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Outsourcing halved: Companies send significantly less jobs abroad

Companies are increasingly keeping production and jobs in Denmark. Actuator manufacturer Linak has invested massively in automatisation and can thereby keep costs down – and its production at home in Als.

Publiceret: 07.12.2017
Af Karen Witt Olsen mail

Danish companies’ relocation of jobs has halved.

New figures from Statistics Denmark show that while Danish companies moved 16,900 jobs abroad in the period 2009-2011, outsourcing was nearly halved in 2014-2016 to 8,500 jobs.

”It’s clearly a result of Danish companies being successful in their attempt to become more competitive,” says Chief Economist Morten Granzau, the Confederation of Danish Industry (DI).

See also: DI Analysis: More companies bring home jobs from abroad (in Danish) 

“We can only have industrial jobs in Denmark if we get more out of fewer hands. Otherwise, we’ll lose to cheaper countries.” COO and Vice President Egon Jensen, Linak

We eliminate the wage difference

According to Statistics Denmark, lower wage costs is the main motive when companies choose to outsource internationally.

71 per cent consider wage costs important or very important, shows a survey among 3,200 companies with more than 50 employees conducted by Statistics Denmark.

Vice President and COO at Linak, Egon Jensen, can relate.

Since 2010, the actuator manufacturer has invested a three-digit million-kroner amount in digitalisation and automatisation of its production in Nordborg on the Danish island of Als in order to keep costs of wages down.

”We can only have industrial jobs in Denmark if we get more out of fewer hands. Otherwise we’ll lose to the cheaper countries,” he says.
Linak has factories in Denmark, USA, Slovakia and China. The COO explains that the minute price of production is 5 kroner in Denmark, 3 kroner in the US, 1.20 kroner in Slovakia and 0.80 kroner in China.

”We continuously look at whether it pays off to produce at home or abroad. With automatisation, we remove the difference in wages between China and Denmark. It isn’t romantic nationalism, but concrete calculations of total cost each time,” says Egon Jensen from Linak.

Since 2010, Linak has brought home production from China, Eastern Europe and Italy.

Cobots and the wheel

In Denmark, the Manufacturing Academy of Denmark (MADE) works every day to increase the country’s productivity and give companies the best conditions for retaining, expanding, or bringing home production.

Director of MADE Nigel Edmondson explains that the major drivers are about getting digitalisation in the form of e.g. 3D and big data and automatisation in the form of e.g. flexible robots out to SMEs as well.

”The newest technology is available, and now it’s about getting the solutions made flexible enough to be implemented in smaller companies and at lower amounts. In that way, we can contribute to getting productivity up at SMEs, which constitute more than 90 per cent of companies in Denmark,” he says.

Thursday, 253 participants were gathered at MADE’s anniversary to hear about the newest possibilities.

On the agenda at Industriens Hus were, among other things, augmented reality and additive manufacturing.
Linak is also part of MADE, and COO and Vice President Egon Jensen explains that he particularly appreciates the networking element.

”We’re part of MADE because we fully believe that we industrial companies can learn something from one another. There’s no reason to reinvent the wheel. If the big companies can do something with cobots that we can’t, we would happily draw inspiration, just as we are also happy to share our experiences,” he says.

The actuator manufacturer on Als is far from finished with what they themselves call their automatisation journey.

”We want more robots and smarter solutions that can increase the company’s overall productivity. The next step will be IT solutions and focus on making more data accessible for employees, so they can solve problems faster,” says Egon Jensen.

 

We can only have industrial jobs in Denmark if we get more out of fewer hands. Otherwise we’ll lose to the cheaper countries

COO AND VICE PRESIDENT EGON JENSEN, LINAK
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PUBLISHED: 12/7/2017 LAST MODIFIED: 12/7/2017