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Denmark could be a DREAM for foreign entrepreneurs

TableGrabber is the name of an entrepreneurial company set up by four foreigners. This summer, the company won the Next Step Challenge, Europe’s largest competition for entrepreneurs, after they and eight other finalists had lived in Esbjerg for five months. Here they tested and developed their business model and the company is currently experiencing rapid growth.
The Indian entrepreneur Pawan Marwaha, one of TableGrabber’s founders, ended by coincidence up in Esbjerg. He thinks that Denmark should be better at branding itself in order to attract international entrepreneurs.

By Niels Brandt Pedersen ;mail and Felix Bekkersgaard Stark;mail

The basic idea of TableGrabber is a programme to help restaurants manage bookings coming in from many different websites. Restaurants – similar to hotels and airlines – are also able to use the programme to adjust their prices up or down depending on demand. All in order to maximise their revenue.

“Our participation in the Next Step Challenge meant that we set up our European headquarters in Esbjerg. But I am very impressed with Denmark and I like living here. We have offices in New Delhi and Singapore and we have also worked in Silicon Valley. I would say that Denmark is able to compete with the United States and Singapore on being one of the best places to start up and run a business,” says Indian Pawan Marwaha, one of the TableGrabber’s founders. 

He highlights Denmark’s excellent infrastructure, in particular – physical and digital, the health service, access to highly qualified employees and not least the opportunity to test a product in a smaller market. All these things make Denmark attractive.

“If we can make things work in Denmark, there is a good chance that we can make them work in the rest of Europe and across the world,” says Pawan Marwaha.

He and his partners are, however, finding establishing social connections slightly difficult, but interaction with Danes can be improved as TableGrabber expands its staff and social networks.

“We will be recruiting five to six people this spring and expect to recruit more as the success of the company grows,” says Pawan Marwaha who finds it difficult to understand that Denmark is not doing more to attract increasing numbers of entrepreneurs like him.

“Entrepreneurs are often willing to relocate and Denmark has a great deal to offer. But you are not known in international entrepreneurial circles where most people are talking about Ireland, Silicon Valley and Singapore,” says Pawan Marwaha, but adds that Denmark should offer a similar environment in terms of tax breaks and access to capital.

“The Danish government has to recognise that it is competing with the rest of the world. Taxation and capital can be vital to the choices entrepreneurs make about where to set up their companies,” he says.
Sluggish nation branding for Denmark
His assessment is confirmed by several sources interviewed by DI Business. According to them, knowledge of Denmark among international entrepreneurs is not widespread. This is partly because Denmark is not good enough at branding itself as a country for entrepreneurs and partly because the process of setting up a business is too cumbersome.

“I am in no doubt that the Danish share of the entrepreneurial talent mass is low compared to other countries – even when you look at Denmark’s overall potential,” says Peter Torstensen, managing director of Accelerace, a company helping entrepreneurial businesses from both Denmark and abroad to grow.

According to Peter Torstensen, it is especially the branding of Denmark that is the problem.

“The government should be doing much more to market Denmark as an entrepreneur-friendly country,” he says.

He points out that getting started in Denmark involves too much bureaucracy for international entrepreneurs.

“The government should do something about the rules to ensure that getting access to Denmark is not too difficult,” says Peter Torstensen.

Only 12 entrepreneurs

In 2014, the Danish government launched a three-year pilot scheme called Startup Denmark to attempt to attract more foreign entrepreneurs. Startup Denmark is open to businesspeople from outside the EU and is based on up to 50 entrepreneurs annually being given residency for a period of two years. If the entrepreneurs are successful, they can have their residency extended for another three years.

But results are far off the intended target. At the end of 2015, only 12 foreigners had been allowed to travel to Denmark to realise their entrepreneurial dreams under this new scheme.

Minister for Business and Growth Troels Lund Poulsen (Danish Liberal Party) recognises that there is still some way to go to fulfil the plan of inviting 50 entrepreneurs to Denmark every year.

“The residency quota was not fully utilised in 2015 as it takes time to spread the word about such a scheme and attract the right applicants. We hope to see more successful applicants in 2016,” writes Troels Lund Poulsen in an e-mail.

The minister refers to the fact that the Startup Denmark scheme secretariat in 2015 saw an improvement in the quality of applicants.

“First and foremost, we have to look at the results of the Startup Denmark scheme. I also want to focus on what needs to be done to generate more growth companies from the entrepreneurs we already have – Danish as well as foreign,” writes Troels Lund Poulsen. 

Denmark has a lot to offer

Entrepreneurs who are prepared to relocate usually represent a great benefit to the countries in which they decide to settle. According to a report published in 2014 by the Kauffman Foundation, an American organisation whose mission is to advance entrepreneurship, entrepreneurial companies that survived for at least four years on average generated nine new jobs each in the United States in the period 2003-2010. 

Daniel Hjorth, professor of Entrepreneurship and Organisation at Copenhagen Business School (CBS), wonders why the Danish government is not doing more to make Denmark attractive to foreign entrepreneurs when the potential is so huge.

“Entrepreneurship benefits the whole of society. But Denmark has not got a very high profile if you are a foreign entrepreneur looking for a country to move your business to. We need a better advertising campaign for Denmark – both by the government and by organisations like the Confederation of Danish Industry,” says Daniel Hjorth.

Like Pawan Marwaha and Peter Torstensen, he believes that the Danish government should be doing more to provide effective advertising and generate knowledge about Denmark around the world.

“Denmark has the advantage of being a knowledge-heavy country with a high level of expertise – especially in the area of climate technology and pharmaceuticals. That is something many entrepreneurs will be able to exploit. Denmark also has a unique social safety net which may be attractive to many businesspeople. Especially when many parts of the world are troubled by conflict and uncertainty,” says Daniel Hjorth. 

What should be done?

Opinion by the Confederation of Danish Industry:

A wide range of initiatives should be implemented to raise Denmark’s profile and highlight the benefits of doing business here to foreign entrepreneurs. This includes emphasising the excellent work/life balance, access to free education, medical treatment and other public sector benefits. Initiatives should draw attention to Denmark’s advanced levels of knowledge and research as well as the country’s excellent digital infrastructure.

There is a need to change the Danish scheme for foreign entrepreneurs to enable companies with more than two partners to obtain working visas.
Denmark should look to entrepreneur schemes in other countries where a working visa gives access to services such as help with introductions to potential investors, mentor schemes and tax benefits. For example, in the form of tax breaks for patent costs or investment in research and development.

No cash support should be given to international entrepreneurs wanting to set up a business in Denmark.

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PUBLISHED: 4/1/2016 LAST MODIFIED: 11/26/2016