Denmark or the Kingdom of Demark is one of the Scandinavian countries and situated in the northwest of Europe. The country shares the border with Germany, Norway, and Sweden. She has a long and brutal history with other Scandinavian and European countries, but it all culminated in the form of the public welfare state and a mixed economy at the beginning of the 20th century.
Now, we should discuss political, economical, social, technological, legal and environmental factors; how all of these factors combined to impact the overall economy of the country and in-depth study of each factor.
Here is the Pestle Analysis of Denmark as follows;
Some of the political factors that can affect the country are given below;
Membership & Alliances
Denmark has been a longstanding member of the European Union and North Atlantic Treaty Organization (NATO). Such political memberships and alliances have played a huge role in shaping up the today’s economy of the country, and she has made various trade deals because of it. Even after Brexit, the country is still a member of the EU and NATO, and she plans to do so in the near foreseeable future. It’s because her political and economical interests are matched with alliances.
System of Government
The administrative and management system of government of Denmark is comprised of constitutional monarchy and a unitary parliamentary system. Where the prime minister is the head of the government and the monarch is the head of the state. However, Queen Margrethe 2nd is the current monarch, and Mette Frederiksen is the prime minister of the kingdom of Denmark.
Some of the economical factors of the country are as follows;
GDP & Per Capita
When it comes to the standard of living of Danish people, gross domestic production (GDP) or per capita; then she’s one of the leading countries among all of the abovementioned dynamics. As a result, Danish people fall into the category of one of the happiest people in the world. It’s because of the economic stability, fewer hours to work and people have a lot of extra money to spend. That’s why all of these factors combined contribute to the economy of the country.
Successful Service Industry
The other for the growth and success of the Danish economy is the service industry. According to an estimate, her economy produces approximately more than 80% of employment opportunities in the service industry like education, law, administration, healthcare, transportation, and other services.
The reason why countries prefer the growth of the service industry is because your manpower uses intellectual capabilities and earns living. Otherwise, you have to invest a lot of resources, learn the skill and then you’d be able to make living.
When we look at the geography of the country, then she doesn’t have a plethora of agrarian land. Therefore, the only viable option left is the service industry which the country uses it with utmost efficiency.
The interesting thing about the Danish economy is that she doesn’t put extra weight in terms of taxes on those who earn less. Even the country has a policy of paying high salaries to both skilled and unskilled workforce because they both have a right to live and satisfy their needs.
When it comes to taxations, she has a law that those who earn higher would pay higher taxes, and less earning people would pay less tax. Such an exemplary income equality system would make Danish people to live a happy life, and they do so with joy.
Below are the social factors that can affect the country and its population.
The high and quality education system of the country has made the Danish people so wise that they are very open-minded towards accepting other people. Especially if you compare it with other European countries where people are very rigid minded and nationalistic, they don’t accept foreigners.
Most importantly, her people don’t live in a state of mind of conflict, whether it’s race, religion or any other. They’re very tolerant; therefore, prejudice among Danish people is very low. Consequently, Danish people live a tension-free quality life that impacts their overall economic productivity. As we know that, mentally and psychologically satisfied people can perform better.
Religion & Beliefs
When it comes to religious beliefs, the Danish education system teaches morality and ethics to young children. Therefore, they’re more inclined toward atheism rather than religion. However, the majority of the people are religious, but some of them take religion seriously. That’s why their culture is comprised of calm and cool minded people who are not intense about their religious beliefs.
Some of the technological factors that have an important role in the development of the country are given below;
According to a recent study, Denmark is the most digitally advanced nation among European countries. I think that one shouldn’t be surprised by such surveys and studies. It’s because when you have a stable economy, the majority of the people have smart devices, and they also have their social media profiles. It means that people have easier access to science, technology, and education. When knowledge is at your doorstep and you’ve got plethora of time to study it, then, of course, people would be digitally advanced.
Research & Development
Research and development fall into the category of the service industry, and Danish people have a strong mindset toward R & D. According to a study, R & D of Denmark is one of the most developed departments among European countries. That’s why; her tech industry is leading the world in this sector.
We’re living at the time of science and technology, where countries of the world are in the race of developing something new to have an economic edge over competitors. Danish R & D department is helping her economy to profit from it with the latest development and advancements.
There are many reasons behind the growth and success of Denmark, her law and judiciary are among one of them. For instance, she doesn’t have a single unified judiciary system that means Greenland has her system. Denmark and the Faroe Islands have their separate judiciary systems. It shows the progressive nature of the Danish mindset that they didn’t impose their laws over others, separate laws form different people.
Transformed into Wind Energy
The Danish government is actively working on the transformation into renewable sources of energy. For instance, over 6000 wind turbines are running and fulfilling approximately 50% of the country’s energy. The kind of wind speed Denmark, she needs a huge investment to install more wind turbines to fully convert into renewable sources of energy. Currently, Denmark is the biggest supplier of Wind turbines.
Dependant on Fossil Fuels
Despite all of her renewable energy efforts, the Danish government is still heavily relying on the coal and burning of fossil fuels. Even the country used to export oil and gas previously, but her energy demand is increasing for the past few years. That’s why her renewable energy sources haven’t been able to satisfy the country’s energy needs.
If the country continues to rely on fossil fuels; then it wouldn’t only be costly for the Danish government, but it would also result in the form of taxes from the European Union.
After going through the study of the PESTLE analysis of Denmark, we have come to know that the country has many strengths and some weaknesses as well. Most of her strengths come from the stable economic conditions and highly advanced research and development department of the country. Her socio-cultural setup plays a huge role in the developing mindset of the people.
Finally, the country must stop burning fossil fuels. It’s not only good for the environment, but it would cost her economy a lot.
Photo by Markus Winkler