Denmark - Economic sectors

In modern Denmark, the economic sectors of agriculture and industry are so closely linked that it is difficult to separate their influences. Both food and wood-based industries such as paper depend heavily on agriculture for raw materials while using sophisticated technology to process them. In addition, agricultural production itself is quite technologically advanced. The agricultural sector's highly technical nature means that its great productivity is generated by a small fraction of the total workforce—4 percent in 2000. In contrast, well over two-thirds of the workforce was employed in the service sector in the same year.

Agriculture in Denmark also includes forestry and fishing. The agricultural industry was Denmark's first engine of growth, especially its livestock production and forestry industry. Agriculture's economic influence relative to other sectors has basically been declining; by the

1960s, industry had surpassed it in terms of employment and percentage of GDP, and by 2000 agriculture made up 3 percent of GDP. Despite the small size of Denmark's agricultural sector today, it is comparatively highly productive, accounting for around 15 percent of exports in 1999. In 1998, Denmark was the world's seventh-largest producer of pork, while the Danish fishing industry was the second-largest in Europe.

The lack of raw materials other than agriculture (until the discovery of oil and natural gas in the 1960s), meant Denmark's industries developed as secondary production and processing concerns, usually specializing in

narrowly-defined fields. This has led to the predominance of small-or medium-sized firms making niche products, often with a high-tech or design focus. For example, in a small design-oriented field such as furniture making, Denmark excels—in 1998 accounting for 20 percent of furniture exports by EU countries. The complexity and versatility of this organization of the industry has somewhat sheltered the Danish manufacturing industry from fluctuations in the world market. Alongside food processing and agro-industry, chemicals and engineering are important industries, and electronics are increasing in significance. Denmark's position in the North Sea has led to the development of a strong shipbuilding sector—it is currently the world's third-largest shipbuilder after Japan. The general trend in the manufacturing industry is that work-and material-intensive industries such as food processing, textiles, and metals decline or stagnate, while knowledge-and technology-based industries such as chemicals, electronics, and engineering have been expanding. Industry contributed about one-quarter of GDP in 2000. The sophisticated technology of much of Denmark's industrial sector has meant that high or increasing productivity does not always correspond with high or increasing employment. Over the past decade, the percentage of the workforce employed in manufacturing has remained fairly constant at around 25 percent.

In 2000, Denmark's services sector contributed more than two-thirds of GDP. Private services accounted for around two-thirds of productivity, and public services the remaining one-third. However, many private services are in fact subcontracted to public institutions. The majority of public services are in health, welfare, and administration. In the service sector as a whole, business services and wholesale/ retail trade accounted for the most productivity growth. Wholesale and retail trade is the largest employer in private services, in 1997 accounting for a little over half of service sector employment. Between 1992 and 1998, the service sector saw a 12 percent increase in employment. Public services have consistently accounted for nearly one-third of employment in services (mostly in health and education) over the past decade, while telecommunications and business services have slowly increased their share of employment.