Globalization and E-Commerce VI: Environment and Policy in Denmark

Abstract

The diffusion of e-commerce in Denmark is mainly a result of a partnership between government and industry initiatives, rather than being purely market- or government-led. While environmental factors are important enablers of e-commerce diffusion, government policy aims to be a key driving force. Although the size of government is substantial and the list of policy instruments is extensive, there is a serious question about whether the governments' efforts to stimulate use within the society (business, consumers, and government itself) are sufficient to stimulate diffusion of e-commerce adequately. Our analysis questions the effectiveness of the government-led approach because of its timing, its lack of coordinated actions, and the mixed motives of government actions, in particular at the European Community level. Our analysis also found serious structural barriers such as high marginal income taxation and a limited supply of qualified labor. Contributing to the limited labor supply are strict immigration policies and late entry into the labor market (college graduates enter the job market at the mean age of 29). Adding to the structural problems is the lack of large high-tech manufacturing companies that can function as locomotives, as well as an insufficient equity and venture funding market. The Danish national e-commerce strategy is focused on rapid adoption, implementation, and exploitation of e-commerce in all sectors of the economy, rather than a production-led strategy. The official goals of the Danish government are to make IT available to all citizens and to be among the top five IT-using nations in the world. Although our analysis points to a high level of diffusion of the technologies that, in principle could enable e-commerce, actual exploitation is lagging behind the lavish display of technology.

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