From his base in Tel Aviv, Tue David Bak has observed the Danish health tech sector and its vibrant ecosystem over the past three years. On April 1, 2020 he will become the director of the Greater Copenhagen Committee, and is eyeing the capital region for its tremendous potential.
“I would love to see a Danish company in the C20 index that is not more than 100 years old,” Tue David Bak casually noted, at the end of the interview as he reflected on health tech and life sciences companies generally.
But it is an excellent place to start this article.
There is no shortage of innovation in Denmark, but there is a great lack of scaling and commercialisation of the innovation that is happening
Tue David Bak
In his view, there are opportunities for companies to become much better at commercialising products and seeking global markets at an early stage in their development. Not surprisingly, this will be one of his priority areas when he takes over the position of director of the Greater Copenhagen Committee on April 1, 2020.
As a political collaboration, Greater Copenhagen strives to bring together stakeholders in Eastern Denmark and Southern Sweden, while keeping Copenhagen at the centre of its planning and operations. Since 2016, the organisation has promoted growth and created jobs throughout the Øresund region.
According to the incoming director: “The region is very well connected. Greater Copenhagen has strong infrastructure and strong brand recognition for international talent who want to benefit from both a high quality of life and a work-life balance. However, we still need to become a true metropolis to foster innovation and collaboration in the industries. We need to attract more risk capital, younger companies, and we need to create an environment where hospitals and other institutions are open to innovation.”
When viewed from Tel Aviv, Greater Copenhagen’s collaborative ecosystem – which focuses on growth, sustainability, and infrastructure – is unique. In fact, in Israel’s capital, many healthcare leaders consider Greater Copenhagen to be among the three most robust life science ecosystems in Europe. Based on Bak’s field studies, the Greater Copenhagen’s region is only outmatched by the ecosystems of Switzerland and Cambridge (in the United Kingdom).
Of course, it is not possible to build the big industrial giants of the future without the right people to create growth and innovation and the right skills to commercialise the solutions. Paraphrasing Bak, before you can put these factors into place you have to prioritise needs. While Denmark has a rich research environment, industry players need to get better at commercialising their research and engaging in tech transfer.
From his time in Israel, Bak has learned that it is neither doctors nor researchers who will generate business: “There is no shortage of innovation in Denmark, but there is a great lack of scaling and commercialisation of the innovation that is happening. There are plenty of great ideas, but they do not take the world by storm.”
The art of commercialisation
While Danish companies can innovate and come up with new solutions, Bak points to a lack of capacity required for innovations to live freely in large companies that must simultaneously navigate national and global regulations. Companies need to be open to collaborating with new businesses and start-ups that are better at bringing innovation forward and refining it to keep close to the market, customers, and industry trends.
“Even if you are among the largest pharmaceutical companies in Northern Europe, you still have to operate closely with stakeholders when you develop your products, and you must know how to work with start-ups. If you understand this form of collaboration, you can tap into partner’s innovations and quickly test new solutions in the market. At the same time, this can become a place to look for new talent and there are definitely opportunities that big health tech companies should take more seriously,” Bak explains.
Broadly speaking, the life sciences sector and healthcare in the region is far ahead of many other countries when it comes to using technology and securing tech-savvy talent. But the question is not whether Denmark is digital enough. The question is whether there are enough cooperative relationships and a solid enough foundation to build a business that is both efficient and digitised.
Bak’s short answer is no: “We need to embark on a new journey where we focus on creating solid business models by leveraging digitalisation and research to create good conditions for start-ups. There is room for improvement here. We can do this by fostering an environment where innovation develops in collaborations that take place between small and large companies.”
Homegrown is optional
It is fair to say that the Danish start-up ecosystem is more up-and-coming than established. As Bak’s sees it, there are not as many companies that have grown in a short time and created a global life sciences business as leading countries. What’s more, the concentration of risk capital is inadequate, as is the number of small business advisers.
“There is probably nothing keeping big companies from collaborating with start-ups. The challenge is that there are not enough attractive start-ups in Denmark. We lack start-ups that are technically complex, ready for scale, and with huge ambitions. True, some have the potential, but there are still too few of them,” Bak observes.
Bearing that in mind, Danish companies typically look abroad when they are seeking to collaborate with agile scale-ups. Knowing this, Bak’s goal is to attract the best advisors and successful entrepreneurs from other countries:
“It’s comparable to when Denmark brought a German coach for the Danish national football team in the 80s. Things quickly became more professional, and it has never been the same since. We need to lure some of the brightest minds and business people from other ecosystems into the country. If we can succeed in that, it will mean that Danish start-ups can gain access to other markets. This is good for diversity, and it can perhaps even shock our Danish mindset a bit – in a positive way.”
Forget about organic growth
Bak sees comparisons between the Danish and Israeli markets, albeit the latter is more abundant and offers more venture capital. That being said, Israel’s universities are not much better than Denmark’s, and they do not receive more research funding. Yet, they still manage to secure more talent, and they are better at commercialising their knowledge.
In Bak’s words: “University administrators have a strong mindset and constantly test the limits of what’s possible. In addition, the public sector has worked hard to build up a venture capital market that tolerates great risk. In Denmark, we are not yet on the same level.”
Viewing this as a “people game,” Bak suggests there is much that depends on who comes up with the ideas, brings them to life, and inspires others to do the same:
“We need to dispense with the idea of organic growth, where the first thing we want to do is enter the Danish market, then the Swedish, German, and English. To succeed in a globalised industry where competition can arise in a matter of days, you have to think globally from the start of any project. This is a different approach than many Danish entrepreneurs, and the health tech industry is accustomed to. We can do a lot if we change our mindset and seek inspiration from entrepreneurs in other industries who have proven that they can do this.”
Consistent with this, Greater Copenhagen needs to become much better at telling success stories. Being part of something successful means a lot to any person, Bak explains, “especially when you come from the other end of the globe to establish yourself in Denmark. Then you want the assurance that there is a shared ambition to create something that makes a difference, and that is greater than anything else.”