Online archive - find the most current content at

Social innovation in local development:

Danish national context

Concepts like rural and remote have a different scope in Denmark than in other Nordic countries due to the country’s higher overall accessibility. Still, many small communities in the outskirts of Danish municipalities face challenges such as ageing populations, outmigration of young people and families, limited economic opportunity and comparatively low educational attainment. At the same time, collective action as a means of addressing societal challenges in rural settings has a long history in Denmark. In the early 19th Century, farmers came together to form cooperatives as a means of managing transformations to the agricultural industry, a process referred to today as “andelsbevægelsen” (the Danish word for cooperative movement).  

Funding and governance of Danish services

Denmark is characterised by a welfare system that provides social safety as well as health and educational services to all citizens. The national government provide a political framework through which the regions and municipalities deliver services. In order to increase the cost-effectiveness of this service provision, a 2007 reform restructured the country into 5 regions (previously 14 counties) and 98 municipalities (previously 271). This has led to the centralisation of public sector workplaces as well as some health services. Municipalities are central actors within the welfare system and are responsible for identifying and responding effectively to social needs. But with shrinking budgets and an expected 60% growth in the 65+ age group over the next thirty years many municipalities are looking for new ways to provide and address social challenges.

Key issues in remote and sparsely populated areas

Many rural municipalities are under a pressure to meet the costs of maintaining local services resulting in closure of schools, kindergartens and other public institutions. In addition, migration patterns from 2003-2010 illustrate  a clear trend  of  people with higher levels of education moving toward urban areas while a larger percentage of those outside the labour market, including the elderly, tend to stay in rural areas. Therefore a key challenge for rural municipalities is to attract resources that stimulate local economic activity as a means of mitigating these demographic imbalances. Alongside this, social support services are necessary to increase labour market participation among marginalised groups and to care for elderly members of the community.   

Social innovation in Denmark

The challenges highlighted above are causing many municipalities to seek new ways to provide services and address societal challenges. A 2012 report entitled Social innovation og sociale entreprenører i yderområder (Social innovation and social entrepreneurs in remote areas), reported that 67 percent of municipalities reported working with SI. Further, approximately 30 municipalities are members of The Danish Municipality Network on Social Innovation, a platform run by the Danish Technological Institute to facilitate the exchange of SI knowledge and inspiration related to social innovation. 

In 2013 a committee were appointed to identify barriers and opportunities as well as make recommendations to strengthen the national commitment in public, private and third sector. Following up on the committee’s recommendations a National Centre for Social Enterprises and a Council for Social Enterprises were established in 2014. Due to a shift in government with new political priorities the financial support to the National Centre for Social Enterprises and Council for Social Enterprises ended by 2015.

At the national level, public procurement rules are also being examined with the view to removing barriers to new types of partnerships. The current legislation is now in relation to tax, employment, tender and procurement it constitutes a barrier for applying unconventional human resources in developing social innovation solutions.  As a result, it has been suggested that some initiatives which function well in other countries could in Denmark risk being defined as illegal ‘black labour’. For example, the concept of time banking, where a fake ‘valuta’ can be exchanged for different services, which has been  an important component of successful innovations in the United Kingdom, Turkey and the USA.

Social innovation in local development

Although it is common for projects to be initiated by the public sector, there is also evidence of an active civil society in Denmark. One report found that approximately 38 percent of the Danish population are engaged as volunteers and another found that many SI initiatives arise from activities in local associations and organisations. There are examples of communities stepping in and taking over due to failures of both the private sector (e.g. closure of a local grocery shop) and the public sector (e.g. closures of schools and kindergartens). These attempts to address social needs through community action are by no means limited to urban areas. Active citizens in sparsely populated areas have been a critical voice in the debate of the lack of services and support in rural Denmark.

Download the full National Contexts report including a complete listing of sources cited


Page last updated September 2016