A gift in a time of crisis – Denmark

The national government owes it to the rest of the country to promote growth in Greater Copenhagen

The economic slump of the 1980s may seem so far off, yet it lurks just over the horizon and threatens to come back if we fail to prevent Copenhagen and the rest of the capital region from falling behind metropolises in other countries.

The Organisation for Economic Co-operation and Development recently published a report about Greater Copenhagen confirming that what is good for the capital is good for Denmark. Every time 100 jobs are created in Copenhagen, it leads to the creation of 20 more in the rest of the country.
But the report also describes what will happen if we don’t do what is required of us. The real title of the report should be ‘Wake up, Denmark!’ It concludes that Greater Copenhagen has labour problems – it can neither attract skilled labour nor can it hang on to it. Neither can it move the immigrants who live here into meaningful, relevant jobs. All this despite economic growth and low unemployment.

In general terms, growth in Copenhagen has been about 2 percent per year the past few years, while Stockholm’s economy has expanded by about 4.5 percent. Their growth costs jobs in all of Denmark, and the situation is only going to get worse if the government continues its politics of indifference towards the nation’s capital.

Fortunately, the OECD’s report has specific recommendations for what is required to put the capital to back on track and moving full throttle away from the economic doldrums of the past.

Based on these recommendations, we urge the parliament, the City of Copenhagen, the Capital Regional Council and businesses to work together to create an ambitious plan for the development of Greater Copenhagen that will lead to growth and employment. This requires the government to drop the illogical and ungrounded aversion to doing something for the Copenhagen and its residents. We expect that it will as soon as it finishes reading the OECD’s report.

The real title of the report should be ‘Wake up, Denmark!’ It concludes that Greater Copenhagen has labour problems – it can neither attract skilled labour nor can it hang on to it. Neither can it move the immigrants who live here into meaningful, relevant jobs. All this despite economic growth and low unemployment.

Only Poland ranks lower when it comes to integrating its foreign-born residents into the job market. Greater Copenhagen has half as many highly skilled immigrants as other capitals – apparently, they are not interested in coming here, or they are scared off by the rigmarole.

Greater Copenhagen is only mediocre when it comes to creating new ideas or products – Copenhagen has only half as many PhDs and half as many new patents than the vast majority of other capitals. The world is looking right past us. We’re number 50 on the list of the top 50 cities with international offices. When are we going to wake up to these facts?

At least we live in a clean, attractive city. Or do we? Not if you believe the OECD. Precisely this area is one that could set Copenhagen apart form other cities, but again we’re in for a wake up call here: people are spending more time in traffic during their commutes.

Congestion is up 10 percent in past two years, and costs 9 billion kroner annually in terms of lost productivity. Add to that a public transit system run by multiple independent companies – S-trains, Metro, buses. And as any commuter knows, they don’t co-ordinate very well with each other. Using public transit is just too much trouble.

And what about Greater Copenhagen as a place where ordinary people live. No again. Particularly the City of Copenhagen is turning into a rich ghetto that is off limits to the people who provide the city’s essential services. The city’s nurses, teachers and elder care assistants all live well beyond the city’s limits, but before too long the rich might be joining them, for who wants to live in a city that has worse air pollution than Paris or London?

If you are more into more academic discussions, the report contains a description of how the otherwise progressive municipal reform of 2006 has eroded Greater Copenhagen’s strength, its cohesion and its ability to act. The damage is due to the fact that the reform, dictated from the national level, did not address the structural challenges Greater Copenhagen faces. As an example of this is that none of the local councils in Greater Copenhagen were merged as part of the plan that saw the number of local councils reduced from 271 to 98.

Another example of this is a city government in Copenhagen that is a relic from the past. Expensive and inefficient, it is a bad experience for residents trying to navigate its institutions. Each has its own administration, yet it is impossible to figure out who is responsible for what. Apart from Denmark’s other cities, every other city government in the world is run on the principle of majority rule. Wake up, Denmark.

The report has no shortage of documentation showing that we are facing a serious problem, and that we need to act if we are to hold our ground. For some, the OECD’s findings are nothing new. We’ve heard much of it before, but this time the correlation that exists is striking. Everything from education and integration to innovation and infrastructure are all hurdles to Greater Copenhagen’s growth and job creation on the national level.

And for those who think this is just another version of corporate Denmark’s refrain that we need more highly skilled labour, think again. This goes beyond that. This is a message that Greater Copenhagen’s social welfare network is in danger.

Where is the state, the OECD asks. Many of the areas that are important for Greater Copenhagen’s development are state areas of responsibility. So then, what is your plan for Greater Copenhagen? Silence. We can’t tell the OECD what our plan is, because there is no national plan for Greater Copenhagen. The OECD was left puzzled by this. In fact, they were really puzzled by it. It was like the emperor without any clothes on.

The government has a role to play here, and it ought to be eager to fulfil that role by creating growth that will benefit all of Denmark. This is a matter of taking the chance when it presents itself. The first and most logical step would be to exploit the potential the OECD finds Greater Copenhagen possesses. Possesses, but doesn’t exploit because we all run around with different plans for local development, for business development, for regional development, for attracting research and development activities.

This is all well and good, but the problem is that the plans must, at a minimum, be organised so certain plans can be emphasised in order to power Greater Copenhagen as the generator for jobs on a national level. This requires a national plan for Greater Copenhagen – and this should be a part of the government’s stimulus package.

We need to take the OECD’s recommendations seriously – the efforts of the state, the region, local councils, and business are all needed as part of a team effort. But in order for that team to come together, the government needs to accept its role as captain. As the OECD put it, the government plays a decisive role in many of the areas that are critical for Greater Copenhagen’s competitiveness, and its involvement is crucial when it comes to developing a strategy.

We have presented a very specific proposal for the first step, which the observant reader has probably noticed is but the OECD’s most basic recommendation: create a national plan for Greater Copenhagen. Such a plan is nothing less than a gift in age of crisis, bailouts and stimulus. Why not make the effort?

So far, the government has rejected the calls with arguments that Copenhagen is already lavished with attention, and that other areas of Denmark need their fair share. That’s true, but what we are urge is that the importance of this report not got lost in regional rivalry. This is no zero-sum game. We are looking to make the cake bigger, not get a bigger slice of it.

That’s the point of the report. It finds that what is good for Greater Copenhagen is good for the rest of the country. That means we can’t afford to wait. The longer we wait to act, the more growth and jobs we lose out on. This isn’t about giving Copenhagen more, it is about working smarter and working closer together.

We call on the government to take the first step and create a commission responsible for drawing up a national plan for Greater Copenhagen. That doesn’t excuse those of us on city councils, the parliament or the regional council from acting. We’ve all been told in no uncertain terms that there is a lot of work that needs to be done.

Copenhagen wants to do its part. We recognise that Mohammed still can’t read as well as Mads can. The Copenhagen Model – the practice of voluntarily mixing students from affluent and less-well off homes – is clearly not meeting its goals. Copenhagen needs a new model, and we’re hard at work putting it together.

The employment rate amongst immigrants in Greater Copenhagen is also dissatisfactory. In Copenhagen, integration is tied to employment, which is why we work to ensure people are healthy, are able to work, and that they have a place to work and a way to get there by bussing unemployed immigrants to companies taking part in our job placement programmes. But Copenhagen needs to have a second look at what we can do to generate better results in a period of rising unemployment.

We need to start thinking about what a plan for Greater Copenhagen’s growth should include. If we are to take a lesson from other countries, it ought to focus on:

- Securing enough highly skilled labour
- Create an effective infrastructure to keep Greater Copenhagen moving
- Creating a good business climate
- Making Copenhagen even a more attractive place for Danes and foreigners to live
- Creating a co-ordinated, effective political administration for Greater Copenhagen

The City of Copenhagen is already well under way on its own in many areas, but if we are to do ensure Denmark’s position on the whole, then the government needs to chip in with an ambitious and visionary plan. Initiatives like these don’t prevent other cities from doing the same. Our suggestion: a fast-track Greater Copenhagen commission led by a dynamic and visionary person who can come up with a multi-faceted strategy by the end of the year.

The commission should be made of representatives from the government, the mayor’s office, the mayor of Frederiksberg, the chair of the Capital Regional Council, as well as economists, urban planners, environmentalists, traffic experts, cultural voices, innovation experts and representatives from other relevant groups. The commission should be tasked with developing a 10-year strategy for Greater Copenhagen, as well as setting milestones 30 years out into the future.

While we wait for the commission’s strategy, we need to get to work laying the legal groundwork.

If we we want to attract highly skilled labour, we need to determine whether tax reform can make Greater Copenhagen a more attractive place to earn money.

Another obvious place to look would be schools. Local councils should be allowed to set up international classes because doing so would make it easier for international workers to settle down here. Or what about striking deals with countries that have high levels of unemployment amongst engineers, nurses and other groups Copenhagen lacks? Most other countries do something similar.

If we want to eliminate congestion, what not let Copenhagen start charging people to drive into the city? Give us until 2020 to see if congestion charges work – or at least until there is a viable national road pricing system in place.

The tolls the city collects from cars entering the city would be earmarked for investment in public transit, which would contribute to combating the mounting congestion and environmental problems the city faces. This is something that can’t wait. In 2020, the results can be evaluated and and if a national road pricing system exists at that point, we can implement that instead.

If we want to solve the housing shortage that stunts our growth – while at the same time creating places to live for people we expect to contribute to that growth – then we need to follow the OECD’s recommendation and allow local councils to enter into agreements with developers that require a certain percentage of new housing to be low-rent.

Working together this way would be an effective tool for making sure there is enough housing in new developments under way in Nordhavn, Ørestad and North-east Amager. In the examples from Britain the OECD pointed to, as many as 12,000 low-rent homes were built a year – primarily for essential services workers.

The government’s own expert panel looking into the problem of ghettos made the same recommendation in November. So why not put it into action? In the same breath, parliament ought to make it easier for local councils to place place people in public housing.

If we want to solve the problem with expensive and ineffective public administration that stunts our growth, why not reform legislation to allow the City of Copenhagen to change from a magistrate rule to majority rule?

The current form of government sees nearly all parties present in the city’s administration, putting majority rule out of play and bogging down decision making at City Hall.

Copenhagen should be allowed to follow in the path of Oslo and establish a parliamentary system for its city government.

Instead of delving deeper into the details, we’ll stop here and reiterate our most important point: we need a commission that can create a national development plan Greater Copenhagen which will lead to growth and increased employment. The work of the commission would ensure that we don’t run out of steam half-way to the goal.

A plan for Greater Copenhagen is no less important than labour market reform or tax reform because we know that new jobs in the capital create jobs elsewhere in the country.

Let’s get started. Accept the OECD’s gift as a reminder that all signs tell us we need to do everything we can. And if you need another argument, have a look at the rest of the world and you will see they are already well under way.

When it was asked, the government chose not to take part in funding the OECD’s report. But now that the report has arrived, it would behove the government to step forward and take on the leading role in drawing the necessary conclusions from it. If not for its own sake, then for the rest of Denmark’s.

Ritt Bjerregaard is the mayor of the City of Copenhagen and a Social Democrat. Rasmus Prehn is a member of parliament and the Social Democrat municipal issues spokesperson.

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