limits, brings home medals
and provides highly visible idols, inspiring members of the broader public to join in sports. Clearly no elite can exist
without a broad recruitment base and the amateur level will find it hard to inspire in the absence of a top elite. Spanning
the organisational, financial and political gap between the best and the rest will thus continue to be a challenge in years
to come.

Language conservation
In Denmark, the English language is replacing Danish in many walks of life. As more English terms for
numerous concepts are seamlessly absorbed into the Danish language, the issue of language conservation has
continuously reappeared on the agenda.
There are almost 7000 languages spoken in the world today: around 2400 in Africa (35per cent), 2000 in Asia (28per
cent), 1200 in the Pacific (19per cent), 1000 in the Americas (15per cent), and 200 in Europe (3per cent). At the height
of language diversity, there were probably 8000 distinct languages. Linguists estimate that half of the world's languages
are endangered and many fear that 90 per cent will disappear by the end of this century since very few people speak
most of the known languages, with half of today s languages having fewer than 10,000 speakers while a quarter have
fewer than 1000. Only about a quarter of languages and very few dialects have writing systems, making the task of
conserving them even harder. The Internet could actually help here. The early tendency for English to massively
dominate no longer holds, and the share of English in Internet access and content is declining, with almost two-thirds of
the world online population non-English
It could be argued that language extinction is not a problem since languages have always flourished and died and that
having fewer languages is a good thing, since language is a barrier to the movement of people and ideas. This argument
could be refuted on the grounds of the intrinsic value of the cultures threatened languages transmit, but there are also
more practical reasons to worry about this. For example, understanding how the mind works is one of the great
challenges of modern science and philosophy, and language is an essential component of this work. However, many, if
not most of the languages that could provide vital insights into questions such as a universal grammar are now
threatened with extinction.
Language can also be a highly precarious issue in societies with ethnical and cultural minorities. Claims for linguistic
rights range from the official and legal status of the minority and indigenous language, to language teaching and use in
schools and other institutions, as well as in the media. International agreements accord minority and indigenous groups
certain linguistic rights, including schooling in their languages; access to the language of the larger community, to that
of national education systems and to international languages. Migrant workers and their families also have language
rights, including teaching their children the languages used in schools and giving children the opportunity to study their
own language and culture. Educational policy making with regard to languages, schooling and the curriculum in
multicultural societies has to cope with possibly conflicting technical and political demands. In countries with
languages little spoken elsewhere, the issue is often the balance between protecting the language and adopting English
in education and business to increase international competitiveness.
In Denmark, the English language is replacing Danish in many walks of life. Danish school children have their first
English course at the age of eight. Computer games, movies, music styles and products are branded in English, and
English is now the working language in science, business, culture and international affairs. As more English terms for
numerous concepts are seamlessly absorbed into the Danish language, the issue of language conservation has
continuously reappeared on the agenda. The Danish language originates from the Scandinavian branch of the Indo-
European language-tribe. It is thus closely related to Swedish and Norwegian, which are intuitively understandable to
most Danish-speakers. Throughout its history, the Danish language has been influenced, shaped and inspired by
numerous other languages, such as Greek, Latin, German, French, and now English. As a dynamic and evolving entity,
the notion of the original Danish language will depend purely on one s own point of view and preferred time frame.
This ambiguity makes the concept of language conservation a tricky one, as it cannot be clearly defined what should be
conserved or how. This raises the challenge of preserving as well as developing the working and evolving piece of
cultural heritage that is the Danish language.

Media convergence
The Danish media industry is experiencing gradual consolidation from single-business television channels, radio
stations and newspapers to a few international media conglomerates each spanning an entire pallet of modern
media.
Media convergence covers two related trends. First, the technical trend for separate technologies to be integrated into
one device, e.g. computers plus telephones equals the Internet, or telephones plus radio equals mobile phones. This is a
slow process: the first telephone presented in 1876, and the first programmable computer in 1945. The changes
engendered can also take time, but still leave many people behind, including industry leaders and policy makers.
Technical convergence of media will produce new modes of consumption and content creation and with them new
attitudes to a variety of factors. For the present, media audiences are largely passive consumers with little or no control
over content or programming, and governments can still largely decide what can be shown in their country.
The second convergence trend refers to merges and acquisitions. The volume of media deals completed in Europe
increased by 12 per cent to 175 transactions in 2006 versus 156 in 2005, almost equalling the record of 186 transactions
in 2000. Consolidation shows no sign of stopping, as the recent 18 billion Thomson-Reuters deal shows. The role of
private equity in these deals is particularly striking, accounting for almost half the financing. The same is true in the US,
where Clear Channel for was bought for 20.6 billion by a private equity consortium which now controls over 1000
radio stations and 42 TV stations, as well as the UK's largest outside advertiser. As long as borrowing remains relatively
cheap on international financial markets, the role of private equity in the media is likely to grow. This will reinforce
trends that raise issues of plurality of information and thus democracy as well as programme quality if seeking wide
audiences to attract advertising becomes the main criterion. As immediate profit and dividends become more dominant,
information production and diffusion risks becoming more standardised and industrialised, with more or less the same
content on offer across a range of theoretically different publications. This is already the case for images: the same
agency picture can be found in different newspapers in different countries for main stories, and is increasingly true of
video footage used in news broadcasts. As the number of journalists is cut and resources are pooled among outputs of
the same conglomerate, this is also becoming the case for text.
The Danish media industry is experiencing gradual consolidation from single-business television channels, radio
stations and newspapers to a few international media conglomerates each spanning an entire pallet of modern media. In
recent years, the competition for viewer attention has sharpened considerably across the full range of media. The two
major national television channels, Danmarks Radio and TV2, are facing stiff competition from a still wider range of
specialised, international channels, while the recent flourishing of free, advertisement-driven, newspapers sparked
intense competition in the Danish newspaper market. Still more single-business media see advantages in joining up into
larger media conglomerates to spread their risk, reach wider audiences and bid for more prestigious events. TV2 s move
into the radio market as their launch of a 24-hour news channel and the merger between two of Denmark s largest
newspapers, Politiken and Jyllands-Posten are recent examples of this trend. Web publishing and online media services
have likewise become increasingly important parts of the portfolio for brands normally associated with single media.
Critics have argued that the continued concentration of the Danish media industry will reinforce the tendency of modern
media to aim for the lowest common denominator, diminish the educational value of the content and lead to increased
viewer-segmentation whereby national coherency weakens. Others argue that the professionalisation of the media
industry will lead to wider choice, better quality and weed out those who fail to meet the requirements of their audience.
The challenge of managing the growing the impact of the ever-changing media industry upon society will likely to be
with us now as in the future.

New forms of family
The traditional family is being challenged by a multitude of new family forms, and it still remains to be seen
what effects this might have in the long term in relation to social relations, education, work, etc.
The nuclear family consisting of a man and woman with children staying together as a unit until the children leave
home to study or work may become the minority as divorce and family recomposition, single parent households, and
same sex couples become more widespread. In many OECD countries, the law is adapting to the new circumstances,
recognising forms of partnership other than the traditional marriage. This is often controversial in itself, but even more
so when attempts are made to extend rights such as adoption or welfare benefits to people in these new arrangements.
The formal and informal services provided by families and to families, e.g. child care or looking after elderly relatives,
will also have to evolve to cope with these changes, particularly since demographic trends are starting to produce a
situation where families number four generations, but there are fewer children than grandparents.
While much of the attention of is focused on women and children in new family structures, the way men's position is
changing is worth considering too, particularly as it relates to children. Parenthood is becoming becoming a less central
and stable element in men's lives, both compared to previous generations and compared to its role in the lives of
women. When couples separate, usually the man moves out, leaving behind his own children. This undoubtedly affects
the children's chances in life, but more research is needed to understand why children from single-parent households
with a female head seem to have more problems than others, but this may be mainly due to the fact that these families
are more likely to be poor than to the absence of a man. Other consequences rarely evoked in debates about the family
include the added burden on grandparents helping their daughter and grandchildren financially and otherwise, and the
fact that the man's parents may lose contact with grandchildren or a daughter-in-law they care about.
Social trends and concerns rarely run smoothly in one direction, and while the instability of families is increasing,
another trend worth noting is the number of young adults who prefer to stay with their parents rather than starting a
family of their own. The evolution of the jobs market towards greater mobility and less security can influence the
decision to start a family. Without a steady job, it can be extremely difficult to find accommodation and many people
feel it would be irresponsible to have children when they are not sure what their income is going to be even in the short
term.
Denmark is home to about 3 million families, 700,000 of them are classical nuclear families with mom, dad and
children. However, while the traditional Danish nuclear family is widespread, the family is being reconfigured. Better
living conditions as well as medical developments contribute to a change from a society with high mortality and high
fertility to a society with low mortality and low fertility. More generations live simultaneously though it is far from
certain that these extended families live together or are even part of each other s lives. At the same time, children have
fewer siblings and cousins due to decreasing fertility rates. Divorce and family recomposition, single parent households,
and same sex couples have, also in a Danish context, become more widespread. New possibilities, such as in vitro
fertilisation of older people as well as new forms of adoption also alter family composition, and new family structures
arise with immigration. Almost 1.4 million Danes live on their own 26 per cent more than in 1980. In the same period
there has been a 37 per cent increase in singles living alone with children, so that about 135,000 adults are now single
parents. At the same time, more and more Danes live in recomposed families. Thus, in a Danish context the trend is
clear: the traditional family is being challenged by a multitude of new family forms, and it still remains to be seen what
effects this might have in the long term in relation to social relations, education, work, etc. It is clear that the Danish
family is developing new values and norms as gender roles shift, women enter the labour market and new relations
between parents and children pressure traditional norms and interactions. In a society moving away from traditional
industrial family-relations, the individual is faced with new obligations. Thus, while people are liberated from
traditional commitments and engagements, they are subject to new obligations - the obligation to be educated, to work
and to consume, which challenge the role of the family and its values and norms on the one hand. The new family
structures in turn will have an impact on other socioeconomic domains.

Non-national identities
The future role of the Danish nation state in mediating coexistence and reconciling conflicts between increasingly
heterogeneous, non-national identities will likely remain an important challenge.
The domination of nationality as an identity is intimately linked to the emergence of the nation state as the prime locus
of political and economic power. This is not to say that there need be a perfect match of nation and state. National
identification can persist long after the nation in question has been absorbed into a wider entity, for example the
different parts of the United Kingdom and possibly in the future the various countries of the European Union. This
identification may have to be created practically from one day to the next, as in Kazakhstan, Uzbekistan and the other
Central Asian republics arbitrarily created by Stalin for the nomadic Muslims of pre-Soviet Turkistan. As these
examples illustrate, economic, geopolitical and demographic developments have always influenced national identity,
and will continue to do so, reinforcing it in some cases, weakening it in others.
Over the coming decades, the nation will probably increasingly lose its centrality to the economic organisation of the
world, and national sovereignty will continue to be weakened by multilateral and supranational forces, notably in
Europe if integration in the EU continues. International mobility is increasing, and the spread of cheap internationalised
mass media and cross national lifestyles and consumption patterns are eroding the power of the nation as an identity.
The result is that non-national identities are being reinforced. These can be based on age, gender, religion, culture,
language, class or some other chosen or accidental trait. Some of these identities are militantly non-national, for
example certain forms of Islamic fundamentalism or regionalism. Most of them are non-exclusive of other identities and
one person can claim several simultaneously.
This can make it difficult to understand which one of these identities is the most important when trying to respond to
social issues, and mistakes can be costly.
After 1864, the Danish state became a comparatively homogeneous cultural, ethnic, religious and linguistic unit and
national identities thus largely coincided with other individual identities. Since this time, the Danish state has moved
from cultural heterogeneity towards a more political and value-based society. The current generation embrace
international cultural trends rather than national and local ones and identify with global pop, goth, street, new punk and
anti-establishment-movements independent of nationality. Cultural and ethnic identities have further diversified through
several waves of immigrant workers and refugees from Poland, Germany, the Middle East, Africa and Asia, some of
which were assimilated or integrated into the predominantly Scandinavian ethnic society or formed parallel societies of
their own. Simultaneously, many new and strongly felt religious identities such as Islam, Hinduism, Judaism and
Buddhism have emerged with immigrants from abroad. The future role of the Danish nation state in mediating
coexistence and reconciling conflicts between increasingly heterogeneous, non-national identities will likely remain an
important challenge.

Performance enhancement?
Performance-enhancing drugs and treatments are now widely used in Danish sports. As the standards of
international competition continue to rise, still more radical training methods are necessary to compete on equal
terms.
The growing financial and media pressures to win mean that sportsmen and women are subjected to ever more rigorous
training regimes, which may include the use of banned substances. This is part of a trend that has seen two important
changes in how performance-enhancement measures are becoming central to sport. First, in the past, these measures
were usually temporary, e.g. drugs or intensive training was used before a competition. Now, they are used all the time,
partly because the calendars are so crowded and it is impossible to continue performing at a top level otherwise.
Second, the athletes involved were previously only at the highest levels of a few sports. Drugs and other techniques now
affect every level of professional and amateur sport, and are found in practically every discipline too. Even children are
affected. That is not to say they are being given illegal drugs or that practices such as those used to retard puberty in
female gymnasts are widespread, but the whole ethos is changing, and a number of elements contribute to make
chemical efforts to enhance performance seem natural, including dietary supplements, vitamin injections and other
para-medical techniques carried out on healthy bodies. This is not limited to sport of course, an increasing share of the
pharmaceutical market is for products that do not tackle disease.
The World Anti-Doping Agency (WADA) has an annual budget of a mere $21 million, and n many areas, it is left to
doctors and coaches to decide what is permissible conduct, for example when prescribing authorised drugs administered
in ways or doses incompatible with medical or sporting ethics, or in providing a quick fix to allow an athlete to
continue competing, in the knowledge that this might cripple him later. As legal and illegal doping grows to include
larger numbers of people, it could become a public health problem, the more serious given the addictive nature of many
of the substances used.
Advances in medicine are likely to produce new challenges to sports ethics. Some athletes already have surgery to
correct perfectly good eyesight or strengthen non-damaged ligaments, and researchers have discovered how to
genetically manipulate muscles to make them stronger, and sports governing bodies are worried that transfer of
genetically-based techniques to athletes would be undetectable. Simultaneously, a number of performance enhancing
technologies are being developed, especially for the military, and given their enormous potential in other fields
(including economic potential), they will inevitably be introduced into society at large.
Performance-enhancing drugs and treatments are now widely used in Danish sports. As the standards of international
competition continue to rise, still more radical training methods are necessary to compete on equal terms. As a response
to this development, WADA continues to expand the list of illegal substances and methods, but the line between
scientific training and doping continues to blur. Cycling remains one of the most tested sports in Denmark, surpassed
only by football. According to Anti Doping Denmark, 1,664 doping-tests were conducted in Denmark in 2006 alone, of
which 0.6 per cent proved positive. Beyond the illegal substances, a growing number of legal performance-enhancing
training methods are likewise in use throughout Danish sports. Vitamin supplements, high-altitude training, controlled
diets, food supplements and super-controlled environments are all part of the physical training necessary to compete
internationally. In addition, psychological training, traditionally associated with army training for high-stress combat
environments, and modern mental training, traditionally associated with management coaching, are likewise gaining
ground in Danish sports. The challenge of pushing the limits, moving higher, faster, stronger , while keeping abreast
the spirit of the game in the face of continued technological development remains as relevant as ever.

Private art
The business of culture is booming in Denmark. How will the new mainstream market for culture affect the
incentives of artists and the role of art in society? How will art develop in a booming market for creative goods?
Art and artists have always enjoyed a special status in society, being outside the traditional relations of production for
most of history. Traditionally, they were also outside the domain of public policy (although wealthy patrons were often
political figures too). In Europe, however, art started to become a growing government concern after the Second World
War, when many governments created ministries of culture and became the main source of funding for numerous
activities. Today, art and culture are important businesses in themselves (the May 2007 sales of modern art in New
York were worth half a billion dollars for example) and are increasingly seen as an important element in regional
attractiveness and thus competitiveness. At the same time, public funding for the arts is being questioned in many
countries. In the the Netherlands, for instance, the BKVB foundation for the visual arts and the Mondriaan Foundation
receive 32m in government subsidies, but their directors recently published a book that echoes many of the criticisms
leveled at public art by the media and others, namely that the system leads to average art, has a dire effect on the
modern art market, increases the gulf between artists and the population, and has not led to an increase in international
attention or higher quality. One of the issues, and this is probably the case in other countries too, is how subsidies are
attributed. Often, commissions do not have to justify their choices, and may even be closed to the taxpayers who
finance them. This can lead in some cases to inertia and favoritism, with the same artists being chosen almost
automatically, and in other cases to compromise rather than innovation in an attempt not to displease the voters.
Critics of government subsidies often point to the US, whose art and artists dominate the international scene in
practically every domain from painting to popular music without any government help. In fact, the level of subsidy is
not very different, except that in the US subsidies are indirect through tax breaks for donations to not for profit
organisations rather than direct grants.
In most OECD countries, the private sector's involvement in financing and promoting culture is small compared with
that of public authorities and foundations. This could change as cultural activities occupy a larger place in people's lives
and if the state withdraws its support. Such a development could be beneficial if business encourages those qualities that
ensure its own dynamism and success such as innovation and risk-taking, but it could also stifle creativity if "safe bets"
are the norm.
The business of culture is booming in Denmark. In the period 1992 to 1998, the creative industry exploded with growth
rates at about 29 per cent, much higher than the average growth rates of 15 per cent in the private sector as a whole. A
substantial part of the turnover came from exports. In 2000 alone, exports within the creative industries reached DKK
68 billion, or some 16 per cent of Danish exports. The most popular Danish artists pull revenues of some DKK 12 to 15
millions a year, and the turnover of many galleries has multiplied by a factor of four or five in as many years. But what
happens to art, when culture sells? How will the new mainstream market for culture affect the incentives of artists and
the role of art in society? Will artists focus on making what sells at the cost of individual expression? How will art
develop in a booming market for creative goods? Do we know enough about these questions, and how will this
development affect Denmark culturally?

Religious fundamentalism
While, in a democracy, it is not illegal to hold fundamentalist and anti-democratic ideals, these do pose the
challenge of how democracy should cope with unquestionable, unyielding and irreconcilable interpretations of
the world.
Despite their differences, and sometimes mutual hostility, religious fundamentalists share a common belief that at some
time in the past their religion was practiced in a pure way according to the principles of its founders and that it is
possible to go back to this state, or at least fight against the corruption and decadence that pollute the founding purity.
Fundamentalists criticise the secular state for giving less importance to religion and spirituality than to economics and
other areas. For the fundamentalists, religious belief or the rejection of religion is not a matter of personal choice: the
laws of religion apply to everyone and non-believers are to be convinced and converted. In this view the founding
scriptures give an accurate, objective description of the world that is not open to subjective or transcending
interpretation.
Although fundamentalists are often very talented in adapting the Internet, mobile communications and the other tools of
modern tele-techno-science to their own ends (televangelists or films of suicide bombers for example), their attitude to
modernity is generally hostile. Many people who are not fundamentalists might share their critique of certain aspects of
modern life such as overemphasis on consumption or the breakdown of the traditional family. The major difference is
that for fundamentalists, the aspects they oppose are not the more or less accidental or inevitable product of the
confluence of a number of trends and driving forces, but a deliberate attempt to undermine fundamental, religious
values. This belief is strengthened when fundamentalists feel attacked by the state or by non-fundamentalists within
their own religion.
It is difficult to estimate the degree and quantity of religious fundamentalism in Denmark because this term cannot be
objectively applied and there is no statistical evidence conclusively documenting that the number of followers of
fundamentalist doctrine is on the rise. Normally the term is associated with the elevation of religious doctrine above all
other principles, thus forming the basis (fundament) of a worldview. A small number of highly vocal, religious groups,
openly describing themselves as fundamentalist, have presented themselves as alternatives to the broader religious and
political establishments. Hizb-ut-Tahrir, a Muslim political party with the expressed purpose of instating a caliphate in
Denmark, and Evangelist, a fundamentalist missionary church based on the literal interpretation of the Bible, are
examples of such groups. Likewise, while membership of the Danish National Church dwindles, a number of Christian
congregations, fractions, and movements have become increasing vocal in Danish society during recent years.
Fundamentalist tendencies have likewise been present in the doctrine preached by a number of resident and visiting
imams. While, in a democracy, it is not illegal to hold fundamentalist and anti-democratic ideals, these do pose the
challenge of how democracy should cope with unquestionable, unyielding and irreconcilable interpretations of the
world.

The cheating culture
This social undercurrent of immaturity and lacking surplus to perform minor feats of altruism is as intangible as
it is widespread. The currently visible outlets of this challenge may be less serious than the mindsets they
represent. The cheating culture is now visible in poor queuing manners, dropping paper on the street, the
interpretation of yellow traffic lights and unprovoked rudeness to strangers.
Cheating is universally condemned, but increasingly seems to be just as universally practised. Many instances are trivial
in themselves, but when added to daily displays of antisocial behaviour, the result is a reduction in the quality of life for
most citizens. Being antisocial has some surprising consequences for the offenders too. A cohort study that is following
over 500 men born in the early 1970s in New Zealand has found that boys engaged in persistent antisocial behaviour
become men with poor physical health (greater likelihood of injury, sexually transmitted diseases, cardiovascular risk,
immune function problems, and dental disease.)
While campaigns to deal with antisocial behaviour seem to be successful, the cheating culture does not concern a highly
visible, easily targeted set of people and actions. Cheating and fraud manifests itself in practically every aspect of life
from business to education to journalism to sport. Again, some of the incidents are trivial but the consequences of other
types of cheating and fraud can be extremely serious, e.g. fraud by corporations such as Enron and WorldCom has cost
billions of dollars (WorldCom investors alone lost $200 billion) and deprived millions of people of their pensions.
In Denmark, people of older generations would ascribe present day lack of respect for authority, weak sense of
collective responsibility and widespread egoism to poor upbringing and a low social standing. This problem has
nonetheless spread far beyond the traditional boundaries of the lower layers of society. The cheating culture is now
visible in poor queuing manners, dropping paper on the street, the interpretation of yellow traffic lights and unprovoked
rudeness to strangers. Police officers, ticket controllers, postmen and paramedics now complain that their uniforms are a
source of scorn and provocation rather than respect. Meaningless, small-scale vandalism and carelessness about the next
person to use toilet-facilities, phone booths, bus seats and public parks are visible everywhere. This social undercurrent
of immaturity and lacking surplus to perform minor feats of altruism is as intangible as it is widespread. The currently
visible outlets of this challenge may be less serious than the mindsets they represent.

Weakening religious establishments
While in 2006, 83 per cent of the Danish population were members of the Danish National Church, less than 5
per cent of these attended Sunday services.
Christianity in its various forms is still the world's biggest religion, but is practised by very few of those who claim to
adhere to it in most of the industrialised countries. Generally, fewer than 10 per cent of the people claiming to hold a
Christian belief actually go to church except for essentially social occasions such as weddings or funerals. At the same
time, a number of smaller religious groups are expanding, and only a small number of people define themselves as non-
religious. Religious identity seems less attached to single beliefs as more people choose as they please from a number of
traditions, mixing, for example, Christianity and Buddhism.
What people believe and how they practice their faith is a matter of personal choice in many countries, but the conflicts
and tendencies in matters of faith can become a challenge for policy makers in several ways. The decline in the more
established churches does not necessarily mean a decline in the desire for spiritual experience. The number of new
religious groupings and their pressure for similar status and privileges as the established churches may grow. This will
highlight another challenge of how to ensure equal representation for people and groups that are not religious or are
anti-religion. These groups may strongly contest their taxes being used to fund faith-based organisations.
These changes are taking place within national borders, but at the same time a major shift in the centre of gravity of is
taking place internationally, with the emergence Africa as the continent where Christianity is growing fastest. Apart
from Africa, the most dynamic churches are now to be found in Latin America and Asia, but even here the dynamism
does not generally favour the more established cults, with Pentecostals, for example, attracting many new followers
even in strongly Catholic countries such as Brazil where protestants, mostly Pentecostal and charismatic, grew from 9
per cent of the population in the 1991 census to 15 per cent in 2000.
These international developments are likewise mirrored in Denmark. While in 2006, 83 per cent of the Danish
population were members of the Evangelist Lutheran Church, less than 5 per cent of these attended Sunday services.
From 1985 to 2003, some 153,000 people gave up membership causing a total decline of some 7.3 per cent. On the
other hand, 75 per cent of newborns were baptised in 2005. A 2007 think tank survey found that some 22 per cent of
ethnic Danes describe themselves as non-religious or atheist. In addition, half of all Danes reply that they were
confirmed merely because of tradition, while only one in four reply that faith was the deciding factor. The broad
national church may be loosing its hold on the population and is torn between conflicting demands to uphold tradition,
attract the young and (re)interpret the Bible. The Evangelist Lutheran Church is known for its tolerance of a wide range
of opinions and recent debates have shown that a wide range of fractions is exists within the church. A number of
priests are publicly in favour of abortion and widely endorse the blessing of the church of homosexual marriages. Still
other priests endorse parishioners demands that only male priests hold services. The challenge of the weakening
establishment is thus likely to play a major part in the lives of believers and non-believers alike over the coming
decades.

Development
Science, technology and innovation is an inexhaustable source of new opportunity and continued to puch the limits of
the possible. This category contains the challenges related to problems and opportunities of new ideas and inventions
and their use in society.

Declining bio-innovation
In a Danish context, the bio and medico technology is an important, high-growth industrial sector. The challenge
of preventing, pre-empting or overcoming innovative stagnation in this field is thus of the utmost importance.
The successful completion of the Human Genome Project raised hopes that an era of radical innovation in healthcare
was on the horizon, characterised by new, highly effective, targeted treatments for a vast range of diseases. This has not
yet happened. Two-thirds of the new applications to the US Food and Drug Administration are for modifications to
existing drugs rather than new drugs. This is happening despite research budgets increasing by almost 150 per cent over
1993-2004. There are fears that a pessimistic scenario could come about in which biotechnology never lives up to its
promise, the flow of major new treatments dries up, and the profits of big pharmaceutical companies decline, creating a
vicious circle where there is less money to invest in long-term R&D to find new products.
Part of the reason that the hopes have not been fulfilled is that the scientific tasks are much more complicated than
anticipated. Identifying a gene present in a given condition is relatively simple compared with understanding how the
genome (the 35,000 genes in the human body) which is static, interacts with the body's hundreds of thousands of
proteins, with these interactions being affected by multiple factors including the environment, time of day, or diet.
Moreover, more than one gene may be responsible for the condition investigated, so it is not just a question of finding
the gene for and switching it on or off. Increasing specialisation of researchers may make this worse if they are
unable to make connections between their own particular findings and wider implications.
There may be more structural or systemic factors linked to the innovation process itself which government policy could
address. Innovation policies already go beyond basic research and seek to ensure that the innovation system performs
well as an entity by including business, framework conditions, infrastructure, and so on. Future policy will have to
focus on government itself, notably to close the co-ordination gap between separate departments that each deal with
specific aspects of the innovation chain, but also between national, international and regional governments. For
example, firms producing plants for the pharmaceutical industry may have to meet the demands of four different
authorities: health, agriculture, environment and trade. The need for an integrated innovation policy poses a number of
challenges. It has to combine objectives such as improving international competitiveness through innovation with high-
quality, affordable public health care. It has to facilitate a more active role of patients and their organisations in
innovation processes, clinical trials and market access. And it has to develop transparent and stable regulations with
short application procedures and an adequate system for protecting innovations.
The debate about the declining rate of innovation in the medico industry has been intense in Denmark. In a Danish
context, the bio and medico technology is an important, high-growth industrial sector. The 168 dedicated medico
companies alone reported a turnover of some DKK 36.8 billion in 2005. The overall turnover of the biotechnology
sector nearly doubled from 1995 to 2005, growing by some 16 percent in 2005. The Danish biotechnology sector has
been the focus of a long-term combined public and private effort. The most tangible result of these efforts is the
Medicon Valley-project, which is among the five largest biotechnology regions in Europe, representing around 300 of
the about 1,000 Danish companies currently engaged in life sciences and medical equipment as well as a number of
universities, hospitals, science parks and innovation environments. In terms of both public and private funding, medico
and biotechnology are the most important research areas in Denmark and the most recent OECD-study from 2000
placed Denmark at the very top in terms of biotechnology patents per one million inhabitants. The challenge of
preventing, pre-empting or overcoming innovative stagnation in this field is thus of the utmost importance.

Designer babies?
There is much to indicate that advances in fertilisation technologies are already widely employed in Denmark.
As technology advances, a still wider range of choices traditionally made by nature will now be in the hands of
individuals and legislators.
Advances in reproductive technology already make it possible for post-menopausal women to bear children, although
public opinion and the law may not always agree. As life spans extend and the number of healthy years increases, the
upper age at which it is acceptable for a woman to become pregnant will probably converge with that for men. This
example illustrates how the capacity of science to change fundamental aspects of family life will be conditioned not
only by technical possibilities, but even more so by policy decisions and the various pressures that shape them.
In most OECD countries, only two types of advanced reproductive technologies may be used on humans at present:
choosing the type of sperm that will fertilise an egg to determine the sex and the genes of the baby; and pre-
implantation genetic diagnosis (PGD) to screen embryos for a genetic disease. In the future it may be possible to use
genetic technologies to modify embryos and choose desirable or cosmetic characteristics, creating so-called designer
babies. Germ line therapy, one of the techniques that could be used to correct genetic disorders by replacing faulty
sections of DNA, has already been used successfully on animal embryos, but is not permitted for humans.
In the longer term, it will probably become technically feasible to create an artificial womb, which means that a woman
could choose not to carry her child. Combined with the ability to store and manipulate embryos, this would also allow
men to become fathers without having to find a mother for the pregnancy. And if human reproductive cloning ever
became feasible and legal, an individual could start a family all on his or her own.
In the meantime, advances in biotechnologies are making even highly complex operations such as the checking of DNA
sequences much cheaper and simpler to carry out, so it appears inevitable that sooner or later commercial operations
will propose to the public DNA sequencing to check for various genetic characteristics in any potential partners, not just
sperm or egg donors. Amazon.com is already selling DNA testing kits for $199. And genebase.com will supply you
with a standard paternal ancestry package for $119, or the advanced version for $199.
Fertilisation technologies are already widely employed in Denmark - both directly and indirectly. Improvements in
gender-determination procedures recently pushed back the date at which the gender of an embryo can be known past the
12-week Danish abortion limit. Advances in other screening and testing technologies will likewise allow determination
of a still wider range of characteristics and deceases of an embryo before the legal abortion limit, widening the scope of
choice. Other types of eugenics and screenings are routinely exercised when sperm donors are selected from sperm
banks. Danmerk is home to the largest sperm bank in the world, and Scandinavian ethnic sperm is a major export. When
donor-perm is selected, it is done on the basis of information about the ethnicity, height, weight, hair colour, eye colour,
skin colour, occupation, personal interests and blood type of the otherwise anonymous donor. Preferences along these
variables are likely to influence the distribution of genetic characteristics among donor children. As technology
advances, a still wider range of choices traditionally made by nature will now be in the hands of individuals, institutions
and legislators. Dealing with the still widening range of choices now becoming available to parents of all ages will
become an evermore-pressing challenge to society.

Entrepreneur survival
In Denmark, somewhere between 14,000 and 18,000 new businesses see the light of day each year, but far from
all pioneers persist and become legends and far from all business ideas survive their first close encounter with
the market.
New businesses, particularly SMEs, develop ideas, processes and technologies in innovative ways and will prosper and
grow if the business environment in which they operate permits this to happen. In Europe at the end of the 1990s, the
total average annual entry rate was 6.6 per cent new firms, but with considerable variation across countries (over 19 per
cent in Lithuania to 3.5 per cent in Italy) and across industries, with exceptionally high entry and exit rates in ICT-
related service sectors and low rates in more mature industries.
Governments can help young enterprises to be created, survive and flourish in a number of ways, first through policies
that affect the whole economy and the general business environment. Policies concerning competition, the regulatory
framework, taxation, labour markets, financial markets and bankruptcy should take account of the way these areas
affect SMEs (and innovation more generally). Administrative regulations and costs in particular deserve special
attention, since young firms usually do not have the specialised knowledge or time to deal with complex procedures,
and may thus fail to profit from the beneficial effects of regulation such as protection of intellectual property or
regulations that boost investor confidence and make access to finance easier. To deal with this, governments could insist
that regulatory agencies prepare small business impact statements; establish one-stop shops for regulatory information
and transactions; and promote the use of e-government tools so that entrepreneurs do not have to waste time going from
office to office. Labour market regulation presents special challenges, and finding the right balance in labour protection
laws is particularly delicate: in labour intensive industries, protection may tend to hamper entry, but in other cases,
higher protection may make it easier to attract talent.
Governments can also help enterprise creation and survival through specific policies to foster entrepreneurship and
facilitate the growth and prosperity of firms once established. For example, entrepreneurship is part talent, part training,
and while governments cannot do much about the former, they can assist the latter by encouraging a culture of
entrepreneurship, e.g. by integrating entrepreneurship in the formal education system and ensuring access to
information, skills and expertise relating to entrepreneurship via lifelong learning programmes for the adult population.
There are particularly difficult training and human capital challenges in dealing with people who started firms through
necessity, e.g. because they lost their job, rather than through entrepreneurial ambition as such. The survival rate of such
firms is likely to be lower than the average, and the consequences of failure especially dramatic.
Relevance for Denmark

Far from all pioneers persist and become legends and far from all business ideas survive their first close encounter with
the market. Currently, somewhere between 14,000 and 18,000 new businesses see the light of day each year, placing
Denmark on the good side of the European average. After three years, however, only some 63 percent of these are still
in business. According to Eurostat, this places the three-year survival rate of Danish businesses well below that of
Spain, Italy, Portugal, Finland, Sweden and the United Kingdom. The survival rate of the majority of these countries is
about 70 percent, while Sweden takes the lead with some 87.5 percent. After ten years, a mere 20-25 percent of Danish
businesses remain open. Survival is, of course, not everything and not all new businesses represent an efficient use of
societal resources. In terms of growth, about 5 percent of newly started Danish businesses experience rapid growth in
turnover or employees, which is about a third of that achieved by the most successful countries. Statistics suggests that
the valley of death can be circumvented and that the conditions offered to entrepreneurs are of vital importance. After
six years, some 47 percent of the entrepreneurs who received private or public advice are still in business, against 30
percent of those who did not. Furthering the creation of new growth industries is a vital challenge to Denmark.

Functional foods
Functional foods constitute both a threat and an opportunity. Improving health standards and consumption
patterns of the Danish population is an opportunity, which would greatly benefit the Danish health care sector.
On the other hand, upholding the distinction between food and medicine may well be a prudent step in
countering aggressive marketing and abuse.
The latest development introduced by the pharmaceutical industry is pharmaceutical products in non-medical
applications, although it is probably more accurate to speak of products with implied pharmaceutical properties.
Foremost among these are cosmeceuticals , which, as their name implies, are cosmetics containing pharmaceutical-
style components. A similar strategy is applied to foods known as nutraceuticals, or the less intimidating functional
foods . The functional food and drinks market was worth $26.4 billion in Europe and the US in 2005, and is growing at
4.4 per cent a year, driven by increasing acceptance, a desire to self-medicate and consumer demand for approaches to
health care that are less expensive and less high-tech.
The food and drinks industry is adopting pharma technologies in order to create more sophisticated and personalised
products, but as for cosmeceuticals, marketing claims appear to be far ahead of the scientific evidence concerning these
products efficacy. Science could catch up to some extent in the longer term thanks to the emergence of nutrigenomics,
which studies the interaction of diet with genes.
In the meantime, licensing authorities do not recognise functional foods (or cosmeceuticals) as a category, generally
defining pharmaceuticals as non-food products that affect the structure of functions of the body for use in the
prevention, diagnosis or treatment of disease. Most countries also ban advertising based on claims that a given food will
improve health, other than general campaigns, e.g. to encourage people to eat more fruit and vegetables. Nonetheless,
pharmaceutical companies active in this sector may seek to take advantage of existing know-how and resources to
propose products and services without the costly risks associated with drug development. This trend is likely to be
reinforced by mergers and partnerships involving pharmaceutical companies and enterprises from other domains that
exploit similar or complementary technologies, e.g., plant biochemistry for the development of phytochemicals.
Although the market for functional foods continues to grow around the world, it remains illegal to advertise food as a
recommended cure for specific deceases in Denmark and in the European Union. Based on numerous examples from
the promotion of medicine, fear of disease is likely to be used in the promotion of functional foods when the line
between food and medicine becomes transparent. Denmark, as well as the EU, is likely to remain hesitant about lifting
these restrictions. Nonetheless, recent studies indicate that four in ten Danes are positive about the notion of functional
foods containing vitamins, minerals and other health promoting or conserving substances. Only one in ten are sceptical.
Women especially are highly positive and would appear to be a major potential market for functional foods in years to
come. Functional foods constitute both a threat and an opportunity. Improving health standards and consumption
patterns of the Danish population is an opportunity, which would greatly benefit the Danish health care sector. On the
other hand, upholding the distinction between food and medicine may well be a prudent step in countering aggressive
marketing and abuse. This challenge thus awaits resolution.

Genetic discrimination
The new gene-technological developments will require extensive trust in the authorities not to misuse information, new
laws and codes of conduct and/or bans against storing sensitive types of information over any given length of time. In a
Danish context, then, the challenge of genetic discrimination is an immanent one.
A commonly expressed concern is that genetic information will be used to deny access to services such as insurance.
This concern is fuelled by the growing recognition that health information is not entirely private, despite people's
expectations and desires to the contrary and recognition in some quarters that limiting access to the medical record to
the patient and the treating clinician is neither possible nor unequivocally desirable. To some extent, worries about
genetic determinism are due to a misunderstanding of what can be predicted using genetic information. Clinicians
have a variable but usually limited ability to predict when, how severely, and even whether a person with a genetic
predisposition to a certain illness is going to become ill, since many other factors will influence the outcome
(environment, job, age, weight, etc.). If a person's genetic variations contribute only a small amount to disease risk, this
information will be of relatively little value in assessing insurance risk, particularly given the complexity of conditions
where more than one gene is involved.
Actual cases of genetic discrimination appear to be rare, but even if only a small fraction of the population may be at
high genetic risk for serious illness and therefore for genetic discrimination that could be thought of as "rational," laws
to protect such people may be worthwhile. Moreover, employers and insurers may discriminate in ways that are
irrational but that nonetheless harm people. Perhaps most important, the fear of genetic discrimination may be deadly if
it prevents people who are at risk from undergoing genetic testing. Such fears may have broader consequences if they
keep people from participating in medical research.
Another fear is that genetics will provide a basis for ethnic discrimination in the development and prescription of
treatment. However, there is more genetic variation within ethnic groups than between them, so it does not necessarily
follow that genetics will be used to increase the grouping of patients according to race or ethnicity There is a danger
though that where such variants exist, pharmaceutical companies will tend to focus their drug discovery efforts to cater
to genetic variants associated with populations in more wealthy parts of the world. However, global funding for
research and development is already highly skewed towards the health needs of those in richer countries with the ability
to pay, and there is already a pressing need to address these inequalities which genetics does not change.
With well-established systems of registration of the Danish population, paving the way for effective public
administration, Denmark is exceptionally vulnerable to misuse of data and data linkages. In addition, the central person
registration system (CPR), a range different registers, contains detailed information on every Danish citizen: Age,
gender, address, date of birth, citizenship, relation to the national church, kinship, civil status, right of voting,
occupational status, etc. Because of this vulnerability, a range of laws and rule sets protect personal information,
imposing a number of limitations on the use and combinations such information. The use of and access to the Danish
registers are thus highly restricted: Data linkage between registers are banned; health authorities are obligated to
observe confidentiality; employers are only allowed to inquire employees about specific conditions; insurance
companies are not allowed to demand genetic tests result prior to an insurance being made, etc. The new technological
developments will require extensive trust in the authorities or private enterprise not to misuse information, new laws
and codes of conduct and/or bans against storing sensitive types of information over any given length of time.

Industrial clusters
Industrial clusters of competency in areas such as design, architecture, furniture, biotechnology, wind power and
medico technology have contributed enormously to the development of the Danish economy in recent decades.
Most OECD countries have a national clusters policy designed to encourage or even create clusters in the hope of
repeating the success of well-known examples such as Silicon Valley, since many industries remain relatively
concentrated in specific regions and firms and research generators in proximity can out-perform their counterparts
located in less rich environments. Governments are also looking for instruments that help maintain employment and
promote restructuring and adaptation, often in the context of regional policy. There are concerns about the ability of
such policies to be effective in a rapidly evolving economic environment, especially since the place of clusters in global
value chains is not fully understood. Moreover, successful clusters, such as those in ICT or biotechnology, mostly
emerged without specific policies.
The debate on clusters has recently experienced a renaissance in connection with a nearly completed charting of the
European industrial clusters commissioned by the EU Commission. The report concludes that, in spite of several world-
class industrial clusters, the European clusters are smaller, less specialised, employs fewer people and are less
competitive than their American competitors. Also, many European clusters are located in low-growth industries. In
connection with the report, the Commission has indicated that cluster policy will be a central area for future European
business policy.
Governments often launch cluster programmes to enhance competitiveness or build innovation capacity without
specifying the nature of the problem they are addressing. Lack of clarity limits the ability to target, fund and evaluate
outcomes. Clear objective setting and planning by central government can help to align different actions and promote
coherence by preventing duplication, filling gaps and also avoid missing opportunities. Programme definitions should
include both targets and resources, but these choices include a number of trade-offs, e.g. whether to concentrate
resources on a limited pool or be more inclusive, on leading or lagging regions, or on dynamic versus exposed sectors.
One major problem with programme definition and goal setting is how to evaluate effectiveness and outcomes.
As for the innovation process, no single model works across countries or regions, and the success of clusters varies both
within and across countries, leading to disillusion and a certain cluster fatigue when programmes fail to meet
expectations. Successful clusters do have points in common though: a strong science base (universities, laboratories,
and private firms); availability of finance (from private and public sectors); infrastructure; close physical proximity;
networks; and an ability to attract a knowledgeable, skilled workforce.

Industrial clusters of competency in areas such as design, architecture, furniture, biotechnology, wind power and
medico technology have contributed enormously to the development of the Danish economy in recent decades. The
recent charting of European clusters conducted by the EU Commission identified 13 Danish industrial clusters in areas
ranging from food to business services. In addition, the report concludes that only three of these experienced net growth
in the period 2000 2004, emphasising the importance, not only of the existence of industrial clusters, but clusters in
high-growth industries. The framework conditions as well as the specific chains of incidents leading to the creation and
development of clusters remains highly uncertain. There is nonetheless much to indicate that the development of new
clusters in high-growth industries is more important than supporting existing clusters. Creating the conditions under
which clusters form and flourish thus remains a challenge to Danish government and industry alike.

Long-term societal planning
Today, the major threats and opportunities posed to Danish society are highly complex, long-term and
uncertain. Nonetheless, few Danish planning exercises employ a time horizon of more than a decade and often as
little a fiscal quarter.
Governments in OECD countries are moving towards a role in which their main task is no longer providing services
directly, to one in which they ensure that services are provided in the most efficient manner by public and private actors
alike. At the same time, they still have responsibility for a number of questions that require co-ordinated intervention by
the state, as well as international action by varying configurations of states. These tasks have in common a need to look
beyond the immediate contingencies of a situation to identify aspects that will remain important over different time
horizons.
Budget constraints make this more difficult. For example, trends suggest that health and pension spending will increase,
and it is clear that many infrastructures will have to be repaired or replaced over the coming decades. It is unlikely that
new government initiatives in these cases can be funded simply by raising extra revenue since expenditure limits may
already have been reached, so new arrangements will have to be found, involving planning and control of large and
complex operations.
The need for government to set expenditure limits and to reallocate rationally within those limits has changed national
budgeting from a support function to the primary vehicle for strategic management. This change implies considerable
rethinking of organisational philosophies and structures to take account of longer timescales and new ways of doing
things. This often means dismantling existing organisations or the creation of new ones, and both present challenges.
Creating better planning, control and management structures would of course be a major achievement in itself, but these
tools will not be used optimally if the basic inputs are flawed, i.e. if foresight is not integrated into analysis and
decisions to ensure that planning is not handicapped by the shorter-term interests and outlooks of politicians,
businessmen and pressure groups.
Today, the major threats and opportunities posed to Danish society are highly complex, long-term and uncertain.
Nonetheless, few Danish planning exercises employ a time horizon of more than a decade and often as little a fiscal
quarter. It is clear that the costs and benefits of today s long-term investments in areas such as education, foreign policy
and technology extend well beyond the time horizons and analytical scope of the planning procedures employed to
undertake them. Historically, societal problems more often than not have had to be felt rather than foreseen to warrant
action. The challenge of anticipating future developments and redeploying societal resources in response to them has
spurred the adoption of econometric models such as ADAM and DREAM, long-term demographic projections such as
those recently used by the Welfare Commission as well as a number of participatory foresight exercises. These efforts
nonetheless remain scattered. Addressing the challenge of long-term societal planning and decision-making thus
remains as relevant today as ever.

New global sourcing
Nearly half of Danish industrial firms are subcontractors and this share is expected to rise in years to come.
Avoiding exclusion while seeking an instrumental position in these new and more tightly woven supply chains
will be a significant challenge to many Danish businesses in years to come.
The traditional company sited in a single physical location with a relatively fixed number of employees and activities is
being challenged by other arrangements made possible by developments in information and communication
technologies and business models that stress flexibility, notably via subcontracting and outsourcing. Such companies
can be reconfigured as business conditions demand, with only some core functions remaining stable. Such a system
relies on a network of SME able to supply human and other resources as and when required, as well as employees who
accept the insecurity associated with working for a virtual company.
The key drivers include expected cost savings, higher flexibility in the face of volatile demand, improved development
and lead times, lower maintenance costs, and access to a wider range of competences. The supplier can gain economies
of scale and scope by having a broad customer base, and when these suppliers are located abroad, they lower the
barriers to globalisation for firms, including SME, encouraging more firms to adopt global outsourcing strategies.
Subcontracting and outsourcing also carry costs associated with vendor selection, contract management, the transition
period when the work is being transferred, and job losses at the firm contracting out. The process can also expose
companies to country-specific risks and intellectual property rights violation, and the possibility that one of the partners
in the deal goes out of business, leading to disruption or, particularly for smaller subcontractors, bankruptcy.
The most sensitive challenges associated with subcontracting and outsourcing concern employment. Offshore suppliers,
particularly in China and India, are moving up the value chain to offer services such as design or accounting, raising
fears that service jobs will follow manufacturing overseas. This movement also means that in the developed countries,
the cluster model has to evolve towards globally connected hubs, more open to the influences of the global economy.
While hubs can learn more quickly and profit more quickly, they also suffer the negative impacts of globalisation more
acutely than clusters. A further challenge is the decoupling of the interests of companies from those of the countries in
which they are based and operate. Even small firms are starting to copy the multinationals in moving activities offshore.
The labour movement is often left behind by these changes, and often has difficulty organising globally. This may
change, at least within the developed countries, and could be helped by other movements, such as consumer groups and
NGOs campaigning around poor working conditions or the environmental impacts of multinationals.
Nearly half of Danish industrial firms are subcontractors and this share is expected to rise in years to come. More than
half of these are almost exclusively involved with Danish clients, while some 12 per cent is almost exclusively involved
with foreign trade. The traditional focus of Danish subcontractors has been standardised, semi-finished products
delivered to long-standing customers at home and abroad. New trends in the supply chain management of major buyers
present a challenge to this traditional focus. The new sourcing strategies of major buyers involve actively developing
and controlling the supply network, demanding research, development and cooperation between groups of suppliers
often across borders. Groups of subcontractors are increasingly required to develop and deliver joint system-solutions
customised to major buyers. As major buyers and groups of suppliers cooperate in the development of still more
specialised components, the entry barriers around these cooperatives are increasing. Avoiding exclusion while seeking
an instrumental position in these new and more tightly woven supply chains will be a significant challenge to many
Danish businesses in years to come.

Regulating Technology?
Danish legislators continue to struggle with the question of regulating a growing number of unforeseen
technological events, pushing back the limits for what can and should be done and by whom. The long-term
consequences of this continuous series of events upon society remain highly uncertain or downright unknown.
Many scientific developments provoke unease in the general public, particularly when life sciences are involved, but
other branches may be affected too, e.g. nuclear and nanotechnologies. With the pace of scientific change outpacing the
rate at which regulation can be created or adapted, governments are increasingly invoking the precautionary principle,
e.g. in the REACH standards for chemicals that states they have to prove they are harmless before being used in the EU.
The principle itself was first formulated in EU policy in relation to environmental effects in 2000 (the UN World
Charter for Nature adopted it in 1982.) It gradually came to include any situation where preliminary objective scientific
evaluation indicates reasonable grounds for concern that the potentially dangerous effects on the environment, human,
animal or plant health may be inconsistent with the high level of protection chosen for the Community .
The basic constituents of the precautionary principle and the prerequisites for its application are the existence of a risk,
the possibility of harm, and scientific uncertainty concerning the actual occurrence of this harm. The original
formulation of the principle, and the spirit in which it was intended to be applied, would possibly be acceptable to many
of today's opponents of the principle, since it did not seek to impose zero risk . Its aim was to ensure that risk
management actions were aimed at identifying the acceptable risk
threshold with regard to the values at stake (which obviously would be higher when human life was involved.)
Some scientists are particularly worried by the approach proposed in the so-called Wingspread statement (from the
name of the conference centre where it was first proposed in 1998). This states that Where an activity raises threats of
harm to the environment or human health, precautionary measures should be taken even if some cause and effect
relationships are not fully established scientifically. (Emphasis added). The critics argue that it is impossible to prove a
negative, i.e. that something will never happen; that it over-emphasizes the consequences of something happening
rather than the chances that it actually will happen; and that almost all scientific and technological endeavour involves
some negative consequences. They also argue that public calls to apply the principle can actually lead to more harm
than good, for instance if parents stop vaccinating their children due to fears of side effects.
While scientists may regret the time and resources they have to devote to convincing various stakeholders that their
work is not harmful, in future they will have to balance the risk-taking that has long characterised research with the
need to anticipate unwelcome consequences of this research, and even perceived unwelcome consequences.

Technology continues to push the limits physical, ethical, political and legal. Nano products in the form of self-
cleaning and liquid-repelling fabrics, super effective sun block and smell-less footwear are now becoming available to
Danish consumers. These will soon find their way to dump yards and into the natural environment. A new scanning
technology recently pushed back the gender-determination of embryos past the Danish 12-week abortion limit de
facto legalising preferred gender-eugenics. Genetically manipulated foodstuffs have likewise made their way past
marking schemes, into products as part ingredients and components. In February 2007, a 61year-old Danish woman
gave birth to a healthy child, bypassing Danish in vitro fertilisation age-limits by admitting herself to a private
fertilisation clinic in the UK. Danish legislators continue to struggle with the question of regulating a growing number
of unforeseen technological events, pushing back the limits for what can and should be done and by whom. The long-
term consequences of this continuous series of events upon society remain highly uncertain or downright unknown.
Clearly, technological progress entails positive as well as negative consequences, but on what side should legislation
err, and will legislators be given that choice? The challenge of balancing the risks and promises of new and often
unforeseen technological breakthroughs thus remains highly relevant.

Scientific illiteracy
Danish students lack science competencies. Overall, there has been a decline in the number of students in the
hard sciences, such as mathematics and physics, while the soft sciences, such as the social sciences and the
humanities, have experienced the opposite tendency.
Economic success in the future will depend on having a sound science and technology base. For this reason, it is a
challenge for many countries that interest in science, technology engineering and mathematics in schools and
universities appears to be declining, especially in subjects perceived as particularly difficult, such as physical sciences
and mathematics. In fact, some universities have closed science departments.
Scientists spend a tremendous amount of energy presenting new work to colleagues, potential research funders, and
peer-review journals. While this internal sharing of knowledge is vitally important, the communication of results to the
broader public contributes to stimulating and fulfilling the public's interest in accessible, up-to-date information about
science. The public ultimately controls scientific budgets provided by the government and elects the representatives
who will make laws regulating what sort of scientific research may be conducted.
Science education will have to change to make the subject more attractive and to equip future scientists and citizens
with the skills needed to ensure that science contributes to achieving society's goals. This means, for example,
modifying the curriculum to encourage creative thinking rather than memorising and to highlight the interdisciplinary
nature of scientific enquiry, both within scientific disciplines and between science and other fields. Efforts will also
have to be made to encourage groups that are under-represented in scientific disciplines, e.g. women or students from
some minority groups.
Danish students lack science competencies. The science competencies of Danish students ranked 31 out of 40 in the
OECD PISA 2003-survey. Of the Nordic countries, Denmark had the worst place. Furthermore, a recent survey made
by the Danish University of Education, showed that science does not appeal to Danish students. Only about half of the
students think that they learned something from their science courses, and very few think that science education can
lead to employment in the future, especially female students. The survey further found that girls find the science classes
more difficult and less interesting than the boys. The subjects that did interest the girls are health, healthy living and
body culture, and the borders of science (e.g. alternative treatments, dream interpretation, astrology etc.), while the boys
are interested in technology and the dramatic effects of physics (e.g. explosive chemicals, the physics of the atom bomb,
etc.). At universities, lack of interest in the hard sciences has likewise been felt. Overall, there has been a decline in the
number of students in the hard sciences, such as mathematics and physics, while the soft sciences, such as the social
sciences and the humanities, have experienced the opposite tendency. Others, however, have argued that, in absolute
figures, there have never been as many students in the hard sciences as now. In relative terms, however, the percentage
students that study mathematics or physics are declining. Thus, confronting the lack of interest in the hard sciences is a
challenge in a Danish context.

Sunrise industries
In Denmark, two thirds of all private sector jobs are now in the service sector and the quaternary industries of
tourism, entertainment and self-realisation are now on the horizon. The flexibility and foresight necessary to
continuously abandon sunset industries and absorb labour into competitive sunrise industries is a long-term
challenge for the Danish economy.
Sunrise industries are fast-growing industries whose importance for the economy is expected to increase significantly.
One good example is the creative industries. These industries are already a leading sector of the economy in many
OECD countries, with an annual growth rates between 5 and 20 per cent. The global entertainment and media industry
will be worth $1.8 trillion by 2010. The sector is knowledge and labour intensive and fosters innovation, has a huge
potential for employment and export expansion, and is thus a key player in the shift to a knowledge-intensive economy.
However, what constitutes a sunrise industry can vary considerable from one country or region to another. For example
heavy manufacturing is not usually thought of as a sunrise industry in OECD countries, but this is not the case for steel
making in India. As this example suggests, it would be a mistake to consider only the more glamorous candidates
such as those linked to new technologies like nanotech or biotech. For instance, given the projected ageing of the
population in the developed countries, care, services and products for the elderly could prove to be a sunrise industry in
the future. This is supported by projections of occupations with the best prospects for employment, e.g. the US Bureau
of Labor Statistics' forecast for 2004-14. Home health aid tops the list of occupations with the highest job creation
projections, and the number of low-skill occupations in the list is striking (janitor/cleaner, fast food and restaurant
staff.). Sunrise industries are not necessarily new industries either, although they can be boosted by new technologies.
Gambling for example is expected to grow at almost 9 per cent a year globally, reaching revenues of $125 billion in
2010, compared with $82 billion in 2006, in part thanks to on-line casinos.
The Danish economy is constantly adrift. Some 150 years ago the major part of the labour force were occupied in
primary extraction sectors such as agriculture, forestry, fishing and mining. As industrialisation took off, secondary
industries, refining and manufacturing goods from the raw materials produced by the primary sector, became the major
occupation. The tertiary service and auxiliary industries of transport, finance, insurance, accounting, design and
telecommunications supporting the primary and secondary sectors, is now the major economic locus. In Denmark, two
thirds of all private sector jobs are now in the service sector and this sector contributes some 63 per cent to the annual
value-creation in the economy. The quaternary industries of tourism, entertainment and self-realisation are now on the
horizon. The flexibility and foresight necessary to continuously abandon sunset industries and absorb labour into
competitive sunrise industries is a long-term challenge for the Danish economy.

The GMO battlefield
The first wave of genetically engineered products was not quite as impressive as many had envisaged. Danish
agriculture is likely to find itself at the centre of the next wave of genetically modified products and therefore
likewise at the centre of the gene technology-debate for many years to come.
In 2004, the global market value of "biotech" crops was $4.7 billion, representing 15 per cent of the $32.5 billion global
crop protection market and 16 per cent of the $30 billion global commercial seed market. Within the next few decades,
virtually all widely marketed seed could be influenced in some way by gene manipulation technology. Claimed benefits
include increased crop productivity thanks to higher tolerance to herbicides and pests, resistance to pathogens,
adaptation to difficult conditions; and better quality via improved proteins, vegetable oils, and polysaccharides.
The first widespread application of biotechnologies to animal production was the introduction of artificial insemination
of cattle as part of genetic improvement programmes to increase milk yield and reduce disease, and although
spectacular applications such as cloning, modifying animals for xenotransplants (e.g. using organs grown in pigs for
human patients) or modifying mosquitoes to fight malaria attract most attention, the most likely advances will probably
be more mundane, such as developing methods to identify the sex of cattle embryos.
Nevertheless, consumer resistance to the application of genetic modification to plants and animals may halt the
commercialisation of many technically feasible processes. The main concerns are gene transfer and "outcrossing"
producing superweeds or affecting human health, as well as possible impacts on biodiversity. For example, transfer of
antibiotic resistance genes from GM foods to cells of the body or to bacteria in the gastrointestinal tract, movement of
genes from GM plants into conventional crops or related species in the wild, as well as the mixing of crops derived
from conventional seeds with those grown using GM crops.
The first wave of genetically engineered products was not quite as impressive as many had envisaged. Danish
agriculture is likely to find itself at the centre of the next wave of genetically modified products and therefore likewise
at the centre of the gene technology-debate for many years to come. Biotechnology is a major research area in Denmark
and is maturing. A wealth of new GMO-applications is in the pipeline There is a wish to promote the uses of gene
technology that are beneficial to the society at large e.g. to create crops that can be grown more environmentally
friendly, or that are that are more nutritious than their conventional counterparts. At the same time there is a will to
explore the potential of modern biotechnology to improve food security in developing countries. Modern biotechnology
can be part of a solution that also includes support to gene conservation. So far, the EU has adopted rules for
certification, traceability and labelling of GMO products, but no common EU rules exist on coexistence between
genetically modified, conventional and organic crops. Denmark was the first country in the EU to adopt legislation on
coexistence in 2004. The law is expected to be evaluated again at the latest five years from now based on experience
from growing GM-crops and new scientific knowledge. Denmark is working for common EU rules on coexistence.
How the GMO debate will shape agricultural products in the future is yet to be seen.

The knowledge gap
In the academic world, the connection between research and development on the one side and entrepreneurship
and commercialisation on the other has drawn increasing interest. Many expect that the countries that first come
to understand this connection and create the appropriate framework will enjoy significant economic advantages
in the future.
The hunt for growth and prosperity continued to involve still larger investments in research and development efforts. As
an example, the EU countries have specific targets for research and development expenditures in the form of the
Barcelona targets. It often seems intuitively appealing that more research and development automatically leads to more
knowledge, which in turn leads to more innovation in the form of new products, processes and services. Conversely, a
number of recent studies found that there is no linear relationship between increasing between research expenditure and
economic growth. While research expenditures in countries like Japan, Germany, and Sweden are very large; they
experience only limited economic growth.
This phenomenon has given rise to the notion of a knowledge filter between research and development on one side
and commercialisation on the other. While many factors seem to determine the thickness of the filter, the intensity of
entrepreneurship would appear to be one of the more important factors. Much uncertainty, however, remains about the
role of entrepreneurship on the return on public research expenditures. As a consequence of globalisation and continued
outsourcing, still more jobs move from the OECD area to less development countries. This is not necessarily a negative
development, but it increases the pressure on many countries to replace the lost jobs. Also in this context, entrepreneurs
play an important part by bringing new products, services and higher productivity to the market, creating growth and
new jobs. Eight of the 25 largest businesses in America either did not exist in 1960 or were very small. In Europe, all of
the largest businesses in 1998 were already large in 1980. This example illustrates the European challenge. The first
countries to understand the relationship between research and development on one side and innovation and
commercialisation on the other and create the proper framework, will like be able to reap significant benefits.
In Denmark, somewhere between 14,000 and 18,000 new businesses see the light of day each year. A series of studies,
the Growth Report 2005 and the Competitiveness Report 2007, nonetheless concludes that the growth of Danish
startups is lower than those in the US, Korea and the UK. In the creation of new high-growth businesses, the interplay
between research and innovation policy becomes a central area. In Denmark, some efforts have been made to integrate
thinking in these two domains during recent years, but there may still more to gain from further integration between
thematic, political research efforts and generic innovation policies. Today, there is solid theoretical backing behind the
translation of the results of research into entrepreneurship. While the politics of the two areas are integrating, the
legislation and organs responsible for funding research and innovation are still largely independent and strategic efforts
in one area is not always coordinated with those if the other. The ability to support the creation of new, high-growth
startups replacing jobs moving abroad, boost productivity and create sustainable growth is this a challenge for
Denmark.

The sanctity of life?
Looking ahead, it is clear that diverging perceptions of life and nature will continue to form the focal point of
much debate and will continue to be a challenge for legislators, scientists and, literally, everyone else.
Converging advances in nanotechnology, biotechnology, robotics and computing are creating unprecedented capacities
to manipulate nature. This is changing what natural means, both as regards human beings and other life forms, raising
a number of ethical issues. For example, some countries already ban xenotransplants, the use of animal organs such as
pig kidneys to replace damaged human organs. Researchers are working on humanising these organs via genetic
modification, but also on growing them from stem cells (a heart valve was recently developed this way). Other research
explores, for example, the possibility of growing human egg cells in animals for retransplantation into infertile women,
or the use of hybrid animal-human embryos in developing cures for Alzheimer's and other diseases. The question is
further complicated when boundaries not only between species, but between living and non-living start to become
blurred. In Korea, the government has drawn up a charter of rights for robots, while according to a strategic review
for the UK armed forces, an implantable information chip could be wired directly into a human user s brain by 2035.
Information and entertainment choices would be accessible through cognition and might include synthetic sensory
perception beamed direct to the user s senses. Related developments might include the invention of synthetic telepathy,
including mind-to-mind or telepathic dialogue.
In time such developments could actually modify perceptions of what it means to be human. Cochlear implants to treat
deafness and deep brain stimulators to treat Parkinson s disease are already on the market and a "bionic eye" is being
tested. Implantable brain-machine interfaces have primitive artificial vision systems and mind-controlled robot
prosthetics. But these devices are designed to correct defects, while in the longer term, technology convergence may
permit enhancement of healthy people. Primitive forerunners of this are treatments such as Prozac, Botox, Viagra,
cosmetic surgery or doping of athletes, that change the body but are not designed to combat an illness. There are claims
that human life expectancy could be extended to 150 years, almost all of them healthy, and in the even longer term,
some researchers would like to see "transhumans", in whom the non-biological portion of intelligence would be more
capable than the biological portion.

The ruling paradigm in Danish hospitals, mental institutions, pharmaceutical industries, animal farms and agricultural
enterprises is that orderly laws of molecular mechanics ultimately govern life as well as all other matter. When zooming
in on a cell, no mysterious life force appears but merely rationally ordered components aimed at maximising the
probability of survival and reproduction across generations and in various environments. Advanced and impressive as
life may be, it is no more sacred or divine than the interactions of complex molecular machines, which can be
consciously manipulated and perhaps one day imitated to perfection. In Denmark, this paradigm is widely opposed by
numerous religious communities, churches, and philosophers as well as in broad segments of the public, finding this
explanation entirely unsatisfactory. They argue that no other goal is as ultimate and self-explanatory unto itself as life,
nature and existence. Reducing it to a mere thing to be studied and categorised is the equivalent of letting a
physiotherapist review a ballet. The conflict-line between these two fundamental paradigms is duly reflected in Danish
legislation. While deliberate termination of life is allowed at its very beginning of life, in the form of abortion up to an
arbitrary 12 weeks into a pregnancy, euthanasia, at the very end of life remains illegal. Looking ahead, it is clear that
diverging perceptions of life and nature will continue to form the focal point of much debate and will continue to be a
challenge for legislators, scientists and, literally, everyone else.

Transport for an ageing population
Danish busses, trains, airplanes and ferries are only beginning to take into consideration the needs of the new
older generation. The continued reform of the Danish transport sector to accommodate the needs of older, but
highly active and mobile people will continue to be a challenge as well as an opportunity in years ahead.
Population ageing will place new and growing demands on transport systems, and providing for safe mobility of ageing
babyboomers will require foresight and a rethinking of strategies, policies and provision of services. Future transport
systems and services can play an essential role in supporting independent, healthy ageing, but to do so they will have to
take into account not only safety and mobility, but land use patterns and socio-economic factors as well. Transport
policy will have to meet a number of interlinked challenges to cope with the impact of ageing. Many of these are also
relevant to other concerns such as the environment or the mobility of groups such as the handicapped. There are
undoubtedly interactions among quality of life, welfare and health costs and lifelong mobility, although studies are
lacking for most countries, particularly concerning the long-term aspects. Aspects of interest include:
The main safety problem for older people is their increased physical frailty and heightened vulnerability to injury if
involved in a road accident. All else being equal, the tripling in the number of those aged over 80 by 2050 is likely to
produce a marked increase in older road user fatalities. This includes better crashworthiness and means to reduce injury
to pedestrians, and driver aids such as vision enhancement.
Designs must likewise recognise the inappropriateness of standards based on the abilities of a fit, young adult driver for
members of an ageing society and meet the needs of all categories of road users (vehicle occupants, pedestrians,
cyclists, motorised wheelchair users, etc.). The best technology may be more expensive, but the extra cost will probably
be limited and could lead to savings elsewhere.
Good alternatives to private cars may prove to be important when considering the needs of older drivers. Access to
public transportation for people with limited mobility is a central issue. The distance to shopping, health care, leisure
and other services is likewise important. The detailed local road layout (which, together with residential density helps to
determine the feasibility of efficient, useable public transport); and the network of paths or sidewalks for pedestrians,
powered wheelchairs, scooters and bicycles, including safe road crossings to encourage use of these transport modes.
By 2015 the Danish population will have increased by some 100,000 people. The number of people aged 65 or more,
however, will have increased by 210,000. The aging Danish babyboomers are likely to be very different from earlier
generations of pensioners and will demand an active, meaningful and self-realising retirement. A vital part of these
demands will be freedom of movement. Danish accident statistics place people aged 75 or more at the same level as the
high risk 18-19 year-olds. Also, pedestrians and cyclists aged 65 or more are more accident prone than 20-64 year-
olds. In general, the risk of traffic accidents starts to increase already from the age of 60, but does not increase markedly
before the age of 75. There are many explanations for the difficulties experienced by older drivers, cyclists and
pedestrians. Poorer vision, slower reaction times, physical frailty and inability to overview complicated traffic situations
have been identified as important factors. At the age of 70, a mandatory medical examination is required to hold a
drivers licence and in May 2006, a so-called mini-dementia test was added to the examination. The transport difficulties
experienced by older people are not limited to private means of transport. Also Danish busses, trains, airplanes and
ferries are only beginning to take into consideration the needs of this new older generation. The continued reform of the
Danish transport sector to accommodate the needs of older, but highly active and mobile people will continue to be a
challenge as well as an opportunity in years ahead.

Transport-technological lock-in
The convenience, efficiency and speed of modern transport technology are now an integral part of the lives of
millions of Danes, so are the problems caused by it. The challenge of overcoming technological lock-in of
transport technology thus remains highly visible.
The current transport system represents a monumental investment of financial, political and cultural capital, which is
not easily reversed. New technological innovations must adhere to a growing number of unquestioned design-
conventions invisibly present in mindsets as well as explicitly present in published codes and standards. This
phenomenon is called technological lock-in and represents a significant challenge to the transport sector as a whole.
Dealing with the challenges posed to transport systems of the future may require significantly more than incremental
improvements of current designs. If this is the case, overcoming technological lock-in may prove an essential challenge
for the future.
Reconciling the economic, environmental, lifestyle and other goals that transport has to contribute to will require
technological change. The biggest impacts in the medium term are likely to come from the cumulative effect of a series
of incremental changes, often linked to information and communication technologies (ICT) that both R&D and
transport policy can encourage. The most radical longer-term changes to transportation will come from new fuels and
materials - biofuels and hydrogen, lightweight composites and nanomaterials capable of repairing themselves after a
shock, etc., But what is feasible using a particular technology may not always be the best way choice. For example, it is
possible to integrate a satellite positioning system with an engine control system to adjust vehicle speed automatically to
speed limits as it moves from urban areas to intercity roads. However, the cost of creating the sensor network and
retrofitting millions of vehicles would be enormous, and the goal of combating speeding could probably be achieved by
other means.
In the even longer term, progress may depend on completely abandoning our present mindsets concerning transport
design. The mentality behind cars has evolved little from the days of animal-powered transport. Cars have four wheels,
drive along roads, have independently powered combustion engines and are manually controlled by human drivers.
These facts have been true for more than half a century and they remain true today. This is not because they are the
characteristics of a perfect transport system that cannot be radically improved, but because moving outside this
dominant design paradigm is extremely difficult.
Road transportation is the mode where developing and implementing a radical new approach will probably be the most
difficult, due to the large number of actors involved, often with diverging or contradictory interests, and the difficulty in
changing infrastructures.
The convenience, efficiency and speed of modern transport technology are now an integral part of the lives of millions
of Danes, so are the problems caused by it. Particle pollution, noise, congestion, climate change and fatal accidents are
becoming increasingly widespread as transport infrastructure expands. Although these transport systems have
undergone numerous incremental improvements, and continues to do so, the basic principals of cars, trucks, busses,
trains and airplanes have remained largely unchanged for nearly half a century. Mindsets are normally focused on single
transport units, such as cars, trains or airplanes, rather than the transport system as a whole. The challenge of
overcoming technological lock-in of transport technology thus remains highly visible.

Economy
The economy is the basis of societal wealth and is in a state of constant change. The economy continuously creates
solutions as well as problems. This category contains challenges related to the economy in our everyday lives, in
business, in society and in the world at large.

Advertisement exposure
Danish consumers are constantly exposed to commercial encouragements through a still widening range of
media.
Average consumers in an OECD country are exposed to over 3,000 advertisements a day, and will ignore most them, so
advertisers are seeking new ways to capture attention and influence behaviour. Many of the strategies that produce
ubiquitous advertising, such as putting ads on everything from buses to boxes of matches, provoke increasing hostility
from people irritated by visual pollution , so advertisers are looking for new means to reach audiences, especially
given the shift towards new media such as the Web. Many of these strategies are simply adaptations of old ideas to new
technologies, such as most Internet advertising, but more subtle approaches are blurring the lines between advertising
and entertainment and advertising and information, and it is not always clear to consumers when they are being targeted
by advertising. This raises questions as to how certain forms of advertising should be regulated, or even if they can be,
for example, product placement in movies and TV shows, sponsorship deals, cross-merchandising, (whereby a media
conglomerate praises one of their products using their different media, e.g. talking about its new movie on its TV
channels), or word of mouth (WOM) campaigns, whereby advertises seek to introduce brand recommendations into
everyday conversations. The equivalent of WOM aimed at children and young adults is buzz or street marketing where
companies pay children thought to be trend setters to use their products, or infiltrate Internet chat groups to promote
products.
Children are particular targets, both for child and adult products, via their own budgets for older children and through
what the advertisers call pester power in all ages. A child's first request for a product occurs at around 24 months of
age and three-quarters of the time this request occurs in a supermarket. The most requested first in-store request is
breakfast cereal, followed by snacks and beverages and toys. Requests are often for the brand name product. A review
of the effects of US television food advertising on preschool and school-age children concluded that children exposed to
advertising choose advertised food products at significantly higher rates than children not exposed, and advertising
increases the number of attempts children make to influence food purchases. Fewer studies have been conducted on the
effects on food intake, but such research could form part of a strategy to understand and combat childhood obesity.
Danish consumers are constantly exposed to commercial encouragements through a still widening range of media. A
growing immunity is now visible in many consumer-segments and a recent study indicates that TV and Internet
commercials cause direct annoyance in an increasing number of people. Commercial interruptions in the middle of TV
programmes and Internet pop-ups are at the very top of the list. In response to fatigue, annoyance and declining effect
of broad-spectrum advertisement, advertisers are now becoming more refined and increasingly targeted in their efforts.
This is likely to present a challenge to Danish consumers. In a Danish context, children, homosexuals and singles are
recent examples of highly selective groups now being singled out for promotion. Likewise, active efforts are now being
made to chart Danish online consumer-habits, investigating whether the likeliness of purchasing one product is
positively correlated with the purchase of others. This information can then be exploited to target advertisement at the
segments most likely to be influenced. Although some consumer groups make an admirable effort, living an
advertisement-free life in Denmark is probably no longer possible. Shielding children from aggressive advertisement is
likewise becoming increasingly problematic as these are now exposed through a still widening range of media. Danish
law specifically requires a commercial to appear in such a way as to leave the viewer in no doubt that it is a
commercial. Nonetheless, subtle product placement in movies and on the Internet operates largely outside the influence
of Danish law. Moderating and limiting exposure to increasingly refined and targeted advertisement is thus a growing
challenge to Danish consumers.

Bubbles and financial instability
The bursting of massive speculative bubbles can severely destabilise an economy and ruin investors overnight.
The Danish economy is no exception.
Bubbles have been a feature of the economy ever since the collapse of tulip prices ruined large numbers of speculators
in 17th century Holland, and are likely to remain so for as long as overconfidence in the future rise of asset values
remains part of investor psychology. Stock markets all over the world have risen dramatically recently, some by 50 per
cent in a year. Real estate prices are at record levels in many countries encouraging the growth of mortgage-backed
securities. Trillions of dollars are being borrowed at zero or low interest rates and then being loaned to the US.
Derivates (the financial instrument that caused the collapse of the Barings Bank in 1995) have grown from $20 trillion
in the 1990s to over $300 trillion today. At some point, prices will start to fall and interest rates to rise. The hope is that
this will happen in an orderly, controlled manner, a soft landing , but the development of global finance combined
with deregulation and liberalisation have increased both the risk of instability and the risk of instability spreading
catastrophically.
One of the paradoxes of this process is that although financial markets are the most globalised market in the world
economy, there is no international body with the legal authority to oversee the system: no global central bank to impose
bank reserve requirements; no agency to issue deposit insurance; no uniform accounting standards; and no international
financial disclosure requirements for firms issuing stock. The nearest equivalent is the IMF's interventions once a crisis
has happened, plus some sixty or so international financial standards, only a dozen of which have been widely adopted,
and the OECD's standards for corporate governance. The chances of creating a global institution are small. The present
institutions, which could form the basis for such an institution, were created by a small group of countries and are still
dominated by them. Many developing countries argue that these institutions lack legitimacy since (a) they favour
traditional lenders over traditional borrowers; (b) they accord too much importance to the interests of the financial and
corporate sectors of the richest countries; (c) they exclude countries such as China which have grown enormously in
importance since the creation of these institutions; and (d) their decision making is undemocratic. One direct
consequence of this perceived lack of legitimacy is the failure to create a sovereign debt reduction mechanism, a kind of
bankruptcy mechanism for nations that could prevent or soften the financial crises caused by a country defaulting on its
debt.
As the number of shareholders continues to rise and people depend more on financial markets for their pensions,
bubbles and financial instability will harm a growing number of small investors directly. Governments may have to
consider contingency measures to deal with the inevitable crises to come, but they will also have to take action to
improve the international cooperation that could prevent the crises occurring in the first place.
Speculative bubbles in which a stampede of expectations far overestimates the future value of an asset have appeared
throughout history and in nearly every economy. The Danish economy is no exception, most recently exemplified on a
large scale by the dot-com craze of the 1990s as well as numerous minor bubbles since then. Currently the Danish real
estate market is subject to speculation and some economists have issued warnings about bubble-tendencies appearing in
this market. The bursting of massive speculative bubbles can severely destabilise an economy and ruin investors
overnight. Some 38 per cent of all Danes are private shareholders and more than 40 per cent are indirect shareholders
through their pensions. As many private savings and pensions are now placed on the stock market, sensitivity to
speculative bubbles is increasing. As recent years have demonstrated, poorly advised and overeager private
stockholders and pensioners are now more likely to become the first victims of bursting bubbles. Speculative bubbles
and the financial instability they cause will likely continue to be an important challenge as the number of speculators
rise.

Cheapskate consumers
Danish consumers are cheapskates when it comes to food, spending less than half of Spanish consumers and
significantly less than countries like France, Germany, the UK and Sweden.
Mass food retailing are currently experiencing two parallel trends which will likely continue for the foreseeable future.
Firstly, retail sector consolidation means that its buying power enables it to impose lower prices, while at the same time
multinational food companies are so big that, through economies of scale, they can produce more food more cheaply
than ever, forcing prices down even more. Parallel to this development, there is a growing market for expensive
products among consumers whose main spending is on lower cost products, and for products that promise to improve
wellbeing. The same supermarket will thus offer standardised mass-produced items, along with much more expensive
products, e.g. cheeses from small producers.
Spending on expensive or "indulgence" items is helped by demographic and technological factors. The large babyboom
generations are entering their peak earnings period at the same time, as their children are no longer so dependent on
them, meaning they have more discretionary income available for non-essential purchases. The Internet is supplying
opportunities to be informed about and buy items unavailable from traditional stores. Retailers are starting to react to
this demand, offering an increasing number of premium-priced goods in-store, and catering to demands that are
minority, but growing, for ethical , sustainable and "fair trade" goods.
The latter trend means that for a growing number of consumers, food or brand choices could be influenced by factors
that have nothing to do with taste, quality or price, e.g. consumer boycotts of certain companies, products or even
source countries, the more so since food supply chains will become increasingly globalised in response to demands for
products all the year round.
Danish consumers are cheapskates when it comes to food. A recent study placed the Danish food-budgets at the very
bottom of a ten-country survey of Western Europe, spending less than half of Spanish consumers and significantly less
than countries like France, Germany, the UK and Sweden. At the same time, Danish consumers and consumer
organisations demand authenticity, ethical, varied and high-quality foods from suppliers. This raises the question of the
connection between poor food choices resulting in obesity, vitamin deficiencies and poor health and the consumers
spending habits. While international competition strengthens the tendency for price to be the most important
competitive parameter in some parts of the food industry, a reversal is visible in others. Perhaps as a counter-movement,
a growing number of Danish consumers demand foods with special qualities, an associated story or locally produced
foods. Also, the market for organic products is growing along with local dairy and beer production. In the long run, the
Danish food industry will come under pressure in the parts of the market where price-competition remains dominant. To
remain competitive, the Danish food products will have to target segments at home and abroad where quality and taste
rather than price are prerequisites for success. Staying ahead of shifting, diversified and specialised consumer needs
thus remains an important challenge for this industry.

Corporate social responsibility
Corporate responsibility has moved one step further. Companies are now accountable in the public eye, not only
for their own actions, but also for those of their subcontractors, customers and associates.
Corporations are increasingly being asked to justify their actions not only to investors and governments, but also to
other stakeholders such as NGOs through calls for greater transparency, accountability and trust. Terms such as
"corporate citizenship" are becoming widespread, and every big company advertises their activities in this domain on
their website. In the US, CRO, a magazine for "corporate responsibility officers" publishes an annual list of the 100 top
CR companies, based on service to shareholders, community, governance, diversity, employees, environment, human
rights, and product. Business ethics trophies are also awarded in a number of countries.
Through their own will or as a reaction to outside pressures, the responsibilities of corporations are thus expanding from
the traditional domains involving the government and business partners, to domains such as respect for human rights,
environmental sustainability, and provision of health care and other social benefits that were previously the state's
concern. These criteria are being monitored not only in the headquarters country, but perhaps even more in some cases,
as they apply overseas, and particularly in developing countries. Improved access to information and the means to
diffuse it will reinforce this trend.
Corporations are creating aid programmes, e.g. to fight a particular disease or provide a particular infrastructure for the
poor, and some of the wealth accumulated by corporations is spent by their owners on philanthropic works through
charities such as those created by Bill Gates or Warren Buffet. Corporations are also using the popular media in
addition to more traditional lobbying activities to defend their interests, e.g. the film and music industries to criminalise
certain forms of copying, or the diamond industry mounting a campaign against a film that featured it prominently.
Stakeholders ranging from trades unions to consumer groups are starting to coordinate their own actions both among
themselves and internationally, as some environmental groups, for example, have been doing for years.
The benefits of increased corporate responsibility are clear, but there may also be issues that are more ambiguous.
Corporate power may also increase along with responsibility. For example, if services depend on corporate or private
financing rather than tax, they may have to be withdrawn if the company suffers financial loss or the philanthropists
change their priorities.
Danish businesses are under tense scrutiny and corporate responsibility has moved one step further. Companies are now
widely held accountable for their own actions and are expected to live up to high ethical, environmental, social, health
and safety standards. In addition, a recent number of cases have amply demonstrated that this is not enough. Companies
are now accountable in the public eye, not only for their own actions, but also for those of their subcontractors,
customers and associates. Subcontractors employing underpaid labour, unethical or undemocratic customers as well as
poorly reputed business associates are now blamed on companies who are otherwise considered responsible. This
second tier of accountability has left Danish companies, increasingly trading with foreign partners, with the problem of
investigating and rejecting favourable business contacts and orders, holding these accountable to standards determined
far from their geographical location and markets. The politicisation of business presents a significant challenge to the
Danish business sector.

Declining national currencies
Denmark declined adopting the Common European Currency as a replacement for the Crown. The euro, as well
as the economic success of the euro zone, has been hotly debated ever since.
As the world economy continues to integrate, it is becoming increasingly difficult for national governments to control
what happens to their currencies. The international exchange rate system is facing serious imbalances, in large part due
to US deficits and Asian surpluses, leading to fears that future readjustments could be brutal and uncoordinated, e.g. if
Asian central banks become worried by the size of potential losses due to the decline of their dollar holdings and shift to
the euro or yen. Greater international cooperation to manage exchange rates may be needed to counter major threats to
the international monetary system.
For the long term, some economists think the solution could be a global currency for a global economy . They argue
that with such a currency prices all over the world would be denominated in the same unit and would be kept equal in
different parts of the world to the extent that the law of one price was allowed to work itself out. Tariffs and controls
would remain, but trade between countries would be as easy as it is between states of the EU or United States, most
likely leading to an increase in the gains from trade and real incomes. The benefits to each country from a stable
currency that is also a universal currency would include a common inflation rate and similar interest rates, and a
considerable increase in trade, productivity and financial integration, all of which would increase economic growth and
well-being.
However, such a system would have to overcome enormous political obstacles, e.g. regarding the question of a global
central bank, so without going as far as a global currency, other proposals seek to improve cooperation among the major
currency zones. For example, the governments of the three major zones could agree that they would not intervene in
foreign exchange markets to affect the value of their own currency against either of other two, unless one of the other
two agreed to intervene as well. In practice, the US essentially ceased to intervene unilaterally in the 1990s and most
euro zone governments and the European Central Bank also believe in the benefits of coordinated intervention.
Any mechanism for improving international coordination and cooperation would reinforce the trend towards regional
currencies and the obsolescence of national currencies, particularly the smaller ones. Currency regionalisation would
reduce transactions costs, but would also mean a loss of both an autonomous monetary policy and seignior-age revenue.
Regionalisation also means giving up not only a degree of insulation from foreign influence but also a vital symbol of
national identity, and would be politically unacceptable in many countries.
After a hotly contested general election in 2000, Denmark declined adopting the Common European Currency as a
replacement for the Crown. The euro, as well as the economic success of the euro zone, has been hotly debated ever
since. The Danish economy nonetheless remains highly dependent upon the economic policy of the 13 countries of the
euro zone. Six of Denmark s top-ten export markets are Euro-zone countries and the Danish Crown remains pegged to
the Euro. Likewise, Denmark is an active participant in the European Currency Cooperation mechanism and thus
coordinates its economic policy with that of the euro zone countries. Proponents of the Common Currency often use this
dependence without influence argument. Conversely, the opponents of the euro argue that the adoption of the
Common Currency by the euro zone countries was riddled with fraud and counterfeit, lead to permanently higher prices
and that the economic competitiveness of the euro zone countries remains well below that of 14 EU Member States who
opted out. With more EU-related general referendums on the horizon, the question of the euro is likely to reappear. The
long-term consequences of the potential adoption or continued rejection of the euro remains a challenge to the many
economic sectors in Denmark.

E7 rising
The major Danish export markets are still located in Western Europe with a total share of some 70 per cent in 2006. Of
the E7-countries, only Russia and China appear among top-20 Danish export markets.
By 2050 it is expected that the seven big emerging economies, or E7 (China, India, Brazil, Russia, Indonesia, Mexico
and Turkey) will be around 25 per cent larger than the current G7 when measured in dollar terms at market exchange
rates, or around 75 per cent larger in purchasing power parity (PPP) terms. The E7 is currently only around 20 per cent
of the size of the G7 at market exchange rates and 75 per cent of its size in PPP. There are likely to be notable shifts in
relative growth rates within the E7, driven partly by divergent demographic trends. China and Russia will see
significant declines in their working-age populations, while India, Indonesia, Brazil, Turkey and Mexico, show growth
to 2050, although they too will begin to see the effects of ageing by then.
India could be the fastest growing large economy in world, with a GDP in 2050 close to 60 per cent of that of the US at
market exchange rates, or of similar size in PPP terms. China is unlikely to maintain its current growth rates, but could
still be around 95 per cent the size of the US at market exchange rates by 2050 or around 40 per cent larger in PPP
terms. Brazil's economy would be of similar size to that of Japan by 2050 at market exchange rates and slightly larger in
PPP terms, but still only around 20 per cent to 25 per cent of the size of the US economy. The economies of Indonesia
and Mexico could be larger than either Germany or the UK by 2050 (even at market exchange rates). Despite the
demographic brake, Russia could still be of similar size to France by 2050 at either market exchange rates or PPP.
Turkey could catch up with Italy by 2050 at both market exchange rates and in PPP terms.
The net effect of sustained growth in such populous economies should be beneficial for the OECD economies overall,
both as export markets and sources of cheap goods and services. However, there will be significant numbers of losers
too, e.g. workers whose jobs are relocated, or companies who loose clients to new competitors, and this could increase
political pressure for protectionism and other policy changes. Mass-market manufacturers in the G7 will tend to suffer
most, both in low tech and increasingly in hi-tech sectors, as China and India become increasingly competitive in
services sectors such as banking and other wholesale financial services. Income inequalities could increase in OECD
countries, with low and medium-skilled workers facing wage competition from lower cost workers in internationally
tradable sectors, as well as migrant workers in non-tradable service sectors. Highly skilled professionals may also face
competition from lower cost but equally qualified E7 graduates, although there could be a counter trend whereby E7
companies increasingly recruit G7 professionals as remuneration converges globally.
In Denmark, the import-export ratio is around 40 per cent of GDP and this cross-border trade is a vital component in
maintaining high standards of living. In 2006, the major Danish export goods were oil products, pharmaceuticals,
industrial machines and meat products. In addition to goods, services are playing an increasingly important role in
Danish exports and this development is likely to continue. The major Danish export markets are still located in Western
Europe with a total share of some 70 per cent in 2006. The top three export markets continue to be Germany, Sweden
and the United Kingdom. Exports to Western Europe have, however, been declining for years, while North American,
Eastern European and Asian markets have become increasingly important. Of the E7-countries, only Russia and China
appear among top-20 Danish export markets with shares of 1.8 and 1.3 per cent respectively. Adapting national
competitiveness to the shifting export landscape will be a prerequisite for maintaining a favourable balance of trade in
years to come. Projections of the increasing importance of the E7-countries indicate that over the coming decades, the
current export situation will change significantly and that the adaptability of the Danish economy will continue to be an

E-consumer trust
The Internet is now an important link between many Danish businesses and their customers. The Internet has
increased competition and made a far wider range of goods and services available to consumers. In Denmark,
this development has, however, been hampered by lack of confidence in the safety of Internet trade.
Internet fraud includes fraudulent lottery schemes, travel and credit-related ploys, modem and web page hijacking, and
identity theft (ID theft). Many scams, such as pyramid selling, are simply online variants of off-line practices, but the
Internet has given criminals access to a worldwide base of consumer targets as well as more opportunities to elude
enforcement.
Although the main fear of Internet shoppers is credit card fraud, this accounts for only a few per cent of total card fraud
(6 to 9 per cent depending on the source of data) and the vast majority of payment frauds involve cash transfers or
cheques. However, there is bigger risk of fraud with Internet transactions than for others. The true scale of the problem
is difficult to measure since many of the data are confidential; nonetheless the perception of this risk is an obstacle to e-
commerce, with surveys showing that 75 to 90 per cent of respondents are worried about it. The problem is likely to
grow in line with the expansion of e-commerce and due to the increasingly sophisticated means used by criminals to
acquire card details, such as tiny web cams and transmitters installed in cash dispensers.
Practically 90 per cent of the e-commerce market consists of business-to-business transactions, so shoppers are not the
only victims of Internet fraud. Businesses in the US alone lost around $3 billion to fraud in 2006, more than double the
$1.2 billion reported for consumers, and a 7 per cent increase over 2005. Apart from the direct loss, this also requires
spending on anti-fraud systems, which most retailers see as the key to fighting fraud. A survey showed that only 15 per
cent of UK retailers believe the situation would be significantly improved by police action.
Prevention strategies will have to rely on technical tools, but soft approaches are vital too. Consumers need to be
educated about possible risks, for example a 2005 survey showed that two-thirds of French and German consumers
were unfamiliar with the concept of ID theft. The international nature of cybercrime means that efforts to combat it
have to be international too, starting with reliable data on where crime is occurring and the scale of the problem.
If consumer trust is to be strengthened, prevention must be accompanied by means to ensure that clients are
compensated for losses. It is very difficult, however, for consumers to take private legal action to obtain redress in cases
of cyberfraud since they probably do not have the means to identify the perpetrator and establish sufficient proof. Also,
most transactions are for relatively small sums, so the cost and inconvenience of going to court outweigh the loss in
most cases. Consumer protection authorities could take steps to strengthen cyberfraud investigations and law
enforcement, especially when cross-border crime is involved, and make efforts to obtain compensation on behalf of
both foreign and domestic consumers.
The Internet is now an important link between many Danish businesses and their customers. The Internet has increased
competition and made a far wider range of goods and services available to consumers. In Denmark, this development
has, however, been hampered by lack of confidence in the safety of Internet trade, following in the wake of a number of
fraud cases. Denmark now lacks behind countries like Sweden and England in terms taking advantage of trading on the
Internet as a means of widening the range of suppliers. A recent study indicates that this reluctance is largely
unfounded. Some 87 per cent of all Internet users in Denmark have made a purchase online, and as many as 38 per cent
of these reported a lack of confidence in e-trade. Paradoxically, 99 per cent of these consumers never experienced any
problems with purchasing online. With its 14 days unconditional right of cancellation, Internet trade has better legal
protection than many other forms of trade. Establishing a lasting trust in Internet trade remains an important challenge
for businesses and consumers alike.

Externalities of wealth
The current generation is wealthier than any one of its predecessors, and the next one will likely break any
records set by this one. Achieving decoupling between continued economic growth and prosperity and the
negative externalities created by such development is therefore a major challenge for the future.
Externalities are the costs and benefits of economic activity that are not accounted for directly in prices, and affect so-
called public goods such as the air we breathe. For example the price of a travel ticket does not include the cost of the
negative externalities this journey might cause, such as pollution. Vaccination is an example of a positive externality,
since apart from the persons vaccinated; the virus has less chance of spreading even to people not vaccinated. Trends in
global production and consumption patterns that are unlikely to change in the foreseeable future mean that externalities
will grow. Goods are becoming cheaper and are being transported in ever-bigger amounts at from one side of the world
to the other. Even a simple pot of yogurt may have traveled over 3,000 km by the time it reaches the table and require
inputs from several countries for its ingredients, production and packaging. Renewal cycles are becoming shorter and
discard rather than repair is increasingly the norm for many consumer goods ranging from electronics to clothing.
Consumption patters in developing countries are converging, however slowly, with those of the rich countries. It has
been calculated that if the entire world consumed resources at the rate of the rich nations, three planet Earths would be
needed to support everyone, and that globally, the ecological footprint exceeded the Earth s biocapacity by 25 per cent
in 2003. In other words, the area of biologically productive land and water needed to provide ecological resources and
services (food, fibre, and timber, land on which to build, and land to absorb CO2 released by burning fossil fuels)
exceeded the amount of biologically productive area available to meet humanity s needs.
Technology will reduce some of the impacts, but evidence from a number of domains suggests that technological
improvements are being outpaced by consumption growth, e.g. cars are now much more fuel-efficient than before, but
air pollution is getting worse because so many more people have cars. The experience of the Kyoto Protocol shows how
difficult it will be to design and implement policies to combat this problem, but shifting public opinion may make it
more feasible. An increasing number of consumers are taking environmental considerations into account in purchasing
decisions, and even big oil companies are providing carbon footprint calculators on their web sites to allow
individuals to calculate how much CO2 they generate.
At current growth rates, Danish consumption doubles roughly every 25 years. In response to increasing competition and
new technology, productivity has been on the rise by some 2.2 per cent every year during the last decade. The current
generation is wealthier than any one of its predecessors, and the next one will likely break any records set by this one.
While market-related transactions have grown evermore efficient and many private goods such as food, cars, air-
conditioning and designer clothes can, in principle, be afforded by anyone who would like them, the growing
externalities of these transactions has made many public goods increasingly scarce. In Denmark, clean air, silence, clear
space, clean water, splendid views, and wildlife diversity are highly valued and sought after. Nearly every transaction of
private goods carries an invisible cost, paid by everyone through degraded public goods. As an example, transactions of
private goods resulted in some 14,210,000 tonnes of waste in the year 2005 alone. Achieving the same powerful
incentives and efficiency in dealing with public goods as we have with private goods remains an important challenge
for a world with steeply increasing buying power. Achieving decoupling between continued economic growth and
prosperity and the negative externalities created by such development is both a major challenge and an opportunity for
Denmark to continue the astounding improvements of the last century into the coming one.

Financing welfare
If nothing is done, the number of people contributing actively to the Danish economy will decline by some
350,000 over the coming 40 years. This development will occur as the large post World War II-generation
gradually retires and is replaced by a series of smaller, longer-lived generations.
As a result of the demographic development in many OECD countries, populations are aging; more people retire form
the labour market and more people demand care. Public spending on social protection represents about a quarter of
GDP in OECD countries and rose from 18 to 22 per cent of GDP over the period 1980 - 2003. Two-thirds of
government social expenditures are on health and pensions. In the absence of additional policy measures, public
spending on health and long-term care could double from close to 7 per cent of GDP in 2005 to 13 per cent in 2050.
Also expenses related to pensions are expected to rise in a number of countries. Particularly in countries like Portugal,
Spain, Ireland and Hungary, and negative in Poland and Austria.
The continued funding of social security schemes will require many countries to reconsider their financing models.
Social protection financing drives a wedge between total labour costs and what finally remains in the workers pocket.
The higher public spending on social protection, the higher this tax wedge .
Funding mechanisms other than social contributions could be considered. Income and consumption taxes have broader
tax bases than social contributions and also affect replacement incomes. Thus, for a given tax revenue, a partial shift
from social security contributions to income or consumption taxes may have favourable employment effects, by
lowering the average tax wedge and by increasing the wage/replacement income ratio. Due to relatively high mobility
of capital, an increase in corporate taxes may be detrimental to investment and growth, and in the end
counterproductive. Adverse effects may also arise for a switch towards a contribution paid by firms on the basis of their
value-added. Taxes on households' capital income on the other hand, are much less likely to affect investment,
especially property taxes, one of the least mobile tax bases and difficult to evade. Environmental taxes are another
possibility. Due to the size of the associated tax base, taxes on energy and transport are the only ones likely to yield
sufficient revenues. Concerns about their effects on competitiveness have tended to limit recourse to this tax base, but
that could change as part of policies designed to combat climate change.
If nothing is done, the number of people contributing actively to the Danish economy will decline by some 350,000
over the coming 40 years. This development will occur as the large post World War II-generation gradually retires and
is replaced by a series of smaller, longer-lived generations. Such a development would that the proportion of people
being passively supported by the economy would outnumber those actively contributing to it. According to the Welfare
Commission, maintaining current levels of welfare in decades to come will require significant reforms, and these will
continue to be a challenge for many years to come. The Commission concluded that, firstly, students would have to
graduate faster. On average, Danish students graduate five years later than they could have, if they had followed the
fastest possible track from ninth grade and onwards. Secondly, older people will have to retire later, as average lifespans
are projected to increase by some three or four years over the next four decades. Today, three out of four people retire
before the official retirement-age of 65. Thirdly, the number of people receiving public support will have to be lowered.
Today, one in three Danes between the age of 18 and 66 receive some form of welfare. This level cannot be maintained.
Financing and in many instances reforming welfare will be a lasting challenge to Danish society in decades to come.

Flexicurity under pressure
The Danish welfare-model has proved surprisingly resilient in terms of combining economic growth and social
security in an age of international competition. Several of its components have, however, come under pressure
from several sides during recent years.
Flexicurity, the combination of flexible labour markets and a high level of employment and income security could be
one way to maintain and improve competitiveness while preserving the European social model. To be effective,
flexicurity has to integrate five different strands: contracts linking productivity and wages that allow sufficiently
flexible work arrangements and reduce labour market segmentation; active labour market policies to help people to
cope with rapid change, unemployment and transition to new jobs; lifelong learning; social security systems which
combine adequate income support with the need to facilitate labour market mobility; and sufficient trust and
cooperation among social partners.
Flexicurity may be thought of as a national-level policy, but it could equally apply within a given company. Despite the
increase of short-term contracts and part-time working in most countries, flexicurity does not have to mean the end of
more permanent arrangements. Its strongest contribution to reducing unemployment and underemployment could in fact
be in reducing the gap between different sectors of the labour market. Women, older workers, ethnic minorities and the
unskilled are often trapped in less secure and less productive employment, or undeclared work, with fewer opportunities
to progress into better jobs. Flexicurity could help these groups to change to better jobs. The portability of rights would
be an important element in this, i.e. allowing the transfer of pension and other rights from one job or employer to
another.
The Danish welfare-model has proved surprisingly resilient in terms of combining economic growth and social security
in an age of international competition despite the fact that it runs contrary to most classical economic theory. Several
of its components have, however, come under pressure from several sides during recent years. It is widely agreed that
the continued competitiveness of the flexicurity-model rely on highly skilled labour being easy to hire and easy to fire,
ensuring quick adaptation to the business cycle. Also, employer and employee-organisations must negotiate the terms of
labour without state intervention to reach labour-market supply and demand equilibrium. In addition, the labour force
must be socially secured, as an incentive to frequent job-changes in response to changing demand. And finally, the state
must actively facilitate and mediate re-education and re-employment of the labour force in substitute industries.
Preserving and developing the balances of the Danish model will likely be an important challenge in the coming
years.

Good corporate governance
Good corporate governance is a challenge to Danish businesses as major developments or changes in corporate
governance methods could improve their competitiveness as well as their ability to develop and survive.
The integrity of businesses and markets is central to the vitality and stability of economies. Good corporate governance,
the rules and practices that govern the relationship between the managers and shareholders of corporations, as well as
other stakeholders such as employees and creditors, contributes to growth and financial stability by underpinning
market confidence, financial market integrity and economic efficiency. Recent corporate scandals have focussed the
minds of governments, regulators, companies, investors and the general public on weaknesses in corporate governance
systems and the need to address this issue. An effective corporate governance framework has to address a number of
challenges: promote transparent and efficient markets; be consistent with the rule of law; clearly articulate the division
of responsibilities among supervisory, regulatory and enforcement authorities; facilitate the exercise of shareholders
rights and ensure equitable treatment of all shareholders; recognise the rights of stakeholders established by law or
through mutual agreements and encourage active co-operation with them; ensure timely and accurate disclosure of all
information regarding the corporation, including the financial situation, performance, ownership, and governance; and
provide tools for the strategic guidance of the company, the effective monitoring of management by the board, and the
board s accountability to the company and the shareholders.
Recent experience shows that although the concept of a listed company has been introduced in many countries, the
accompanying legal and regulatory system has often lagged, leading in some cases to abuse of minority shareholders
and to reduced growth prospects when financial markets lose credibility or fail to achieve it in the first place.
Professional managers have a key role to play in the listed or widely-held company, but to avoid possible misuse of
their position requires effective monitoring by the board. Such monitoring does not necessarily involve day-today
management but rather ensure strategic guidance of the company and the oversight of internal controls.
But who monitors the monitors? The board is accountable to shareholders who should be able to exercise their
fundamental ownership rights, including appointing and removing board members, and should be treated equitably by
the company. Reality is, however, often more complex with companies and their management controlled by a dominant
shareholder, a case which requires particular provisions for good governance. Moreover, in a number of cases, boards
appear to have been dormant or even to have become a part of management, rather than an active monitor of
management performance. In other cases, boards appear to act simply as rubber stamps, responding to the wishes of a
dominant shareholder. Shareholders appear to have been either passive or ineffective at sanctioning the board and in a
number of cases controlling shareholders have pursued their interests at the expense of minority shareholders. Complex
financial institutions and complex corporate structures around the world have also thrown into stark relief the question
of conflicts of interest, which have been most apparent in some brokerage research and in fund management.
Good corporate governance is a challenge to Danish businesses as major developments or changes in corporate
governance methods could improve their competitiveness as well as their ability to develop and survive. Efficient
boards of directors are essential to the continued development of Danish enterprises. Danish boards of directors are still
characterised by relatively traditional structures. The most important task for Danish boards of directors is to play a very
active role in the definition, development and implementation of the strategic direction of businesses. In a Danish
context, the Committee for Good Corporate Governance has played an active part in shaping the debate, within the
framework of the Copenhagen Stock Market. The committee developed a number of recommendations to good
corporate governance. The challenge of improving the basis for good corporate governance this remains highly relevant
for Danish businesses.

Infrastructure planning
In a Danish context, infrastructural investments will likely include such massive projects as the Femern Belt
Bridge between Denmark and Germany, the complete modernisation of the Danish railroad system as well as the
construction of numerous highways across the country.
The socio-economic, and technological changes of the coming decades will have significant implications for
infrastructures and infrastructure planning, necessitating a review of strategic objectives, financing mechanisms, risk-
and burden-sharing, management methods, and operating modes - In other words, a re-examination of the prevailing
infrastructure business models and their long-term viability. That viability is inextricably intertwined with the policy
environment and the governance context in which infrastructures are developed, and sound planning will be a major
factor in the success of future undertakings.
Planning, financing and implementing infrastructure is a major global challenge: road transport alone will require
investments of $220 to 290 billion a year until 2030, not counting maintenance. Also new harbour and terminal
facilities will likewise require massive investments if harbour capacity is to match increases in global sea trade.
Planning such massive undertakings will require reconciling a complex mix of public finance with political, economic,
environment, and land use issues, all with overlapping time frames, decision cycles and deadlines. Transport
infrastructure has a very long economic life, and capital planning and budgeting require time scales of 10 to 20 years.
These conflict with 7-year business cycles, 3- to 5-year political cycles and 2- to 3-year budgetary cycles. The danger is
that any time there is a short-term crisis, long-term plans for land transport infrastructure funding will be sacrificed for
short-term expediency to meet other, more pressing goals.
Even if new construction is economically desirable, public finance policy and constraints may not allow the optimum
level of road new construction to occur. But on the other hand, there are real dangers in overinvestment in road
transport infrastructure, in poor land use policies, in low-density urban sprawl, etc. it is difficult to manage these
effectively except at the relatively local level but with policy guidance, planning and co-ordination involving higher
levels of government. This is particularly important regarding infrastructures with implications for international
mobility, such as road and rail connectivity to airports and ports where there is a risk that local planning and amenity
issues override national and international interests. This highlights the need for an integrated, long-term approach to
planning. A particularly important issue here is right-of-way acquisition and protection from encroachment. Within
urban areas especially, there is a need for long-term planning to ensure that urban spatial growth will be adequately and
efficiently managed by infrastructure investments, along dedicated infrastructure rights-of-way, and in an integrated
manner. This can mean that infrastructure planners may have to anticipate developments in other domains such as
housing or leisure before these projects are even conceived.
Investments in infrastructure are among the largest long-term investments made in modern societies. In Denmark some
DKK 12,500,000,000 was spent on infrastructure in 2003 alone. The location of new stretches of road, railway stations,
airports, harbours and bridges has an enormous long-term impact upon society. Infrastructure determines - and is
determined by - the location of major industries, the growth of cities, where people live and work and which regions of
the country prosper and which do not. The impact of infrastructural investments extends beyond any single election-
term and requires a kind of detailed, long-term planning, which often requires broad political consensus. The past has
given ample examples of long-term overspending or neglect, exemplified by the neglected Danish railroad network.
Future infrastructural investments will likely include such massive projects as the Femern Belt Bridge between
Denmark and Germany (a DKK 30,000,000,000 project), the complete modernisation of the Danish railroad system (a
DKK 10,000,000,000 project) as well as the construction of numerous highways across the country. Also, the
construction of new harbours and thermals as well as IT infrastructure will be important investments over the coming
years. Acquiring adequate knowledge and expertise on long-term planning of construction, maintenance and
decommissioning of infrastructure will be an important challenge to the Danish transport sector and to the economy as a
whole.

Open economy governance
Financial policy is considerably easier in a closed than in an open economy. Nonetheless, since the middle of the
last century, the Danish economy has gone from a closed national economy to an international one.
International flows of capital are influenced by government policy, demography, technology and international
agreements as well as economic cycles and movements within the financial services industry itself. The capacity of any
government to influence most of these trends is limited. Even policy is no longer a purely national affair, and there
seems to be little chance of insulating the domestic financial sector without making it inefficient. This does not mean
that financial policy is becoming meaningless in a national context, rather that policy makers are faced with new
challenges, not least the growing complexity of financial products such as hedge funds and derivatives and of the
financial services business itself.
Market structures are tending to become more concentrated, comprising only a few service providers in operating
services. It is becoming increasingly difficult to know where to draw the line between monopoly and the realisation of
network externalities in trading platforms and other market infrastructures. There is an increased tendency for conflict
of interests and conduct of business problems to arise in large, integrated service providers. Interventions concerning
technological barriers to entry and other switching costs are growing in complication along with the actual exercise of
the financial professions. Prudential standards and the approach to risk management vary across sectors, and reporting
standards vary not only across sectors but across borders and between tax and prudential purposes. This is compounded
by the fact that the increased complexity of products and risks is accompanied by dispersion of risk to more opaque
participants.
In addition to what might be termed these technical problems in the workings of markets, there are also more general
governance problems such as the dilemmas faced in trying to optimise policy at the national level without
compromising broader regional or international goals and competitiveness, e.g. ensuring that tax revenue is high enough
to create the positive externalities that will attract business (e.g. good schools or transport) but not so high as to divert
investment to countries that are more tax competitive. Increasing reliance on financial markets to fund public
programmes such as infrastructure or private services such as pensions and health care also create challenges, including
protecting investment against possible bankruptcy and making sure that small investors are educated in the risks and
opportunities of services they may be interested in.
A further layer of difficulty is added by the rapid pace of change in the domains that financial policy has to address. To
avoid making contradictory changes in policies or implementing choices that quickly become obsolete or
counterproductive, authorities have to develop the skill to anticipate whether innovations will become permanent
features of the financial landscape.
Financial policy is considerably easier in a closed than in an open economy. Since the middle of the last century, the
Danish economy has gone from a closed national economy to an international one. Both export and imports have risen
as a percentage of GDP to about 40 per cent at present time, and exports now accounts for a quarter of total
employment. Cross-border capital flows have likewise been on the rise during recent years, and a tenth of all
investments made by Danish companies are now made abroad. Conversely, about a tenth of the capital invested in
Danish production facilities comes from abroad and foreign companies provide some 14 per cent of all private sector
employment. While the open economy has contributed enormously to the rising standards of living, many classical
instruments of financial policy are now ineffective. Danish tax policy is often passed in light of international
developments in this area. Likewise, the Danish currency is now is pegged to the Euro and currency policy is now to
some extent dependent upon decisions made by the European Central Bank and the institutions of the Currency
Cooperation. In years to come, the challenge of governing an national economy in a still more international
environment will likely remain an important challenge to the Danish financial policy.

Political consumption
Danish exports to the Arab world have yet to recover after the Mohammad crisis. Political consumerism
increasingly influence corporate social responsibility and is simultaneously used as a marketing tool.
Political consumerism, also called ethical or responsible consumerism, emphasises the link between private acts of
consumption and the potential political implications of these acts. It seeks to influence political questions such as
human rights, working conditions or environment protection through consumption. It is visible in a range of behaviours
such as the fair trade movement, ecolabelling, and ethical investment funds. Political consumers challenge business to
adopt what they consider being more morally acceptable practices, and can have a significant impact, e.g. forcing Pepsi
out of Burma or stopping Shell from sinking its Brent Spar oilrig in the North Sea rather than dismantling it. A study of
21 boycott calls showed that the overall market value of the target firms dropped by an average of more than $120
million over the two-month post-announcement period.
Political consumerism has a growing influence on corporate social responsibility, and at the same time is increasingly
used as a marketing tool. For large companies, retailers pioneered this trend, but producers are adopting it too. Nestlé, a
target of boycott campaigns, is now selling a fair trade coffee after market research revealed a new consumer group that,
while not currently regular purchasers of fair trade coffee, are predisposed to fair trade and/or sustainable products. An
ever-wider range of products and services is likely to be affected, from plastic bags to air travel, as the information
needed to assess the impacts of purchases becomes more readily available. And the focus need not be a particular
product or company; whole countries have been the target, including South Africa during apartheid, or France following
its opposition to the Iraq war.
Political consumerism also questions traditional ways of constructing an identity, such as party politics, and is part of a
trend where individuals are increasingly defined by lifestyle choices, including consumption, rather than ideology or
social class. In some countries in Europe, it could also be in part due to a feeling that the government is no longer
capable of defending consumers against multinational companies, and that international mobilisation by citizen-
consumers can influence decisions.
Since the mid-990s, the political consumer has been a well-established phenomenon in Denmark. Examples of
politically motivated consumer behaviour have appeared in response to a number of media exposed events in recent
years. Consumer protests resulted from such diverse events as French nuclear tests, GMOs, animal welfare, fair trade
and Israeli bombings. In 2006, Danish industry itself became the victim of political consumers when large parts of the
Arab world organised and sustained boycotts of Danish products after drawings of the Prophet Muhammad were
published in a Danish newspaper. Exports to the Arab World have yet to recover. Political consumption is here to stay,
and the development of this phenomenon may potentially influence many sectors of society.

Price transparency
In Denmark, many industries hide the true price of their goods and services behind murky price schemes. No
one, however, suffers more from incompatible price schemes than the most efficient companies with the most
competitive offers, for the simple reason that customers are unable to pick them out from their less efficient
competitors.
Price transparency refers to the costs in time and money required to discover actual prices of goods, so the lower these
costs, the more transparent the market. Price transparency is necessary for competition to exist and enhanced price
transparency benefits consumers by lowering search costs. The Internet's capacity to store and disseminate information
makes a potentially powerful means to increase price transparency, especially for e-commerce, but the sheer volume of
information available complicates this task. This has lead to the development of various shopping bots that compare
prices across a range of commerces, but these are subject to growing criticism for their links with shops. Moreover, the
bots can also be used by sellers who may have the monitoring resources to learn about price cuts well before a
significant number of consumers have had a chance to switch suppliers in response to them. E-commerce may end up
improving price transparency more for sellers than buyers and make it easier, cheaper and faster for them to change
prices in response to competitor moves. Over time, rapidly matched price cutting could reduce price competition, and
reduce transparency for consumers who have to spend more time studying non-price factors such as delivery, return
policies, after-sales service, etc.
The growing use of fidelity schemes is also complicating price transparency and discouraging price competition. For
example, few travellers can predict their future travel needs so accurately that they can compare the post-discount price
of an airline ticket offered by two companies, one or both of which offers frequent flyer programmes. Consumers as a
group could be better off in the short run because of fidelity discounts but lose in the long run via two mechanisms. The
first is predatory pricing. Once the low prices associated with a discount have made enough competitors leave the
market, the discounter raises prices above pre-discount levels. A second strategy is called predatory foreclosure . In
order to preserve existing supra-competitive price levels, fidelity discounts could be employed in both the short and
long run to keep potential entrants out of the market. The result would be that although prices in the short run are below
what they would be without the discounts, prices in the future would be higher than they otherwise would be.
Consumer protection legislation can help increase price transparency by obliging sellers to include all the necessary
information in their advertising, but the number of footnotes in small print on many ads shows the limits of such a
strategy.
In Denmark, many industries hide the true price of their goods and services behind murky price schemes. Banking fees,
insurance policies, cell phone minute prices and opticians examinations are all examples of markets for goods and
services where price transparency historically has been an issue. No one suffers more from incompatible price schemes
than the most efficient companies with the most competitive offers, for the simple reason that customers are unable to
pick them out from their less efficient competitors. In some markets, a second echelon of commercially sponsored
online price-comparison schemes has sprung up to reinstate transparency. These are, however, few and far between and
their impartiality is being widely questioned. In Denmark, this area has proved difficult to regulate because of the
highly specific nature of individual price schemes and the ingenuity employed in inventing and reinventing them. This
deliberate market flaw thus continues to be a challenge to consumers, consumer organisations and antitrust authorities
as well as businesses that know their job better than the competition.

Productivity
In Denmark, significant investments are currently made in education, research and innovation, but
our knowledge about the causes of Denmark s low productivity growth remains limited.
Recent economic developments have been propitious in many OECD countries, notably where GDP per
capita is far below the best performers. In Japan and Korea growth has retained momentum and in European
countries lagging behind, the recovery has been strong and is potentially sustainable over the next few years.
There is considerable variation in the productivity growth between countries. Korea, Slovakia, Ireland, The
Czech Republic, Greece, Hungary, and Iceland have experienced a high growth in labour productivity from
1995 to 2005. Other countries have faced low or moderate progress in labour productivity. Some of this
variation can be explained by catching-up effects. However, there is still a considerable variation in
productivity performance among the richest countries and several of them are still lacking 10-20 pct. behind
the US productivity level.
A crucial question is whether reforms of labour market policies, different trends in entrepreneurship, tax
structure, competition, educational level etc. can explain why some countries experience considerably higher
productivity growth. What can be learned from countries with rapid productivity growth and high levels of
productivity? Do certain reforms tend to be particularly effective in order to stimulate productivity?
Do countries with moderate or low productivity growth have similar structures in the labour market? And
will an expansion of the labour force decrease overall productivity growth if the new participants have less
experience and/or education than the existing labour force. Can this effect be identified and if so, is it
temporary or permanent?
OECD research suggests that open product markets stimulate innovation by pushing companies to catch up
or to take the lead. Going for Growth 2006 thoroughly documents the growth dividends accruing from
further financial market liberalisation and good innovation policies. Going for Growth 2007 quantifies the
benefits from increased product market competition in terms of innovation and productivity. It is no
coincidence that the United States and Northern Europe, who early on began opening their product markets
to competition, benefited most from the new information and communication technologies. Further more,
Going for Growth 2007 stresses that enforcement of competition law is weak in some countries and that
regulations still limit competition in many sectors, notably network industries.
Economic development is mainly driven by improvements in productivity. The productivity growth in
Denmark has been moderate in the last decade and the level of GDP per capita has declined relative to the
best performing countries, partly due to slower productivity improvements. Historically, an increasing labour
force has contributed to growth in GDP per capita. In the coming decades the labour force is expected to be
approximately unchanged in the face of the demographic development. Hence, productivity will play an even
greater role in maintaining growth in the future. The Danish government has taken an important step to
improve productivity e.g. by setting aside 0.5 pct. of GDP for further investment in education, research and
innovation, cf. the Strategy for Denmark in the Global Economy. However, more knowledge about the
reasons and answers to the modest productivity performance is crucial to underpin a successful strategy. A
comprehensive comparison with other OECD countries in areas important to productivity and
competitiveness shows that Denmark is taking a modest position in several areas.

Public sector efficiency
Efficiency differences between public libraries, hospitals, schools and entire municipalities are now fairly well
documented. If all public institutions were as efficient as a best ones, vast improvements could have been
achieved.
Improving public sector efficiency has moved centre stage as governments face mounting demands on public
expenditure, calls for higher quality services, and unwillingness to pay higher taxes. The response has been to adopt
new approaches to management, budgeting, personnel and institutional structures, such as performance measures, the
relaxation of input controls, delegation of responsibilities to line ministries/agencies, changes in public employment
typified by the adoption of contracts for public servants, and performance-related pay. Institutional changes include the
creation of executive agencies and the privatisation or outsourcing of public service provision. However, while
efficiency is a goal accepted by all stakeholders, actually defining and measuring it can be extremely difficult. For
example, if a large number of people with a given social problem are helped a little bit, is this more efficient than
helping far fewer people, but helping them much more? Finding measures for specific activities, and relating what an
agency or programme actually contributes towards achieving specific outcomes is especially hard. Outcomes are
complex and involve the interaction of many factors, planned and unplanned. There are problems with time lag and the
results may not be within the control of the government. However, they have a strong appeal for the public and
politicians.
Performance targets are another popular method that is in fact very complicated to use successfully. Low targets can
mean that agencies are not challenged to improve performance, while high targets can create unrealistic expectations
and situations in which agencies will fail. Too many targets create information overload and make it difficult to select
priorities; having too few creates distortion effects since agencies will tend to concentrate on targeted activities. Using
the budget to improve efficiency is another popular but challenging strategy. As for performance measurement, defining
and obtaining good data is hard, especially where budgets are structured in accordance with institutional and functional
boundaries and not results categories. Financial incentives can also be problematic. For example, punishing poor
performers does not help address the underlying causes of poor performance. And if the reason is lack of resources,
reducing resources will make performance worse. Rewarding good performance is intuitively appealing, but does not
take into account cost issues and government priorities, and again there is the danger of creating incentives to distort
and cheat in presenting information.
One of the most difficult challenges is to create a results based culture within organisations and throughout government.
An OECD survey showed that in 72 per cent of OECD countries, targets are routinely displayed in budget
documentation presented to the legislature, but in only 19 per cent of countries do members of the legislature use
performance measures in decision making. The percentage is even lower for the politicians in the legislative budget
committee with only 8 per cent using this information.
Denmark has the second highest tax rate in the world, and the efficiency of the comparatively large public sector is thus
vital to the economy. The traditional focus has been on the effectiveness of the public sector whether the public sector
delivers the promised services. Increasingly, however, focus is shifting to the efficiency of the public sector not just
whether the public sector delivers value, but whether it delivers value for money. A number of studies indicate the
efficiency of the Danish public sector has been stagnating or even declining during recent years. The overall efficiency
of the Danish public sector nonetheless covers great differences between institutions and locations. Efficiency
differences between public libraries, hospitals, schools and entire municipalities are now fairly well documented. From
these differences as well as benchmarking against the private sector, it is clear that the scope for improving the
efficiency of the public sector is present. If all public institutions were as efficient as a best ones, significant
improvements have been achieved. Outsourcing, result contracts, performance pay and lean production and case-
handling principles have increasingly become common means employed to increase efficiency. However, these
measures often have adverse effects on the working conditions, stress levels and attractiveness of the public sector on
the labour market. Another path, which is currently being explored, is digital administration of both citizens and
businesses to combat bureaucracy and increased efficiency. Initial Danish experiences in this direction are promising.
The challenge of efficiency will become increasingly important in years to come, as expectations to public service
increase and as demographic changes increase the likeliness of labour shortages in many service sectors.

Replacing taxation
The public sector, national as well as local, is increasingly looking for opportunities for private co-financing of
everything from infrastructure to strategic research projects. Striking a healthy balance between private and
public enterprise will be an important challenge as well as an opportunity in Denmark for years to come.
The desire to maintain small budget deficits combined with increasing demands on the public purse means that
governments need to find new ways to finance activities. Infrastructure is a major example of innovative financing,
partly because the sums involved are so huge. Road infrastructure spending worldwide over 2000-30 is projected to be
almost $750 billion, simply for new capacity; rail almost $160 billion; telecoms almost $1.5 trillion; and water almost
$2.4 trillion in the OECD, China, Russia, India and Brazil alone, mainly for maintenance, repair and replacement in
Europe and North America. Cumulative investment in energy-supply infrastructure of over $20 trillion is needed in real
terms over 2005-2030.
Various schemes are grouped under the broad term Public Private Partnerships (PPP). In PPP, the state grants certain
privileges to private enterprise in exchange for the infrastructure, for example, the right to charge tolls on a road.
However, a large number of failed PPP attest to the difficult challenges facing policy makers. Infrastructure investment
involves contracts which are more complex and of longer duration than in most other parts of the economy, operated
under the double imperative of ensuring financial sustainability and meeting user needs and social objectives. The
challenges are even more acute when governments bring in international investors. Although the cost, time-scale and
complexity of projects vary considerably, six general challenges facing authorities wishing to enter into a PPP can be
outlined:
The degree of public subsidy that is socially optimal and fiscally feasible needs to be established as it
conditions the terms on which private investor participation can be envisaged.
The decision to involve private investors has to be guided by an assessment of the relative long-term costs and
benefits, taking into account the pricing of risks transferred to the private investors and prudent fiscal treatment
risks remaining in the public domain.
The success of private involvement in infrastructure depends on public acceptance and on the capacities at all
levels of government to implement agreed projects.
Both sides have to establish a working relationship toward the joint fulfilment of the general public's
infrastructure needs.
Governments expectations regarding responsible business conduct need to be clearly communicated to their
private partners, by legal arrangements or otherwise.
Infrastructure is not the only area where private capital is being called on to finance activities that previously were
financed through tax. On a smaller scale, businesses may be increasingly called upon to sponsor school activities, health
services and suchlike. While such practices reduce pressures on the state budget, they may also reduce access of many
citizens to the services provided. And if the private sponsor can no longer finance the activity, be it a major
infrastructure project or a school's computers, there may be no ready alternative.
In Denmark, private co-financing of public projects and user charges on a range of public services are now being hotly
debated. The public sector, national as well as local, is increasingly looking for opportunities for private co-financing of
everything from infrastructure to strategic research projects. User charges on, for example, health care, bridge-
crossings, road-space and university admittance is likewise on the rise, and is increasingly considered an option by
many public institutions. The intermingling of public and private funding ensures real demand from final users and
functions as a rationing-device against careless use of otherwise free services. Also, private money reduces public
spending, and projects that would not otherwise be feasible can now be afforded. Finally, public-private partnerships
allow the public sector to benchmark its efficiency against that of the private sector. User charge does not, however,
influence everyone equally. High-income groups can afford whatever service they want, while user charges may be
prohibitive for low-income groups. Striking a healthy balance between private and public enterprise will be an
important challenge as well as an opportunity in Denmark for years to come.

Tackling counterfeit
The mega-brands of today carry enormous clout and incentives are thus ripe for counterfeit and other violations
of copyrights as these infringements yield enormous profits.
The World Customs Organization estimates that counterfeiting accounts for 5 to 7 per cent of global merchandise trade,
equivalent to lost sales of as much as $512 billion last year, though other estimates put the figure at twice that. During
2006, the International Chamber of Commerce monitored 414 global incidents of intellectual property theft, which
relate primarily to mobile, temporary, and low rent locations in 44 countries. Results show a 250 per cent increase in
counterfeit and pirated goods sold at these locations in 2006 compared to the previous year and sales valued at $1.9
billion. Unilever Group says copies of its shampoos, soaps, and teas are growing by 30 per cent annually. The WHO
says up to 10 per cent of medicines worldwide are counterfeited, putting lives at risk and costing the pharmaceutical
industry $46 billion a year. Bogus car parts add up to $12 billion worldwide, and can cause accidents and death.
Counterfeiting thrives on the whole process of globalization itself: the spread of capital and know-how to new markets,
which in turn contribute low-cost labour to create the ideal export machine, starting with cheap goods, then moving up
the value chain. The result is a global industry that is starting to rival the multinationals in speed, reach, and
sophistication. As counterfeiters get more entrenched and more global, they will be increasingly hard to eradicate. Their
financing comes from a variety of sources, including organised crime. Sometimes the counterfeiters are legitimate
companies, and many are licensed producers of brand-name goods that simply run an extra, unauthorized shift or are
former licensees who have kept the moulds and designs that allow them to go into business for themselves.
The software industry estimates that globally a third of software is obtained illegally, at a direct cost of $34 billion in
lost sales. National piracy rates vary from 20 per cent to 90 per cent. The industry also claims that reducing piracy by 10
percentage points over 200-10 would create 2.4 million new jobs and add $70 billion to tax revenues. The record
industry says that illegal copying costs it $4.2 billion a year worldwide. Illegal copying certainly exists, but it is hard to
know the real extent of the problem, partly because the figures can be hard to verify. For example, in June 2006, the
Washington Post wrote that intellectual property industry and law enforcement officials estimate US companies lose as
much as $250 billion per year to Internet pirates . Worldwide revenues for music and movies were only around $56
billion for the year in question.
For global firms, the intellectual property climate is important in location decisions, so any short-term benefits of
violation would be cancelled by long-term loss of confidence. Even countries with high rates of violation generally have
adequate legal provisions, so the problem is more one of enforcement than reinforcing theoretical sanctions. In
countries, which are favourable regarding protection, the media plays an important role in increasing public awareness,
as well as informing the public of the consequences of infringement. In the least favourable countries, media apathy
towards infringement tends to relegate this issue to the margins of public discussions, except when international
pressure is brought to bear.
The individualist mega-brands of today carry enormous clout; duly represented in the price of the still wider range of
branded products. Incentives are thus ripe for counterfeit and other violations of copyrights as these infringements yield
enormous profits. Judging from the success of Danish Customs, the amount of counterfeits crossing the border is on the
rise. In 2003, Danish tax authorities impounded counterfeit goods with a market value of some 2.6 million (had they
been the real thing). In 2005, that figure was 13 million. Not only physical goods but also virtual services are
increasingly exposed to property rights violations. Software, music, movies, books, games, etc. can now be freely
downloaded and file-shared, cutting out not only record companies and traditional distributors, but also the artists,
writers and moviemakers who created them. In spite of some initial success of campaigns against pirate copies, 26 per
cent of all software used in Denmark currently violates the property rights of those who made it. Also Danish furniture
and other designs are increasingly being copied by low-price producers and sold online. Such violations cheat creators
of useful things out of fair return on their investment and thus hurt incentives to innovate and market new useful things.
Counterfeit and property violations are probably here to stay and remain a significant challenge to society.

The consumer child
It is old news that every new generation is now richer than its predecessor. The truly new is exactly how rich. In
Denmark, today s young make their debut as independent consumers at age of 8-12. At this age, pocket money is
normally introduced and children fully realise their influence upon their parent s consumption.
It costs hundreds of thousands of euros to feed, clothe, educate and amuse a child in an OECD country ( 250,000 for a
European child who continues education to tertiary level according to one estimate) and the children themselves spend a
significant amount of this money. Discretionary spending by children is expected to grow in the years to come, for
example from $18 billion in 2005 to over 21 billion by 2010 for children aged 3 to 11 in the US, where annual
expenditures by families on consumer goods for children will reach around $143 billion by 2010. Although the number
of children is falling in many countries and there are calls to restrict marketing aimed at children, these factors could be
less important for markets than trends that reinforce the role of the child as consumer. These include the overall increase
in wealth; the fact that grandparents (a reliable source of pocket-money) are living longer; gifts to children in many
countries are increasingly in the form of cash or shopping vouchers; and children are being given more autonomy as to
how they spend their money, and whether they spend or save. Furthermore, for some markets, young people are the
main consumers, e.g. in North America people aged 12 to 17 are much more likely than adults to own MP3 players,
video game consoles, and DVD recorders.
A significant amount of children's consumption is on food. Children aged 7-15 in the UK spend over a third of their
£1.5 billion pocket money on sweets, snacks, drinks and takeaways. This no doubt contributes to trends in childhood
obesity: 10 per cent of British six year olds are obese, rising to 17 per cent of 15 year olds. The number of obese
children has tripled in 20 years, and if present trends continue, half the children in England in 2020 could be obese.
Children are also consumers of alcohol, tobacco and illicit drugs, with alcohol by far the most common of the three.
According to the 2003 European School Survey, over 80 per cent of students had consumed alcohol in the previous 12
months, 50 per cent of them getting drunk. There is a worrying trend for drinking to begin at an early age, with children
as young as six needing hospital treatment after binge drinking and a third of children in Europe getting drunk for the
first time before age 13. Underage alcohol use is associated with traffic fatalities, violence, unsafe sex, suicide, and
educational failure. The social cost of underage drinking has been estimated at $53 billion a year for the US, including
$19 billion from traffic crashes and $29 billion from violent crime. Despite the fact that more young people drink
alcohol than smoke or use drugs, governments tend to spend more on campaigns to fight the these last two.
It is old news that every new generation is now richer than its predecessor. The truly new is exactly how rich. In
Denmark, today s young make their debut as independent consumers at age of 8-12. At this age, pocket money is
normally introduced and children fully realise their influence upon their parent s consumption. 13-15 year-olds on
average have some DKK 1,500 a month to spend on their own consumption. This age group still lives at home, has
various small jobs and few fixed expenses. On average 16-18 year-olds maintain an average workweek of 12.5 hours
next to school and are able to double their disposable income to some DKK 3,000. Young consumers set themselves
apart from other consumers in a number of ways. Estimates suggest that teenage consumption accounts for some DKK
10 billion a year and the larger part of this is spent on perishable consumer goods, such as fast food, sweets, ice cream,
clothes, make-up, music, movie tickets and cell phones. The purchase of more expensive, durable goods is highly
impulsive and largely influenced by fashion, friends and advertisement. Environmental awareness and long-term
planning are largely absent. Targeted consumer information and campaigns have little influence upon consumption
patterns of young people and the effects of educational material introduced at school decline rapidly after the age of 13.
As the wealth of the next generation is likely to be as record-breaking as the wealth of this one, introducing
responsibility to consumer children continues to be a challenge to society.

The economics of climate change
Although the cost remains uncertain, there is little doubt that Danish industries will feel the economic impact of
the GHG reduction schemes. Conversely, other Danish industries, such as the wind turbine industry, will no
doubt benefit from increasingly ambitious GHG reduction-targets.
Industrialised countries that introduce binding emission objectives are faced with a competitiveness risk that could also
lead to so-called carbon leakage. This occurs when a constraint on the emissions from the production of an
internationally traded good creates a cost not faced by competitors without such a constraint. In time, this can lead to
relocation and the displacement of emission sources (leakage), undermining the effectiveness of the environmental
policy. In developing countries, rapidly growing activities with long-lived capital stocks may be locked in a carbon-
intensive path in the future. This may generate large capital stocks with high GHG intensity; these would either need to
be retired early at some economic cost to meet emission goals, or would slow down global efforts to reduce emissions if
the costs are deemed too high. These issues may best be dealt with by adopting a sector-wide rather than a national
approach. In the developed countries, this could help manage competitiveness and leakage risks, while in the
developing countries; it could bring incentives for mitigation in the relevant sectors without requiring economy-wide
emission reductions.
Although the energy sector is studied extensively in this context, data for other important sectors are scarce. This is the
case for agriculture, which alone will account for 20 per cent of the projected increase in anthropogenic radiative-
forcing between 1990 and 2020-2050 if trends persist. Some industrial sectors such as steel are better understood than
others and could provide valuable lessons on the optimal mix of voluntary agreements, environmental taxes and
emissions allowances.
Public support for GHG mitigation will be reinforced by better understanding of the benefits other than those directly
associated with climate change, the so-called ancillary benefits, e.g. for health. Estimates of the magnitude of ancillary
benefits per tonne of carbon reduced in OECD countries vary widely, but even the most conservative estimates are
substantial. A third or more of the abatement costs for modest mitigation efforts could be compensated for by ancillary
benefits. A Hungarian study estimated that a 7.7 per cent reduction in CO2 emissions would result in national health
benefits of $650 million, enough to cover the investment required to implement the CO2 reduction measures.
Greenhouse gas reduction policies that lower demand for transport also lead to social benefits, such as those that result
from less traffic congestion. Ancillary benefits could lower the net social costs to society of GHG reduction, so it is
important to identify the major areas where these benefits are present, to develop methods to quantify them, and find the
best ways of injecting this information back into the public debate and regulatory and decision-making process.
As part of the Kyoto Protocol, Denmark is legally committed to reducing its GHG emissions by 21 per cent (relative to
1990-levels) during the period 2008-2012. There are numerous ways in which this target can be met and the total cost of
Kyoto Protocol thus depends on the portfolio of methods chosen. With the recent Post-Kyoto EU-agreement to a 30 per
cent GHG reduction by 2020, the long-term sustainability of measures taken now will become more important in
determining the true cost of GHG reduction. Current (and highly uncertain) estimates suggest that, depending on the
measures taken, meeting the Danish Kyoto obligation will cost somewhere between DKK 1 and 2 billion a year, during
the obligation period. Given the technological difficulties of reaching the Danish obligation, the EU-Emission Trading
and Emission Credit schemes may prove to be a part of meeting the demanding target on time. Although the cost
remains uncertain, there is little doubt that Danish industries will feel the economic impact of the GHG reduction
schemes and that a range of energy-heavy industries, such as the chemical industry, may choose to move their primary
activities out of Europe altogether. Conversely, other Danish industries, such as the wind turbine industry, will no doubt
benefit from increasingly ambitious GHG reduction-targets. The challenge of choosing and implementing climate
mitigation schemes with a clear, long-term understanding of the economic incentives they entail thus remains relevant,
also in the Post-Kyoto era.

Working welfare
What welfare initiatives work? In 2005, the Danish states spend some DKK 65 billion, or about 7 per cent of total
public spending, on welfare initiatives, but what did the taxpayers get for their money?
On an international level, social policy has evolved from simple income payments to people in need to help in
overcoming barriers to social and labour market activity. Future policy will seek to prevent distress from happening.
The challenge will be to go beyond welfare-to-work programmes to help those in work with social problems or who are
otherwise disadvantaged, including lone parents, the long-term unemployed and people with disabilities.
Investing in children is seen as an efficient way of breaking the cycle of disadvantage. Children who grow up in
disadvantaged households are more likely to do poorly at school, be unemployed, and experience health problems as
adults. They are more likely to be parents of poor children and children who are recipients of social programmes
themselves, threatening an inter-generational cycle of deprivation. The economic and social costs of allowing this to
continue are unacceptably high. On average OECD countries use around 2 per cent of GDP on social expenditures on
children and families . Public spending on old-age pensions alone accounts for over 8 per cent of GDP. Fiscal
projections show that, without reform, in some countries spending on pension systems and long-term care for the
elderly will increase by 5 per cent of GDP or more up to 2050 and will place an unacceptable burden on the working-
age population. It is increasingly difficult to ask younger age groups to make sacrifices in order to support consumption
by older people: on average across OECD countries child poverty rates are now as high as poverty rates among the 65-
75 year old age group (poverty rates for the over 75 year olds remain much higher). The objectives of policy differ for
the two groups, pensions usually being the main source of income for seniors, but even so, new spending initiatives for
the family start from a low base. This is possible because the family is still the best way to ensure that children receive
sufficient support, resources, and care. However, changes in families and society will weaken this. More children are in
lone-parent families than previously and nearly everywhere such families face a higher risk of poverty than almost any
other group in society. Countries with make work pay policies show that these can be effective in raising incomes and
promoting work. But little is known about what else might be cost-effective in helping people keep their jobs and
advance up the career ladder, although additional childcare help, training and continuing case-worker involvement for
people with social problems appear to produce the desired outcomes.
Expenditure on reintegration policies for disability benefit recipients is a tiny fraction of that spent on the unemployed,
a group that is on average far less disadvantaged and smaller in aggregate in the OECD area than that of disability
benefit recipients of working age. The more socially disadvantaged a group is, the greater is the cost, in the short term,
at least, of removing barriers to labour market and social participation. A system of mutual obligations has proved
effective in reforms of unemployment and welfare benefits, but applying this to other, more disadvantaged groups may
not be so effective, or even feasible.
What welfare initiatives work? In 2005, the Danish states spend some DKK 65 billion, or about 7 per cent of total
public spending, on welfare initiatives. Between 2001 and 2005 public spending on social services rose by some 5 DKK
billions (in 2007 prices). The major part of these funds, some DKK 30.2 billion, is spend on services provided to senior
citizens, about DKK 19.7 billion was spend on services to disabled people, DKK 11.6 billion was spend on
marginalized children and young, while DKK 3.6 billion was spend on services to marginalized adults. The funds are
used in a variety of public initiatives, ranging from social support to abortive or foster care, specialized education,
housing-initiatives, crisis centres, treatment initiative etc. Ensuring the quality of social services, that the initiatives help
and are effective as well as efficient, has been a central issue in recent years in Denmark, but only few comprehensive
evaluation studies exist. The challenge of setting explicit and appropriate goals for welfare spending and obtaining
sound knowledge of whether we reach them or not remains highly relevant.

Global
Globalisation creates a more open world, presenting new opportunities as well as new problems to Denmark. This
category contains challenges related to relations between Denmark and the wider world.

Catastrophe management
Danish society is highly sensitive to international breakdowns and catastrophes. Today, large, unforeseen events
such as terrorist attacks, stock market collapse, tsunamis, political crisis and the sudden outbreak of war directly
influence Danish society in a number of ways, regardless of their physical location.
Catastrophes are low probability-high impact events. In other words, there is little chance that a catastrophe will occur,
but if it does the consequences are enormous. The most extreme example, but one which is increasingly being taken
seriously by governments, is a meteor impact. However, the probability of more usual types of catastrophe is increasing
and with it the human and economic costs. The number of natural disasters, including floods, storms and droughts has
risen dramatically since the beginning of the 1960s and is likely to continue rising due to global warming. Recorded
technological disasters such as explosions, fires, and transportation accidents have also risen rapidly since the beginning
of the 1970s, and economic expansion and competition, combined with greater concentrations of population, will
increase the risks. The last major new health catastrophe to appear was HIV/AIDS, but new diseases such as SARS
continue to emerge and others are evolving, leading to fears that at some stage a new global pandemic is inevitable.
Terrorist attacks remain a constant threat and the world financial system is not immune to major crises.
Effective response to such a wide range of potential situations will depend not only on actions immediately before,
during and after a catastrophe, but also on pre-existing plans, structures and arrangements for bringing together the
efforts of government, voluntary and private agencies in a comprehensive and coordinated way. This implies a number
of challenges, not least identifying risks. Despite considerable progress in surveillance structures in areas such as
chemical and nuclear hazards, weaknesses remain, particularly regarding systemic risks such as terrorism and emerging
infectious diseases. Communication technologies are central to catastrophe preparedness and management, but they can
suffer from uneven distribution and access, lack of skills, vulnerability and unreliability in emergencies, and inability to
furnish data and information that are comprehensible and of use on the ground. This reduces the efficiency and
effectiveness of emergency services, whose planning and co-ordination raises other issues. Risks such as bio- and
cyber-terrorism or new infectious diseases could pose particular challenges for emergency response because the sheer
scale of the disaster may place intolerable strains on the emergency services, and imply higher levels of decision
making, at national and international levels. Poor informational infrastructure or notification can result in poor co-
ordination of relief operations leading to under-response or uncoordinated relief measures resulting in over-response,
while the absence of guidelines and structures for minimising disaster spillover effects can have serious consequences
for other countries.
Once a disaster has struck, damage has to be limited. This will require continuing assessment of the situation through
efficient, dependable information collection and analysis and will depend to a large extent on the resilience of the
emergency management systems, organisations and mechanisms to the impact of the disaster, for instance the capacity
of primary health care systems to cope with sudden, massive demand or the reliability of mobile communications.
Danish society is highly sensitive to international breakdowns and catastrophes. Today, large, unforeseen events such as
terrorist attacks, stock market collapse, tsunamis, political crisis and the sudden outbreak of war directly influence
Danish society in a number of ways, regardless of their physical location. Societal systems are becoming increasingly
sensitive to such events as international interconnections become denser. Preparing for and managing international
catastrophe is notoriously difficult because of the sheer number of possible events for which to prepare. Recent
examples of unexpected catastrophes include the reaction of the Danish stock market to the terrorist attacks in the
United States and Europe, the challenges posed to Danish exporting companies and the Ministry of Foreign Affairs to
the Muhammad crisis, the reaction of Danish health authorities to the outbreak of the bird flu H5N1 and the evacuation
of Danish citizens from Lebanon in response to Israeli bombings. Because each catastrophic event is in itself highly
improbable, there is a natural tendency to ignore them. Nonetheless, the true probability of a catastrophe is the
combined likelihood of all such possible events. The challenge of managing unavoidable, unpredictable and not
infrequent catastrophes remains highly relevant to Denmark as well as the international system of which it is a part.

Close cultural relations
The world has become interlinked in a new and far denser way than in the past and that differences of opinion
clearly exist. Managing still closer relations between cultures will become an important challenge for the future.
If Newtonian physics with its masses, forces, and reactions was a good metaphor for geopolitics up to the collapse of
communism, chaos theory might be the most suitable successor for a world where death and destruction on one side of
the world can be the result of an incident on the other side that would have been unknown or irrelevant to most people
only a few years ago. An early example of this was the murder in Japan of the translator of Salman Rushdie s The
Satanic Verses in 1991, following the book s condemnation as blasphemous by the Iranian leader Ayatollah Khomeini
in 1989. The Danish cartoons of Mohammed are a more recent example.
In the Middle East more generally, the lines of conflict are drawn less between Islam and the West than between Iran
and Syria on the one hand and a grouping around Saudi Arabia and Egypt on the other. When Israel invaded Lebanon in
2006, reaction from Arab capitals was muted and the Saudi, Egyptian and Jordanian governments openly criticised
Hezbollah and Hamas.
In the Western world, a growing number of young people of immigrant origin are defining themselves primarily in
terms of religion and the country of origin of their parents or grandparents. This is made easier by having easy access to
the media of these countries, and communication is both ways news of an incident in one country spreads
immediately to others. One of the paradoxes of globalisation could be that greater knowledge of the world and ever-
growing flows of information do not always bring people closer together but serve in fact to reinforce their cultural
differences and sense of exclusion.
On September 30th of 2005, 12 drawings of the Prophet Mohammad featured in a Danish newspaper as part of an article
claiming growing fear of criticising Islam. During the next five months, some 139 people died as a result of violent
protests throughout the Muslim world, the Danish embassies in Syria and Lebanon burned to the ground and a general
boycott of Danish goods were fully or partially adopted in Kuwait, Saudi Arabia, Qatar, The United Arab Emirates,
Oman, Egypt, Bahrain, Syria, Libya, Jordan, Gaza, Algeria and Tunisia. While protests receded and the boycott is no
longer in place, the conclusions to be drawn from these events remain hotly debated and a highly tense issue. Some
interpret the crisis as the result of an undignified and unwarranted provocation of the Muslim community in Denmark in
particular and a major world religion in general, while others see the crisis as vivid evidence of the incompatibility of
Islam and secular democracy and confirmation of Huntington s Clash of Civilizations -thesis. Regardless of these
differences of opinion it is however widely agreed that that the crisis demonstrated that the world has become
interlinked in a new and far denser way than in the past and that differences of opinion clearly exist. Managing closer
relations between cultures is clearly an important issue for Danish foreign policy in years to come.

Global issues, global solutions
How can international organisations be renewed to adjust to the profound changes taking place in the
international system while assuring the accountability and legitimacy of these organisations?
Today, few areas of policy making are insulated from global influence, either because of the nature of the issue in
question, as in the case of global warming or nuclear proliferation, or because national conditions are shaped by
international influences, for example corporation tax or energy supplies. The organisations that oversee international
cooperation within the UN system or in other multilateral arrangements such as the EU have contributed much to
progress and global well-being, and international rules-based systems will continue to set the framework for
international relations for the foreseeable future. There is however a growing sentiment that the role and powers of
international organisations need to be redefined to cope with the changing nature of the challenges with which they are
confronted, and to respond to calls for greater accountability and transparency in their governance.
Apart from the technical competence of international organisations to deal with global problems, the central question is
how representative and democratic these institutions are. The configuration of world power has evolved almost beyond
recognition since these organisations were created in the 1940s. China and India for example are already nuclear powers
with ambitious space programmes, and are likely to have bigger economies than most OECD countries within a few
decades. Their diplomatic ambitions and interests will expand as well, and they will demand a greater say in managing
world affairs.
The importance of multilateral organisations will be weakened by a tendency to seek bilateral agreements in a number
of important economic domains, and as the global economy continues to expand and competition for finite resources
intensifies, this trend is likely to be reinforced. Increasing instability in diplomatic relations, with ad hoc alliances
gaining ground at the expense of more stable configurations, will mirror this development. There may also be a growing
tendency for states to opt out of organisations they disagree with, or never join them in the first place. Public support for
such moves will be strongest where the organisation in question is seen as remote and unaccountable.
The influence of bodies other than governments in international affairs, and thus on the role of international
organisations, is also growing. Multinational corporations wield enormous economic power, which they can also
transform into political power. As these companies are almost exclusively from the industrialised nations, the criticism
is often heard that international organisations in charge of economic cooperation and intervention are biased against the
developing countries. In the WTO this has lead to coalitions of developing countries in a series of negotiations, and to
calls to change decision-making processes in a number of international instances. (At times the relationship between
business and the international organisations is much more conflictual. There is outright hostility towards the tobacco
industry in the WHO for example.) Civil society too is playing a greater part in international affairs, either directly
through NGOs or indirectly through mobilisations around particular causes, for instance the movement for the
cancellation of Third World debt or environmental movements.
Denmark actively supports and participates in a number of international organisations, such the EU, UN, WTO, WHO
and NATO. Historically, public backing behind the membership of these organisations has been significant, but has
been combined with scepticism about ceding decision-making authority to such bodies is most evident in relation to the
EU. Such opposition is not equally strong in all political areas, but in almost all areas the opposition is stronger in
Denmark than in the remainder of the EU-countries. However, a recent Eurobarometer survey found that the majority
of Danes support EU-membership, with 56 per cent indicating that the Danish membership is a good thing . With an
increasing number of cross-border issues the influence of international organisations will likely increase in the years to
come. This raises the question of how international organisations can be renewed to adjust to the profound changes
taking place in the international system while assuring the accountability and legitimacy of these organisations.

More countries
The number of countries could continue to grow in the future if those countries tied to another by military force
become free to choose, and if the trend towards greater regional autonomy evolves towards calls for complete
independence. This is also the case in Denmark, where Greenland and the Faroe Islands are still part of the
Kingdom. Looking ahead, it is far from certain that they will remain so in the future.
In 1900, there were 57 countries in the world. In 1946, following a wave of decolonisation, there were still only 74.
Today there are around 193 (depending on how Taiwan, the Vatican and Tibet are counted) as well as 63 dependent
territories and areas of special sovereignty. Increasing global economic integration seems to be accompanied by
political disintegration. This can be spectacular as in the break-up of the USSR, but long-lasting struggles for
independence can also finish by paying, as in the case of East Timor, which finally achieved independence in 2002 after
being occupied by Indonesia since 1975 and Portugal for four centuries before that. Most of the world's countries have
small populations: 87 have fewer than 5 million inhabitants, 58 fewer than 2.5 million, and 35 fewer than 500,000.
The number of countries could continue to grow in the future if those countries tied to another by military force become
free to choose, and if the trend towards greater regional autonomy evolves towards calls for complete independence that
are accepted by both the central state and the population of the autonomous entity. In Europe, a number of countries
could potentially be affected by the latter tendency, assisted by the existence of the EU as a supranational structure of
governance that could fulfil many of the functions of a nation-state. At present, EU defence and foreign policies remain
fragmented, but an increasing number of other issues are settled at European level, and the success of new, small states,
such as Slovenia, could encourage others to follow this example. If political integration deepens, the ties binding
traditional partnerships could weaken and the EU-27 could end up as the EU-30+ without modifying its external
borders.
Greenland and the Faroe Islands are still part of the Kingdom of Denmark. Looking ahead, it is far from certain that
they will remain so in the future. Independence movements in both communities are working towards economic and
political independence from Denmark. The relationship between Denmark and these North Atlantic communities have
been a long-standing, sensitive and often turbulent issue. Recent Danish criticism of the Faroe Islands failure to pass
minority-protection-laws for homosexuals on biblical grounds caused fierce counter-criticism about Danish interference
in internal affairs. As for Greenland, the influence of western culture upon the native Greenlandic culture has proved
problematic and social problems persist. The future looks no less interesting as the recent discovery of potential oil-
reserves has fuelled a new wave of independence debate in Greenland. Meanwhile, a ten-year international exploration-
project is now underway, investigating the Greenlandic geology to officially establish the northern border of the Danish
kingdom. The region in question holds potentially valuable geological resources, a new waterway between Europe and
North America because of ice melting as a result of climate change, as well as the North Pole itself. The turbulent future
of the union is no doubt a challenge here to stay.

Shifting alliances
Honouring Danish commitments to constantly shifting, and sometimes conflicting, alliances will be a challenge in
a world order under rapid change.
The emergence of China, India and others as new major global players will transform the geopolitical landscape, with
impacts potentially as dramatic as the decline of the European empires and the rise of the United States. Just as the
1900s are the American Century, the 21st century may be Asian. A combination of sustained high economic growth,
expanding military capabilities, and large populations will drive the expected rapid rise in economic and political power
of China and India. How they exercise their growing power and whether they relate cooperatively or competitively to
other powers in the international system are key uncertainties.
At the same time, an enlarged Europe could increase its weight on the international scene if it manages to coordinate the
foreign policies of the EU member states. Europe s strength could be in providing a model of global and regional
governance and cooperation to the rising powers. But ageing populations and shrinking work forces could reduce the
vitality of the continent. Japan faces a similar ageing crisis, and will have to re-examine the imbalance between its
economic power and its military and diplomatic status. It will also have to find a strategy to deal with the rise of China
that mixes rivalry with cooperation. Cooperation will be particularly important in dealing with North Korea, whose
current regime and system are unlikely to resist growing internal and external pressures. A greater regional role will
however have to overcome historical resentment to Japan's role in the Second World War. Taiwan-China relations will
further complicate achieving regional equilibrium, but the two governments might decide on a pragmatic solution of
economic integration without seeking to settle political differences.
Russia shows an increasing willingness to exploit its energy reserves to enhance its international role. However, it faces
a severe demographic crisis resulting from low birth rates, poor medical care, and a potentially explosive AIDS
situation, and could even see a continued decline in life expectancy. The break-up of the USSR has left it with tense
relations with many of its neighbours, particularly those seeking to join western institutions such as NATO or the EU.
The Caucasus and Central Asia remain unstable. While these factors diminish Russia's global potential, it is likely to
seek ad hoc alliances to further its ambitions, with China, Europe, or the US as circumstances demand.
Shifting configurations will render the Cold War categories increasingly obsolete (East and West, North and South,
aligned and nonaligned, developed and developing.) Governments will strive to reinforce groupings based on
geographical proximity, but these will increasingly have to take account of other organisations of the geopolitical space,
characterised by mega-cities, and global flows of information, trade and finance. Alliances will thus be more open,
temporary and opportunist than in the past.
Since the end of the Cold War, the overall goals of Danish foreign policy have been alliance-building and strengthening
of mutual commitments between countries of special importance to Danish international relations. In addition to the
United Nations and Nordic forums, the two major themes of these efforts have been the European Union and the
USA/NATO. During recent years, the European area has become increasingly important, as closer EU-integration has
continued parallel to enlargements. Much effort was invested in the EU Enlargement during the Danish chairmanship of
the Union in 2002. The Atlantic area has likewise become increasingly important as ties between Danish and US
foreign policy has strengthened with the Danish participation in the 2003-invasion of Iraq. Honouring Danish
commitments to constantly shifting, and sometimes conflicting, alliances will be a challenge in a world order under
rapid change.

Supranational lawmaking
Realising the advantages of supranational legislation, while securing legitimacy, transparency and the influence
of the regulated parties is an important challenge for Denmark as well as its international partners.
International law has existed from around the middle of the 19th century and mainly concerns relations between states,
but not their sovereignty. It is derived from and complemented by international agreements. In general, this system
provokes little controversy, with the notable exception of international courts for war crimes. In the European Union,
however, national law making is becoming less important as EU law extends its competence.
It could be argued that this weakens democracy, because it gives power to courts that are non-accountable to the
citizens subject to their rulings. It could equally be argued that many issues are best dealt with on a wider scale, and also
that supranational legal instruments can protect citizens' rights in the face of government inaction or hostility, even in
the most egalitarian societies.
This is a highly complex debate, in which historical, legal, subjective and political considerations all influence the
outcome. The issue hinges on the perceived legitimacy of supranational lawmaking
Attempts to promote participatory democracy within EU governance also have to contend with a general decline in the
interest in politics in most countries. Low turnout in elections for the European parliament are not the only
manifestation of this: there is a widespread feeling that the various processes making up globalisation are reducing the
relevance of elected representatives in many areas, e.g. they cannot stop the relocation of a factory to another country.
During these years, Danish legislation is coordinated, harmonised and passed at the EU-level. In a more interwoven
world, still more border-crossing legal issues are raised. Areas such as environmental standards, patent law, antitrust law
and food safety are all examples of areas, where demands from governments, businesses or citizens have lead to the
establishment of supranational law. While supranational law enables regulation of border-crossing pollution,
internationally valid intellectual property rights, fair competition between countries and common quality standards for
food, supranational legislation is at the same time an important challenge. In a Danish context, the introduction of
supranational legislation on a still wider range of areas has raised debate about the growing physical as well as mental
distance between legislators and the legislated. Also, the passing of supranational legislation is a complicated process
involving mangy languages and can difficult to understand for regulated parties. Reforming supranational law must
likewise take place at an international level and can involve compromises between many countries. Realising the
advantages of supranational legislation, while securing legitimacy, transparency and the influence of the regulated
parties is thus an important challenge for Denmark as well as its international partners.

Taxing the international economy
In Denmark, businesses are taxed 25 per cent of their declared profits and so unprofitable companies are tax-
exempt. This has created a powerful incentive to move profits abroad, declaring them in countries where the
taxation of businesses is virtually non-existent.
An increasing number of economic activities escape taxes imposed on more traditional enterprises by national
governments. For example, VOIP phone calls are not subject to VAT, even when customers pay for the service.
Likewise, e-commerce sites can escape sales taxes by offshoring operations. Taxing such activities poses particular
problems, not the least being how to know that a transaction has taken place. The increasing internationalisation and
virtualisation of many transactions and the larger share of digital goods and services in the economy, raises the question
of the rationality and feasibility of adapting tax systems to these activities.
One of the most well-known proposals in this domain is the Tobin Tax, named after the economist who first proposed
it. The Tobin Tax would be a kind of sales tax on currency trading. Each day, around $1.8 trillion is traded on money
markets, so a tax of even a tenth of a cent on each dollar could yield hundreds of billions of dollars each year to tackle
global problems that national governments do not have the means or political will to address. Some governments would
support such a tax, others oppose it, illustrating one of the major difficulties in any attempt to create an international tax
regime: the need for international agreement and cooperation. A country that does not impose a tax would generally
attract capital away from those who did (if the country's regime was stable enough). So to work effectively, a global
economy needs some acceptable rules to guide governments and help business to move capital to locations where it can
optimise its return, without hampering government efforts to meet the legitimate expectations of their citizens for a fair
share in the benefits of globalisation.
Both OECD and non-OECD governments are concerned at the proliferation of certain tax havens and special regimes
which, together with the new opportunities opened up by globalisation, increase the potential for distorting economic
behaviour and the risk of non-compliance with the tax laws of a taxpayer s home country. Similarly, law-abiding
businesses are concerned that such opportunities can give an unfair advantage to the tax abuser and penalise the
company that plays by the rules. It is difficult to quantify the overall revenue losses from non-compliance across
borders, but Ireland recently collected almost 900 million from residents who had been using Channel Island banks to
evade Irish taxes. The UK expects to recover £1.9 billion from its recent clampdown on offshore evasion, while a recent
report by the US Senate estimated that the Internal Revenue Service could be losing some $40-70 billion to tax havens.
The success of the Danish economy is intimately connected to the success of a still widening range of other economies.
In Denmark, the import-export quota is around 40 per cent of GDP and this cross-border trade is a vital component in
maintaining high standards of living. While super-mobile businesses and geographically diversified business models
allow countries to specialise at what they do best (and to import the rest), the internationalising economy poses real
challenges to taxation. In Denmark, businesses are taxed 25 per cent of their declared profits and so unprofitable
companies are tax-exempt. The rise of the virtual economy has made transactions between business units in different
tax-regimes very easy. Intra-firm trade (also known as transfer pricing) can thus ensure that only business units in
favourable tax-regimes are able to report a profit. Taxing an increasingly international and virtual economy will be a
returning issue.

Tough global priorities
Addressing the difficult challenge of putting the right issues on the international agenda and prioritising
resources between them in a manner, which is consistent with both public opinion, and sound use of scarce
resources remains highly important.
In the 1990s, the World Summit for Children set out an ambitious series of goals concerning education, health, access to
clean water, and so on. The cost was estimated at $20 billion a year by UNICEF, who admitted that it was a huge sum,
but pointed out that this was the equivalent of one week's military spending at that time. Examples like this suggest that
the resources required to provide for the basic needs of humanity exist in the world economy, and the question is
therefore one of allocation.
Foreign aid for developing countries is another central example of the challenges related to global prioritisation. The 22
member countries of the OECD Development Assistance Committee (DAC), the world's major donors, provided $103.9
billion in aid in 2006, down 5.1 per cent from 2005 in constant 2005 dollars. This amount is, of course, not nearly
enough to support all the foreign aid projects that need funding and prioritisation therefore becomes inevitable.
When deciding on how to allocate resources, it is only natural that experts, like everybody else, tend to think in terms of
their own knowledge and domain of expertise. An economist, for example, would most likely think that cost-benefit
analysis is an objective way to decide such an issue. A politician might pay more attention to the questions of power,
influence and governance that would determine the outcome of any decision. A priest, a doctor, a business leader and a
police officer would bring their own differing worldviews to bear on the exercise.
Nonetheless, there would probably be a consensus on at least the broad priority areas, with the rest of a list more
influenced by personal experience, preferences and prejudices. Healthcare would be near the top of most lists, although
within this the main priority may be HIV/AIDS, malaria or maternal and child health depending on the criteria retained.
Problems that are much talked about in the media would also figure prominently, for example global warming or
refugee crises.
For the policy maker who has to make decisions, the challenge is to reconcile budget constraints, political pressures,
public opinion, multiple time frames, etc. knowing that the only certain outcome is that many people are going to
disagree with the choice, whatever it is.
In a Danish context, the challenge of prioritising the major issues on the international agenda became highly relevant
through the much-debated Copenhagen Consensus project. The project revolved around developing a prioritised list of
world issues aiming at the most rational allocation of an imaginary $50 billion between them. Although, the
methodological, ethical and economic aspects of Copenhagen Consensus gave rise to much controversy, the necessity
of prioritising finite resources among infinite needs were clearly illustrated. In reality, the resources made available for
solving the world's problems are extremely limited, and choices have to be made as to which good cause wins the
competition. In the real world, Denmark donates about DKK 13 billion a year to foreign aid. These means must not only
be prioritised between worthy projects in developing countries, but also be weighed against competing investment
opportunities in Danish society. Providing a firm basis for the prioritisation of limited means between an unlimited
number of worthy investments in the space between ethics, morality and economic logic will likely continue to be an

Nature
We are dependent on the environment around us and nature contains many challenges. The challenges in this category
are related to animals, plants, fungi, bacteria and other natural phenomena.

Acidity
So far, the more calcium-rich soil in Denmark has provided some protection for wildlife and the effect of acid
rain is mostly felt in calcium-poor regions in mid- and western Jutland, where lakes and streams are now
souring.
Acidity can have negative impacts not only on water, soil, the air and the lifeforms that depend on them, but also on
buildings and materials. The main cause is airborne deposition of sulphur, nitrogen oxides and ammonia. Sulphur is the
biggest contributor, mainly sulphuric acid from coal and oil combustion. Anthropogenic emissions of sulphur in Europe
rose sharply from 1945 to the end of the 1970s, but land-based sources started to decline, falling by almost 75 per cent
over 1980-2003. However, emissions from international shipping in European waters nearly doubled, and constitute the
main source of sulphur pollution in some areas. Emissions from land-based sources of nitrogen oxides in Europe have
also fallen, by over 30 per cent in 1980-2000, but emission reduction from land-based sources has been offset by rising
emissions at sea, which have almost doubled since 1980. The European Commission has promised to draft legislation
by the end of 2007 to combat shipping's growing contribution to climate change, given that CO2 emissions from
shipping. These measures would also contribute to reducing sulphur emissions.
Local efforts to reduce factors that contribute to acidification can be countered by other influences. Many countries that
have made considerable efforts to reduce their own pollution suffer from that transported from elsewhere. This means
that internationally, the problem could get worse because of projected energy consumption patterns in major emerging
economies. World coal demand is projected to grow from 2700 million tonnes oil equivalent (mtoe) today to almost
4,500 mtoe in 2030. China plans to expand coal-fired generation capacity from 302 GW in 2004 to 661 GW in 2020,
and India from 73 GW to 160 GW.
The impacts of acidification that are already visible show the urgency of not allowing the situation to degenerate. A
quarter of the trees in Europe are damaged by pollution, much of it due to acid rain and soil acidification and many
lakes can no longer support fish. The oceans could also suffer major damage. Acidity levels of the ocean have increased
by 30 per cent due to the CO2 they absorb from the combustion of fossil fuels. As CO2 dissolves, it produces carbonic
acid, which can erode protective shells and other structures of sea creatures, including coral, zooplankton and other
creatures vital to fisheries. In some areas of the North Pacific researchers already have detected a kind of saturation
point where acidity causes shells to disintegrate faster than they can grow and if trends continue, this phenomenon will
probably spread to other oceans and depths.
The environment around us is becoming increasingly acidic, as a result of emissions from the combustion of fossil fuels
being emitted into the air through exhaust pipes and industrial chimneys and gradually falling or are washed out of the
air as acid rain. Up to some point, nature works as a buffer as plants and trees absorb and decompose these pollutants.
However, saturation eventually occurs and soil and lakes and streams begin to sour. In Sweden, more than 10,000 lakes
are now without fish-life because of acidity and another 10,000 lakes are experiencing increased fish-death. In Norway,
an area the size of 40 per cent of Denmark is now devoid of fish-life in lakes and streams. Conditions in northern
Germany are likewise worsening. So far, the more calcium-rich soil in Denmark has provided some protection for
wildlife and the effect of acid rain is mostly felt in calcium-poor regions in mid- and western Jutland, where lakes and
streams are now souring, but the increased acidity of our environment is an important challenge.

Chemical side effects
The average Danish consumer is exposed to a very wide range of manmade chemical compounds every day
throughout their lives. An estimated 30,000 manmade substances are currently in use in everyday goods and
services.
World production of chemicals rose from 7 million tonnes in 1950 to over 400 million today, and this growth is likely
to continue over the coming years. Of the 2,500 most abundantly produced chemicals in the EU, the effects on the
environment and the human health are only properly known for 3 per cent.
Many chemicals, e.g. pesticides and air-fresheners, are deliberately released into the environment, while others find
their way through sewage outlets and waste dumps. When released into the environment, some chemicals are naturally
decomposed over a limited period of time and are rendered harmless. Other chemicals are persistent and permanently
remain in natural organisms. These substances are then gradually accumulated and concentrated through the food chain
and often end up in human consumption. Scientists have estimated that every living human body contains at least 700
contaminants (the body burden ), some of which can remain for decades. The vast majority of chemical substances
were put on the market without a thorough examination of their toxicological and ecotoxicological characteristics. In
the European Union, the evaluations performed in the past 10 years on just 1 per cent of more than 30,000 chemicals
resulted in 70 per cent of, the 1 per cent, being classified as dangerous substances .
Toxic chemicals can cause a frightening range of health problems through various mechanisms, including direct
damage to the lungs, liver, kidney, bones, blood, brain and other nerves, and the reproductive systems. Chemicals that
cause cancer are called carcinogens; those that cause birth defects are called teratogens; the normal development of the
foetus, infant, or child, and functioning of reproductive tissues are called developmental/reproductive toxicants; and
chemicals that interfere with normal hormone function are called endocrine disrupters (these have been shown to make
some male fish develop egg proteins or become hermaphrodite and to transform female whelks into male.) Although
many of these effects are observable, the chemicals causing them are often hard to identify. Some chemicals, although
harmless when released, react with the natural environment or even other man-made chemicals; creating secondary and
synergistic effects in ways we know little about.
The average Danish consumer is exposed to a very wide range of manmade chemical compounds every day throughout
their lives. An estimated 30,000 manmade substances are currently in use in everyday goods and services. In a Danish
context as elsewhere, the regulation of these substances has proven highly problematic. It is difficult to chart the long-
term implications and synergistic effects are hard to determine and entail the problem of who should benefit from the
inevitable doubt about such risks. While Danish health and safety legislation is comparatively strict and has grown more
so over the past decades, such national legislation is often made obsolete, as supply chains have grow longer and now
spans many regulatory regimes with different health standards in both production and consumption. The success of
these efforts has been mixed, as strong interests are involved, national as well as industrial. The chemical industry is an
important contributor to the economy in several large European countries, especially in Germany, and chemical
innovations has reduced the production costs of many existing products and processes and made possible a widening
range of new ones in ways not easily substituted. In many ways, this is a challenge of taking the good without the bad:
how can we enjoy the wealth of new useful processes and products that are introduced into our everyday lives without
suffering from their harmful side effects? As technology presses on, this challenge is likely to become evermore
relevant.

Clear waters
Natural groundwater in Denmark is generally of high quality, requiring only minimal treatment before
consumption, but maintaining quality has become a challenge, as pollution from agriculture, industry, and old,
unsealed waste dumps is seeping through natural ground layers and reaching groundwater reservoirs.
Water supply and demand in the coming decades will be shaped by demography, economic development, government
policy and possibly climate change, although this effect will be marginal compared with population and economic
growth over the time period considered. The problems of supply and quality will occur in those countries the least well-
equipped to deal with them. Over 1 billion people do not have access to the 20 to 50 litres of safe freshwater needed
daily for basic needs. Two people in five lack proper sanitation facilities, and every day, 3,800 children die from
diseases associated with a lack of safe drinking water and proper sanitation. Over half of the 12,500 cubic kilometres of
freshwater available for human use is already used and 90 per cent will be used in 2030 if current trends continue. If
present consumption patterns continue, two out of every three persons on Earth will live in water-stressed conditions by
2025.
Irrigation will continue to represent the biggest single demand on primary water supply (around 70 per cent), but non-
irrigation water demand will increase by 96 per cent in developing countries, and by 22 per cent in developed countries.
To meet the water needs projected for 2025, the world must develop 22 per cent more primary water supply and
although worldwide investment in the water sector is $80 billion a year today, a further $100 billion a year is needed to
2025 to meet needs, leading to fears that there may be increasing numbers of "water refugees" and even armed conflicts
over access to water. Human activities now produce more biologically usable nitrogen than is produced by all natural
processes combined, and more than half of all the manufactured nitrogen fertilizer ever used on the planet (first
produced in 1913) has been applied since 1985. The flow of nitrogen to the oceans has doubled since 1860. The use of
phosphorus fertilizers and the rate of phosphorus accumulation in agricultural soils both increased nearly threefold
between 1960 and 1990. Although the rate has declined somewhat since then, phosphorus can remain in soils for
decades before entering the wider environment.
One of the most worrying challenges concerns nutrients such as nitrogen and phosphorous from pesticides, fertilizers
and other agricultural sources. Dissolved nutrients can stimulate algal blooms and eutrophication, thereby depleting
oxygen and killing aquatic organisms. Dissolved nitrates in drinking water can also harm human health. Nitrates are
highest in areas with intensive livestock and crop production, especially in the northern parts of Western Europe.
Overall nitrate concentrations in monitored European rivers have not changed significantly since 1980, despite lower
nitrogen fertilizer application rates since the 1990s. Similar regional patterns are also evident for phosphorous trends.
Although concentrations have decreased significantly since 1985, mostly due to improvements in wastewater treatment
and the reduced use of phosphorous in detergents, levels remain a problem in most regions of Europe.
Groundwater aquifers are also affected, notably because of leaching of pollutants from agriculture, industry, and
untreated sewage, as well as saltwater intrusion caused by overpumping. Because groundwater is primarily used for
drinking water, pollution can cause serious human health problems. The damage can be long lasting, partly because of
the very long time needed to flush pollutants out of the aquifer. As with surface waters, nitrate pollution is one of the
most serious threats.
Danish water supply is based on over 50,000, largely decentralised ground water wells, which provide 99 per cent of the
drinking water. Most are small, private wells supplying individual households and farms, while larger waterworks
supply industry and cities. Natural groundwater in Denmark is generally of high quality, requiring only minimal
treatment before consumption, but maintaining quality has become a challenge, as pollution from agriculture, industry,
and old, unsealed waste dumps is seeping through natural ground layers and reaching groundwater reservoirs. Today,
pesticides and nitrates from agriculture affect half of the ground water down to 40 metres. As the process of gradual
pollution-seepage to still deeper reservoirs will continue, drilling deeper wells merely postpones the inevitable and a
lasting solution will have to be found. Climate change will likewise affect ground water quality in years to come. First,
as the average annual temperature in Denmark rises by between 1-5oC, the water will become warmer, creating a more
favourable environment for bacteria. Second, as precipitation gradually decreases during summer, shortfalls of water
supply are likely to be more frequent. Thirdly, the increased precipitation during winter increases the risk of nitrogen-
leakage from the soil to ground and surface waters. More frequent flooding, caused by extreme weather is a fourth
consequence, and may cause freshwater reservoirs to mix with incoming seawater. As a consequence of these
challenges both the domestic and global markets for water management solutions will likely be of great importance to
Danish industry. Long-term preservation of the ground water cycle to secure plentiful, high quality drinking water is
thus an important challenge for the future.

Climate change
Climate change means different things at different latitudes. In Denmark, the gradual warming of the climate by
some 1-5oC of the annual average, will have a very wide range of effects over the coming years some
favourable, some unfortunate and some as yet unknown.
Climate change is affecting physical, ecological, and social systems everywhere and is among other factors a result of
historical emissions of greenhouse gases (GHG). These emissions are projected to grow by 60 per cent over the next 20-
30 years, resulting in an estimated increase in global temperature of 1.8 C by 2050 and further increases to 2,100. The
world s oceans have also been warming over the past few decades. Natural factors alone such as volcanoes and changes
in solar radiation cannot explain this phenomenon. Atlantic Ocean circulation may be slowing. Carbon dioxide and
methane concentrations are higher than at any time in the last 650,000 years. The estimated decline in "end-of-summer"
Arctic sea ice is now approximately 8 per cent per decade, and 87 per cent of the glaciers in the West Antarctic peninsula
have retreated. Changes in ocean acidity due to increases in CO2 emissions, first reported in 2004, are dramatically
altering ocean chemistry and may threaten marine organisms.
Arctic sea ice and permafrost areas will decline further, western areas of North America may undergo more persistent
droughts and southern parts of Europe will see water deficits due to precipitation declines. Significant impacts will
grow over time as temperatures and sea levels continue to increase during the latter part of the century and beyond, and
could be made worse by feedback effects, for example if reduced snow and ice cover means less sunlight is reflected
and more heat absorbed. The duration and size of wildfires in the western United States is now partially attributed to
changes in summer temperatures and earlier spring snowmelt. Ecological systems of all types are shifting in elevation
and geographical location. A delay of 25 years in stabilising atmospheric concentrations could lead to a 50 per cent
probability of a temperature rise exceeding 2 C because large emission sources currently being planned will remain in
place for decades. Most scientists agree that increases above this value would lead to extreme changes.
Climate change means different things at different latitudes. In Denmark, the gradual warming of the climate by some
1-5oC of the annual average, will have a very wide range of effects over the coming years some favourable, some
unfortunate and some as yet unknown. Higher temperatures, rising waters, fiercer storms and increasing precipitation
will affect such diverse areas as coastal zones, inland waterways, ground water quality, infrastructure, buildings,
agriculture, fisheries, forestry, energy supply, insurance policies and land use. Seemingly small, long-term changes in
the climate will have a massive impact on society when the true range of consequences is taken into consideration. The
very diverse challenges posed by climate change are likely to be present for a very long time to come. Looking beyond
the temperate Danish climate, the impact of climate change on Greenlandic ecology and economy is likely to be
profound. With its 2,166,086 square kilometres, Greenland is roughly fifty times the size of Denmark, extending some
2,600 kilometres from the North Atlantic in the south to the Arctic Ocean in the north. 85 percent of Greenland is
permanently covered in ice up to three kilometres thick. Over the coming decades, the average temperature in southern
Greenland will rise about two degrees, while northern Greenland will experience temperature rises of some 6-10
degrees. Extended growth seasons on- as well as offshore will, however, increase survival rates of most species.
Exceptions include highly specialised species adapted to the extremely dry and cold north, such as mush oxes, polar
bears, the ring seal and shallow-water birds. The Greenlandic society of some 57,000 people will likewise be affected
by climate change. Overall, current estimates suggest that climate change will have a positive impact on the
Greenlandic economy, while impacts upon the traditional hunter-culture will be severe. Fishing - the primary economic
sector in Greenland - will benefit from expanding fish stocks and tourism is likely to flourish during warmer summers.
Conversely, traditional culture and hunting methods relying on dogsleds and kayaks will suffer from poorer quality ice
and retreating game. Preparing for the effects of climate change in Greenland will be an important priority in years to
come.

Environmental refugees
Climate change will likely change current patterns of migration and the refugees of the future may be motivated
by environmental disasters in areas such as Sub-Saharan Africa or Bangladesh as well as places not currently
associated with refugees.
According to international law, refugees are people forced to leave their homes for fear of persecution, and because of
this they a right to protection by the international community. Without a change to the Geneva Convention,
environmental refugees as a category will have no legal existence and no special rights. Lack of definition is not just a
legal problem; it makes understanding and reacting to the issue more complicated. For most governments,
environmental refugees are no different from economic migrants, and would not be accorded priority for asylum, for
example. Sometimes of course this distinction is meaningless, as when drought or another environmental catastrophe
destroys a poor family's livelihood and the ecosystem on which it depends. Millions of people are uprooted by gradual
environmental change and are therefore not recognised as refugees, with the benefits that it bestows.
A working definition would be that environmental refugees are people who flee their home as a consequence of
drought, soil erosion, desertification, deforestation, inundation or other environmental problems. There were 25 million
people in this situation in 1995, the last time an estimate was made, compared with 27 million normal refugees. At
that time, there were 135 million people threatened by severe desertification, and 550 million people subject to chronic
water shortages, many of whom may have migrated for environmental reasons without being counted. Another 100
million people lost their homes in the 1990s because of dams and other development projects. The number of refugees
could reach 50 million by 2010, and Red Cross research shows more people are now displaced by environmental
disasters than war. Environment-related migration is most acute in Sub-Saharan Africa, but also affects Asia and India.
Meanwhile, Europe and the United States are witnessing increasing migration pressure from victims of deteriorating
soil and water conditions in North Africa and Latin America.
The problem seems bound to get worse. Morocco, Tunisia and Libya are each losing over 1,000 square kilometres of
productive land a year to desertification. In Egypt, half of irrigated croplands suffer from
salinisation. Turkey has lost 160,000 square kilometres of farmlands to soil erosion. The aquifer on which Yemen's
capital Sana'a depends may be exhausted by 2010. In the longer term, climate change is likely to make things worse. A
1m rise in sea level would create 60 million refugees, and even without this, the increased severity of storms could
affect the 16 megacities situated on coasts, 12 of them in developing countries. Hurricane Katrina did not hit a
megacity, but damage is estimated at over $80 billion. For example, while desertification costs $42 billion a year
through the loss of agricultural produce alone, the UN Anti-Desertification Action Plan would cost no more than $22
billion a year.
During the last century, a number of distinct waves of immigrants have arrived in Denmark for various reasons. In more
recent history the first wave consisted of Polish workers leaving poverty and unemployment in Poland to join a labour-
starved agricultural sector in Denmark at the beginning of the nineteenth century. Next, Hungarians fled to Denmark
after the Soviet Union crushed the Hungarian insurgency in 1956. The third wave of refugees, arriving in 1967,
consisted of Polish Jews fleeing Soviet persecution. Finally, from the 1970s until today, Arabs and North Africans have
fled to Denmark to escape persecution, conflict and poverty. While the immigrants of the past were motivated by tragic
political and economic events, the refugees of the future may equally be motivated by environmental disasters like those
arriving already today from areas such as Sub-Saharan Africa or Bangladesh. Environmental problems can change the
conditions under which people live in various places around the world and may change current patterns of migration.
Environmental refugees may well come from places which are not currently associated with refugees. The challenge of
getting ahead of the curve on environmental refugees by either pre-empting the existence of such refugees or preparing
for their arrival has yet to be addressed.

Noise pollution
Unwanted noise is a constant intrusion into our lives. Traffic, people, sirens, construction, industry and
electronic devices emit a constant backdrop of white noise throughout our day and sometimes throughout our
nights.
Noise pollution is unlike other forms of pollution in that it is generally short-lived and the definition is highly subjective
any form or level of noise could be considered as pollution if it provokes unwelcome effects. Nonetheless, some
objective criteria are available. At 45 decibels, the average person cannot sleep. Hearing damage begins at 85 dB, while
at 120 dB the ear registers pain. There is evidence that among young Americans hearing sensitivity is decreasing year
by year because of exposure to noise. Recent research indicates that noise can reduce life quality and cause a number of
non-auditory effects including lack of sleep, irritability, heartburn, indigestion, ulcers, high blood pressure, and possibly
heart disease. One burst of noise, as from a passing truck, is known to alter endocrine, neurological, and cardiovascular
functions in many individuals; prolonged or frequent exposure to such noise tends to make the physiological
disturbances chronic. In addition, noise-induced stress creates severe tension in daily living and contributes to mental
illness.
A number of trends could worsen the objective and subjective aspects of the problem in the years to come. All forms of
traffic are expected to grow. Round the clock living means that places of public entertainment will be open longer,
and changing work patterns mean that many people will not have the same timetables as their neighbours. Older people
are generally more sensitive to noise pollution, and their numbers will increase through population ageing.
Unwanted noise is a constant intrusion into our lives. Traffic, people, sirens, construction, industry and electronic
devices emit a constant backdrop of white noise throughout our day and sometimes throughout our nights. In Denmark,
some 165,000 households are located in areas with an average noise-level of more than 65 decibels. Road traffic is the
major reason for the increase in noise pollution over the past decades, as the traffic density is on the rise especially in
cities. At the same time, people have become more willing to pay to avoid noise pollution. This, coupled with a
decreasing tolerance of unwanted noise has lead to increased pressure to find solutions through regulation, insulation,
altered habits and better working environments. This noise pollution emitted from new as well as old sources is a
challenge to our everyday lives as cities cramp up and infrastructure becomes denser.

Oxygen depletion
Oxygen depletion has been a growing problem for many species living in inner Danish waters. At moderate
oxygen depletion fish generally migrate the area. If oxygen-levels are not restored, most sediment-species die and
the ecosystem do not recover for decades.
A number of human activities including agriculture, waste disposal, and energy generation and consumption are
increasing the amount of nutrients in both inland waters and the oceans. Human activities now produce more
biologically usable nitrogen than is produced by all natural processes combined, and more than half of all the
manufactured nitrogen fertilizer ever used on the planet (first produced in 1913) has been applied since 1985. The flow
of nitrogen to the oceans has doubled since 1860. The use of phosphorus fertilizers and the rate of phosphorus
accumulation in agricultural soils both increased nearly threefold between 1960 and 1990. Although the rate has
declined somewhat since then, phosphorus can remain in soils for decades before entering the wider environment.
When the concentration of nutrients is too high, it can stimulate excessive plant growth, a process known as
eutrophication. Eutrophication in turn contributes to two other environmental problems: harmful algal blooms (HABs)
and the depletion of oxygen dissolved in bottom waters (hypoxia). Both HABs and oxygen depletion affect whole
ecosystems, with direct and indirect effects on human health, food supplies, and recreation. In the Baltic Sea, hypoxia
contributed to the collapse of the Norwegian lobster fishery, and there is evidence that hypoxia off the coast of
Louisiana harmed the shrimp fishery and possibly contributed to the replacement of bottom-dwelling species such as
snapper with less valuable mid-water species. Oxygen depletion has other causes too, none of which are likely to
diminish in the coming years, for example the cooling water used in electrical power generation. This water is generally
returned to the source, and often has a higher temperature than when it was abstracted, and a lower oxygen level,
leading to oxygen depletion in freshwater ecosystems.
The complex evolution of ecosystems and interactions renders policy making in this domain difficult, the more so given
the wide range of economic activities that contribute to the problem and suffer from it. Policies with the best chance of
success may be those with benefits for those who might potentially be harmed. For example, fertilisers are a major
source of nutrients in some ecosystems, and they are also expensive. To reduce fertiliser use would thus benefit both
the environment and the farmers themselves. Likewise, improved sewage disposal and waste recycling could have
benefits for human health and possibly positive economic impacts too. Restoring natural defences such as wetlands
could have indirect payoffs in tourism, as well as a positive impact on biodiversity.
Oxygen depletion has been a growing problem for many species living in inner Danish waters. Oxygen depletion
happens when the temperature of nutrition-rich, still water exceeds 21.5°C. Above this temperature, algae breeds
explosively and eventually die and fall to the bottom. Here, bacteria use oxygen to consume the algae and the oxygen
content in the water is gradually depleted. Oxygen depletion is thus a natural process, but today, this process is
amplified by additional nutrition released from households, industry and agriculture in the form of fertiliser, human
waste and phosphate from bottled water. These pollutants cause increased algae-growth during spring and late summer,
thus up-scaling the process. The oxygen content is of vital importance to the ecosystems inhabiting these waters. At
moderate oxygen depletion fish generally migrate the area. If oxygen-levels are not restored, most sediment-species die
and the ecosystem do not recover for decades. With the gradual warming of the climate, the critical temperature 21.5°C
will be reached more often and this challenge may thus put increasing pressure on ecosystems in inner Danish waters
over the coming decades.

Particle pollution
Although air pollution constitutes only a minor risk factor on the individual level, it seems to be a major public
health problem. It thus remains a significant challenge to solve the adverse effects of a transport sector which
remains vitally important to the Danish economy and which continues to grow year by year.
Despite improvements in ambient air quality in most European countries, exposure to air pollution still leads to adverse
health effects. Normal people inhale some 15 litres of air every minute throughout their life. The air we breathe contains
a multitude of particles of differing size and chemical composition, which in various ways affect health and well-being.
Many of these particles are of natural origin (eroded rock particles, soil dust, water vapour, etc.) and are composed of
harmless substances. In recent years, however, an increasing amount of ultra-fine particles present in the air are of
human origin. These particles, primarily produced by traffic exhaust, are ultra-fine (0.01-0.1µm) and are composed of
partially burnt fuel, lubricants, sulphuric acid, PAH s and heavy metals. These smaller particles are better able to stay
afloat in the air for longer, and are only occasionally washed out by rainfall.
It is estimated that exposure to fine particulate matter in outdoor air leads to about 100,000 deaths (and 725,000 years of
life lost) annually in Europe. Exposure to particulate matter and ozone is associated with increases in hospital
admissions for cardiovascular and respiratory disease and mortality in many cities. Epidemiological studies are
identifying adverse effects from air pollution at increasingly lower levels. For some pollutants and adverse health
effects, effects are expected even where air quality standards are being met, so it may be better to replace the threshold
concept with complete exposure/concentration response relationships for different health endpoints (e.g. diminished
pulmonary function) when designing strategies to reduce adverse effects on human health. The challenge of particle
pollution will become even more urgent as the density of traffic increases over the coming years.
Fuel use for road transport in Denmark increased by 48 per cent over 1985-2004, but emissions of many pollutants
nonetheless declined thanks to stricter emission standards. Particulate mater (PM) from exhausts declined by 35 per
cent, CO by 58 per cent, NOX by 34 per cent, and non-methane volatile organic compounds (NMVOC) by 66 per cent.
However, emissions of N2O increased by 301 per cent mainly due to high emissions from gasoline catalyst cars. For
other mobile sources such as aviation or agricultural machinery, fuel use and CO2 emissions decreased by 15 per cent
from 1985 to 2004. Emissions of PM declined by 46 per cent, NOx by 14 per cent, and NMVOC by 10 per cent. For
SO2 emissions dropped by 74 per cent, due to gradually lower fuel sulphur contents. For CO the 1985 and 2004
emissions are the same. While these trends are encouraging, epidemiological studies show that there is no room for
complacency. Average population exposure to PM is about 22 micrograms/m3, about one third of which is not
anthropogenic. The number of cases per year attributable to the estimated exposure included about 5,000 deaths, 5,000
hospital admissions, 5,000 cases of chronic bronchitis, 17,000 cases of acute bronchitis, 200,000 asthma attacks, and
about three million restricted activity days. The health-related gains from installing particle filters on all heavy-duty
vehicles in Denmark are uncertain: estimates for mortality ranged from 22 to 1,250, depending on the assumptions.
Although air pollution constitutes only a minor risk factor on the individual level, it seems to be a major public health
problem. It thus remains a significant challenge to solve the adverse effects of a transport sector which remains vitally
important to the Danish economy and which continues to grow year by year.

Retreating wildlife
The intensity of human activity has risen enormously during the past 50 years and the Danihs land area is now
one of the most intensely utilised in the world. Natural areas such as lakes, bogs and scrubland take up less than
a tenth of the total area.
Some 12 per cent of birds, 25 per cent of mammals, and at least 32 per cent of amphibians are threatened with
extinction over the next century, and humans may have increased the rate of global extinctions by up to 1,000 times the
natural rate typical of Earth s long-term history. The main impacts in OECD countries are likely to remain the
negative effects of agriculture and the positive effects of protected areas. In developing countries, economic and
population growth will add to the pressure on land-use through agriculture, urbanisation and infrastructure
development.
A quarter of the Earth s land surface is now cultivated and more areas are being cleared. In 2000-2006, Brazil cleared
nearly 150,000 square kilometres of forest (an area bigger than Greece) mostly to for cattle pasture. Since about 1980,
35 per cent of mangroves have been lost, while 20 per cent of the world s coral reefs have been destroyed and a further
20 per cent badly degraded or destroyed.
At least one quarter of marine fish stocks are overharvested. The quantity of fish caught increased until the 1980s but is
now declining because of the shortage of stocks. In many sea areas, the total weight of fish available to be captured is
less than a tenth of that available before the onset of industrial fishing.
The Danish land area is one of the most intensely utilised in the world. More than half the landmass is occupied by
agriculture, while infrastructure and buildings take up more than a fifth. About 14 per cent is covered by forest, by far
the larger part of which is under some form of commercial use. Natural areas such as lakes, bogs and scrubland take up
less than a tenth of the total area. The intensity of human activity has increased enormously during the past 50 years.
Today, many wildlife areas are completely surrounded by human activity. Preserving and restoring wildlife, including
the biodiversity at the scale of landscape, species and genetics, while dealing with increasing demands for more land for
buildings and infrastructure is a major challenge today and will be no less so in the future.

Rising waters
Rising waters, fiercer storms and increasing precipitation will increase coastal erosion, flooding frequencies and
put sewage systems and harbour facilities under pressure.
Scientific uncertainty concerns the rate of the rise, not whether it will happen, but there is medium confidence in the
Intergovernmental Panel on Climate Change (IPCC) that at least partial deglaciation of the Greenland ice sheet and
possibly the West Antarctic ice sheet would occur over a period of time ranging from centuries to millennia for global
warming ranging from 1 to 4 degrees, causing a contribution to sea level rise of 4-6 m or more. The complete melting of
the Greenland ice sheet and the West Antarctic ice sheet would lead to a contribution to sea-level rise of up to 7 m and
about 5 m, respectively. Prediction is complicated by the possibility of feedback effects that could accelerate the
process. For example, reduced snow and ice cover would mean less sun reflected and more heat absorbed by the Earth,
making more melt possible and releasing methane trapped in the tundra, thereby contributing to still further atmospheric
heating.
Sea-level rise will expose coasts to increasing risks, including erosion, and the effect will be exacerbated by increasing
human-induced pressures on coastal areas. The population living within 30 km of the coast is growing at twice the
global average, and GDP growth in coastal areas exceeds the national average in many countries. Deterioration in
coastal conditions, for example through erosion of beaches and coral bleaching will have particularly devastating effects
on poor countries that depend on tourism and fisheries.
Estimates of the total costs of coastal protection against a 1m rise range from $13 billion to $47 billion per year over the
21st century, with the lower figure assuming optimal protection strategies. Responses will include coastal protection,
managed retreat from threatened areas or realignment, abandonment, measures to reduce wave and current energy,
morphological modification of coasts, and resilience building and vulnerability reduction measures. No one response is
likely to be pursued in isolation, with coastal management strategies instead being based on a portfolio of options in an
integrated way. Otherwise, protection of one area can increase vulnerability elsewhere.
Denmark is a nation of islands and peninsulas with some 7.300 km of coastline and countless inland waters. The effect
of climate change upon the surrounding waters will likely be of key importance for centuries to come. Rising waters,
fiercer storms and increasing precipitation will increase coastal erosion, annual flooding frequencies and put sewage
systems and harbour facilities under pressure. Dike-systems currently protect some 1.100 km of the total Danish
coastline, and future reinforcement projects are raising questions about the cost-efficiency of protecting some remote
areas and thinly populated islands. Likewise, large parts of Danish sewage systems will be insufficient at handling the
increasing water flows. Sound, long-term planning, new radial innovations and political consensus about such massive
infrastructural investments will be a key theme in national as well as regional policy for many years to come.

People
People are the purpose of society and society is shaped by the diversity of human life in all its phases. This category
contains challenges related to upbringing, education, behaviour and well-being.

Alternative medicines
Patients themselves are increasingly embracing the merits of alternative treatments and are demanding more
holistic treatments from public health care. How should the established health care sector respond to the
growing market for alternative treatments and the patients who demand them?
Complementary and alternative medicine (CAM also called traditional medicine) means different things in different
countries, for example osteopathy, acupuncture and homeopathy are offered by some public health systems but not
others. Alternative medicines are used instead of standard treatments, complementary medicines are used with them.
Definitions are complicated by cultural factors, with Chinese and ayurvedic medicine being the standard for many
people. This cultural aspect is likely to be particularly important in areas with large immigrant communities, and for
health authorities who have to decide what to license and finance. A further complication is the wide range of CAM
therapies (a joint EU-WHO report talks of over a hundred), ranging from biologically-based approaches that are similar
to standard medicine, to art therapy and faith-based healing.
The demand for alternative medicine in the EU is significant and growing, mostly financed directly by the consumer,
and is part of self-care. The accumulating evidence of the efficacy and effectiveness of some CAM is likely to challenge
their exclusion from public financing systems, at the same time as insurers and governments are seeking to reduce
public health expenditure overall. Integration of CAM into orthodox practice is likely to continue, but the tension
between doctors who prescribe (and dispense) allopathic medicines and practitioners (and patients) who utilize
alternative medicines will not dissipate rapidly. While many CAM treatments may have little or no real medical
implications for patients, others that involve consuming substances could provoke interactions with standard treatments,
so steps may be needed to strengthen mutual understanding and facilitate dialogue and openness between practitioners
and users of allopathic and alternative medicines. Licensing of homoeopathic and herbal medicines is being
strengthened at the EU level together with systems of pharmacovigilance (monitoring undesirable effects of drugs). As
alternative medical practitioners gain statutory recognition or further develop systems of voluntary self-regulation in
certain member states, provisions may be needed to ensure that regulations are compatible across borders.
The WHO recommends that countries implement policies and regulations that support the proper use of traditional
medicine, and its integration into national health care systems; set up or expand and strengthen existing national drug-
safety monitoring systems to monitor herbal medicines; and promote sound use of traditional medicine and
complementary and alternative medicine by consumers and providers.
Non-conventional medicines are increasingly influencing the health care sector. Patients themselves are increasingly
embracing the merits of alternative treatments and are demanding more holistic treatments from public health care.
More holistic treatment, with the patient at its centre rather than isolated symptoms and diseases, is putting pressure on
the medical profession. In Denmark, many of these alternative treatments are offered on a grey market , spanning
ancient herbal medicines as well as new age religions. According to a study published in 2006 by the Danish Institute of
Public Health, the percentage of people who have used alternative treatment rose from 23.6 to 40.2 per cent between
1987 and 2003. Accepting as well as rejecting alternative treatments is becoming an issue for health care professionals.
An example of a one such development is acupuncture, which has been introduced as a method of general pain relief
and as a means to prevent pregnancy-related nausea. How should the established health care sector respond to the
opportunities and problems of a growing market for alternative treatments and the patients who demand them?

Burdened Families
Growing up in a burdened family has serious life-long consequences. About ten per cent of children in Denmark
growing up in families that are burdened by unemployment, broken homes, psychiatric illness, drug or alcohol
abuse, or violence.
Data on income, education and earnings suggest that children largely inherit their parents' socio-economic status.
From the point of view of social policy, intergenerational inheritance of negative characteristics signals failures
regarding the reduction of social divisions, improving life chances and ensuring equal opportunity for all. For economic
policy, the emphasis is more likely to be on market failures regarding distribution of income and earnings.
Low income and social status are not the only negative social inheritance. A range of social problems often reoccur in
succeeding generations, irrespective of income, although the impacts are often worse when combined with poverty.
The chances of problem behaviours being passed on is greater for cases such as alcoholism, which have a genetic
component, but the factors that contribute to transforming a predisposition into a practice are mostly social, and can
often be addressed by the same policy instruments as other problems. Such problems include conjugal and self-inflicted
violence, child abuse, and drug and alcohol abuse. These are all highly emotive subjects and policy makers may find it
difficult to evaluate causes and policy options objectively when quick solutions are being demanded (and proposed).
Although there might be a consensus that changes in major determinants such as family structures, work patterns and
social norms explain the phenomenon considered; often there is little objective understanding of the mechanisms by
which these changes actually influence outcomes.
For example, the decline in the traditional nuclear family based on heterosexual partnership is well documented, but
relatively little is known about how this increases tensions within the family or about the impact of different
institutional systems in mediating such pressures
Growing up in a burdened family has serious life-long consequences. In a Danish context, the Danish National Institute
of Social Research, in a longitudinal study of children born in 1966, found that social inheritance significantly increase
the odds of social problems at some later point in life. The study found that the risk of violence in the family is four
times more frequent in families with a long-time unemployed father and that the risk of children place in care is six
times more frequent in broken homes. Furthermore, the study found that self-destructive behaviour (drug addition and
suicide) is far more common among people that grew up in a burdened family. For example, the risk of self-destructive
behaviour was found to be two to three time as frequent with children of drug addicts, the risk of self-destructive
behaviour is twice as high for children of parents with psychiatric illness and the risk of self-destructive behaviour is ten
times as high for children that have been exposed to violence during their childhood. With about ten per cent of children
in Denmark growing up in families that are burdened by unemployment, broken homes, psychiatric illness, drug or
alcohol abuse, or violence, dealing with negative social inheritance continues to be a challenge.

Changing patterns of disease
While the number of deaths caused by malignant diseases has remained more or less stable, the number of
deaths caused by cardiac disorders decreased substantially throughout the nineties, making malignant diseases
the number one killer.
Global numbers of deaths are projected to rise from 57 million in 2002 to 64 million in 2015 with a dramatic shift in the
distribution of deaths from younger to older ages and from communicable, maternal, perinatal and nutritional (Group I)
causes to non-communicable disease (Group II) causes. The decline in Group I conditions is due to increased income,
education and technological progress in the development of antimicrobials and vaccines. The projected increase in the
burden of noncommunicable diseases is largely driven by population ageing, augmented by the large numbers of people
in developing regions who smoke or are exposed to tobacco.
The burden of disease is measured by disability-adjusted life years (DALYs). One DALY can be thought of as one lost
year of healthy life. Group I causes are projected to account for 30 per cent of total DALYs in 2030, compared with
over 40 per cent in 2002, and to decrease from 56 per cent to 41 per cent in low-income countries, despite HIV/AIDS.
In 2030, the burden of non-communicable diseases (Group II) is projected to increase to 57 per cent, and to represent a
greater burden of disease than Group I conditions in all income groups. The three leading causes of DALYs in all
scenarios are projected to be HIV/AIDS, unipolar depressive disorders and ischaemic heart disease. Psychiatric and
neurological conditions could increase their share of the total global burden by almost half, from 10.5 per cent of the
total burden to almost 15 per cent in 2020, i.e., a bigger proportionate increase than that for cardiovascular diseases.
The burden of disease is a measurement of the gap between current health status and an ideal situation where everyone
lives into old age free of disease and disability. HIV/AIDS will become the leading contributor to the burden of disease
in middle-income and low-income countries by 2015. Lower respiratory infections, perinatal conditions, diarrhoeal
diseases, malaria, measles, protein-energy malnutrition and congenital anomalies are all projected to decline
substantially in relative importance. Ischaemic heart disease, diabetes mellitus, lung cancer, chronic obstructive
pulmonary disease, age-related vision disorders and cataracts are all projected to move up three or more places in the
rankings. Hearing loss disorders are projected to be among the top ten causes of burden of disease in high and middle
income countries, and Alzheimer disease and other dementias and alcohol use disorders among the top ten causes in
high income countries in 2030. In low-income countries in 2030, malaria and tuberculosis are projected to remain
among the top ten causes of burden of disease, as are diarrhoeal diseases and lower respiratory infections.
As in other European countries, the Danish disease pattern has changed from communicable, maternal, perinatal and
nutritional causes to non-communicable disease. Malignant diseases, for instance lung cancer and breast cancer, became
the most frequent cause of death in Denmark during the nineties. While the number of deaths caused by diseases such as
lung cancer and breast cancer has remained more or less stable, the number of deaths caused by cardiac disorders
decreased substantially throughout the nineties, making malignant diseases the number one killer. Vascular disorders
are by far the most resource-demanding treatment in the health care sector. In 2000, vascular disorders counted for
approximately 4.4 per cent of all healthcare expenditures, while such disorders accounted for 13.1 per cent of
expenditures in 2005. The second most resource-demanding treatments are larger joint operations on hips and legs,
uncomplicated childbirths and rehabilitation. Also, patients with chronic diseases such as asthma, allergies, arthritis and
arthritis are appearing more often. Adjusting the healthcare sector to comply with the changing health pattern is a
continuing challenge not least taking into account the scare resources available.

Competencies or general education?
Should career preparation and competencies be the main focus of the Danish school system, or should the
general education and maturing of students be the basis of the education system and can we have both?
The perception is growing in many countries that education systems designed during periods of mass industrialisation to
provide some education for the majority and the special skills needed by the elite are now struggling to adapt to the
demands of modern societies and economies. On the one hand, it can be argued that the main role of the school should
be to teach students how to learn, given that much of the knowledge they will need and acquire is yet to be created. In
this way of looking at things, the culture needed to analyse and evaluate information and use it in cooperation with
others is at least as important as acquiring the technical competence to perform a given set of tasks. The
counterargument is that too many young people are leaving the education system without the marketable skills that
would allow them to start a satisfying professional life.
Given that one of the main strands of the debate usually involves comparing a given national system with systems in
other countries, it is worthwhile comparing data across countries, if only to rule out certain explanations for the relative
success of some systems. Students in OECD countries receive, on average, 6,847 hours of instruction between ages 7-
14, of which 1,570 hours are between ages 7 and 8; 2,494 hours between 9 and 11; and 2,785 hours between 12 and 14.
On average, reading, writing, mathematics and science comprises nearly 50 per cent of compulsory instruction time of
students aged 9 to 11, and 41 per cent for students aged 12-14. For 9-11-year-olds, the proportion of compulsory
curriculum time devoted to reading and writing varies from 13 per cent or less to 30 per cent. There is considerable
variation in time devoted to modern foreign languages too, ranging from 1 per cent to 21 per cent.
The number of teaching hours per year in public schools averages 704 in the OECD countries, but varies from over
1000 in Mexico and the United States to 534 in Japan. There are also considerable variations in how teaching time is
distributed throughout the year, with, for example, teachers in Iceland working more hours in the year over a 36-week
school year than teachers in Denmark where the school year lasts 42 weeks. However, teaching hours are only one
indicator of what teachers actually do in school. Teachers can also spend significant amounts of time spent on
preparation and marking or extracurricular activities. Schools are increasingly being called on to play a role beyond
their academic duties to students, since some of the work of "socialising" children is no longer carried out to the same
extent by parents and other social groupings such as churches, youth clubs, and so on. This is generally not recognised
in school curricula, but teachers in many countries claim that time that should be spent teaching has to be devoted to
discipline, or solving various problems involving families, administration, etc. This is becoming a major challenge in
itself for many education systems.
In Denmark, nine years of school is mandatory. In recent years not least in the aftermath of the reforms of the public
school system in 2006 the debate about the purpose of the school has intensified. The result has been the
establishment of a contrast between those who emphasise that the role of the school is to give the students competences
and those who highlight more general education. On the one hand it has been argued that the Danish school does not
prepare its students for further education. Such arguments have been backed by the OECD PISA-survey, which places
the reading, math and science competences of Danish students in the lower end. Thus it has been argued that if nothing
is done, Danish students will fail in the global competition. Therefore it is necessary to introduce mandatory tests and
curriculum to improve the competences of Danish students. On the other hand the argument has been that the Danish
school system actually functions well, and that the PISA-survey does not measure that Danish students score high on
social and personal competences, e.g. the ability to participate and cooperate. Thus the argument is that a thorough
reform with mandatory tests etc. of the Danish school system would be to throw the baby out with the bathwater,
clipping the unique, historical funded, strength of the Danish school system, namely its general educational qualities.
Whether the role of the school should be preparatory and focus predominantly on competences, or whether it should
focus on general education or both, thus, is an outstanding issue in the Danish educational debate and a continuing
challenge.

Competitive health care
Free patient choice of hospital combined with more private hospitals is increasing competition in the health care
sector. Around a quarter of a million Danes currently hold private health insurance. This number is growing
and public interest in this option is increasing.
Spending on health care grew faster than GDP in every OECD country except Finland over 1990-2004, rising from 7
per cent of GDP to almost 9 per cent. Competition is seen as one way to curb the rising costs, but a free market in health
would not achieve the highest level of social and consumer welfare, for various reasons. First there is the presence of
insurance, which means that the consumer-patient is rarely aware of the true cost of an intervention, and may have to
pay nothing at all. Being insured against the consequences of a risk may also encourage acceptance of the risk. There
are also cases where market logic is not applied to insurance for social reasons, e.g. smokers are still covered although
they greatly increase their chances of getting cancer. Second, consumer information is incomplete, and generally comes
from a source that may have a particular reason for advising a given course of action, e.g. the practitioner who is to
carry out the treatment. Third, there are externalities, i.e. the costs and benefits that are not accounted for directly in
prices, as when the treatment or non-treatment of a person with a contagious disease influences public health.
Free patient choice of hospital combined with more private hospitals is increasing competition in the health care sector.
Increased emphasis has been put on cost-effective processes and professional management of hospitals. Private health
care insurance is also increasing, with an increasing number of private firms purchasing additional private health
insurance for their employees. Recruitment, education and training of health care professionals will thus continue to be
important issues on the health care agenda. Recent estimates suggest that around a quarter of a million Danes currently
hold private health insurance. This number is growing and public interest in this option is increasing. This raises the
issues of the interplay between the public and private health care system.

Declining populations
The Danish population is currently failing to reproduce itself. On average, Danish women give birth to 1.8
children, which is a fall from 2.0 in the mid-1970s.
Population decline is not a global challenge, indeed overpopulation and unsustainable population densities will be
problems in many places, particularly the cities of developing countries which will have to absorb over 2 billion of the 3
billion people that could be added to the world's population over the next 50 years. In other countries however, notably
in the OECD area, population ageing and even decline will be a problem. At an average of 1.6, the total fertility rate is
below its replacement level in most OECD countries except Mexico, Turkey, Iceland and the US.
Reasons invoked to explain the phenomenon include changes in both lifestyles and in the constraints of everyday life,
such employment insecurity, difficulties in finding suitable housing, unaffordable childcare, and failure of policies to
provide adequate support. The positive (and widening) gap between the number of children that women declare they
want and the number they actually have suggests that these constraints are major factor in fertility trends in most OECD
countries.
Fertility decline is also related to changes in the marital status of women. The larger share of unmarried women may
have depressed fertility rates in those countries where the link between nuptiality and maternity is strong. However
childbearing patterns of non-married women have also changed significantly. More than half of all births occur today
outside marriage in the Nordic countries, compared to 1 in 10 in 1960. In 2004, this share was close to 47 per cent in
France and to 37 per cent in the United States. In general, OECD countries where the share of out-of-wedlock birth is
higher also display higher fertility rates.
The trend towards lower fertility rates is accompanied by the postponement of childbirth. The mean age of mothers at
first childbirth has increased on average by around a year per decade since 1970. Besides contributing to fertility
decline, postponement of childbearing increases the probability that women remain childless or have fewer children
than desired, as well as increasing morbidity risks for mothers and children. In Germany, around half the women aged
35 with higher education are childless and around 40 per cent in Switzerland for women aged 40.
The Danish population is currently failing to reproduce itself. On average, Danish women give birth to 1.8 children,
which is a fall from 2.0 in the mid-1970s. Still, a recent Eurobarometer survey showed that the problem it not
unwillingness to have children, in fact, families, on average, wish to have 2.4 children. So what are the barriers to
having more children? And how can Danish society be made more children- and family-friendly? These questions are
particular interesting in a Danish context, since Denmark, like other European countries, has a long history of public
services actively supportive of the family, i.e. child care, maternity leave, etc. A major challenge is how Danish society
can support families in actually having the number of children that they would like to have, thereby countering the
declining population.

Disabled opportunities
Even though conditions for disabled people have improved significantly during the past years, studied indicate
that is remains difficult to live a normal life with a disability.
Disability-related policies face a number of well-known practical challenges such as wheelchair access or designing
information systems for people with learning difficulties. There are formal difficulties too, not the least being how to
define disability. This has important consequences in areas such as labour policy where being diagnosed as disabled
grants access to certain rights. Many countries spend more on incapacity schemes than unemployment. In 2001,
unemployment benefit expenditures averaged 1.5 per cent of GDP in the Nordic countries, 1 per cent in Continental
Europe, Southern Europe and Turkey, under 1 per cent in English-speaking countries, while spending on incapacity
benefits amounted to 4 per cent of GDP in the Nordic countries, 3 per cent in many continental European countries, and
2 per cent in Southern European and English-speaking countries.
Disabled people are often considered of minor importance to the labour market because of psychological or physical
barriers to employment. However, many people classified as disabled can do some form of work. The growth of
disability benefit claimants has involved an increasing share of back pain and mental disorders, which previously were
less frequently compensated and in many cases appear to have been compatible with working. A significant share of
disability benefit recipients does not even classify themselves as disabled. In population surveys, about only one third of
working-age people who consider themselves to be disabled (either registered as disabled or not) report that their
disability is severe. Nevertheless, two-thirds of disability benefit recipients do not work. This suggests that incapacity
benefits may encourage people to exit the labour force and it may be worthwhile to link benefits to incitations to find
employment.
Of course this will not help those who want to work but are victims of discrimination or those who look for work but
find that their training did not equip them with skills employers demand. There is a danger that this mismatch will
widen as the level of education and training in the economy grows. So as well as antidiscrimination measures and
campaigns to change public perceptions, education should be a key component of programmes to help the disabled find
work. The employment rate among highly skilled people with disabilities is almost 50 per cent above those with low
skills or who are unskilled.
For disabled people of retirement age, the challenges are different, with long-term care a major preoccupation. While
old-age disability rates may improve thanks to further improvements in the socioeconomic status of new generations of
the elderly, the rising prevalence of certain chronic conditions, such as arthritis and diabetes, and of certain risk factors,
such as hypertension and obesity, may already be neutralising the positive effect of other factors on the prevalence of
disability at older ages in some countries.
Living a normal life with a disability is not an easy task. A recent study found that, of all minorities in Europe, disabled
people experience the most difficulties in their everyday lives. 79 per cent of all disabled in both Denmark and the EU
indicate that their disability makes it hard to manage in society. A major concern has been accessibility to buildings and
information to ensure that people living with a disability can participate on equal terms in the labour market, as
consumers, at the library, in church, when travelling, on the Internet etc. An international study from 2005 found that
the quality of social services offered to disabled people is comparatively high in Denmark. Nonetheless, the study also
found that labour market participation rates for disabled people are not significantly higher in Denmark than in other
countries surveyed. In light of the aging workforce and expected higher retirement rates, utilising the resources of this
minority will prove increasingly vital both in terms of preventing employee burn out and using the potential of people
born with disabilities. Simultaneously, as the conditions of disabled people have come into focus, Danish industries
working with instruments for diagnostics, treatment and aid has grown significantly. Hearing aids has been the major
area for Danish industry, holding a world market share of some 40 per cent. The challenge as well as the potential of
allowing people with a disability to lead normal lives thus remains highly relevant and promising.

Distributed health services
The challenge of increasing the efficiency of the healthcare system not only involves overcoming rigidity of
established structures and practices, but also the implementation of radically new and often untested technology.
Healthcare provision is fairly centralised in most OECD countries, and the trend has been to regroup services through
the closure of smaller hospitals and to encourage family doctors to work in group practices at health centres rather in
individual practices scattered throughout the city or district. This trend will persist both for reasons of cost-saving and
for quality of service, for example, it is argued that a centralised maternity unit that has the experience and equipment
needed to handle difficult cases is better than a small clinic that sees far fewer births and has much less equipment.
Nonetheless, there will be a number of countervailing trends. For example, the UK government has put forward
proposals to extend the range of health services available from supermarkets, although the proposals are strongly
opposed by doctors' representatives. Increasing private sector involvement will probably reinforce this trend, as will
improved telecommunications.
There are already a number of telemedicine applications ranging from data storage and transmission to robotic surgery.
The Internet could also provide the backbone for telehealth applications, in line with the shift from reactive to
preventive health care strategies and patients' wishes to be able to access health services more readily. The increasing
relative importance of chronic diseases that have to be managed rather than cured will reinforce this trend. By shifting
the balance of health care toward individuals in their own environment (home or workplace, for example), overall
health costs can be decreased through emphasising prevention and better managing minor chronic problems to slow
their progress into major ones. Such a personal health system can also lighten the load on family caregivers, and be
adapted to other settings such as group homes and assisted living facilities.
The Danish Healthcare system faces a range of new demands: The ageing population, entailing more people suffering
from chronic diseases for longer periods of time, while new patterns of disease, increases the need for prophylactic
efforts. Also, development in life-style related diseases and the technological development are expected to increase the
general demand for healthcare. In a Danish context, these challenges have lead to a number of attempts to distribute
health services using telemedicine applications: The city of Aarhus conducted a trial, where patients suffering from
diabetic foot wounds were no longer admitted to a hospital, but were attended to by home-helpers equipped with mobile
computers, transmitting information about the patients condition to specialists. Another example is asthmatic self-
treatment, supervised by physicians over the Internet, which in turn provides advice through an ordinary television set.
The most extensive IT implementation project in recent years has been the electronic patient journals, which
experienced several setbacks, raised issues of data security, and proved far more costly and time-consuming to
implement than first anticipated. The challenge of increasing the efficiency of the healthcare system not only involves
overcoming the natural rigidity of established structures and practices, but also the mindful implementation of radically
new and often untested technology.

Domestic violence
It is estimated that at least 41,000 women, or 2.5 per cent of all women are beaten each year in their own homes.
In two-thirds of the cases, present or pervious partners commit the violence. Domestic violence continues to be a
problem in a Danish context. Breaking the silence and confronting the issue, thus, continues to be a challenge.
The World Bank estimated that in the industrialised countries, domestic violence and rape accounted for nearly one in
five disability adjusted life years lost to women ages 15 to 44. Knowing the true extent of the problem is a challenge in
itself because of under reporting due to fear of reprisals, lack of information about the legal system, etc. as well as under
recording by police and health authorities untrained in dealing with it. Surveys of domestic violence in a number of
countries worldwide suggest that 20 to 50 per cent of women have been victims. However, these surveys usually cover
only direct physical assault, not psychological violence or sexual abuse. Sexual abuse of children is particularly
difficult to measure. From 40 to 60 per cent of known sexual assaults within the family are committed against girls aged
15 years and younger, regardless of region or culture, but the rights of the child are often sacrificed to protect family
honour and the adult perpetrator, so the crime is never reported.
Combating domestic violence means acting on a highly complex set of causes and responses involving cultural,
economic, political and legal factors. The wide variety of situations in which domestic violence is perpetrated means
that strategies to combat it have to be varied too, but they can all share five principles: prevention; protection; early
intervention; rebuilding the lives of victim-survivors; and accountability. It also means combating a number of common
myths. One widely held belief, for instance, is that alcohol causes domestic violence. It certainly can play a role, but
many perpetrators drink only moderately or not at all (particularly where alcohol is forbidden for religious reasons) and
often when the perpetrator has followed a programme to stop drinking, the violence continues. Likewise, the stresses of
poverty can undoubtedly play a part, but domestic violence occurs in all income and social groups. Another widespread
myth is that abusers were abused themselves, but much research shows that the majority did not grow up in violent
homes, and many who did witness or suffer violence as children work hard to make sure it never happens to their own
family.
Almost 3.500 children under 15 years die from maltreatment (physical abuse and neglect) every year in the
industrialised world. The risk of death by maltreatment is about three times greater for the under-ones than for those
aged 1-4, who in turn face double the risk of those aged 5-14. In a 2001 UNICEF survey of 9 to 17 year olds, 59 per
cent of children were found to have experienced violent or aggressive behaviour within their families. However, reliable
data on domestic violence against children are even more difficult to acquire because the phenomena at work in
violence against women (fear, isolation, etc.) are present to an even greater degree, and young children are totally
incapable of doing anything to help themselves. There are also serious gaps in the research. For example, there are few
studies in Europe that include the views of the child victims themselves, perhaps because of the methodological and
ethical challenges this poses (although there are many retrospective studies). There is actually a methodological
challenge in defining what constitutes violence, e.g. in the UNICEF study mentioned above, this was defined as
scolding, insulting or beating children when they do something wrong, but it could be argued that this definition is too
broad to describe the problem in a meaningful way.

Some women live with violence or threats for years, before the leave their spouse. Each year some 2,000 Danish
women move into a crisis-centre. However, that is only the tip of the iceberg. It is estimated that at least 41,000 women,
or 2.5 per cent of all women are beaten each year in their own homes. In two-thirds of the cases, present or pervious
partners commit the violence. However, the estimates are very uncertain, as domestic violence is surround by silence
and embarrassment. It is estimated that about 30,000 children witness violent assaults against their mothers. In 1995
4,214 women contacted the emergency rooms following domestic violence, in 2003 the figure rose to 5,342. Though it
is unclear what the increase indicates more women report domestic violence, an increase in the severity of the
violence, or increase in the extent of the problems it is clear that domestic violence continues to be a problem in a
Danish context. Breaking the silence and confronting the issue, thus, continues to be a challenge.

Education as resource
Denmark is among the OECD-countries that spend most public funds on education. Denmark is moving down
the global educational scale, despite significant investments.
Education is recognised as one of the keys to success in a global economy that is becoming increasingly knowledge-
intensive, but beyond this basic consensus there is much less agreement about how to achieve the goal of high quality
education for all. Spending on education averages 5.9 per cent of GDP in OECD countries. Spending on education per
student in a typical OECD country is $5,450 a year at primary level, $6,962 at secondary and $11,254 at tertiary. The
OECD countries spend on average $77,204 per student over the theoretical duration of primary and secondary studies.
At tertiary level, the wide variety of courses offered makes comparisons much more difficult. Lower unit expenditure
does not necessarily lead to lower achievement. For example, expenditures for Korea and the Netherlands are below the
OECD average for primary and secondary education, yet both were among the best-performing countries in the
OECD s Programme for International Student Assessment (PISA) 2003 survey.
The estimated long-term effect on economic output of one additional year of education in the OECD area is generally
between 3 per cent and 6 per cent. Using literacy as a measure of human capital shows that a country able to attain
literacy scores 1 per cent higher than the international average will achieve levels of labour productivity and GDP per
capita that are 2.5 per cent and 1.5 per cent higher, respectively, than those of other countries. Despite widespread
reports of grade inflation and the devaluation of qualifications, the investment to obtain a university level degree,
when undertaken as part of initial education, can produce private annual returns (calculated by comparing future earning
prospects with the private cost of studying) as high as 22.6 per cent, with all countries showing a rate of return above 8
per cent.
The PISA survey also shows that Europe and the United States are increasingly outperformed by countries in East Asia.
Two generations ago, South Korea had the standard of living of Afghanistan today and was among the lowest
performers in education. Today, 97 per cent of all South Korean 25-to-34-year-olds have completed upper-secondary
education, the highest rate among the OECD countries. The experience of South Korea is not unique. Between 1995 and
2004 alone, the number of students attending university more than doubled in China and Malaysia, and expanded by 83
per cent in Thailand and 51 per cent in India. The six East Asian education systems that took part in PISA 2003 were
among the top ten performers, and succeed without leaving many students behind. In contrast, 20 per cent of 15-year-
olds on average in the EU, and over 25 per cent in the US performed at Level 1 (the lowest PISA level) or below.
Across OECD countries as a whole, students from the poorest families are on average 3.5 times more likely to be at or
below Level 1 than those from the most socio-economically advantaged backgrounds.
Class size does not seem to explain differences in performance. There are 30 or more students per class in Japan, Korea
and Mexico, Brazil, Chile and Israel, versus 20 or fewer in Denmark, Iceland, Luxembourg, Switzerland and the
Russian Federation, but countries with the highest student/teacher ratio often do better than those with fewer students
per class. Only 2.7 per cent of students in Luxembourg, for example, are in the highest group in the PISA mathematics
scale compared with 8.2 per cent for Japan.
A well-educated pollution is often highlighted as the primary resource of Denmark. The aim of Danish education
policies has been to ensure as many Danes as possible get a qualifying education. Denmark is among the OECD-
countries that spend most public funds on education also measured by expenses per student. In 2002, public
expenditure on education amounted to some 7.1 per cent of GNP. From 1991 to 2004 expenditures climbed DKK 33,8
billons (in 2004 prices). However, according to a recent report by the Welfare Commission, Denmark is moving down
the global educational scale, despite significant investments. In recent years, thus, there has been an upsurge in debate
on the quality of the teaching and accessibility to education. As education is seen as the main resource of Denmark,
ensuring the quality of and the accessibility to the education system remains an important challenge in a Danish
context.

Food as cure and cause
Food is both the cure and the cause of many of the ills plaguing Danish society. Putting our knowledge into
action by changing minds, habits, and ultimately demand is a vital task ahead.
Obesity rates have risen three-fold or more since 1980 in some areas of the world, and by 2030, average food energy
supplies in 43 countries, with a total population of 3.5 billion people, will be above the recommended 3,200 kcal mark.
One possible consequence of this is that the trend in disability among the young may diverge from that of the old.
Several US studies suggest that while disability among the elderly is falling, the opposite is happening for younger
cohorts, with obesity a major cause. Non-fatal but debilitating health problems associated with obesity includes
respiratory difficulties, chronic musculoskeletal problems, skin problems and infertility. Life-threatening problems
include cardiovascular diseases; conditions associated with insulin resistance such as type-2 diabetes; certain types of
cancer, especially the hormonally related and large bowel cancer; and gallbladder disease. Obesity already represents a
pharmaceutical market worth over $500 million. Given the likely aggravation of the problem worldwide, plus the fact
that that the two leading drugs are associated with unpleasant side effects, poor efficacy and high costs, there is a huge
demand for drugs that can address unmet needs.
In the current situation, another less well-described nutrition problem likewise gives rise to concern in the western
world: diets have a low, and perhaps a deficit of, micronutrients and other bioactive substances, which are instrumental
for optimal health, combined with a too high energy intake. The primary problem related to obesity is changes in
lifestyle, meaning that the energy intake (EI) surpasses the energy consumption (EC). There are two ways to handle this
problem: reduce EI or increase EC.
Despite steady progress in food hygiene and nutrition, diseases borne by food or caused by poor nutrition remain a
significant health challenge, with important economic consequences too. Food related ill health is responsible for about
10 per cent of morbidity and mortality in the UK and costs the National Health Service (NHS) about £6 billion annually
(roughly EUR 9 billion). The burden of food related ill health measured in terms of mortality and morbidity is similar to
that attributable to smoking. The cost to the NHS is twice the amount attributable to car, train, and other accidents, and
more than twice that attributable to smoking. The vast majority of the burden is attributable to unhealthy diets rather
than to food-borne diseases. However, food-borne diseases can carry a significant economic cost too. A Swedish study
shows that there are around 80,000 cases of campylobacteriosis each year (a common bacterial infection that can cause
diarrhoea), with direct and indirect costs of SEK 330 million (about 33 million). The number of salmonellosis cases is
about 17,000 each year, with direct and indirect costs amounting to SEK 80 million ( 8 million). While nutrition-related
disease is a complex phenomenon involving a range of factors, food-borne diseases generally result from non-respect of
basic hygiene, or infringement of food safety regulations.
Food is both the cure and the cause of many of the ills plaguing modern societies. In this area, Denmark is following
international trends closely: Some 25 per cent of adult females and some 40 per cent of adult males are now overweight
and this tendency is on the rise and can likewise be observed among young people. Obesity is only the most obvious
result of poor food choices. Heart disease, allergies, vitamin shortages and cancer are caused by poor food choices.
There is no doubt that better food choices would lead to predictable and rapid health improvements for large parts of the
population. Today, there is a massive gap between our understanding of the connection between the human health and
human diet, and our ability to use this knowledge to improve life quality and life spans. Putting our knowledge into
action by changing minds, habits, and ultimately demand is a vital task ahead. For the Danish food industry, this is a
challenge as well as an opportunity. Seeding and nurturing new consumer segments focussed more on quality and
health and less on price and convenience is an opportunity to diversity out of the still harsher international price
competition.

Gendered education
The Danish education system is gendered both in terms of level of educational and in terms of the education that
men and women choose and it remains difficult to cross in-grown gender-barriers.
An examination of trends overt the past few decades shows that women and girls are becoming better educated than
boys and men in OECD countries. For 55-to-64-year-olds, average duration of formal study favours females in only
three countries, but for 25-to-34-year-olds, the average number of years of study completed is higher among females in
20 out of 30 OECD countries, and only 2 of the remaining 10 countries (Switzerland and Turkey) register differences of
more than 0.5 years in favour of males.
In 15 of the 16 OECD countries for which total upper secondary graduation rates can be compared between the genders,
in 2001 the rate for women exceeded that for men, by up to 13 percentage points. In 1991, the levels of tertiary
attainment were about the same for men and women, in 2001, the advantage was clearly in favour of women: on
average in the OECD area, 29 per cent of women have tertiary qualifications, compared with only 26 per cent of men.
Among 15-year olds, PISA 2000 shows large gender differences in reading literacy: in every OECD country girls reach
higher levels of performance on average than do boys. In mathematical literacy however, in about half the countries,
boys perform better, but the difference is equal to only a third of the level recorded in reading literacy. In scientific
literacy, 25 countries show no significant gender differences.
Major gender differences remain between fields of study in tertiary education. In 2001, in the humanities, arts,
education, health and welfare, on average women made up more than two thirds of the graduates in OECD countries,
but less than one third of mathematics and computer science graduates and less than one fifth of engineering,
manufacturing and construction graduates. In addition, on average in OECD countries, nearly two thirds of all Ph.D.
graduates are men.
The Danish education system is gendered both in terms of level of educational and in terms of the education that men
and women choose. The percentage of women with a high school education is higher that the percentage of men. While
women tend to go for medium-long qualifying education, men tend to go for vocational education. In 2006 a little less
than 50,000 students were enrolled at a further or higher education. The majority, about 62 percent, was women. Today
women dominate a number of long further educations. For example law where 15 percent of the students were women
in 1950s, the percentage today is 63. Furthermore, 40 percent of the population is educated within occupations that are
dominated by one sex. Women choose care, office work and humanities, while men choose handicrafts, technique and
IT. Educational choice leads to gender discrepancies at the labour market, in terms of sectors of employment, in terms
of salaries etc. A levelling of existing differences between the sexes starts in the educational system and as the figures
indicate it remains difficult to cross in-grown gender-barriers

Increasing health care costs
Danish health expenditures have escalated significantly in recent years and will most likely continue to do so in
the future. It will be necessary to prioritise the finite resources of the healthcare sector now as well as in the
future. Finding the appropriate models to do so is an urgent challenge.
Projections by the OECD for health and long-term care expenditures depend on whether costs are assumed to continue
to rise at a higher rate than incomes (using the rate of 1 per cent higher per annum, in line with trends since 1980), or
whether cost-containment measures are applied. In the first case, average health and long-term care spending across
OECD countries is projected to almost double from close to 7 per cent of GDP in 2005 to 13 per cent by 2050. With
cost-containment , expenditures still reach around 10 per cent of GDP by 2050. However, these projections show that
non-demographic factors (including effects from technology and relative prices) are the most important driver of the
increase in health-care expenditure rather than ageing.
The continuing growth in health expenditures and growing tensions among providers, payers and patients is raising
fears in a number of countries that health care systems may not be sustainable in the longer term without significant
change. The main challenges include:
Balancing public versus private interests.
Incentive systems to manage access to care while supporting accountability and responsibility for healthcare
decisions.
Defined and enforced clinical standards to build consumer trust.
Competing demands to control costs while providing sufficient access.
Innovation, technology and process changes to improve treatment, efficiency and outcomes.
Flexible care settings and expanded clinical roles to provide care centred on the needs of the patient.
Competition for qualified staff, including international recruitment. International competition is also an issue in
service provision, with the growth of medical tourism .
A related challenge is to develop and supply advanced treatments for serious illnesses where there is little market
potential. Development time, financial risk and patent protection remain roughly constant whether drugs are developed
for a large patient-market with potentially millions of consumers, or a small market with perhaps a few hundred cases
annually. This means that research investments are abundantly available for numerous or wealthy patient groups, while
poorer and smaller groups fall outside the system. This challenge raises the question how (and if) the health care sector
can achieve better coverage where market incentives are weak, but where suffering and death are no less real than
everywhere else. It also raises the question of whether expensive, highly targeted treatments should be refused to
patients who may not benefit much, but who argue that a little improvement is better than nothing. The increasing
power of patient pressure groups could make this problem more acute.
Danish health expenditures have escalated significantly in recent years and will most likely continue to do so in the
future. The period 1995 to 2005 saw public healthcare spending rise from DKK 53,7 billion to DKK 71,5 billion, in
2005 prices. Similarly, private healthcare spending rose from DKK 14,6 billions to DKK 19,1 billions over the same
period. Total healthcare expenditures thus rose slightly faster than GDP, increasing the share of the healthcare sector
from 8.2 to 9.0 percent of GDP from 1995 to 2005. The percentage of GNP spent on healthcare in Denmark is thus
slightly higher than the OECD average of 8.7 percent. It is expected that the economic pressures on the healthcare
sector will continue to increase in the future. This will happen because of the aging population, but also as a
consequence of technological development, which will boost public demand for new, expensive and individualised
treatments. Financing healthcare is a highly debated issue in a Danish context. Currently, general practitioners,
ambulatory treatments and hospitalisations are publicly financed, while dentists and medicine expenditures are
predominantly financed through co-payments. It has, however, been suggested, most recently by the Danish Welfare
Commission, to increase user charges to halt the increasing public spending. Critiques argue that this solution will give
rise to social inequalities in the healthcare sector undermining the long-standing principle of equal access to medical
treatments. It is, however, widely accepted that it will be necessary to prioritise the finite resources of the healthcare
sector now as well as in the future. Finding the appropriate models to do so is an urgent challenge.

Lifestyle as illness
Denmark is witnessing a rapid increase in lifestyle-related diseases especially diabetes caused by obesity, with
approximately 10,000 new cases a year. More and more people, including children and the young, suffer from
severe overweight.
The increasing global epidemic non-communicable diseases are related to changes in lifestyles. Tobacco is the main
problem, and although smoking is in decline in the developed countries, it is getting worse in the developing world.
Tobacco consumption results in the premature death of nearly five million people a year. It is a major cause of death by
cardiovascular disease and lung cancer, and is responsible for 1 in 10 adult deaths each year. If current smoking patterns
continue, the number of deaths caused by smoking will double to 10 million a year by 2020. Half the people who smoke
today, about 650 million people, will eventually be killed by tobacco.
Tobacco remains one of the leading contributors to the disease burden in more than half of European states, and one of
the three leading contributors in the absolute majority. Tobacco-related national health care costs range from 0.1 per
cent to 1.1 per cent of GDP. The growing concentration of smoking in the lower socioeconomic groups is particularly
worrying. This is leading to a widening gap in current and future health outcomes.
Obesity is probably the fastest developing lifestyle-related problem. More than 1 billion adults worldwide are
overweight and at least 300 million clinically obese. In the US alone, obesity causes 300,000 deaths annually, second
only to deaths related to tobacco. In China, 200 million people could become obese in the next ten years. Overall
physical inactivity is estimated to cause 1.9 million deaths globally each year. Worldwide, more than 60 per cent of
adults do not engage in levels of physical activity beneficial to their health. Inactivity is worse among women, older
adults, individuals from low socio-economic groups, and the disabled. Physical activity also decreases with age during
adolescence, and this decline continues throughout the adult years. In many countries, less than one-third of young
people are sufficiently active to benefit their present and future health. Female adolescents are less active than males.
Increasing obesity/overweight among young people and middle-aged adults is often due to spending increasing amounts
of time in sedentary behaviours such as watching TV or using computers, and excessive use of passive modes of
transport (cars, buses, motorcycles). Data from North America show the economic benefits of increased physical
activity. In the USA, an investment of $1 (time and equipment) leads to $3.2 savings in medical costs. In Canada,
physical inactivity accounts for about 6 per cent of total health care costs, and companies with employee physical
activity programmes can reap benefits of $513 per worker per year from changes in productivity, absenteeism, turnover
and injury. Much of the health gain is obtained through at least 30 minutes of cumulative moderate physical activity
every day (e.g. walking to work or gardening).
Denmark is witnessing a rapid increase in lifestyle-related diseases especially diabetes caused by obesity, with
approximately 10,000 new cases a year. More and more people, including children and the young, suffer from severe
overweight. The proportion of energy that comes from fat has generally been decreasing in recent years but
consumption of sweet beverages increased by 86 per cent from 1990 to 1999. On a more positive note, the number of
physically active people is increasing, with about 75 per cent of the population physically active in one way or another.
However, children are less physically active than earlier, spending more time watching TV and in sedentary play, while
people with sedentary occupations do not compensate through increased exercise in their spare time. Danes bike less
than previously: 625 km annually on average in 1990, but only 450 km in 1999. In the same period car transport
increased by 30 per cent. Alcohol consumption is fairly stable but at a relatively high level. Among younger people,
there is a tendency towards increasing alcohol consumption, and to start drinking younger. Young Danes hold the
European record in alcohol consumption. How should the healthcare system deal with these changes in the Danish life
style?

Male trouble
Traditionally, men have been perceived as the stronger sex. However, the statistical evidence suggests that that is
not the case. Men s problems are an often-overlooked challenge for society.
Gender inequalities are in men's favour in a number of domains, e.g. in most countries there are far fewer women
members of parliament than men, and for a given level of educational attainment, women typically earn only 50 per
cent to 80 per cent of what men earn in OECD countries. But in a whole series of areas, men's situation is worse.
Females are outperforming males at practically every level of the education system. Data on health also show marked
gender differences. Globally, female life expectancy is 68 years versus 63 for males. The female advantage is
considerably larger in the more developed regions (7 years) than in the less developed regions (3 years). Gender
differences are marked in various aspects of ageing. Men s mortality rates from cancer are 30 to 50 per cent higher than
women s, with much of this difference due to lung cancer. However, since death rates from cardiovascular diseases
(CVD) are often higher among men than women at specific ages, there is a tendency to think of them as a male
problem, but almost everywhere CVD are the main killer of older people of both sexes. Despite older women s higher
recorded rates of depression, older men are much more likely than older women (and, usually, than younger men) to
commit suicide. This may be because women have stronger social networks and better means of coping.
Overall prevalence of mental and behavioural disorders is similar for both sexes, but patterns and symptoms
vary by age. In childhood, boys show more conduct disorders such as aggressive behaviour than girls, while adolescent
girls have a much higher prevalence of depression, suicide attempts and eating disorders than boys. Boys have fewer
suicide attempts, but commit suicide more and experience more problems with anger and high-risk behaviours. In
adulthood, depression and anxiety are more common in women, while tobacco, alcohol, drug and other substance abuse
and antisocial behaviours are higher in men. There are no consistent sex differences for severe mental disorders such as
schizophrenia and bipolar depression, but schizophrenia appears earlier in men, while women are more likely to exhibit
serious forms of bipolar depression. Alzheimer s disease affects both sexes similarly, but women s longer life
expectancy means that there are more women than men living with the condition. Perception of and reaction to
problems varies, with men generally tending to seek help much later than women for similar symptoms, and in some
countries seeking to cope with pressures by using alcohol, whereas women use psychotropic drugs more frequently.
Almost three times as many males die from road traffic injuries as females, and there are more males in every category
of road victim, including pedestrians and cyclists, probably because of risk taking. Males are also more likely to die of
falls, drowning and poisoning, although females are more likely to die in fires.

Traditionally, men have been perceived as the stronger sex. However, the statistical evidence suggests that that is not
the case. Danish men do not complete their education and attain less education than women. About 62 per cent of all
students at higher-level educations are women. In 2000, 83 per cent of the women completed a qualifying education,
while only 75.5 per cent of the men did so. Often, it is the man who moves out when families break up and 80 per cent
of all homeless are men. Danish men commit significantly more crime than Danish women. Each year between 1990
and 2005, Danish men were convicted for around 140,000 crimes, while Danish women were convicted for some
25,000. Men commit 85 per cent of all crimes, associated with mental illness. While Danish men suffer from
schizophrenia, Danish women are depressed. More Danish men are abusers of drugs and alcohol than is the case of
Danish women. 75 per cent of all persons in Danish rehabilitation after heavy drug abuse are men, and 6.9 per cent of
all men die of an alcohol related illness, versus 2.9 per cent of women. On average, Danish men die at age 75, while
Danish women live to be 80. Men commit suicide more frequently than women (though women try more frequently).
Men die twice as frequently as women in traffic. Danish men are more likely to have diabetes and bad lifestyle habits,
they eat bad food and suffer from heavy overweight and they smoke more than Danish women. At the same time,
Danish men see the doctor less than women do. While women on average had 10 contacts with the health care system,
men had some 6.8. It would seem that society lacks cross-sector initiatives that accommodate the male issues. Male
trouble is an often-overlooked societal challenge.

Medicalisation of social problems
Are phenomenon such as menopause, menstrual pains, pregnancies, stress, and overweight should be understood
as diseases and treated accordingly? In Denmark, the consumption of painkillers, anti-depressants, tranquilisers
and potency boosters in rapid growth along with the general consumption of medicine.
Disease is not an objective concept and definitions, diagnoses and treatments vary from one country to another and
can evolve rapidly. Medicalisation is the process of defining what many might consider as normal problems of living as
medical problems, for example children who do not pay attention in class can be diagnosed as suffering from attention
deficit disorder, and people who lose their temper and commit or try to commit acts of violence may be suffering from
IED intermittent explosive disorder. Defining such conditions as diseases may seem absurd, but until fairly recently
Alzheimer's disease was dismissed as an inevitable consequence of ageing.
Nonetheless, the forces driving this trend are not all medical. Patients and their professional advocacy groups can gain
moral and financial benefit from having their condition defined as a disease. Some doctors, particularly some
specialists, may welcome the boost to status, influence, and income that comes when new territory is defined as
medical. Advances in genetics open up the possibility of defining almost all of us as sick, by diagnosing the deficient
genes that predispose us to disease. Global pharmaceutical companies have a clear interest in medicalising life s
problems, and are accused of "disease mongering", defining conditions as diseases in order to sell their treatments.
The most immediate impact of this trend if it is confirmed would be on health budgets. Those diagnosed with a given
condition could reasonably claim they have a right to treatment, but care providers would have to balance these claims
with other uses of health resources. Their would be implications for the legal system too. If violent behaviour is the
result of a medical condition, defence lawyers could argue that it should be treated medically, not penally.
In a Danish context there has been debates about whether phenomenon such as menopause, menstrual pains,
pregnancies, stress, and overweight should be understood as diseases and treated accordingly, or whether such issues
are normal problems of living. In Denmark use of pharmaceuticals has grown in recent years. According to the WHO,
the percentage of GNP spent on pharmaceuticals in Denmark rose from approximately 0.7 to 1.5 from 1990 to 2002.
The newest figures from the Danish Medicines Agency indicate that the use of pharmaceutical continues to climb. The
total volume of pharmaceuticals (measured in defined day doses) per 1.000 inhabitants rose from 1,087 in 2002 to 1,336
in 2006 accounting for a rise in expenditure from DKK 10,935 million in 2002 to DKK 12,404 million in 2006. The
total use of anti-depressants has increased since 1994 and the total volume continues to rise. From 1994 to 2003 the use
of all anti-depressants products rose with 260 per cent. Another example is the use of potency boosters. From 1998 to
2003 the number of men being treated has increased by some 150 per cent, and the development continues. In 2006
Danes spent DKK 144 million on potency boosters. The figures of sales in the pharmaceutical field and the debates
indicate that we have seen an increasingly medicalisation in Denmark. Another indication is that Danish doctors, in
recent years, have begun to write prescriptions for workouts for individuals that are overweight. Thus, Danes turn to the
medical profession and expect medical solutions, and this development puts a strain on limited health budgets. Finding
the balance between medicalisation and other social solutions to the problems of people thus is a challenge in the future.

Outcast?
In Denmark, social problems such as alcohol or drug abuse, homelessness, prostitution and domestic violence
persist into the 21st century.
Expenditure on social programmes is an enormous part of national budgets. In 2003, gross public social expenditure
represented 20 per cent of GDP on average in OECD countries, and when net social expenditure is calculated (public
and private social expenditures, net of the effects of taxes) the figure rises to over 22 per cent. Despite this, significant
inequalities persist. People with lower education and lower income tend to die at younger ages and to have a higher
prevalence of different health and social problems. In Europe, less educated people have a life expectancy around 15
per cent lower than that of more educated people. Differences in life-expectancy are also significant between ethnic
groups, e.g. 6.5 years between Afro-American and white men in the United States and between registered Indians and
non-Indians in Canada, and 18 years for Aboriginal and Torres Strait Islanders compared with the non-aboriginal
population in Australia.
Social problems affecting smaller numbers of people persist too. Alcoholism is probably the most widespread. The
WHO estimates that 2 billion people worldwide consume alcohol and 76.3 million have diagnosable alcohol use
disorders. Alcohol causes 1.8 million deaths a year and contributes to many other problem: alcoholic men are more
likely to beat their wives and children; time and money spent drinking is usually to the detriment of family; alcoholics
are more likely to be absent from work and be involved in accidents; consumption of alcohol during pregnancy can
damage the foetus; alcohol is a major cause of road violence. Despite this, the fight against alcoholism is given
significantly fewer resources than anti-drug campaigns. The success of anti-drug campaigns is difficult to assess, partly
because definitions can change, e.g. cannabis use may cease to be penalised, and patterns of drug use evolve. Since the
1980s there have been global increases in the production and use of drugs; new forms of old drugs (e.g. smokeable
crack cocaine); changes in way drugs are taken (e.g. transitions from opium smoking to heroin injection); and the
introduction of new drugs (e.g. MDMA ecstasy and other amphetamine-type stimulants). Another worrying trend is the
growth in polyconsumption and polyaddiction, i.e. Involving several drugs or drugs plus alcohol. Drug injection also
poses special problems as a transmission route for HIV.
Drug and alcohol abuse contribute to another major problem: homelessness. At least 3 million Western Europeans are
homeless and between a fifth and a third of them are members of homeless families. Up to 10 per cent of the homeless
sleep rough, the others are given temporary accommodation by friends and family, charities and public refuges, or live
in shelters constructed by themselves. The figures are similar in the US as a percentage of the population, around 2
million. Initiatives to tackle homelessness are hampered by lack of coherent definitions and data, with some countries
not collecting data and others publishing figures that are considered as gross underestimates by NGOs working on the
problem. These agencies claim that although single men are the largest group of homeless, the fastest growing group is
young women with families.
In Denmark, social problems such as alcohol or drug abuse, homelessness, prostitution and domestic violence persist
into the 21st century. Estimates suggest that about some 190.000 people have an addiction to alcohol, which trigger
physical or social problems. It is estimated that there is about 27,000 drug addicts in Denmark. It is estimated that
10,000 to 12,000 are homeless. There are, at least, 4,500, men and women prostitutes in Denmark. And finally, each
year about 2,000 women seek refuge in crisis-centres. However, this is only the tip of the iceberg as it is estimated that
about 41,000 women, or 2.5 per cent of all women, each year are beaten in their own homes. Immigrants are likewise
heavily represented in these figures. A range of different public initiatives, housing-initiatives, crisis centres, treatment
initiative etc. has been implemented to handle these problems. In 2005 DKK 3.6 billions of public spending was used
on the handling of these problems. Yet, the figures indicate that social problems continue to prevail and the question,
thus, it is a challenge.

Redefining old age
Danes live and remains active for longer. Danish society is, however, built around a chronological age-scale that
pre-determines individuals right to benefits, pensions, obligations, education, work and retirement.
Today we still define elderly as 60 or 65 years old although life expectancy in the EU15 is almost 76 years for males
and almost 82 for females and will progress further. In the developed world, 15 per cent of the population is aged over
65. By 2030, they will be around 25 per cent of the population and the median age is projected to be 45 (over 50 in
much of southern and eastern Europe). In the future, the equivalent of today's elderly may be the very old (80+), while
the 60-80 age-group will generally be of good health, have decades experience using the Internet and other ICT, have
lower expectations of public welfare, and may want to, or have to, continue working beyond the present retirement age.
This means that old age may have to be redefined in a number of domains from welfare systems to marketing. When
asked about themselves, very few people define old age in terms of chronology, preferring qualitative criteria such as
the decline in physical or mental ability.
For governments, the main impact concerns pension systems. Increasing the effective age of retirement, which has
fallen despite rapid increases in life expectancy and healthy life expectancy, could help to deal with the demographic
burden of population ageing. Assuming average OECD mortality rates and a baseline retirement age of 65 for both men
and women, each additional year of work after 65 without drawing a pension reduces the cost of a government s
pension obligations by more than 3 per cent. Such increases could have a double positive effect, potentially both
reducing benefit expenditure and increasing tax and contribution revenues.
However, many countries continue to subsidise early retirement even for healthy people through pension systems and
other pathways to early retirement. In old-age pension systems, for example some allow people to retire early with little
or no reduction in benefits to reflect the longer duration for which pensions will be paid; resource tests encourage low
earners to retire as early as possible; some systems give little or no extra benefit for an extra year's contributions; and
earnings tests prevent people combining work and pension receipt. The result is that on average in OECD countries,
fewer than 60 per cent of people aged between 50 and 64 have a job, compared with 75 per cent of people in the 25-49
age group. If current trends continue, the ratio of older inactive persons per worker will almost double in the OECD
area over the next decades, from around 38 per cent in 2000 to just over 70 per cent in 2050. This, in turn, would lead to
higher taxes and/or lower benefits, coupled with slower economic growth. On the basis of unchanged patterns, OECD
analysis shows that GDP growth per capita in the OECD area could shrink to around 1.7 per cent per year over the next
three decades, about 30 per cent below the average annual rates witnessed between 1970 and 2000.
The Danish population is ageing. By 2015 the Danish population will have increased by some 100,000 people. The
number of people aged 65 or more, however, will have increased by 210,000. However, the ageing society is a not a
problem in itself. It is rather the positive development that people live and remains active for longer. Danish society is,
however, built around a chronological age-scale that pre-determines individuals right to benefits, pensions, obligations,
education, work and retirement. For example,the normal age of retirement is 65. At this age individuals are given the
same obligations and rights, regardless of their ability, and desire, to work. As the demographics of society are shifting
toward an older population, it becomes increasingly important to utilise the potential of the aging babyboomers.
Redefining old age is not a simple task, as this will imply new societal roles and new social institutions. It thus remains
a challenge as well as an opportunity to reform societal systems to match the changing age composition of society.

Road safety
Getting from A to B is statistically among the most dangerous activities most people do in their lives. In 2005,
there were 14,223 traffic accidents in Denmark, injuring some 6,919 people. Of these, 361 died.
Road traffic crashes kill 1.2 million people each year and injure millions more, particularly in low-income and middle-
income countries. Every day just over 1000 young people under the age of 25 years are killed in road traffic crashes
around the world. According to the WHO, road traffic injuries are the leading cause of death globally among 15 19-
year-olds, while for those in the 10 14-years and 20 24-years age brackets they are the second leading cause of death.
Most young people killed in road crashes are vulnerable road users pedestrians, cyclists, motorcyclists and passengers
of public transport with those from the African and Eastern Mediterranean regions most at risk.
The annual costs of road crashes in low-income and middle-income countries are estimated to be between $65 billion
and $100 billion more than the total annual amount received in development aid. Road accidents among young are
costly in OECD countries too, e.g. crashes involving 15 20-year-old drivers cost the US $41 billion in 2002. Road
accidents cost Japan YEN 6.74 trillion in 2004 (over 40 billion). In the EU, over 40,000 people are killed and 1.7
million people injured on the roads every at a cost to society estimated at 160 billion annually, which corresponds to 2
per cent of the Union s economic output.
Safety has to be addressed in all aspects of the design, operation and interfacing of the transport system, including road
users, vehicles and the corresponding infrastructure. In addition, technical solutions will need to be backed up by soft
measures to influence user behaviour. The most serious issues are: excessive speed; impairment by alcohol, drugs and
fatigue; high risks facing pedestrians, cyclists, moped users, motorcyclists and inexperienced young drivers; inadequate
visibility of motor vehicles and road users; failure to use protective equipment such as seat belts and helmets;
unforgiving vehicles and infrastructure (i.e. that increase the chances of accident, injury or death compared with other
vehicles and infrastructure) and high-risk accident black spots.
Societies around the world have a remarkable tolerance for traffic-related injury and death. Getting from A to B is
statistically among the most dangerous activities most people do in their lives. In 2005, there were 14,223 traffic
accidents in Denmark, injuring some 6,919 people. Of these, 361 died. The 2005-death toll is actually the lowest since
1946. When accident statistics peaked in 1971, as many as 1,213 people died from traffic accidents in that year alone.
There is now a growing awareness about traffic safety and high annual death tolls are becoming increasingly
unacceptable in public opinion. Not everyone is equally accident-prone and some accident-types tend to reappear.
Young, drunken males are by far the most accident-prone group. Unlike most bad drivers, who drive more carefully
because of it, members of this group tend to be ignorant of their poor skills. Trucks overtaking cyclists while turning
right at crossroads are another curiosity continuously reappearing in accident statistics. Trucks have a critical blind spot
concealing anything immediately to the right of the truck. Meeting the overall problem of traffic safety thus means
addressing a very wide range of both technical and social problems and remains both a major challenge and an
important opportunity for the future.

Social mobility
While economic mobility in Denmark remains comparatively high, the educational mobility continues to lack
behind that of other countries.
One of the main challenges for social policy is to allow individuals to develop to the full extent of their capacity,
irrespective of their origins. Evidence from a number of indicators across OECD countries shows mixed results in
achieving this, but the general trend is for children to inherit their parents' socio-economic status. The degree of
association between parental and child incomes is one indicator of mobility. Less than 20 per cent of the differences in
parental incomes are passed on to the children in some of the Nordic countries, Australia and Canada, while 40 per cent
to 50 per cent of these differences are passed on in Italy, the UK and the United States. In other words, the success of
children in these latter countries is determined to a greater extent by their parents than elsewhere, either directly (e.g.
through transfers of money) or indirectly (e.g. through parental lifestyles and behaviours). Mobility is especially low for
the poorest people.
However, income statistics produce interesting anomalies. Australia and Canada are more unequal societies than a
number of European countries when looking at current incomes of households, but they are among the most
intergenerationally mobile. This may be due to immigration, since immigration increases both current inequality and
income mobility, but the explanation might also be interventions made in early education and care and programmes for
disadvantaged individuals as well. Another explanation is that this is merely a temporary situation and that in future
intergenerational mobility will decline.
Education appears to be a major factor in mobility. The range of family characteristics that shape educational mobility
across generations includes ethnic origin, the language spoken at home, family size and structure, and the socio-
economic and cultural background of the parents. Some of the cross-country differences in educational mobility are
shaped by policies. For example, early streaming of students based on their ability seems to considerably reduce
mobility across generations.
Intergenerational immobility extends to other outcomes. For example, occupations persist across generations and are
strongly influenced not only by education, but also race or migrant status. Wealth also persists heavily across
generations: as they are larger at the top of the income distribution, wealth transfers may deepen inequality. Welfare
receipt is also transmitted across generations and this transmission appears to be influenced by specific aspects of
welfare policy. Personality and family traits also tend to persist across generations and affect both labour market
outcomes and decisions about family formation. For example, children of divorced parents are more likely to divorce
too.
Although the relative importance of the various factors is difficult to determine, it is clear that increasing access to
education and tackling child poverty would help to increase social mobility.
While economic mobility in Denmark remains comparatively high, the educational mobility continues to lack behind
that of other countries. Discounting structural mobility, the ability of ordinary Danes to move up the economic ladder is
at the same level as in other Scandinavian countries and well ahead of the USA, the UK, Italy and Germany. Looking at
social mobility in relation to education, however, it turns out that the social standing and heritage of parents has more
influence on educational level achieved in Denmark than is the case in, for example, Sweden and Finland. Even though,
the Danish population has a high level of education, compared to other western countries, it remains a challenge to
remove social heritage from educational choices at all levels of the education system. As the labour market develops
and the role of educational standards becomes evermore important, removing the barriers to social mobility are not only
a challenge but also a major opportunity for people who have yet to experience the benefits of economic growth.

Suicide
Each day about 20 people try to end their own life somewhere in Demark. And each day, two succeed. Thus
about one per cent of all deaths are due to suicide. Suicide kills 30 per cent more people than traffic accidents.
Suicide is evidence not only of personal breakdown, but also frequently of a deterioration of the social context in which
individuals live. It results from many different factors, including divorce, alcohol and drug abuse, unemployment,
clinical depression and other forms of mental illness. The average suicide rate observed in OECD countries has declined
moderately but steadily since the peaks of the late 1980s. While such progress can be observed for both sexes, suicide
remains a predominantly male phenomenon: men are twice as likely to kill themselves then women, although women
are more likely to have attempted suicide. The frequency of suicides also depends on the age of individual, although
these differences have declined over time. In general, suicide rates among the elderly have declined significantly over
the past two decades, while almost no progress has been observed for younger cohorts.
Average suicide rates across 23 OECD countries hide large cross-country differences. Suicide rates range from 5 per
100,000 persons or less in most Mediterranean countries to above 20 per 100,000 persons in Hungary, Japan, Belgium
or Finland. Differences in suicide rates among OECD countries are not related to their per capita income and are only
weakly related to self-reported levels of life satisfaction. Empirical studies suggest that the same range of factors
explain cross-country differences in both subjective life satisfaction and suicides rates, with close to 80 per cent of the
variance in suicide rates across 50 countries reflecting differences in the prevalence of divorce, unemployment, quality
of government, religious beliefs, trust in other people and membership of non-religious organisations.
Each day about 20 people try to end their own life somewhere in Demark. And each day, two succeed. In 2005, 173
women and 455 men committed suicide. Thus about one per cent of all deaths are due to suicide. Suicide kills 30 per
cent more people than traffic accidents. It is estimated that about 15,000 people try to commit suicide each year.
Women aged 15 to 29 are responsible for more than 40 per cent of the suicide attempts. Over 75,000 people family
and friends are affected by suicide attempts each year, about five persons per attempt. In recent years there has been a
significant raise (a tripling) in the number of suicide attempts among young girls aged 15 to 19. Even though, the
frequency of suicides has halved since 1980. The frequency of suicides in Denmark, compared to other western
European countries, is only lower than in Belgium, Switzerland, Austria and France. Thus the rate of suicides in
Denmark remains a sinister challenge.

The ageing patient
Like other countries in Europe, Denmark is faced with an ageing population. For the Danish health care sector,
this will mean older patients, scarcer labour and fewer taxpayers.
It is often assumed that health expenditures will rise in coming years because of population ageing, but analyses carried
out by the OECD present a more complicated picture. Although health costs rise with age, the average cost per
individual in older age groups should fall over time because longevity gains translate into additional years of good
health ( healthy ageing); and major health costs come at the end of life. Dependency on long-term care will tend to rise
with population ageing, although once again, healthy ageing should mitigate some of the impact since the share of
dependents per older age group will fall. Expenditures on long-term care are likely to be pushed up by a possible cost
disease effect, i.e. the relative price of long-term care increasing in line with average productivity growth in the
economy because the scope for productivity gains in long-term care is more limited.
The growing importance of prevention means that the elderly and their caregivers will expect to be given the
information and preparation needed to participate in the care of ageing patients. Efforts to keep patients at home as long
as possible will reinforce this.
Technological innovations such as portable monitoring systems will help to improve care, but they will be no substitute
for human contact, and. the training of healthcare professionals will have to include a strong interpersonal relations
aspect to allow them to understand the needs and capacities of ageing patients. Health care professionals will need to be
trained to function in an interdisciplinary and collaborative manner, particularly in the areas of functional assessment,
family involvement, coordination of care, and methods for working in partnership. Training in the use of alternative and
complementary medicine may be useful too.
One specific problem that will have to be addressed is fall-related injury. More than a third of people aged over 65
suffer a fall each year, and coordinated efforts are needed to understand and tackle the problem. Paradoxically, hospitals
can be just as dangerous as the home in this respect. The consequences of falls are often serious, wherever they happen:
20 per cent to 30 per cent of them cause moderate to severe injuries that reduce mobility and independence, and
increase the risk of premature death. A Japanese study found that before hip fracture, 50.9 per cent of patients were
able to go out freely utilising public transportation, or able to visit immediate neighbours independently. A year after
the initial visit, this ratio showed a decrease of 24.1 percentage points compared with before the fracture. Older adults
are hospitalised for fall-related injuries five times more often than they are for injuries from other causes, and falls are
the leading cause of death for older adults in some countries.
Like other countries in Europe, Denmark is faced with an ageing population. By 2015 the Danish population will have
increased by some 100,000 people. The number of people aged 65 or more, however, will have increased by 210,000.
This will have three major implications for the healthcare industry. Firstly, changing demands on the types of healthcare
required will emerge with increased care for older people. Secondly, there will be a shortage of labour in the care sector.
And finally, there will be fewer people paying taxes to finance the increasing healthcare expenditures, but perhaps there
will be more cash-rich people who can purchase private healthcare. The combination of these three factors entail that
the traditional role of the doctor and the hospital will change, making way for better use of scarce human resources
either by an increase in spending (private or public) or a more targeted and efficient approach to the provision of
healthcare. The ageing patient is a challenge to the health sector.

Trafficking
In Denmark, the number of prostitutes of foreign origin has increased by a factor of ten since the mid 1990s.
Even though trafficking recently has received massive attention in Denmark, it continues to be an important
challenge.
Human trafficking and slavery is the third most lucrative illicit business in the world after arms and drug trafficking,
generating an estimated $7 to $12 billion annually, although as for criminal activities generally real figures are difficult
to establish. These sums reflect profits only from the initial sale of persons. The International Labour Organisation
(ILO) estimates that once victims are in the destination country, traffickers net an additional $32 billion a year, half
generated in industrialised countries, a third in Asia. Southeast Asia and South Asia are home to the largest numbers of
internationally trafficked persons, at an estimated 225,000 and 150,000 respectively. More than 100,000 persons are
trafficked from the former Soviet Union and 75,000 from Eastern Europe each year, while Africans account for an
additional 50,000. Approximately 100,000 persons are trafficked from Latin America and the Caribbean. In Europe
most trafficked persons now come from Eastern Europe, and numbers appear to be rising. Estimates range from
120,000 a year to several times that. The ILO estimates that at least 2.45 million trafficking victims are currently
working in exploitative conditions worldwide, and that another 1.2 million are trafficked annually, both across and
within national borders. The US Department of State numbers are similar: between 600,000 and 800,000 trafficked
across international borders each year, mostly for commercial sexual exploitation. Of these, up to 80 per cent are
women. Up to 50 per cent are children.
Trafficking and the modern slave trade are driven by the same factors that encourage other aspects of globalisation such
as increased mobility, cheaper travel and the ease of organising international networks. They are also reinforced by the
economic misery and absence or removal of social protection in countries opening up to the international economy, and
the illusions engendered by images of a better life elsewhere on satellite television and other easily accessible mass
media. Trafficking also uses legal migration channels. In 2004 the Council of Europe drew attention to the fact that
slaves are predominantly female and usually work in private households, starting out as migrant domestic workers, au
pairs or mail-order brides .
Preventing trafficking requires a multilevel strategy. The 2003 Protocol to Prevent, Suppress and Punish Trafficking in
Persons is the leading international instrument. It goes beyond trafficking for forced prostitution and takes into account
new forms, such as forced domestic work and commercial marriage. It recommends that governments allow victims to
remain in the destination country, temporarily or permanently, ensure their safety and protect their privacy and identity.
It also recommends that governments establish legal measures to award victims compensation. At national level, efforts
in source countries to tackle poverty and lack of rights would strike at the root of the problem. Destination countries can
contribute to such programmes, and also help victims by protecting them even if they are not prepared to help the
authorities investigating the trafficking networks, and not deporting them back to the country they were trafficked from.

New lines of trafficking are appearing with the opening of European borders. In Denmark, the number of prostitutes of
foreign origin has increased by a factor of ten since the mid 1990s. It is estimated that a least 2,500 women of foreign
origin are currently working as prostitutes in Denmark; some of these are victims of trafficking. According to the
International Organization for Migration (IOM), trafficking in young girls and women from the Baltic States to Western
European countries, including the Nordic countries, is a growing problem. Denmark predominantly receives women
traded for prostitution from the Baltic countries, East and Central European Countries, Nigeria, and to a lesser extent
from Thailand and South America. In the period between the 1st of January 2003 and the 31st of December 2005, the
Danish police charged fourteen persons with violation of the penal code for trafficking in people. The low number of
cases does not necessarily reflect the number of violations. It is very difficult for the police and social organisations to
get in contact with the victims, who, in many cases, are afraid of the authorities and live in forced conditions. Even
though trafficking recently has received massive attention in Denmark, it continues to be an important challenge.

Transport anarchy
Many Danish drivers have an intuitive feeling that their fellow drivers are becoming increasingly aggressive,
intolerant and selfish, and many experience that they themselves loose their temper over petty annoyances. A
number of psychological studies indicate that this feeling may be fairly accurate.
Aggressive driving behaviour is an increasing characteristic of modern life. Official statistics on the phenomenon are
rare since most incidents are not reported, while those that are reported are usually filed under a wider category such as
dangerous driving or assault. Nonetheless, surveys by insurers and motoring organisations in different countries suggest
that the phenomenon is widespread and growing. Nine out of ten British drivers claim to have been the victims of road
rage, with more than 70 per cent confessing to committing the offence themselves. Only 14 per cent of those guilty of
road rage showed any remorse for their crimes. This follows another survey in which more than 600,000 British drivers
claim to have been physically attacked during a road-rage incident and more than a million drivers had been
deliberately rammed by another car. An Australian study suggests similar patterns, with just under 20 per cent admitting
to being an impatient driver, 86 per cent believing that aggression on the roads is increasing, and 92 per cent claiming to
have suffered some form of road rage from another driver.
A parliamentary inquiry in Australia found that the problem was often caused by the interaction of person-related,
situational, car-related and cultural factors, precipitated by a single triggering event. The committee recommended
abandoning the term road rage in favour of three, sometimes overlapping, categories. Road violence refers to
spontaneous, driving-related acts of violence that are specifically targeted at strangers, or where strangers reasonably
feel they are being targeted. Road hostility means spontaneous, driving-related, non-violent but hostile acts that are
specifically targeted at strangers, or where strangers reasonably feel they are being targeted. Selfish driving is time-
urgent or self-oriented driving behaviour, at the expense of other drivers in general, but which is not specifically
targeted at particular individuals (e.g. weaving in and out of traffic).
The physical factors creating the conditions for road rage to occur, notably traffic congestion, are likely to worsen, and
these will in all likelihood be aggravated by other factors such as stress and the growing range of drivers from different
age groups with different norms, expectations and capacities.
Many Danish drivers have an intuitive feeling that their fellow drivers are becoming increasingly aggressive, intolerant
and selfish, and many experience that they themselves loose their temper over petty annoyances. A number of
psychological studies indicate that this feeling may be fairly accurate. Danish psychologists speculate into several
aspects of modern life causing traffic anarchy. Firstly, stress-levels are increasing and drivers often concentrate more on
what they must do when they reach their destination, than on how they get there. Secondly, driving has become a means
of expressing the individualism of the driver. Breaking the rules and living on the edge are now desirable characteristics
sought by many. Thirdly, individualistic tendencies in Danish society have weakened the collective consciousness of
many drivers. Finally, the isolation provided by the confines of a car is highly artificial and prevents social feedback
from the driver s surroundings. This makes self-correction very difficult and allows anger, frustration, impatience and
other escalatory emotions to spiral away uncontrollably. The challenge of declining traffic culture is as intangible as it is
important.

Resources
Plentiful supplies of raw materials, energy and food are prerequisites for any society. This category contains the
challenges related to Danish agriculture, fisheries and energy sector.

Bio resistance
A number of infectious deceases are now exhibiting resistance to the most common antibiotics used in animal
farming, and although the impacts on humans are receiving growing attention, the threats to animals are
becoming more widespread too.
Microbes resistant to penicillin appeared within a few years of the drug's introduction, and since then medical science
has been fighting an increasingly serious battle against microbial resistance to cheap and effective first-choice, or "first-
line" drugs. Bacterial infections, which contribute most to human disease are also the most resistant: diarrhoeal
diseases, respiratory tract infections, meningitis, sexually transmitted infecctions, and hospital-acquired infections. The
development of resistance to drugs commonly used to treat malaria is particularly worrying, as is the emerging
resistance to anti-HIV drugs. The human and other consequences are enormous. In South Asia, for example, one
newborn baby dies every two minutes due to treatment failure caused by antibiotic resistance. About 3 million women
are at risk of impaired fertility following failure in treatment of gonorrhea. Treating multidrug-resistant tuberculosis in
South Africa costs around $4,300, compared with $35 if first-line drugs are effective. As many as 53 million people
worldwide could be carrying the superbug MRSA, and genetic changes are producing strains which could be even more
resistant to treatment. While new diseases such as bird flu are emerging and others appearing in new locations (e.g.
dengue fever in Texas and West Nile encephalitis in New York) only two new classes of antibiotics have been brought
to the market in the past 30 years.
Resistance is becoming more serious due to a number of parallel trends. Urbanisation facilitates the spread of typhoid,
tuberculosis, respiratory infections, and pneumonia; pollution, environmental degradation, and changing weather
patterns affect incidence and distribution, especially those spread by insects and other vectors; a growing proportion of
elderly people needing hospital care and thus at risk of exposure to highly resistant pathogens found in hospitals; AIDS
has enlarged the population of patients at risk of many previously rare infections; the resurgence of diseases such as
malaria and tuberculosis; and global mobility increases the speed and facility with which diseases and resistant micro-
organisms can spread. Irrational use of antibiotics is also promoting resistance. This is due to their being prescribed
when not needed or in self-medication, or because patients do not complete courses for financial or other reasons.
Antibiotics use in agriculture is another factor. In North America and Europe, half of all antimicrobial production by
weight is used in farm animals and poultry, notably as regular supplements for prophylaxis or growth promotion,
risking exposing healthy animals to frequently subtherapeutic concentrations of antimicrobials. This is accompanied by
an increased resistance in bacteria (such as salmonella and campylobacter) that can spread from animals, often through
food, to cause infections in humans. After the introduction of the fluoroquinolone antibiotics for use in food animals,
strains of salmonella with increased resistance appeared in humans in France, Germany, Ireland, the Netherlands,
Russia, Spain and the UK. The Australian government's policy of restricting fluoroquinolone caused a reduction in
human levels of drug-resistant bacteria.
Over a number of years, antibiotics have become an increasingly important ingredient in animal farming. In the period
2002-2004 alone, Danish consumption rose by some 25 per cent. A number of infectious deceases are now exhibiting
resistance to the most common antibiotics used in animal farming, and although the impacts on humans are receiving
growing attention, the threats to animals are becoming more widespread too. Handling this problem is an important
challenge for the future.

Bycatch
In 2002, a catch of 2,300 tonnes of lobsters resulted in 4,600 tonnes of by-catch. In addition to fish, shellfish and a
variety of sedimentary species, some 4,000-7,000 porpoise and an unknown number of birds end their lives as
bycatch. Continued innovation, not only along the lines of more selective trawls, but on a wider scale of
ecosystem and stock management is a challenge as well as an opportunity for modern fisheries.
By-catch refers to non-target species that are caught accidentally in nets, as well as juveniles and undersize members
of the target species. Bycatch is often discarded, but sometimes kept and sold. Estimates for fish bycatch range from 8
per cent of total global catch to 25 per cent, with some activities showing much higher rates, e.g. estimates of 90 per
cent for some shrimp trawlers. The FAO estimates that 8 to 8.35 tonnes of marine life are discarded at sea each year, the
equivalent of 10 per cent of what is reportedly landed. Discard volumes declined in the 1990s, but have increased by 10
to 15 per cent in recent years, due mainly to increased shrimp trawling. The WWF estimates that each year 300,000
small whales, dolphins and porpoises die after becoming entangled in fishing gear; over 250,000 loggerhead and
leatherback marine turtles are caught by commercial longline fisheries; 100,000 sharks are caught as bycatch in the
Mediterranean; and 100,000 albatrosses are killed because of longline fisheries.
Bycatch raises biological/ecological issues due to discards of populations or species that are in danger of extinction or
could be put at risk later; ecosystems impacts, where a complex of species is removed; unquantifiable discards for
which a lack of data creates an unknown level of impact (probably the majority of cases); and environmental impacts
including changes in oxygen levels due to decomposition of dead species. Discard can also have positive impacts on
species that scavenge, for example this may partially explain increases in the numbers of sea birds in the North Sea.
The most direct economic consequence is the loss when one fishery discards fish of economic importance to another.
This may be improved by allowing fishers to catch a mix of target and discard species ( Acceptable Biological Catch )
rather than setting quotas based on specific species. Discard induced mortalities can also affect immature individuals or
non-legal sexes of the target species. Studies of the Texas shrimp fishery determined that the value of the harvest
increased by some $9.4 million when closure of the fishery allowed juvenile shrimp to grow to more marketable sizes.
The Bering Sea crab fishery has been cited as loosing between $40 and $50 million per year through the discarding of
illegal crab. There are also economic costs associated with the discard of species that have little commercial value.
These species still generate costs such as crew time, wear and tear on material, and fuel consumption.
Discards increase the overall cost of monitoring and surveillance of fishing, estimated at over $4 billion a year
(although discard monitoring is only a small part of this). The lack of data on discard probably has a negative impact on
fisheries management, since it makes estimating fish stocks more difficult.
Socio-cultural values regarding fishing in general and bycatch can have economic consequences. In rich countries, the
most high-profile impact comes from the bycatch of charismatic species, but public perception is not always complete
and objective. For example, drift net tuna fisheries have been condemned as walls of death for dolphins, but they have
relatively low discard rates and some fishermen have been encouraged to use them on conservation grounds. Shrimp
fishing has also been a target for groups concerned with bycatch, but many people in poor countries sort the bycatch for
human consumption or animal feed. Reducing bycatch could endanger their livelihood and reduce animal protein
available for livestock.
The Danish fishing fleet consists of some 3,200 vessels. Although this number has been steadily declining during the
past decade, the size of the remaining vessels has grown significantly. Modern fishing is now an industrial affair
involving dragging large net-bags (trawls) through areas where echolocation indicates large concentrations of fish.
About three quarters of Danish fishing is based on this method. Other methods involve stationary nets and traps placed
near fish-migration routes or tide-currents. Although these methods have become increasingly sophisticated, none of
them are able to exclude bycatch of a wide range of off-target species. In Denmark, this resulted in 30,000 tonnes of
bycatch out of a total catch of some 85,000 tonnes in 2002. By-catch is especially a problem for sea-floor-trawling. In
2002, a catch of 2,300 tonnes of lobsters resulted in 4,600 tonnes of by-catch. In addition to fish, shellfish and a variety
of sedimentary species, some 4,000-7,000 porpoise and an unknown number of birds end their lives as bycatch.
Continued innovation, not only along the lines of more selective trawls, but on a wider scale of ecosystem and stock
management is a challenge as well as an opportunity for modern fisheries.

Congested traffic
Today, some 2,000,000 cars, 400,000 trucks and 15,000 busses roam the little more than 72,000 kilometres of
Danish road. Road space is gradually becoming a scarce resource, particularly in the larger cities, where rush
hour queuing and lack of parking spaces are now everyday occurrences.
Passenger transport in the EU-27 is expected to grow by 31 per cent (in passenger kilometres) over 2000-2020 and
freight by 75 per cent freight (in tons per km). The structure of passenger transport is projected to undergo significant
changes, with air transport the fastest growing transport mode, accounting by 2030 for 10.8 per cent of passenger
transport activity, compared to 5.4 per cent in 2000. Public transport modes will continue to have a more important role
in new member/accession countries over the projection period compared with the EU-15, while the contribution of air
transport activity will remain by 2030 at levels well below those projected for the EU-15.
The structure of freight transportation is also projected to change considerably, with road gaining significantly in terms
of market share at the expense of rail. The share of rail transport will fall from 17.1 per cent of total freight transport in
2000 to 11.2 per cent in 2030. The share of inland navigation is also projected to exhibit a continuous, thought limited,
decline over the projection period. Starting from a much higher share for rail freight transport in 2000, new
member/accession countries are projected to remain heavily dependent on rail. In 2030, some 24 per cent of freight
transport activity in new member/accession countries will be satisfied by rail transport, whereas in the EU-15 the
corresponding share will be just 9 per cent. The costs of road congestion are expected to increase considerably in the
coming decades at EU-27 level.
Growth in passenger transport is linked to growth in car use. The number of cars has increased by 3 million a year over
the past three decades. Car ownership is likely to stabilise in most EU countries but will continue to grow in the new
and candidate members. Growth in goods transport is due not only to economic expansion as such, but to the way
production is organised, with goods being delivered as needed rather than stocked, and production taking place on sites
than can be thousands of kilometres away from not only their final market but also their final assembly location.
Sea transport is a prerequisite for globalization. Production moves to low cost areas and consequently raw material,
semi-manufactures and finished goods have to be transported over long distances. A more global consumer taste
demands finished goods from all over the world further adding to the worldwide seaborne transport demand.
Furthermore globalisation demands transport of commodities as oil, ore, coal and grain etc. Bulk as well as unitized
transport especially containerized transport is expected to increase because of these circumstances. At the more local
and regional level the increasing trade and division of labour lead to congested roads. Further development of efficient
intermodal transport supported by ICT and infrastructure development, including ports and terminals are needed to
relieve the traffic pressure on the roads.
Growth in all modes of transport is aided by the not having to pay for externalities , the environmental, health and
other costs they generate.
Today, some 2,000,000 cars, 400,000 trucks and 15,000 busses roam the little more than 72,000 kilometres of Danish
road. These are just the means of transport registered in Denmark; a large number of foreign vehicles cross the border
and join them every day. Over the coming years, more people will own a car, while trucks become more numerous and
heavier. Also sea transportation will develop and ships will become more specialised, adapting to the goods being
transported. This in turn will require more efficient harbours. The number of kilometres people travel by car has been
rising steadily during the past decade, while travel by public transport has remained roughly constant. Discovering
acceptable methods by which limited road space at peak hours can be rationed will become an increasingly important
challenge to the Danish transport sector. The total volume of goods travelling to, from and in transit through Denmark is
expected to increase by 75 pct. towards 2025. These volumes demands development of an efficient road, rail, port and
terminal system and ICT to facilitate intermodality and an efficient use of the different modes of transport and hereby
development of a more efficient transport system.

Declining fish stocks
Achieving long-term sustainability in fish stocks as well in fisheries in the face of climate change, illegal fishing,
regulatory disputes and ecological decline will be a significant challenge for the future.
Around half of the capture wild fish stocks monitored by the FAO are fully exploited and therefore producing catches
at, or close to, their maximum sustainable limits, with no room for further expansion. A quarter of the stocks are either
overexploited, depleted or recovering from depletion and thus yielding less than their maximum potential owing to
excess fishing pressure. The remainder are underexploited or moderately exploited, and could perhaps produce more,
but many of the species involved have little value for human consumption.
The situation seems more serious for certain fishery resources that are exploited solely or partially on the high seas
Observations confirm that the maximum wild capture fishery potential from the world s oceans has probably been
reached. In many sea areas, the total weight of fish available to be captured is less than a tenth of that available before
the onset of industrial fishing in the 1950s. Indeed, some studies suggest that if present trends continue, commercial fish
and seafood species could all collapse by 2048. Collapses of previously abundant stocks have happened already, for
example cod stocks off Newfoundland collapsed in 1992 and never recovered, leading to 40,000 job losses. The same
thing could happen in the Baltic and North Sea. Inland fisheries, especially important for providing high-quality diets
for the poor, have also declined due to overfishing due to intensive targeting of individual large-size species in major
river systems or overexploitation of highly diverse species or ecosystems in the tropics. Changes to habitats and
withdrawal of fresh water are also having serious effects.
The decline in stocks could have a number of direct and indirect consequences. For example, fish supply around a fifth
of the protein consumed by humans, and aquaculture is unlikely to be able to make up the shortfall. The ecological
consequences are generally negative, since loss of biodiversity damages or distorts ecosystems, but they can also have
some positive impacts, at least in the short-term: the disappearance of cod off Newfoundland led to an increase in more
valuable species such as crab, but fewer fish due to overfishing can also encourage jellyfish, e.g. off Senegal and China.
For the fishing industry, the traditional response to declining stocks has been to switch species and fishing grounds, or
improve the technology. This has allowed the actual weight of global catches to remain stable or only decline slightly
over the past decade. However, the industry will increasingly have to take account of public hostility to unsustainable
practices. At present, because of overfishing of European waters, almost all the sustainable seafood consumed in
Europe comes from non-EU sources. In the US, Walmart announced that it will purchase all of its wild-caught fresh and
frozen fish for the North American market from fisheries certified by the London-based Marine Stewardship Council
within the next three to five years, further increasing global demand for certified fish. At present 86 per cent of MSC-
certified fish comes from the Americas and 4.7 per cent from Oceania, including the first MSC certified cod fishery, in
the North Pacific.
Fish stocks in the North Sea and the Baltic Sea vary greatly from year to year in response to natural factors such as
salinity, temperature and nutrition-levels. Industrial scale fishing has, however, become a major factor determining
fluctuations in fish stocks. Danish fisheries, now widely regulated through quotas, land a catch of some 85.000 tonnes
of fish each year. Quotas are revised annually based on biological surveys, estimating the size of fish stocks. Although
widely disputed, especially by fisheries, the quotas for many species of fish have been steadily declining over recent
years. Varying fish stocks and thus quotas has been a persistent source of financial instability and decline in fisheries
over the past decade. Achieving long-term sustainability in fish stocks as well in fisheries in the face of climate change,
illegal fishing, regulatory disputes and ecological decline will be a significant challenge for the future.

Energy efficiency
In spite of historical progress in this area, energy efficiency continues to be a major issue on the energy agenda in
the face of increasing import dependency and CO2 reduction-targets.
In a business as usual scenario featuring the absence of new government policies or accelerated deployment of new
technology, global primary energy demand will increase by 53 per cent between now and 2030. Over 70 per cent of this
increase comes from developing countries, led by China and India. Imports of oil and gas in the OECD and developing
Asia will grow even faster than demand. World oil demand will reach 116 mb/d in 2030, up from 84 mb/d in 2005.
The outlook could be substantially improved in an alternative scenario where governments implement the policies and
measures they are currently considering. In this scenario, global energy demand is reduced by 10 per cent in 2030, the
equivalent of China s entire energy consumption today. Global CO2 emissions are reduced by 16 per cent, equivalent to
current emissions in the United States and Canada combined. In the OECD countries, oil imports and CO2 emissions
peak by 2015 and then begin to fall. Improved efficiency of energy use contributes most to the energy savings, although
increased use of nuclear power and renewables also help reduce fossil-fuel demand and emissions. Biofuels' share will
increase, but rising food demand, which competes with biofuels for existing arable and pasture land, and the need for
subsidy in many parts of the world, will constrain the long-term potential for biofuels production using current
technology, so they still represent only 4 per cent of road-fuel use in the reference scenario in 2030 and 7 per cent in the
alternative (1 per cent today.) The shifts in energy trends described in this scenario would not only increase security of
supply, they would also contribute to environmental protection and improved economic efficiency.
Some extremely simple actions could have significant impacts. For example, many household electronic devices have a
standby mode, which may be just a clock or a little diode that remains lit. If all OECD country governments could agree
on a standard to limit standby power use to no more than 1 watt per device, peak electricity load could be reduced by
roughly 20GW, the equivalent of twenty large power plants. In the longer term, the energy sector will have to look
beyond its current vision, but nit has a long and well-established tradition of looking ahead. The focus may increasingly
shift to an energy system composed of renewable energy sources, supported by hydrogen storage technology.
The Danish economy has come some way toward increasing its energy efficiency over the past decades. Since 1980, the
total energy consumption in Denmark has increased by 3,8 per cent, while GDP grew by around 70 per cent. This
means that producing a unit of GDP in 1980 would have taken 39 per cent more energy than producing the same unit
today. In spite of historical progress in this area, energy efficiency continues to be a major issue on the energy agenda
in the face of increasing import dependency and CO2 reduction-targets. Energy efficiency continues to be an important
challenge for the future.

Energy system flexibility
With the liberalisation of the Nordic power market and the introduction of vast amounts of intermittent,
renewable energy - especially wind power - into the energy system, the challenge of integrating still more
heterogeneous power sources to match varying demand levels has arisen.
Residential and commercial energy demand is seasonal, temperature-dependent and inelastic. It must be covered as it
arises. To respond to such variations requires flexibility, meaning the ability to adapt supply to foreseeable variations in
demand, which are mainly seasonal, and to adjust for erratic fluctuations in demand, mainly short-term variations due to
temperature, or to adapt demand (reduce it) when supply is insufficient. This issue is likely to grow in importance as a
consequence of climate change, first because global warming will increase, or even create, demand for air conditioning
and refrigeration, and second because the number of extreme weather events is expected to increase. These will have
direct consequences as in the case of heat waves or severe cold, and energy infrastructures could be destroyed or
damaged by storms.
Flexibility can be achieved through physical instruments and contractual arrangements that anticipate likely variations
in demand and balance supply and demand at any time. Physical instruments include variable supply in production and
import contracts, or use of stocks of gas or oil from storage reserves. Contractual arrangements include contracts with
interruptible customers that allow interruption of their supply at agreed times.
The notion of flexibility is usually linked both to the quantity of energy supplied, e.g. volumes of gas, and to delivery or
transmission capacities. The latter are becoming more critical because the unbundling of the supply and transmission
businesses creates a new risk, that a transmission network s capacity will not always be sufficient to carry all the
available supply. Thus, flexibility to produce a certain amount of additional supply is not in itself sufficient to meet
unexpected requirements. Enough extra capacity must be available on the transmission grid to transport this increment
in a timely way.
With the liberalisation of the Nordic power market and the introduction of vast amounts of intermittent, renewable
energy - especially wind power - into the energy system, the challenge of integrating still more heterogeneous power
sources to match varying demand levels has arisen. For example, local heat markets and the national electricity market
operate independently. Nonetheless, the production of electricity and heat from a coal- or biomass-fired power plant are
closely interrelated, as the production of the former cannot happen without producing the latter. Likewise, wind farms;
now supplying some 20 per cent of total Danish electricity demand, produces electricity when there is wind - regardless
of demand. A storm hitting a large offshore wind installation on a warm spring night with little demand places great
strains upon the energy system. Other power sources must rapidly shut down to balance out production, and excess
power must be dumped at low prices on the international power market. Matching supply and demand is thus a complex
long-term challenge because of the interrelatedness of the energy system and its many components. The unique Danish
conditions in this area may well provide a favourable first-mover advantage for solutions introduced by the Danish
energy industry as this challenge spreads to other countries shifting from conventional to renewable energy sources.

Feeding 8 billion people
The global developments in food consumption patterns combined with a scenario with possible climate changes
and enhanced focus on sustainable agriculture gives rise to new opportunities and challenges for the Danish
agricultural sector.
Increasing population and rising standards of living are leading to demand both for more food and for different diets,
notably more animal proteins. However, current methods may not be able to meet future demands for agricultural
products, not only because of increasing demand as such, but because agriculture will be competing for resources with
other uses, e.g. arable land being sacrificed to urbanisation or energy crops. Biotechnologies such as GMO may provide
solutions, but they also raise a number of issues, notably concerning environmental effects, safety and public
acceptance.
World nutrition will improve on average, but deep disparities will remain. In 2030, world population is projected to be
over 8 billion, versus 6 billion today. Thanks to improved agricultural productivity, there will be 3,050 kilocalories
(kcal) available per person per day, versus 2,800 today. Patterns of food consumption will converge throughout the
world, shifting towards higher-quality and more expensive foods such as meat and dairy products, with the increase
mostly due to rising consumption in many developing countries. Meat consumption in developing countries was 26 kg
per year in 1997-99 and is projected to rise to 37 kg 2030. Milk and dairy products are expected to grow from 45 kg
now to 66 kg in 2030.
The developing countries will become increasingly dependent on cereal, meat and milk imports, their production will
not keep pace with demand (an extra billion tonnes of cereals will be needed by 2030). By 2030, developing countries
could be producing only 86 per cent of their own cereal needs, with net imports rising from 103 million tonnes today to
265 million tonnes by 2030.
Although the number of hungry people in developing countries is expected to decline from over 700 million today to
440 million in 2030, the target of the World Food Summit in 1996, to half the number of hungry people from 815
million in 1990-92 by 2015 will not even be met by 2030. In Sub-Saharan Africa, the number of chronically
undernourished people will only decrease from 194 to 183 million.
The global developments in food consumption patterns combined with a scenario with possible climate changes and
enhanced focus on sustainable agriculture gives rise to new opportunities and challenges for the Danish agricultural
sector. This sector is traditionally very export-oriented. This orientation and very efficient domestic structures
(ownership, trade, research and development) make agricultural exports mean more to the Danish economy than to any
other country in the EU15. In 2006, Danish agricultural exports reached an all time high of some DKK 61 billion - 5
billion more than the preceding year and held a share of all Danish exports of some 13 per cent. Especially exportsof
pork and live pigs have grown explosively in response to increasing meat demand in Japan, the UK, Germany and the
new Eastern European Member States, while the world market demand for milk powder is declining. In years to come,
the major developments in meat and dairy markets are expected to occur in developing countries, where diets will
change rapidly over the coming decades and whose domestic production will fail to keep pace. The EU continues to be
the major market for the Danish agricultural sector and the sector s representation in developing countries remains
weak. Knowledge about and adaptation to the constantly shifting consumption patterns will continue to be a challenge
for this sector of the Danish economy.

Food safety
In Denmark, recent years have provided evidence that the asymmetry of information between consumers and
producers is being exploited to sell and serve poor-quality food.
The importance of food preservation varies dramatically depending on whether developed or developing countries are
considered. In developed countries the main challenges involve monitoring increasingly long and complex supply
chains as the demand for every type of food all the year round grows; exploring the opportunities and risks of
technologies such as irradiation or nanotechnology-based techniques for preservation; and assessing the safety of
chemical preservatives, notably given worries that the increase in allergies and other food-related conditions may be
linked in part to preservatives and other additives.
In developing countries, better food preservation could make a significant contribution to reducing hunger, and is
literally a life and death issue when up to a billion people are undernourished. Every food group loses enormous
quantities of its production in post-harvest losses to temperature, insects, diseases, etc, and these losses could in large
part be avoided by better preservation. Post-harvest losses of cereals and grain legumes of 10 to 15 per cent are
common. In some regions of Africa and Latin America up to half the harvest is lost. Horticultural production, especially
in hot-wet tropical environments, is particularly severely constrained by post-harvest losses since the crops are often
highly perishable, restricting the ability of producers to store them to cope with price fluctuations. Between 20 per cent
to 50 per cent of crops are lost.
The FAO projects that demand for milk in the developing world will double by 2030. The vast majority of milk
produced in these countries comes from small-scale farmers. Dairy imports to developing countries grew by 43 per cent
in value terms between 1998 and 2001, yet a study of the milk and dairy industry in Kenya, Uganda and Tanzania
revealed that annual losses due to spoilage and waste add up to $56 million each year. The FAO also estimates that for
every 100 litres of milk produced locally, up to five jobs are created in related industries like processing and transport.
Final consumers of food products are not always in a good position to assess the quality of what they are about to buy.
This is especially true for processed foods and ready meals, where the basic ingredients have already been mixed and
cooked, and whose cold chain and other preservation and storage aspects are vulnerable due to the number of
companies and individuals involved. In Denmark, recent years have provided evidence that the asymmetry of
information between consumers and producers is being exploited to sell and serve poor-quality food. As the food
supply-chain globalises and offers a still wider range of processed foods, it becomes ever more difficult to police. In a
Danish contexy, this is most obvious in continuous claims of underfunding of food control authorities. Re-establishing
consumer-trust in a still longer and wider supply chain with such clear financial incentives to cheat will be a massive
challenge facing the food industry as a whole over the coming years

Harvesting climate change
Over the coming years, the average annual temperature in Denmark is projected to rise. Precipitation patterns
are likely to change towards drier summers and wetter winters. As agriculture takes up 62 per cent of the total
land area, climate change will have significant impact upon the Danish agricultural sector.
Climate change could benefit agricultural production globally through the fertilisation effect of increased CO2 and an
increase in temperature, although after 3C, the impacts become negative. Temperate crops will tend to move north as
growing conditions nearer to the equator become less suitable, while growing conditions improve at higher latitudes. At
regional and local level, the impacts are much more complex and influences can be contradictory. The economic and
scientific resources available to adapt to change will have a major influence, but will not be able to mitigate all the
negative consequences. Australia and New Zealand, for example, have well-developed economies and scientific and
technical capabilities, but production from agriculture and forestry is projected to decline by 2030 over much of
southern and eastern Australia, and over parts of eastern New Zealand, due to increased drought and fire.
The worst impacts are likely to be in the areas least equipped to deal with them. In the Sahel, for instance, warmer and
drier conditions have already led to a reduced growing season with detrimental effects on crops and agricultural
production, including access to food. In many other African countries and regions, agriculture is projected to be
severely compromised by climate variability and change. The area suitable for agriculture, the length of growing
seasons and yield potential, particularly along the margins of semi-arid and arid areas, are expected to decrease. Yields
from rain-fed agriculture could be reduced by up to 50 per cent by 2020 in some countries. Local food supplies are also
projected to be negatively affected by decreasing fisheries resources in large lakes due to rising water temperatures,
which may be exacerbated by continued over-fishing.
In Europe, the situation will vary widely. In Southern Europe, climate change is projected to worsen conditions through
high temperatures and drought in a region already vulnerable to climate variability, and to reduce water availability. In
Central and Eastern Europe, summer precipitation is projected to decrease, causing higher water stress. Forest
productivity is expected to decline and the frequency of peatland fires to increase. In Northern Europe, climate change
will lengthen growing seasons, increase crop yields and and stimulate forest growth. However, as change continues,
negative impacts such as more frequent winter floods, endangered ecosystems and increasing ground instability are
likely to outweigh the benefits. Even in the shorter term, the impacts could be mixed. The benefit to forests from longer
growing seasons could be reduced by changes in precipitation that increase fire risk. Pigs, poultry and other livestock
could be exposed to more heat stress and increased disease transmission by faster growth rates of pathogens with more
efficient and abundant vectors, including insects that have migrated from more southerly latitudes. Food storage,
including animal feed, could become more expensive.
Some models predict that over the coming 100 years, the average annual temperature in Denmark is projected to rise
between 1 and 5oC. Precipitation patterns are likely to change towards drier summers and wetter winters. As agriculture
takes up 62 per cent of the total land area, climate change could have significant impact upon the Danish agricultural
sector. A higher average annual temperature will reduce the length of the growing season for one-year crops, e.g. rape
and cereals, as these will ripen earlier than today. Although this will tend to reduce yields, increasing CO2-levels in the
atmosphere causing accelerated plant-growth, is likely to more than make up for that loss if altered precipitation
patterns or intensified irrigation permits. Moreover, increasing temperature will lengthen the growing season for grass,
sugar beets and corn contributing to higher yields, dependent on precipitation or irrigation. Vegetable-growth too will
benefit from an extended growing season. In the wake of climate changes themselves and changed cropping patterns,
net pests and diseases, including invasive plant species, will appear and might cause serious losses on crops and nature.
Adjusting crop-selection to a gradually changing climate will be a continuous challenge to Danish agriculture.

Intensifying animal production
The development up until today has demonstrated that Danish agriculture has been able to adapt to still stricter
environmental demands and continue intense animal production. The challenge of continued technological
development within this area is a necessity for the future position of this sector.
Both at a global, European and at national levels, animal production continues to concentrate in still larger production
units and in areas where producers find the most favourable production and infrastructural conditions. These larger units
emphasises the impact of animal production upon its surroundings and creates demand for technological solutions able
to reduce the impact upon the environment, nature and neighbours, while maintaining such intensive production. In
areas where the animal production intensity is high, the continued competitiveness of the industry will depend on the
development of such solutions.
The market for technological solutions able to manage local impacts of intense animal production is expected to be
significant, for example the removal of waste products from intense production areas to where fertilizer is needed or for
alternative uses. Environmentally efficient technologies for, among other things, alternative uses of waste products
could be a promising growth area with considerable job creation and export potential. A recent report from Aarhus
Business School found that the global market for animal waste management to be worth at least some DKK 750 billion
a year.
Agriculture, food production and the associated industries are of significant importance to the Danish economy and
occupation. This sector takes up some 20 per cent of all Danish exports and about 16 per cent of all employment. The
importance of this sector is especially large in rural areas and peripheral regions. A prerequisite for the continued
success of this sector in the international competition is that animal production can happen in a more finically,
environmentally and socially sustainable way. Environmentally efficient animal production is a Danish position of
strength. The development up until today has demonstrated that Danish agriculture has been able to adapt to still stricter
environmental demands and continue intense animal production. This has been possible because of close cooperation
between research and development, refinement and the primary production. The challenge of continued technological
development within this area is a necessity for the future position of this sector.

Non-food rising
The introduction of radically new crops and new markets demanding them is likely to be a significant challenge
for the agricultural sector over the years to come. Markets for various energy crops are emerging in the energy
and transport sectors, while experimentation with new bio-fuel producing crops are in the pipeline. The
introduction of radically new crops will likely prove a significant challenge to this sector over the coming years.
At the same time as global demand for food expands, agriculture will be expected to provide a number of non-food
products:
Renewable sources of energy such as ethanol from biomass, and renewable materials, e.g. biodegradable
plastics. It is highly unlikely that significant numbers of cars in OECD markets will run exclusively on biofuels
in the foreseeable future, but many countries are promoting fuel mixes, such as adding a given percentage of
ethanol to traditional fuels.
Plants with new output traits for feed stocks such as starches and oils to improve animal nutrition without the
use of additives such as antibiotics, or with better storage qualities.
Plants with new output traits for enhanced consumer products including clothing and cosmetics. While many
of the plants used in new applications to cosmetics (and food products) will come from developing regions
such as the Amazon basin, the green consumer movement will encourage the use of plants from all regions.
Plants (and animals) for producing therapeutic agents particularly antibodies These are expected to be much
more efficient and less expensive than traditional methods.
Plants for bioremediation, for example to clean up polluted lakes or soils, and leisure and amenity provision.
This trend offers new possibilities to farmers, but also raises a number of questions. Biopharming, for example, only
needs a small acreage and thus very few farms, and the risks of contamination of food crops means that the food
industry will call for extremely strict containment regulations and may refuse to do business with farmers involved in
biopharming. Fuel crops on the other hand require large areas to be economically viable as well as investment in
transport and transformation infrastructures, which farmers do not control. Moreover, optimal production conditions
may be in developing countries.
The introduction of radically new crops and new markets demanding them is likely to be a significant challenge for the
agricultural sector over the years to come. Markets for various energy crops are emerging in the energy and transport
sectors, while experimentation with new bio-fuel producing crops are in the pipeline. Current estimates indicate that
substituting even a small percentage of the energy currently used in the transport sector with bio-fuels will entail a vast
demand on agricultural energy products. Also the pharmaceutical and chemical industries may develop into a major
market for highly specialised agricultural products as new medicine, protein and enzyme-producing crops are
developed. The nature of current incentives, legislation and subsidies may likewise change in response to these new
socetal demands. If and how this new green revolution will transform the Danish agricultural sector is largely
unknown, but it may emerge entirely different from the predominantly food-producing primary industry we know
today.

Organic food
The challenge and opportunity of the emergence of new segments of organic food consumers is highly relevant to
the Danish food industry as international price-competition intensifies.
The ongoing globalisation of food markets has amplified the twin tendency for competition in markets dominated by
price has become more intensive, while the market for quality foods and specialised delicacies continue to grow. This
tendency includes growing interest in locally produced foods as well as organic foods.
Large producers dominate the food industry, and perhaps more importantly, so do large distributors. However the
demand for "nonindustrial" food is growing steadily, and practically every supermarket now sells "organic" products.
Global sales of organic food and drink increased by 43 per cent from $23 billion (17.8 billion Euros) in 2002 to $33
billion (25.5 billion Euros) in 2005, and are estimated at $40 billion (30.9 billion Euros) in 2006. In 2004, the EU-25
market for organic food products was estimated at 11 billion euros. Germany was the largest national market with a
share of about 30 per cent of the total EU market volume. Nonetheless, the share of organic products in total turnover of
food products is tiny, with the highest shares of organic food in total food products turnover in Denmark (5 per cent),
Sweden (3 per cent) and Germany (2.6 per cent).
The outlook is optimistic, but the sector has to address issues including standards and their enforcement, supply chain
reliability, competition and consolidation as large firms move into the sector and overseas producers exploit supply
shortfalls in the major EU and North American markets.
Demand for organic food products in Danish retailing escalates like never before. In 2006, organic food and beverages
was traded for DKK 2.7 billion in Danish supermarkets and departments stores an increase of 18 per cent compared to
2005. A recent study by the Danish Consumer Council concluded that the primary reason is that organic food products
have become more available, and that consumers increasingly associate organic food products with health and quality.
Especially organic milk, flour, eggs and vegetables have become increasingly popular, but also organic meat is on the
rise. On the whole, however, Danish agricultural production is pronominally conventional. In 2005, only about 3,000
farms out of a total of some 44,000, or about 6.1 per cent, were certified organic producers. While the number of
organic farms grew from the 1990s and onwards, the figure stagnated around 2002. From 2002 and until today, the
number of organic farms has declined slightly. According to the Danish National Association of Organic Farming, a
shortage of organic food products is imminent as to few farmers chooses organic production methods. The global
demand for food with special qualities is growing along with consumer interest in food products with an associated
story or sense of originality. This tendency includes growing interest in locally produced foods as well as organic foods.
In a Danish context, the flourishing of local breweries and even vine production are recent examples. The challenge and
opportunity of the emergence of new segments of quality food consumers is highly relevant to the Danish food industry
as international price-competition intensifies.

Reducing greenhouse gasses
Denmark is obligated to reduce emissions by 21 per cent relative to the emission-levels of 1990 during the period
2008 - 2012. Negations are now underway to set longer-term post-Kyoto targets.
If current trends continue, global energy-related carbon-dioxide (CO2) emissions will increase by 55 per cent between
2004 and 2030, or 1.7 per cent per year. They could reach 40 gigatonnes in 2030, an increase of 14 Gt over 2004. Power
generation contributes half of this increase. Coal overtook oil in 2003 as the leading contributor to global energy-related
CO2 emissions and consolidates this position through to 2030. Emissions are projected to grow slightly faster than
primary energy demand, reversing the trend of the last two-and-a-half decades, because the average carbon content of
primary energy consumption increases.
Developing countries account for over three-quarters of the increase in global CO2 emissions to 2030. They overtake
the OECD as the biggest emitter soon after 2010. The share of developing countries in world emissions rises from 39
per cent in 2004 to over 50 per cent by 2030. This increase is faster than that of their share in energy demand, because
their incremental energy use is more carbon-intensive than that of the OECD and transition economies. In general, the
developing countries use proportionately more coal and less gas. China alone is responsible for about 39 per cent of the
rise in global emissions. China s emissions more than double between 2004 and 2030, driven by strong economic
growth and heavy reliance on coal in power generation and industry. China overtakes the United States as the world s
biggest emitter before 2010. Other Asian countries, notably India, also contribute heavily to the increase in global
emissions. The per-capita emissions of non-OECD countries nonetheless remain well below those of the OECD.
It is unlikely that the growth in CO2 emissions over the next 20 years will cease, but if the policies and measures being
considered today are implemented, energy-related CO2 emissions could be cut by 1.7 Gt, or 5 per cent, in 2015 and by
6.3 Gt, or 16 per cent, in 2030 compared with a business as usual scenario. The various actions would cause
emissions in the OECD and in the transition economies to stabilise and then decline before 2030, although emissions in
2030 are still slightly higher than in 2004. Emissions in the EU and Japan would however fall to below current levels.
Policies that encourage the more efficient production and use of energy contribute almost 80 per cent of the avoided
CO2 emissions. The remainder comes from switching to low- and or zero-carbon fuels. More efficient use of fuels,
mainly through more efficient vehicles, accounts for almost 36 per cent of the emissions saved. More efficient use of
electricity in a wide range of applications, including lighting, air-conditioning, appliances and industrial motors,
accounts for another 30 per cent. More efficient energy production contributes 13 per cent. Renewables and biofuels
together yield another 12 per cent and nuclear the remaining 10 per cent. The policies that are most effective in reducing
emissions also yield the biggest reductions in oil and gas imports.
As for many other European countries, Denmark has ratified the Kyoto Protocol and has, as part of European Union
burden sharing agreements, committed itself to one of the most ambitions GHG-reduction targets in the world.
Denmark is obligated to reduce emissions by 21 per cent relative to the emission-levels of 1990 during the period 2008
- 2012. Although this target poses a significant medium-term challenge to the energy sector, negations are now
underway to set longer-term post-Kyoto targets. Initial statements from EU-leaders indicate that reduction targets at 15-
30 per cent of 1990 emission-levels by 2020 are being seriously considered. Achieving CO2 reductions effectively as
well as efficiently poses a significant long-term challenge to the Danish energy sector and potentially a major market
for the Danish energy industry.

Security of gas supplies
The major part of natural gas consumed by the Danish energy sector is produced from domestic fields in the
North Sea. At current consumption levels, these reserves are estimated to last around 15-20 years.
As for oil, non-OPEC production of natural gas liquids is set to peak within a decade and an increasing share of gas
demand will have to be met by imports, via pipeline or in the form of liquefied natural gas from increasingly distant
suppliers. Consumption is projected to grow substantially. In Europe, the share of gas in primary energy supply is
expected to increase from around a quarter today to over a third by 2030, with imports tripling.
However, there are major differences between oil and gas when it comes to supply security, especially in Europe. There
has never been a major gas price shock, there is no gas equivalent to OPEC, and until recently, gas supply was a
monopoly in many countries, often controlled by the state. Security of supply in recently liberalised gas market is likely
to pose different challenges to those found in oil markets. The European Commission is worried that no player will of
its own accord automatically assume responsibility for security of supply. In a commercial market, it is not certain that
gas suppliers will give strategic priority to security of supply, as companies increasingly focus on competition.
Apart from a possible failure by private companies to ensure supply security for whatever reason (including
bankruptcy), the risks associated with security are of three types. Increased imports increases dependence on the
technological and political reliability of the sources of the gas itself and the networks needed to transport it to importing
countries and final users. While the technological aspects are mostly in the hands of the gas industry, the political risks
have to be dealt with at government level. This is similar to the oil industry, but the third type of risk is essentially
pertinent to gas, and relates to the facilities for storing, processing and distributing the product once it reaches the
importing country (this risk also applies to non-importers). Europe has practically no spare capacity and would be
incapable of redirecting supplies in the case of a major interruption in a given country nor region. So even if imported
supplies were readily available, an accident or a deliberate attack on a gas facility could seriously compromise supply
security. And of course infrastructure undercapacity would also prevent sufficient flows from being redirected if a
major supplier decided to interrupt deliveries.
The challenges for gas security are thus not only diversification of supply, but providing the physical facilities and
regulatory or other incentives to ensure that enough gas is available and can be delivered to those who need it.
Natural gas is an important component in Danish energy supply, with a share of about a quarter of the total energy
consumption. This share has grown steadily since the mid 1980s and the trend is set to continue. The major part of
natural gas consumed by the Danish energy sector is produced from domestic fields in the North Sea. At current
consumption levels, these reserves are estimated to last around 15-20 years. Some time during this period, Denmark is
likely to share the growing import dependency, which already characterises the major part of Europe. By far the largest
natural gas reserves in the world are found in Russian Siberia, the Middle East and at the Caspian Sea. These regions
are likely to play a key role as import dependency increases. Instability and tension in the Middle East remains a
problem in and around many key producer countries and thus a problem to long-term security of supply. Russian natural
gas resources have increasingly become subject to political influence through Gazprom, the national resource company,
of which the Russian government now holds the majority of shares. This raises the challenge the long-term security of
natural gas supply, which depends on an increasing number of factors beyond national control.

Security of oil supplies
The major share of Danish oil consumption is produced in domestic fields in the North Sea. At current
consumption levels, these domestic reserves are estimated to last for some 30 years.
Rising demand for oil will accentuate importing countries vulnerability to a severe supply disruption and resulting
price shocks. The OECD area and developing Asian countries are increasingly dependent on imports as their indigenous
production fails to keep pace with demand. Non-OPEC production of conventional crude oil is expected to peak within
a decade. By 2030, the OECD as a whole will have to import two-thirds of its oil needs, compared with 56 per cent
today. Much of the additional imports will come from the Middle East, along vulnerable maritime routes. For example,
over 20 per cent of world oil supplies transit via the Straits of Hormuz, a narrow channel between Iran and Oman. If this
were blocked, only a small share could be transported along alternative routes. The concentration of oil production in a
small group of countries with large reserves, notably Middle East OPEC members and Russia, will increase their market
dominance and their ability to impose higher prices or to use energy supply to achieve political goals.
The growing insensitivity of oil demand to price accentuates the potential impact on international oil prices of a supply
disruption. Already, even rumours of a reduction can cause major price rises. The share of transport demand is projected
to rise, and as a result, oil demand will become less and less responsive to movements in international crude oil prices.
The corollary of this is that prices could fluctuate more than in the past in response to future short-term shifts in demand
and supply. The cushioning effect of subsidies to oil consumers on demand contributes to the insensitivity of global oil
demand to changes in international prices. Current subsidies on oil products in non-OECD countries are estimated at
over $90 billion annually. Subsidies on all forms of final energy outside the OECD amount to over $250 billion per
year, equal to all the investment needed in the power sector each year, on average, in those countries.
The eventual impact of higher energy prices on macroeconomic prospects remains uncertain, partly because the effects
of recent price increases have not fully worked their way through the economic system. Most OECD countries have
experienced a worsening of their current account balances, notably the US. The recycling of petro-dollars may have
helped to mitigate the increase in long-term interest rates, delaying the adverse impact on real incomes and output of
higher energy prices. However, the longer prices remain at current levels or the more they rise, the greater the threat to
economic growth in importing countries. An oil-price shock caused by a sudden and severe supply disruption would be
particularly damaging, for heavily indebted poor countries most of all.
Security of oil supply has ranked high on the energy policy agenda since the first oil crisis in the 1970s and this
challenge remains as relevant as ever, since more than 40 per cent of Danish energy is supplied in the form of oil. The
major share of Danish oil consumption is produced in domestic fields in the North Sea. Most of this oil is consumed by
the transport sector. Current production from these fields surpasses domestic consumption by some 45 per cent, making
Denmark a net oil-exporting country. Assuming a continuation of the current high oil prices, it is estimated that
Denmark can maintain self-sufficiency for a further 30 years. This will require increased extraction efficiencies
achieved through technological improvements and that current expectations to new finds are realised. Beyond this time,
however, we will need to look beyond our borders to satisfy demand. By far the largest oil reserves in the world are
located in the Middle East and as import dependency increases, this unstable region will be of key importance to
Denmark as to other countries. This raises the challenge the long-term security of oil supply, which will depend on an
increasing number of factors beyond national control.

Stagnating public transport
While the number of people choosing private transport has grown steadily for decades, the number of users of
public transport has largely stagnated. The challenge is to improve the quality public transportation where the
advantages of this form of transport are greatest.
Trends in public transport vary widely across countries, and even within a given country. Countries with well-
developed high-speed rail networks can see growth for this mode at the same time as urban public transport usage
stagnates or declines. Stagnation in use can also be a sign of success to some extent, where links are saturated and there
is little chance of expansion without massive investment in new capacity such as doubling existing rail lines. This
problem is likely to become serious for a growing number of urban agglomerations where real estate prices and other
factors force increasing numbers of people to live further and further from their place of work.
If passengers were deserting public transport, or never using in in the first place, because they were walking or cycling
more, this would be a positive development, but in all countries where public transport is stagnating, the trend is
towards greater use of the private car. A number of factors are encouraging this trend. Saturation, mentioned above,
means that it can be less unpleasant to spend an hour in a car, even with traffic jams, than a shorter time standing in an
overcrowded bus or train. Quality of service is thus a priority for authorities hoping to attract car travellers back onto
trains, buses and metros, but evidence suggests that there is much more chance of persuading car passengers to switch
to another mode than drivers. However, car ownership is closely linked to income level, and as general wealth
increases, groups that previously could not afford a car can do so, so that in many OECD countries, there is now at least
one car per household. The car-less population will also tend to diminish as the babyboom generation ages, since
most of them will be drivers, unlike older people of previous generations.
Authorities hoping to encourage public transport will have to adopt a varied set of policies, many of which are likely to
prove unpopular (such as those aimed at penalising car use), and some of which have to influence subjective factors
such as the perception of quality (such as waiting times).
Stagnating public transport is a significant challenge to Danish society. While the number of people choosing private
transport has grown steadily for decades, the number of users of public transport has largely stagnated. This is
especially the case for bus transport, having experienced a declining number of travellers during recent years. Public
transport is now at a crossroads. Maintaining and modernising public transport systems will require significant
investments in the years to come, but what should be the long-term role of public transport in Denmark? Under a
number of conditions it can be more advantageous to use means of transport such as private cars or bikes. The challenge
is to improve the quality of public transportation where the advantages of this form of transport are the greatest.

Waste production
Denmark produced 14,210,000 tonnes of waste in 2005 alone. Over the past decade, waste production has
increased by 28 per cent and will continue to increase over the coming decades as a side effect of increasing
wealth.
Each year, the OECD countries generate over 4 billion tonnes of waste. With the evolution of the economy towards
services and high-technology manufacturing, and with a declining share of output from the primary sectors, the
composition of total waste is expected to change significantly. The generation of municipal waste and of waste from
manufacturing industries and construction and demolition is expected to increase faster than the average growth rate of
total waste. Waste from the primary sectors, such as agriculture and forestry and mining and quarrying, is expected to
grow at a slower rate.
Apart from cement, municipal solid wastes are the biggest mass of solid materials generated by humanity. The quantity
of municipal solid waste is rising steadily, and has now reached over 600 million tonnes a year in the OECD area, the
equivalent of almost 600 kg a year for each inhabitant, which is half as much again as the level in 1980. In non-OECD
countries, municipal waste generation is expected to increase roughly at the same rate as GDP, which means that by
2020 it would be double the 1995 level, or around 1.3 billion tonnes per year. Over the next 20 years, socio-
demographic developments such as the trend towards smaller households, and increasing affluence and consumption
levels, are expected to lead to further increases in the quantity of waste generated per person in OECD regions, and if
trends continue, the total for municipal solid wastes could reach over 800 million tonnes by 2030, i.e. Around 650 kg
per person.
Annual hazardous waste generation is estimated to be about 100 kg per capita in OECD regions. Because of widely
varying and constantly changing definitions of hazardous waste in OECD countries, it is difficult to calculate trends, but
most countries expect hazardous wastes to continue growing in line with economic expansion.
Waste has a number of environmental impacts, including land use, air and water pollution, and greenhouse gas
emissions. Reducing such impacts implies preventing waste from being generated, increasing waste recovery and
recycling, and disposing of any remaining waste in an environmentally safe manner. Projections are encouraging. In
2020, about 50 per cent of municipal waste is likely to be landfilled, 33 per cent to be recycled and 17 per cent
incinerated in OECD regions, compared with 64 per cent, 18 per cent and 18 per cent respectively in the mid-1990s.
Non-OECD regions are also projected to show significant changes in waste treatment methods, with landfill expected to
decrease from about 80 per cent in 1995 to 70 per cent in 2020, and recycling to increase from 10 per cent in 1995 to 20
per cent in 2020. However, given that the amount of waste generated could increase so much, waste volumes may
cancel out improvements in waste management.
Denmark produced 14,210,000 tonnes of waste in 2005 alone. A little over a third of this is construction waste.
Household waste contributes nearly a quarter, while industry and services take up about 13 per cent each. Over the past
decade, waste production has increased by 28 per cent and will continue to increase over the coming decades as a side
effect of increasing wealth. Waste handling, sorting, treatment, storing and recycling are already major industries.
Currently, two thirds of the waste produced in Denmark is recycled, nearly a quarter is incinerated and some eight per
cent is permanently stored. Reducing waste production and making better use of waste as a resource, is a challenge as
well as an opportunity. One example is products designed to be taken apart after use, greatly decreasing the cost and
energy consumption often entailed by recycling efforts. Other examples include industrial synergies, where the waste
products of one industry are profitably used as a raw material for another. As Danish legislation and technology in this
direction is already well advanced, the further-development and introduction of these capabilities to new areas may
prove a significant opportunity as well as a challenge.

State
Danish society has changed a lot over the years and the ongoing changes create new possibilities as well as problems.
This category contains the challenges related to the defence of Denmark, law and order and regional and metropolitan
development.

Coherency
Coherency is a complex and often vaguely defined term, which depends on a very wide range of factors within a
society. Some of these factors are social and economic equality. Communities characterised by such inequalities risk
fragmentation, which challenges the collective sense of responsibility as well as common support behind the norms and
values upon which communities are based. Despite a significant improvement in labour market conditions in most
OECD countries, inequality in the distribution of household disposable income among the total population increased
over the second half of the 1990s, continuing the trend of the previous decade.
The always poor represent around 40 per cent of those who have low income at any time among people aged 25 to 64,
but close to 50 per cent for children and more than 60 per cent among the elderly. Women living alone also face a
higher probability of persistent poverty than men.
Education is another factor, which is often associated with coherency. Also in terms of education, inequalities persist
within many OECD countries. Students whose parents (either father or mother) have a low educational attainment have,
on average, mathematics scores equivalent to around 1.5 years less than those with highly educated parents. Similarly,
students from single-parent households record lower test scores, by those born in a different country from the one where
they attend school and by first-generation immigrants (with a gap equivalent to more than one grade-year, on average,
relative to natives). This educational disadvantage carries over into employment prospects. Employment rates of people
with less than upper secondary education are 17 points lower than for those with upper secondary education, and 27
points less than among those with university and other tertiary degrees.
The coherency of a society also about integration people from the outside. Almost 191 million people lived outside their
country of birth in 2005, double the numbers 50 years earlier, but as a proportion of world population, this has changed
little: 2.5 per cent in 1960 versus 2.9 per cent in 2005. The number of new international migrants has decreased from 41
million between 1975 and 1990 to 36 million between 1990 and 2005, but of the 33 of the 36 million who migrated in
1990-2005 went to industrialised countries. Today, a third of all migrants live in Europe, a quarter in North America.
The bulk of migrants in OECD countries are originally from OECD countries, but flows seem to be growing more
diverse.
Denmark normally prides itself of its low Gini coefficient and high level of social coherency. Nonetheless, coherency is
not to be taken for granted. This is demonstrated by developments both ends of the social ladder and in particular
among ethnic minorities. The problem of ghetto formation is an example of this. Although there is no clear definition of
a ghetto, this word is often used about a number of geographically limited areas where social problems are particularly
concentrated. Areas such as Mjølnerparken in Copenhagen, Vollsmose in Odense and Gellerupparken in Aarhus are
characterised by a significantly higher than average rate of unemployment, crime as well as non-western immigrants
and descendants. These areas are often actively avoided by ethnic Danes and scorned by the media because of events
such as violence and riots. Also, at the top of the societal pyramid, coherency can come under pressure. As an example,
real estate prices can keep lower classes out of wealthy municipalities and well-off neighbourhoods. These
developments are likewise visible in public schools, where wealthy or middle class parents often avoid public schools
with a high concentration of immigrants and/or social problems, reinforcing the tendency for some schools to be
overwhelmed with social problems and low grade averages. The long-standing ideal of one schools for everyone in
which the composition of pupils reflects society at large can come under pressure. Maintaining the high level of
coherency and collective responsibility characterising Danish society is a serious challenge for the future and an area
where better understanding may well be needed.

Competitive cities
In Denmark, competition between cities is longstanding and deep-felt. The capital city of Copenhagen is engaged
in fierce rivalry with the large provincial cities of Aarhus, Aalborg and Odense for jobs, infrastructure,
investments, concerts, exhibitions, happenings, parking space and many other things.
Cities are dynamic, dirty, vibrant, overcrowded, engines of growth, a drain on resources. Their successes are as
spectacular as their failures. The contradictions and paradoxes of metropolitan regions make policymaking an exercise
in reconciling opposites. High concentrations of population contribute to dynamism, but also create problems. Some
countries have tried to counter the negative effects through containment policies, but there is little reliable data showing
whether losses in the area subject to containment is compensated by higher growth elsewhere in the country. In
addition, there is increasing concern that such policies might hinder international competitiveness of the major city.
Economic growth across the whole metropolitan region also depends on social cohesion, for which policies have to be
designed. Social and distressed neighbourhoods policies have produced mixed outcomes. While economic dynamism is
driven by the market, while public policy has to deal with its externalities, which usually appear later. Urban
governance has to anticipate problems, as they are often far more difficult and expensive to solve after they have
developed than when they could have been prevented.
The involvement of private-sector interests is essential to creating competitive cities, as this ensures that public policy-
makers are well informed of the needs of firms and can in turn mobilise firms behind the strategic vision. However, care
has to be taken that large enterprises do not dominate the process: small firms often lack capacity for public-policy
engagement, but they are vital to most development strategies. There are also risks that individual firms will lobby for
their own interests in contracts, etc, rather than represent wider concerns. This can be especially harmful if the lobby
represents dominant but declining sectors. There is also a danger that non-economic social interests in the region are
neglected.
In Denmark, competition between cities is longstanding and deep-felt. The capital city of Copenhagen is engaged in
fierce rivalry with the large provincial cities of Aarhus, Aalborg and Odense for jobs, infrastructure, investments,
concerts, exhibitions, happenings, parking space and many other things. In a wider scope, large Danish cities compete
for Nordic metropolitan dominance against Oslo, Stockholm and Hamburg. Also smaller Danish cities have joined the
race by arranging massive festivals and events, often doubling or tripling the number of inhabitants while they last.
Cities like Horsens and Roskilde have been enormously successful in attracting the world s most famous musicians and
massive international crowds. These events have become cultural engines of enormous economic importance for the
cities hosting them. Mobilising local assets to become an economic, cultural and dynamic hotspot has become a
persistent challenge and a requirement for modern day cities of all sizes.

Conflicting freedoms
In Denmark, religious freedoms are a fundamental part of the Constitution, but in come cases such freedoms
sometimes conflict with other constitutional freedoms.
The OECD countries are facing increasing pressure to place respect for religious beliefs in equal terms with other
values such as press and academic freedom or gender equality. A concrete example is the US government's refusal to
finance research on embryonic stem cells. Hospitals in several countries have reported problems in allowing male
doctors to examine or treat female patients, and some religions forbid certain medical practices such as abortion or
blood transfusion. The National Museum of the American Indian in Washington does not allow the public or
researchers to see or handle certain objects if doing so is considered contrary to the beliefs of the ethnic group it came
from. Other countries have started to adopt similar policies, e.g. not allowing women access to some collections or
objects, and the British Museum now has objects that nobody is allowed to see apart from certain members of the
Ethiopian Orthodox Church.
The controversy surrounding Muslim headscarves in various countries has shown how difficult it is to react to this
phenomenon. If the aim is to fight oppression, depriving girls and women of education and employment opportunities
may be seen as counterproductive, but it can equally be argued that strong backing from the state can enable girls and
women to resist family and other pressures. Representatives of many faiths also argue that it is hypocritical to claim that
religious freedom is a fundamental right but to deny it in schools.
In Denmark, religious freedoms are a fundamental part of the Constitution, but a number of recent examples have
demonstrated that such freedoms sometimes conflict with other constitutional freedoms. The scriptures of many
religions, be it the Bible, the Koran or the Torah, can be interpreted as being supportive of discrimination of people
based on their gender, sexuality, race or religion within religious communities. Female priests were allowed in the
Danish Christian Church in 1948 and, as in most countries, there are still no female imams or rabbis in Denmark. Some
Christian parishioners continue to refuse services held by female priests and the church accommodates this with extra
services held by male priests. In addition, homosexual couples cannot get married by any of the major religions in
Denmark, with the exception that priests of the Danish Christian Church can choose themselves whether they wish to
bless homosexual couples. Drawings of the Prophet of Mohammad brought in a Danish newspaper gave rise to fierce
debate about the applicability of Muslim doctrine to people outside the Muslim community. A similar debate arose
about the right of Muslims to wear veils or burqas at schools or at work if this conflicts with dress codes to which
everyone else must abide. Without doubt, the challenge of reconciling conflicting religious and other constitutional
freedoms will continue to be an important challenge.

Judicialisation of society
In Denmark, an increasing number of lawsuits and complaints over such things as medical treatment, smoking,
copyrights, divorces, employment contracts and neighbourhood strife are putting an increasing strain on the
justice system.
There is a growing tendency towards asking courts to settle disputes, define blame and award compensation.
Medicine is one example of an area where this tendency is visible across several countries. Doctors are increasing being
sued not only when operations go wrong, but also when they fail to meet patient expectations, despite the operation
being performed correctly. For instance, many clients do not understand the limits of laser surgery to correct eyesight
and the insurance premium for malpractice lawsuits related to this technique is now over 30,000. This development
can lead to a situation in which doctors are discouraged from pursuing certain careers because of the cost of malpractice
suits and insurance, and, as happened in the US, insurers quit the market because payouts are so large, while those who
remain raise their prices.
Education is another example of an area whereschools in some countries are facing difficulties in organising
extracurricular activities because teachers and other adults are becoming reluctant to participate due to fears of being
held penally responsible and liable to pay damages if something goes wrong.
Also for businesses this problem is highly relevant. National and international legislation of businesses are becoming
increasingly complex, which could be a contributing factor in making traditional out-of-court settlements increasingly
inadequate. Many businesses are likewise concerned about collective lawsuits, which have been seen in the US and may
become increasingly common in Europe too.
In Denmark, an increasing number of lawsuits and complaints over such things as medical treatment, smoking,
copyrights, divorces, employment contracts and neighbourhood strife are putting an increasing strain on the justice
system. More trials and an increasing number of appeals drove waiting times for high court rulings up to an average of
765 days last year. Today, people and organisations are less willing to settle disputes amongst themselves and
increasingly prefer to involve courts and lawyers. As a consequence, the risk of being sued in various contexts is on the
rise for individuals, businesses and public institutions alike. As demand for legal services and protection is spreading
into areas such as childcare and marriage, courts and political legislators will come under increasing pressure to draw
lines where convention and negotiation sufficed in the past. The continuation of this development, which has been
observed abroad, could lead to a vastly inflated legal system presenting an economic burden on society while presenting
an ever-present risk of ruining and wasteful lawsuits in many societal spheres. This development presents a challenge to
all areas of the legal profession as well as to society at large.

Proliferation of WMD
Today, any talk of Denmark s offensive role in the use of WMD has ceased, but Denmark s potential role as a
target continues to rank high on the security-agenda.
Many countries already possess nuclear, chemical or biological weapons of mass destruction, or have the industrial,
scientific and technological means to produce them relatively quickly. Although nuclear programmes such as those of
Iran and North Korea receive the most media attention, many experts consider biological weapons a greater threat than
nuclear (or chemical), in that they are more likely to be produced and deployed. The top two reasons for an increasing
bioweapons threat are the increasing availability of dual-use know-how, technology, and equipment, and the revolution
in the life sciences creating technologies and know-how that makes biological weapons acquisition easier. The most
likely bioweapons proliferation scenarios are small-scale, sporadic biological attacks by states or terrorists to undermine
public confidence in government; and lone or deranged individuals who produce and use biological weapons.
Countermeasures include requiring facilities that work with highly infectious pathogens to establish strong biosafety
and biosecurity measures, oversee genetic engineering experiments, and certify their employees in biosafety and
biosecurity. Other possibilities include professional codes for life scientists, a standard curriculum in ethics, biosafety,
and biosecurity for life sciences students, and monitoring provisions for the biological and weapons ban.
Even with all these measures in place, the problem of verification remains, and has to tackle two dimensions: the
proliferation of weapons across the world ("horizontal") and the progressive development of WMD through acquisition
and development of the means for their production ("vertical"). States, which already possess WMD often, argue that
they have to reinforce their vertical capability to counteract the horizontal spread. But verification of vertical
proliferation has to start in the originating countries to prevent the transfer of technology that offers a second use in
WMD development. Iraq's WMD programmes, for example, were made possible by technology transfers and exports
from Germany, France, Russia, the UK, the US, Spain, South Africa, Brazil and China. Ideally, export control
mechanisms for all WMD-relevant technologies could be crosschecked by accounting for the imports of receiving
countries. But this needs the political will of all: any agreement has to be based on consensus. While most developed
countries have voluntary regimes (which the EU is making efforts to extend to eastern European countries), most of the
developing world, India, Pakistan, and especially China, remain opposed.
Denmark has a long and troubled relationship with the question of weapons of mass destruction, both as a potential
attacker and as a defender. During the early stages of the cold war, it was decided that Denmark would not build or
harbour a nuclear weapons capability because of an extremely adverse public opinion. Nonetheless, to honour Danish
NATO-obligations the minister of state, H.C. Hansen, allowed the construction of an American nuclear-armed SAC
base in Thule, Northern Greenland, in 1957. Up until today, the Danish defence continues a no-WMD policy, and has
instead specialised in countering the effects of such weapons through the ABC-Service (Atomic, Biological and
Chemical) of the armed forces. Denmark s potential role as a target continues to rank high on the security-agenda. The
prospect of a WMD-attack on Danish soil was a significant part of the 2007-2010-emergency preparedness agreement,
allocating an additional DKK 55-60 million to Danish Emergency Management Agency (DEMA). This reform brought
DEMA-funding to an all-time high, with the explicit aim of strengthening its post-strike coordination and management
capability in case of a chemical, biological, radiological or nuclear attack on Danish soil and to assist internationally.
The continued proliferation of WMD is in many ways an old challenge in a new form, in that the physical threat
remains the same, while traditional means of type I, II and III deterrence may prove meaningless against the non-state
organisations, which present the most credible threat today.

Regional development
Because of the Danish geography, many Danish regions are, by their very nature, peripheral. One fifth of the
Danish population, or about a million people, live in regions that are to some extent economically, culturally and
politically peripheral, relative to the metropolitan centres.
Although significant differences exist between the OECD countries, the differences between the regions internally in
these countries are of at least equal importance. The OECD area encompasses a wide range of governance traditions
from unitary to federalist, but in all countries future developments will emphasise regional dimensions. Some regions
even extend national borders the so-called metro regions.
Regional development efforts often seek to create synergies by building co-operative exchange networks between the
major cities in the region and to other regions and rather than distributing direct subsidies to lagging regions while
ignoring the best performing regions, capture differentiated regional competitive advantages. The ambitions of such
efforts are often that all of a country's regions need to strengthen their own functional specialisations enough to develop
cross-regional complementarities. Nonetheless, many countries have redistribution systems through which wealthier
regions support less wealthy ones often with the state as a mediator.
For EU countries, the 2007-13 Cohesion Policy will have a major influence, making EUR 350 billion available to
help improving the attractiveness of regions and cities; encouraging innovation, entrepreneurship and growth in the
knowledge economy; and creating more and better jobs. The regional dimension focuses on the contribution of urban
areas to growth and jobs; supporting the economic diversification of rural areas (e.g. the synergy between structural,
employment and rural development policies); and cross-border, transnational and interregional cooperation for growth
and job creation. Regional authorities will have to articulate these aims with other challenges and programmes such as
enterprise development schemes; social and cultural policies to address socio-health questions, vulnerable groups, and
culture and education; and urban and spatial policies including town planning, infrastructure, urban regeneration, and
environmental issues.
Denmark is a nation of oddly shaped islands randomly scattered around a single large peninsula. By their very nature,
many Danish regions are peripheral. One fifth of the Danish population, or about a million people, live in regions that
are to some extent economically, culturally and politically peripheral, relative to the metropolitan centres. According to
the Regional Policy Statement, the regions of Lolland, Langeland and some regions in northern and southern Jutland
experienced significantly lower growth than the national average during the period 1988 2003. The increasing
developmental gap between peripheral and central regions (mostly caused by high growth and increasing dynamism in
the latter) has raised questions about how, and if, regions left behind can catch up. It is a well-known problem that the
talented young migrate from the periphery to the centre to receive higher educations and better job-opportunities and
most tend not to return in later life. The proportion of people with a higher education is thus significantly higher in the
central regions of the country. Businesses naturally locate near major markets, to access highly skilled labour or near
suppliers to minimise transport costs. Regional development is in many ways a game of vicious and virtuous cycles,
reinforcing successes as well as failures for regional councils. In a Danish context, the Oresund Region is an example of
a trans-national region. This region is of enormous importance and produces a quarter of both Denmark s and Sweden s
GDP. Achieving a better understanding of the dynamic development taking place in and between regions continues to
be a challenge.

Rethinking punishment?
In 2005, a record-beating 16.120 people were imprisoned in Denmark and on average; about one in four (or
more than 4.000 people) will re-offend within two years of their release.
On average, across the 30 OECD countries, the incarceration rate has increased from 100 persons per 100,000 of the
total population in the early 1990s to around 130 persons in the mid-2000s. The rate is highest in the US, at more than
700 per 100,000 population in 2005, three to four times higher than second highest country (Poland). Since 1992, the
prison population rate has more than doubled in the Netherlands, Mexico, Japan, the Czech Republic, Luxembourg,
Spain and the UK, while it appears to have declined only in Canada, Iceland and Korea.
On average, one in four prisoners is a a remand prisoner. The share of foreigners is close to 20 per cent of all prisoners,
on average, exceeding 40 per cent in Luxembourg, Switzerland, Australia, Austria, Belgium and Greece. The high
figure is partly explained by the number imprisoned for offences against immigration rules.
Prison occupancy levels are above 100 per cent in more than half of OECD countries (i.e. prisons have more inmates
than they were designed to hold, and above 125 per cent in Greece, Hungary, Italy, Spain and Mexico.Several studies
suggest a close link between incarceration and extreme poverty and marginalisation. Incarceration predominantly
affects individuals with few social ties, and that have experienced family breakdown, educational failure and violent
treatment. Incarceration appears to have (at best) limited effects in helping the social re-insertion of former detainees,
e.g. in France, three-quarters of people condemned for burglary repeat that offence within five years.
Because imprisonment may amplify social exclusion, some countries have taken limited steps to help re-insertion, for
example through interventions by public employment offices to help detainees to prepare their exit from prison and
their return to the labour market.
The recent, significant increase in OECD prison populations has been accompanied by another phenomenon: the
privatisation of prison and other penal services, justified on the basis that private companies can provide the same or
better services as state institutions at cheaper rates. Private companies are now selling governments a range of products
including prisons, detention centres for immigrants, probation services, electronic surveillance, and prisoner transfer.
Apart from the moral questions posed by the state delegating one of its defining functions to private business, this raises
an obvious conflict of interest, in that these companies would like to see their prison and other punishment-related
business expand, while governments would like them to contract.
In 2005, a record-beating 16.120 people were imprisoned in Denmark and on average; about one in four (or more than
4.000 people) will re-offend within two years of their release. The challenge to the penal system of deterring crime and
successfully rehabilitating criminals is a major challenge to the current paradigm of punishment and prevention.
Rehabilitation is, of course, not the only rationale behind the current penal system. Satisfying the victim, statuating an
example, deterring crime. Better knowledge about the rationale for punishing as well as the reasons for committing
crime and the successful rehabilitation of criminals in to society. Either way, as offenders grow younger and more
ethnic minorities come into contact with the Danish penal system, new challenges are on the horizon.

Risk management
Risk acceptance is a particularly difficult challenge when the trend in society is for greater risk aversion, as
shown by the growing application of the precautionary principle. Zero risk is impossible in many cases; so all
stakeholders must be involved in defining what level of risk society is willing to face.
The number, type and scale of accidents and catastrophes affecting both developed and developing countries in recent
years suggest that the nature of the risks society has to face is changing. These include geophysical-related disasters
such as storms and earthquakes, massive terrorist attacks, the emergence of new diseases, or failure of electric power
systems across large parts of Europe and North America. The factors driving this change include growing population
density in urban centres and increasing concentrations of economic activity in certain regions; the intensifying of
globalisation and mobility which increases interdependence, making it easier for pathogens, pollutants and technical
failures to spread; the increasing complexity of systems; and the growing pace of scientific discovery and technological
innovation, which are confronting society with unknown impacts and immensely difficult choices.
These changes contribute to making risk management an important challenge. Risk management frameworks range
from centralised command-and-control to decentralised self-regulation. Command-and-control emphasising individual
compliance to rules is less adapted to modern, largely decentralised economies and societies where complexity makes
work flows and production processes difficult to break down into readily codifiable items, as needed in top-down safety
procedures. A second trend is a greater role for tort law and insurance, which seek to create optimal incentives with
regard to attitudes towards risk and provide redress to victims. A classical challenge in risk management is the
tendency towards underinvestment in security precautions because the coasts of such measures are immediate and in
come cases large, while the gains are uncertain and may lie far into the future.
Another trend that is growing in importance in risk management is the role of the media and communication. The media
can disseminate warnings or communicate information on mitigating action and mobilise solidarity in favour of the
victims. However, they can also invade a disaster site and hamper emergency operations, contribute to the propagation
of disaster myths, or release erroneous reports. The need to encapsulate news in a catchy headline can amplify impacts,
as happened to the UK meat industry when the tabloid press started referring to BSE as mad cow disease . This
example also underlines the importance of trust in risk management and dealing with disasters, both trust in public
authorities and trust in the bodies directly involved or responsible for the disaster.
The main risk management body in Denmark is the Danish Emergency Management Agency (DEMA), the national
safety authority responsible for national rescue preparedness as well as the supervision and counselling of municipal
services and other authorities. DEMA's brief ranges from firefighting to oil pollution to nuclear safety. National
preparedness involves a series of tasks: identifying critical infrastructures and their interdependencies; protecting
vulnerable regions or groups of the population; detecting changes in risk patterns; assessing the magnitude of risk in
locations with a high density of people, activities and assets; and monitoring hazard propagation mechanisms. Analyses
must be constantly updated and integrated in policy-making, which means maintaining close links with the private
sector as well as government departments and local authorities to obtain a complete picture of existing and potential
risks and vulnerabilities. Risk acceptance is a particularly difficult challenge when the trend in society is for greater risk
aversion, as shown by the growing application of the precautionary principle. Zero risk is impossible in many cases; so
all stakeholders must be involved in defining what level of risk society is willing to face.

Secularism
For 150 years, the Christian-Lutheran Church has occupied a special place in the Danish Constitution as the
official state religion. However, as Denmark is now home to 140 other official religious communities, and the
special status of the Christian-Lutheran Church has been called into question.
Many democracies are not officially secular states. The British sovereign for example is also the Defender of the
faith , but church and state are usually separated even when there is an official religion. There are signs that this may be
changing. One of the debates around the future constitution of the European Union concerned the importance that the
continent's Christian heritage should be accorded. The government leaders of several western nations are men of deep
religious conviction, including born again Christians and traditionalist Catholics. Even in countries where secularism
is the official policy, religion is intervening in the public debate more often than in the past. Areas of government policy
as diverse as foreign affairs, science, education, women's rights and the family can be affected, implying that the
respective weights of secularism and faith in the conduct of public affairs could become a governance challenge in the
future. In some foreign affairs, for example, this has already lead to international relations being defined not in terms of
interests, rivalries, and alliances, but of a struggle of good against evil. In domestic affairs, consequences include the
right to abortion being challenged or creationism being taught in schools.
Nonetheless, even in the West, the traditional separation of religion from the roles of the state is being weakened. In the
western democracies, despite some parties defining themselves by religion, religion is rarely presented as the main
driver of political programmes. This is not the case elsewhere, in the Middle East or India, for example, where faith-
based parties contest elections on the basis of promoting a theocratic approach to governance. The retreat of secularism
could be reinforced by the diminishing role of the state in many areas, notably the privatisation of what were once
public welfare responsibilities. This happens when private organisations, including faith-based organisations, are given
the responsibility and funding for public programmes such as drug rehabilitation. In some cases, this includes
implementation of foreign aid programmes. The influence of these groups on policy making will probably grow in
domains where they are important intermediaries between the state and groups targeted by public programmes.
Newer religious groups often see themselves as missionaries for the faith that inspired them, and seek to convince the
populations they help to adhere to their beliefs. This makes it all the more necessary to set clear guidelines on what is
acceptable for publicly funded NGOs, especially if they are the only bodies intervening in certain situations.
Denmark is not a completely secular society. For 150 years, the Evangelist-Lutheran Church has occupied a special
place in the Danish Constitution as the official state religion. However, as Denmark is now home to 140 other official
religious communities, and as membership of the national church continues to decline, the special status of the
Evangelist-Lutheran Church has been called into question. Opponents of the current constitutional arrangement argue
that the equal status of all faiths is a prerequisite for religious freedom. Conversely, proponents argue that Denmark has
been a predominantly Christian society for more than a thousand years and that the separation of the Danish State from
its Christian heritage is to deny its roots as well as the inerasable imprint of the Christian faith upon Danish society.
This poses the challenge of acknowledging its historical and religious roots, while remaining impartial and inclusive of
the many religions now being practiced in Denmark.

Terrorism
Whether the actual probability of a terrorist attack on Danish soil is greater now than at other times in history is
difficult to estimate, in part, because of ambiguousness about what actually constitutes such an event.
Nonetheless, the possibility, size and shape of a terrorist attack as well as the motivation of the attacker now
dominate much current debate.
Traditionally, terrorism was the work of organised groups with identifiable political goals, such as national liberation,
and was used as a bargaining counter to attain a clearly defined objective, e.g. freeing of prisoners. The new terrorism is
totally different from this, in that its aim may be sustained opposition to an entire economic, social, political and
cultural system. As a consequence, the new terrorism is more global than ever before, and is more difficult, even
impossible, to negotiate with. Another difference is that the terrorist act is designed for the random killing of large
numbers of civilians, rather than security forces or those whose interests they are defined as defending.
The vast majority of recent terrorist acts have been committed with conventional means (traditional explosives, guns,
etc.), or even improvised weapons (e.g. bottled gas). However, the 1995 Tokyo sarin gas attack and the dissemination of
anthrax spores in 2001 in the United States call attention to the emerging use of unconventional means: bioterrorism,
chemical weapons and, more hypothetically, nuclear attacks. Biological weapons could well be the most dangerous:
they can be extremely deadly and are easy to procure and difficult to detect, although they are difficult to maintain in a
stable condition or to disperse effectively. Chemical weapons, using compounds that affect skin, blood, or the nervous
system, can also be highly lethal and are generally considered easy to obtain or produce. Again, handling and utilisation
are complicated, but the Tokyo gas attack shows that deadly strikes are possible. Terrorist movements are unlikely to
produce a nuclear weapon without the active support of a state, but simple radiological material would be easy to
collect, and its dispersion, although unlikely to cause substantial damage, could have devastating psychological impacts.
In this last respect, the new terrorism is similar to more traditional types. The main purpose of attacks is not military
victory, but to create a climate of fear and insecurity and provoke disruption (Bin Laden contrasted the $500,000 needed
to finance the 9/11 attacks with the billions the US and Western powers are spending on the war on terror ). This is
one of the reasons that terrorists attack soft targets such as train stations and may target other infrastructures,
including telecommunications hubs.
While transport is the easiest and most frequent target, other infrastructures including energy and telecommunications
could be vulnerable too. The British secret services claim to have foiled a terrorist plot to blow up a major Internet hub.
The US authorities issued a warning after the discovery in Afghanistan of structural analysis programs for dams
combined with an increase in Web traffic relating to supervisory control and data analysis (SCADA) systems. These
examples illustrate how terrorists can combine traditional and modern targets and tactics, and one fear is that they will
attempt to do so to provoke cascade effects by combining two kinds of attack. For example, a physical attack combined
with a cyberattack that disabled emergency communications would heighten casualties. So far, successful attacks have
been physical, using explosives or gas, but in the future this could change, once again combining various methods,
targets and objectives.
Another aspect is the terrorist threat is the question of reliable intelligence. The terrorist threat is often vaguely defined
and decisions about national security must often be based on information provided by intelligence agencies. If this
information is inaccurate or wrong, public confidence in the authorities that make policy or decisions based on this
intelligence is undermined, making it harder to mobilise support for interventions, and making people less likely to
follow useful advice in future situations. Money and other resources are wasted on nonexistent or relatively unimportant
threats. Allies may be less willing to believe and act on intelligence in the future.
The developments of September 11th, 2001 and the subsequent attacks upon Madrid and London had enormous
significance in Denmark. Besides leading to a major reorganisation of the armed forces, these events spurred
Denmark s participation in the wars in both Afghanistan and Iraq. Whether the actual probability of a terrorist attack on
Danish soil is greater now than at other times in history is difficult to estimate, in part, because of ambiguousness about
what actually constitutes such an event. Nonetheless, the possibility, size and shape of a terrorist attack as well as the
motivation of the attacker now dominate much current debate. At the end of the day, we still know little about this
poorly defined threat and perhaps even less about the long-term consequences of our reaction to it.

Underage crime
Although Danish crime rates continue to drop, a still younger hard core of underage criminals persist. It thus
remains an important challenge to rehabilitate still younger, hardened offenders below the age of criminal
liability.
Children are much more likely to be victims of crime than perpetrators, and, in Europe at least, there is no trend
showing significant increases in juvenile crime rates. Nonetheless, cracking down on underage crime has become
central to the debate on justice in many countries, the more so following high-profile cases of particularly violent crimes
committed by very young persons. There is thus growing support in many countries for reducing the age of criminal
responsibility and reinforcing custodial sentences for children. Before taking such steps, it nonetheless remains
important to whether they are both efficient and feasible. A first challenge is to actually clarify what is meant by
criminal responsibility , since in many legal systems three quite different notions may coexist. The first refers to the
age below which a child is deemed incapable of committing a crime and cannot be brought into the criminal justice
system. The second notion is a middle level in which a child can be held criminally responsible, but is liable to lighter
penalties than adults, while the third notion is the age at which a child is subject to all the sanctions of the legal system,
including prison. In Scotland, for example, responsibility in the first sense is only 8 years old, but up to around 16 or 17
children are dealt with in special hearings.
Any changes to the law have to respect the international engagements of the country concerned. In Europe, any person
under 18 is legally still a child and children in conflict with the law are still children first, and do not lose their rights to
special treatment as children. This does not mean that children cannot be tried. In cases brought against the UK, The
European Court of Human Rights ruled that subjecting a child as young as 11 to a criminal trial does not in itself
constitute a breach of the Convention on Human Rights, but insisted that that it is essential that children be dealt with in
a manner which takes full account of their age, level of maturity and intellectual and emotional capacities, and that steps
are taken to promote their ability to understand and participate in the proceedings. The UN Convention on the Rights of
the Child, also binding for signatory states, stipulates that the best interests of the child shall be a primary consideration.
A number of nonbinding rules may also apply, such as the UN Standard Minimal Rules for the Administration of
Juvenile Justice (the so-called Beijing Rules) which links the age of criminal responsibility with the age used in other
areas of the law, such as marriage age.
In addition to purely legal matters, it likewise seems important for society in general to understand what causes
underage crime as well as possible measures to take against these causes. The rising number of dysfunctional families
and the increasing number of abandoned or neglected children is probably one, since this leaves many children
inadequately socialised. Increasing drug use contributes to crime both directly as a criminal activity as such and through
drug related crime, but also by undermining social norms and raising the level of criminal behaviour to which children
may be exposed.
Police and social authorities are continuously surprised by the low age of hardened and frequent re-offenders. The
official age of criminal liability in Denmark is 15, but children far younger than that often commit serious crime. Social
authorities were recently given additional powers by Parliament to confine children down to the age of 12 to
correctional institutions for youth offenders. The problem is most pronounced in large cities where the general number
of youth offenders has been declining over past year, but where a still younger hard core has remained. In 2006, the
Crime Prevention Department in Copenhagen found that 12 percent of all crime committed by offenders below the age
of 18 in the capital are committed by 14 year olds. This new breed of criminals is clearly too young for the adult prison
system and often too hardened for correctional institutions. More importantly than having adequate correctional
facilities in place for these hardened children is understanding and improving the social environments that produce
them. Youth offenders present both the immediate challenges of measured punishment and correction as well as the
long-term challenges of a potential lifetime career path as a criminal. Addressing the underlying causes of youth crime
will no doubt be a difficult challenge.

Work life
Today, work and career are central elements of people s personal development as well as the development of society at
large. This category contains challenges related to the larour market.

Equal opportunity
Although women are the primary reason for the comparably high labour participation of the Danish economy,
there is still some way to go in terms of equality between genders.
Female labour-force participation is lower than men s in many countries, partly due to culture and social norms, but also
economic incentives. A number of policy instruments, including tax, can have a significant influence on participation
rates. Although taxation and work-family reconciliation policies can have a significant impact, female education, well-
functioning labour markets, and cultural attitudes remain major determinants of female participation.
A more neutral tax treatment of the work incentives of second earners compared with single earners boosts female
participation by increasing the return on married women s market work but also by increasing incentives to share
market work between spouses, leading more inactive women to take on part-time jobs.
Better availability of part-time work opportunities also tends to raise female participation, although when part-time
working entails a wage penalty, low social security coverage, job insecurity, and little training, it risks marginalising
women in these jobs.
Child benefits, essentially lump sum transfers for home-nursing children, reduce female labour supply, particularly of
potential part-time workers, whereas childcare subsidies tend to increase female labour participation. Childcare
subsidies will often be more effective and less costly when conditioned on female labour force participation.
Paid parental leave also tends to boost female labour participation, by helping women to reconcile work and family life
and strengthening their attachment to the labour market through a job guarantee. Beyond 20 weeks, the marginal effect
of additional parental leave on female participation, however, becomes negative.
In the EU-25, the gender pay gap is almost 25 per cent and appears to have been stable over the past decade. The largest
gap is in the UK (30 per cent), the smallest in Slovenia (11 per cent). In 2003, EU Member States were called on to
achieve by 2010 a substantial reduction in the gender pay gap in each Member State through a multi-faceted approach
addressing the underlying factors of the gender pay gap including sectoral and occupational segregation, education and
training, job classifications and pay systems, awareness raising and transparency Eliminating the gender pay gap is
also an important objective of the Roadmap for equality between women and men, 2006 10 . According to the
roadmap, the persistence of the gender pay gap results from direct discrimination against women and structural
inequalities, such as segregation in sectors, occupations and work patterns, access to education and training, biased
evaluation and pay systems, and stereotypes.

Although women are the primary reason for the comparably high labour participation of the Danish economy, there is
still some way to go in terms of equality between genders. The gross wage-difference between men and women is
currently 12-19 per cent. When this figure is corrected for education-levels and seniority, the figure drops to some 2-6
per cent, where gender remains the only explanatory variable. Likewise, there are markedly fewer women represented
in top management than men. In the top echelons of the private sector, women constitute a mere 7 per cent, while the
same figure for the public sector is around 20. In the Danish parliament women hold 66 out of 179 seats, some 37 per
cent. Although the figures have been improving steadily over the past decades, it is clear that inequalities remain present
throughout Danish society.

Labour market integration
It is now widely recognised that a job is an integral part of successful integration into the Danish society.
Unemployment rates are, however, more than twice as high for immigrants than for ethnic Danes.
At present around 3 million legal immigrants enter the OECD countries each year and this number is expected to grow
as immigration becomes part of the response to the projected decline of working-age populations and labour shortages
in a number of sectors that are expected to expand, such as personal services. Competition to attract immigrants with
certain qualifications may intensify and some OECD governments are elaborating immigration programmes targeted
towards potential migrants with the desired profiles. These are likely to remain the minority though, with most
immigrants arriving with no job waiting for them. Integrating these people into the labour market will remain a
challenge. Although immigrants seek employment opportunities globally, they have to integrate local job markets
where they can face barriers ranging from complex administrative procedures or lack of language skills to outright
hostility. Governments recognise these difficulties and, aware of the benefits to the economy of the inflow of migrants,
have set up a number of initiatives over the years to help newcomers. These efforts have met with mixed success, and in
some cases even the children and grandchildren of immigrants still face many of the same obstacles as their elders. This
has come as a surprise as many believed that children born in the host country would benefit from sharing the same
education as native children, and growing up speaking the same language. The efficacy of national migration policies
and their local relevance is called into question.
In many countries, immigration policies are rarely accompanied by adequate support for integration, particularly the
adaptation of labour market and education policies to the needs of immigrants. Most countries provide specialised
support to immigrants on arrival, e.g. language training, but then the labour market and education system is expected to
do the rest. This overlooks the fact that immigrants are usually at a disadvantage in competing for jobs since they have
no local referees or work experience, and may not even know about local jobs since they may not have the networks of
contacts on which recruitment often depends. There can also be problems with language (increasingly important in
services and knowledge-based employment) or having qualifications recognised or evaluated fairly.
The outcome can then often be that the immigrants have to take any job they can find, with the risk that their skills
depreciate and they become stuck in dead-end jobs, to the detriment of both themselves and the host country. They may
also become concentrated in deprived neighbourhoods, creating further social and economic problems. Given that the
problems of integration are most urgent at local level, immigration policy should not stop at national level, but has to
engage a whole range of actors who could contribute knowledge and experience, including local and regional
authorities, NGOs, adult educational institutions, trades unions, and of course immigrants and employers. Adapting
existing programmes to fully exploit the potential of these groups may be more effective than trying to create new
initiatives.
For most Danes, a job is more than a purely instrumental means of paying the bills. A job is a source of financial
freedom, identity, personal development and self-respect. It is now widely recognised that a job is an integral part of
successful integration into the Danish society. Unemployment rates are, however, more than twice as high for
immigrants than for ethnic Danes - some 12 and 5 per cent respectively. These figures cover significant variation
between ethnic groups and genders. A recent study by Catinét found that three out of four Pakistani immigrants have
jobs against only one in four for Somali immigrants. Also, immigrant women have significantly higher unemployment
rates than males. In terms of education, Pakistani and Iranian immigrants are in far better position than, for example,
their Turkish counterparts. There are many reasons for the higher unemployment rate among immigrants such as poor
language skills, cultural background, traditional family patterns, religious limitations and downright discrimination.
Addressing the challenge of labour market integration is of increasing importance for reasons other than integration.
Many areas of the Danish service sector are now experiencing labour shortages and over the coming decades a
significant proportion of the workforce will retire. In this context, it is of special importance that a still larger percentage
of decedents of immigrants are below the age of 15. Integrating skilled as well as unskilled immigrants into the labour
market is an important societal challenge.

Labour mobility
In Denmark, the days when employment was for life are long gone, and the time people spend in each job is
declining rapidly. 800,000 positions are reoccupied each year by a work force of some 2.9 million. The rapid
mobility of labour is confronting employers and employees with a very different set of demands.
In 2003, 8.2 per cent of the EU s total employed labour force had moved to another job after one year, ranging from 13
per cent in Denmark and the UK to around 5 per cent in Sweden and Greece. Workers in the EU stay in the same job for
an average of 10.6 years, compared to 6.7 years in the United States. Assuming annual employment growth rates of 1 to
2 per cent, several regions of the EU are predicted to have employment rates of 80 per cent or above by 2010, including
the south of England, Denmark, Sweden, the Netherlands, central France, southern Germany, western Austria and the
centre of Portugal. Without significant inflows of labour, these regions are likely to face significant shortages of skilled
labour, especially since migration from Member States in Central and Eastern Europe is lower than expected. New
Member State (EU10) nationals represented less than 1 per cent of the working age population in all countries except
Austria (1.4 per cent in 2005) and Ireland (3.8 per cent in 2005).
When asked by Eurobarometer what the EU represents for them, 53 per cent of respondents cited freedom to travel and
work in the EU , well ahead of the euro (44 per cent) and peace (36 per cent), but only 1.5 per cent of EU-25 citizens
live and work in a different Member State from their country of origin, a proportion that has hardly changed for the last
30 years. However, cross-border commuting, although low (0.2 per cent of the EU-15 working population), is
increasing. Language is one of the main barriers to geographical mobility. Across the EU, every second person speaks
at least one language other than their mother tongue, but this hides large differences countries. Some 70 per cent of UK
citizens speak only one language, while in Denmark, Sweden, the Netherlands, the Baltic States, Malta and
Luxembourg, more than 87 per cent of the population speak at least one other language.
There are negative as well as positive consequences both for the individual and society of labour mobility. When
mobility is forced on a worker through redundancy, it can mean a lower standard of living, increased stress, relocation
costs, and more insecurity. The national economy may have to pay for unemployment insurance and retraining, as well
as the direct and indirect costs that can arise from social problems linked to unemployment. On the other hand,
individuals may profit from mobility by finding a better job or developing new skills, and if labour mobility is high in
the economy, the stigma attached to unemployment is likely to be lower. Macroeconomic benefits of higher mobility
include higher productivity and employment levels. However, these benefits generally take time to appear, and the
short-term costs can be high.
Labour market and employment policies thus have to reconcile the demand for flexibility, generally expressed by firms,
with the demand for job security expressed by workers. Less strict rules may make it easier for employers to hire
workers, thus improving the job prospects of new entrants to the workforce such as young people or women returning
after time off to raise a family. However, easing restrictions can also make people who are already in work worry more
about the risk of losing their job. Differences in the strictness of employment protection legislation between permanent
and temporary jobs may be an important element in explaining the recent rise in the incidence of temporary work for
the low-skilled and young people in many OECD countries. Temporary work increases flexibility and responsiveness,
but it tends to weaken job attachment, with detrimental effects on training and human capital formation.
In Denmark, the days when employment was for life are long gone, and the time people spend in each job is declining
rapidly. 800,000 positions are reoccupied each year by a work force of some 2.9 million. This trend has been heavily
reinforced during recent years through a combination of economic growth, social security, low unemployment and
regulatory encouragements. While contributing to economic growth and competitiveness, the rapid mobility of labour is
confronting employers and employees with a very different set of demands. For employees in the private as well as the
public sector, incentives schemes and result contracts are now rewarding productivity and flexibility rather than
seniority and stability. This may be connected to rising work-related stress and older employees are finding it difficult
to adjust to the ever-moving fad of the day. Employers, on the other hand, no longer enjoy the long-term loyalty of their
employees and especially highly skilled people are constantly on lookout for a better job offer. Likewise, international
competition for the brightest minds has intensified. Continuous recruitment and headhunting of human resources, while
struggling to hold on to vital employees, have become a constant state of affairs.

Lifelong learning
The challenge and opportunity of setting new standards of re-education as a source of labour mobility, economic
entrepreneurship and personal development without leaving entire population groups behind will remain highly
relevant.
Everyone agrees that lifelong learning for all is becoming increasingly necessary. It is seen as a core element of the
March 2000 Lisbon European Council s 10-year goal of making the EU the most competitive and dynamic
knowledge-based economy in the world, capable of sustained economic growth with more and better jobs and greater
social cohesion. Yet about two thirds of the adult population in most OECD countries do not participate in organised
learning activities, and according to the International Adult Literacy Survey of and follow-up surveys of over 20 OECD
countries plus Chile, a quarter or more of the adult population fails the level which many experts regard as the minimum
needed to cope adequately with the demands of everyday life.
Investment in lifelong learning strategies helps address social and economic objectives simultaneously by providing
long-term benefits for the individual, the enterprise, the economy and society more generally. For the individual,
lifelong learning emphasises creativity, initiative and responsiveness attributes which contribute to self-fulfilment,
higher earnings and employment, and to innovation and productivity. The skills and competence of the workforce are a
major factor in economic performance and success at the enterprise level. For the economy, there is a positive
relationship between educational attainment and economic growth.
Learning opportunities open to the unemployed, employees of small firms and disadvantaged groups in society are
generally far fewer than for the employees of larger firms. The disparities are also reflected in the large earnings gaps
between those with and without postsecondary education, and which widens over the lifetime.
Denmark has a long tradition of adult education and re-education dating back to the folk high school movement in the
mid-1800s and there has been a broad political consensus on long-term investment in human resources development.
Today, the aims of re-educational programmes ranges from narrowly focussed labour market and economic rationales
to broader personal and life development schemes. After a comparison of 17 countries through a period of five years, a
recent OECD report concluded that Denmark is in the top league when it comes to re-education of people with little or
no formal education. The challenge of increasing demands for re-education is likely to continue in decades to come.
The Danish economy is rapidly moving into a situation where educations are outdated much faster than earlier and
where few employees stay in the same job for long. Studies now show that 90 per cent of all Danish businesses expect
to offer some form of formal education to their employees each year. Constantly upgrading your skill set has become an
increasingly persistent requirement in large parts of The challenge of setting new standards of re-education as a source
of labour mobility, economic entrepreneurship and personal development will remain highly relevant.

Sources of sick leave
In Denmark, every day of the year, some 140,000 people call in sick and this number has been steadily increasing
since the end of the 1990s. . Currently, sick leave costs some 35 billion a year.
Stress is the second most common work-related health problem across the EU15, after back pain. As well as absence
from work, stress is associated with cardiovascular diseases, musculoskeletal disorders, particularly back problems,
neck-shoulder-arm-wrist-hand problems (the so-called repetitive strain injuries), weakening of the immune system and
possibly other conditions we still know little about. In extreme cases stress can lead to suicide. Sectors in which
relatively many women are occupied appeared to be risk groups, including health care, education, public services,
hotels and restaurants, and banking. Male dominated risk groups include freight transport and policing, but these are
relatively small sectors.
Work-related stress reactions occur when workers are presented with work demands that are not matched to their
knowledge, skills or abilities, and which challenge their ability to cope. Possible reactions include physiological
responses (e.g. increase in heart rate, blood pressure, hyperventilation); emotional responses (e.g. feeling nervous or
irritated); cognitive responses (e.g. reduced attention and perception, forgetfulness); and behavioural reactions (e.g.
aggressive, impulsive behaviour, making mistakes). Although some cases of stress may be due to violence or aggression
aimed deliberately at a particular worker or group of workers, the reported increases in the prevalence of work-related
stress have more systemic causes. To compete more effectively, many companies have restructured themselves and
downsized their workforce, increasing their reliance on non-traditional employment practices that depend on temporary
workers and contractor-supplied labour, and adopting more flexible and lean production technologies and
technological changes. The way in which information can be used or accessed has expanded, with computers and new
communication devices making it easier to work away from the workplace. This has advantages, but also increases the
possibility of working outside working hours, a factor associated with increased fatigue and risk of burnout, and
disruption of the work-life balance.
Data on the costs of stress are unavailable for many countries, but where such information exists, it indicates high costs.
For the Netherlands, absenteeism and disability cost around 12 billion a year, with sick leave and disability, mainly
caused by psychological and musculoskeletal disorders, each accounting for about 3 billion each. In Germany,
absenteeism due to psychological disorders rose by almost 75 per cent over 1994-2004, at a cost of 3 billion in 2001,
while the number of days lost rose by over a third. Depression accounts for 37 per cent of all psychological disorders.
Despite the importance of organisational causes, most research on effective work stress interventions looks at efforts to
adapt individuals to their environment, because management often thinks the problem is caused by the individual's
incapacity to cope with the work demands imposed upon them, and it is in the interests of management not to change
work organisation too much. It is also much easier to study the effect of individual interventions in an experimentally
rigorous way. Unfortunately, indicators reflecting work demands or social support, or to other aspects considered
important such as (over) commitment, are not usually included in national statistics.
In Denmark, every day of the year, some 140,000 people call in sick and this number has been steadily increasing since
the end of the 1990s. From 2004 to 2005, the annual days sick leave in the Danish private sector increased from 8 to
9.1, while the public sector saw an increase from 7.9 to 5. Currently, sick leave costs some 35 billion a year. While
much sick leave is due to poor health, the flu or recovery from accidents, an estimated 14 billion of the total costs are
attributed to stress. One in ten Danes suffers from stress or stress-related conditions. This figure is up by some 50 per
cent since 1987. An estimated 1,400 people die each year from stress-related diseases. Being a psychological condition,
stress is purely in the mind and is not connected to physical activity or even the amount of hours people work. A recent
study found that Danish part time employees are among the most stressed groups in the country, while high-level
executives in both the public and private sector, were amongst the least stressed. Stress is a subtle phenomenon closely
related to the perception of unclear expectations of others, dependence upon events beyond control and burdens of
heavy responsibility. Women and private business-owners responsible for employees are the two groups most
susceptible to stress.

The ageing employee
As the average age of the Danish population increases over the coming decades, the ability of the Danish labour
market to appeal all parts of the labour force will become still more important.
In OECD countries, fewer than 60 per cent of people aged 50-64 have a job, on average. For people aged 25 to 49, the
share is 75 per cent. If current trends continue, there could be only one person employed for every retiree in European
countries by 2050. As a result, the labour market could shrink by nearly 15 per cent in the EU 15 over the next five
decades, and by over 30 per cent in Japan. In contrast, the younger labour force of the United States is expected to
continue to grow, albeit more slowly than in the past, through immigration and higher birth rates than in most other
OECD countries. Older people face various employment barriers and disincentives.
Social-protection systems, including old-age pensions, and disability and unemployment benefits, often
encourage people to leave work before the official pension age, and it is often financially unrewarding to work
beyond age 65. Some governments promoted early retirement in the past as a response to high and persistent
unemployment in the mistaken belief that retiring older workers would encourage firms to offer more jobs to
the young.
Negative attitudes to older workers are still widespread, as reflected in hiring and firing practices. Older
workers are often thought of by employers as being less productive than the young and since they rarely
receive on-the-job training, their skills can become obsolete. Some employers believe that older workers are
not adaptable and are resistant to change. Ageism is also evident in the public employment service: older
workers in several countries are exempt from job-search requirements and are much less likely than the young
to be covered by active labour-market policies.
Working conditions are often ill suited to the needs and capacities of older workers. Inflexible working
patterns mean that many older workers face a stark choice between full-time work and full-time retirement.
Older workers often cost more than younger workers in terms of either higher wages or higher non-wage
labour costs, such as sickness or health insurance. Employers may also seek to encourage older workers to
leave through early retirement schemes that are often publicly subsidised.
Governments can influence the financial disincentives to carry on working by closing pathways to early retirement,
raising the pension age, rewarding work at older ages, and allowing flexibility in combining income from work and
pensions so that the older worker is better off. Some countries have age discrimination legislation, while others rely on
public-information campaigns and guidelines.
Tackling weak employability of older workers requires action on three fronts: skills, job search and better working
conditions. The rewards for improved skills through training can be lower for older workers than they are for the young,
so lifelong learning policies need to devote special attention to upgrading skills over the whole working life. Public
employment services may need extra resources to provide tailored help to the over 50s. Improving occupational health
and safety for workers of all ages will also assist future generations of older workers to remain in employment longer.
As the average age of the Danish population increases over the coming decades. In Denmark, only 28 per cent of people
between 60-69 years of age are still working. This is slightly less than the OECD-average, and significantly less than
the 43 and 40 per cent achieved in Norway and Sweden respectively. These figures indicate that there is still scope for
improvement in the Danish labour market in terms of utilising the efforts of people of all age groups. The ability of the
Danish labour market to appeal all parts of the labour force will grow increasingly vital as the labour force ages.
Businesses increasingly value the dynamism, ambition and flexibility associated with youth rather than the experience,
stability and reflection associated with age. Delaying pensions by making the labour market more attractive to ageing
employees will be an important challenge in years to come, where expanding the work force will be a prerequisite for
continued prosperity. Making work pay to strengthen the incentive remain on the labour market for longer is both a
challenge and an opportunity to the Danish labour market.

Horizon Scan

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Horizon Scan

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OECD Horizon Scan

Source: OECD Horizon Scan 2

Shifting alliances ...........................................................................................................................................................62

Source: OECD Horizon Scan 3

Work life ........................................................................................................................................................................132

Source: OECD Horizon Scan 4

Source: OECD Horizon Scan 5

Source: OECD Horizon Scan 6

Source: OECD Horizon Scan 7

Source: OECD Horizon Scan 8

Source: OECD Horizon Scan 9

New forms of family

Source: OECD Horizon Scan 10

Source: OECD Horizon Scan 11

Source: OECD Horizon Scan 12

Source: OECD Horizon Scan 13

Source: OECD Horizon Scan 14

The cheating culture

Source: OECD Horizon Scan 15

Weakening religious establishments

Source: OECD Horizon Scan 16

Source: OECD Horizon Scan 17

Source: OECD Horizon Scan 18

Source: OECD Horizon Scan 19

Relevance for Denmark

Source: OECD Horizon Scan 20

Source: OECD Horizon Scan 21

Source: OECD Horizon Scan 22

Relevance for Denmark

Source: OECD Horizon Scan 23

Long-term societal planning

Source: OECD Horizon Scan 24

New global sourcing

Source: OECD Horizon Scan 25

Relevance for Denmark

Source: OECD Horizon Scan 26

Source: OECD Horizon Scan 27

Source: OECD Horizon Scan 28

The GMO battlefield

Source: OECD Horizon Scan 29

The knowledge gap

Source: OECD Horizon Scan 30

The sanctity of life?

Relevance for Denmark

Source: OECD Horizon Scan 31

Transport for an ageing population

Source: OECD Horizon Scan 32

Source: OECD Horizon Scan 33

Source: OECD Horizon Scan 34

Source: OECD Horizon Scan 35

Bubbles and financial instability

Source: OECD Horizon Scan 36

Source: OECD Horizon Scan 37

Corporate social responsibility

Source: OECD Horizon Scan 38

Declining national currencies

Source: OECD Horizon Scan 39

Source: OECD Horizon Scan 40

Source: OECD Horizon Scan 41

Source: OECD Horizon Scan 42

Source: OECD Horizon Scan 43

Flexicurity under pressure