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Innovation, Growth and Social Cohesion

The Danish Model

Bengt-Åke Lundvall

Written by the scholar who, together with Chris Freeman, first introduced the concept of the innovation system, this book brings the literature an important step forward. Based upon extraordinarily rich empirical material, it shows how and why competence building and innovation are crucial for economic growth and competitiveness in the current era. It also provides a case study of a small, very successful European economy combining wealth creation with social cohesion.
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Chapter 9: Knowledge Intensity and Knowledge Flows in the Danish Innovation System

The Danish Model

Bengt-Åke Lundvall


1 One portion of the knowledge that firms use comes through internal development – investment in research and development, the development of competence through courses or through learning by doing. Another portion that carries great weight in Danish firms is embodied in the products and tools that the firm purchases from outside sources. It is this side of the development of firms’ competence in particular that we shall examine more closely in this chapter. Thus we begin by examining the knowledge intensity of different parts of the Danish economy; thereafter we shall examine how firms belonging to different sectors, including the service sectors, act as producers and purchasers of knowledge. We shall use several different types of knowledge indicators as the basis for this analysis. In Chapter 10 we move forward and analyse the interactive learning and direct exchange of knowledge that takes place between firms in connection with product development. DENMARK’S RELATIVE POSITION IN TERMS OF KNOWLEDGE INTENSITY Increasingly we find the understanding that the current phase of economic development is characterized by ‘knowledge-based competition’ and it is argued that the knowledge foundation for production, distribution and consumption is becoming increasingly important for economic development (Foray and Lundvall 1996b; OECD 1996). In this light Denmark’s position relative to countries at comparable levels of economic development is of particular interest. It is especially worrying when analyses (Mandag Morgen 1996) claim that Denmark receives mediocre placement internationally with regard to the knowledge content in production measured on the basis of indicators such...

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