I usually take Saturday morning to catch up with the news since it is a nice way to relax while keeping updated. Since being in Denmark, Danish news are obviously part of the menu.
The relevant news to me can be summarized this way: In Denmark unemployment nearly doubled in one year (numbers confirming what people know about the crisis), bankruptcies are skyrocketing and the government is worried about jobs among young people and will consequently dump 1 Billion DKK to facilitate 5000 interships by 2010.
I know that Denmark is quite liberal/capitalist about businesses, that the Social Security system (public+private) is supporting lots of unemployed people during this phase and that this may only last some time (whatever “some” means)… [1] I also believe that the current numbers (6% unemployment rate) are not sound, as they will change quickly
Even so, I believe that 1 Billion could be better used. Assuming there are 10% for running costs (not sure how (in)efficient public services actually are) that’s an incentive of 180,000 DKK per employee. This incentive only lasts the timeframe of one internship if the company is not interested in renewing the contract with the intern [2].
The current governmental plans are partially done to protect some issues regarding compulsory interships in some academical degrees. Even so, what if this money could be spent on early-stage innovation? Young people can have low burning rates when starting a new business (personal expenses and commitments are lower) and this money could help a team of 2-3 entrepreneurs sustain a small business for 1/2 years. For the sake of reasoning what if that money could generate 1 or 2 thousand lightweight, agile and money-sensitive companies? Which impact would that have in a 3-5 year time frame, even assuming conservatively that only 10% would be a sound success? This would certainly result in long-lasting effect with the creation of even more jobs and a very reasonable economic impact.
I am not arguing for high risk ventures. I am trying to contextualize this into concepts like Services, where companies can start generating income faster. The truth is that 1Billion DKK, put in the hands of some early stage investors, would generate a lot more return.
When I was in Portugal it was common knowledge that crisis situations (like companies closing down) would tend to create a spike on the creation of small local companies as people move to create their own jobs (specially relevant in countries where the economy is not able to re-absorb those people). What Denmark could do now was to create that same business creating effect. This crisis doesn’t have the same meaning as it does in less dynamic economies but by doing so the Danish government would artificially create the same conditions that can generate small businesses , with a very relevant impact.
I can think of different areas where new business initiatives are needed in Denmark: If you travel and see the price disproportion between different goods (not tourist prices but normal day-to-day prices) or the things that Denmark doesn’t have, you’ll get some ideas…. The web is full of opportunities, not only for IT geeks…
Footnotes
[1] I actually think that this is mostly over and people are now watching to see: my feeling is that Q4 2009/ Q1 2010 will see the beginning of the rebound.
[2] It would be nice to know in detail some stats about “intern turnover rates”, ie if they statistically continue in the company of it the company will get another intern to replace it (being cheaper)
