The growth of the Danish economy last year was almost entirely due to Novo Nordisk Pharmaceuticals, the company behind the weight-loss injection.
Statistics from Denmark’s statistical agency reveal that the drug industry in the country, which is dominated largely by Novo Nordisk, was responsible for the 1.8% growth of the economy in 2023. This helped Denmark avoid the stagnation experienced by most European economies.
Novo Nordisk has become Europe’s largest company, with a market cap of over $600 billion, thanks to the success of Wegovy. It is the 12th biggest company in the entire world.
Las Olsen is the chief economist of Danske Bank. He said that Novo Nordisk’s rapid investments, production, and job creation created a “manufacturing explosion” in the Danish economy, which was reflected in its GDP figures. Without Novo Nordisk the Danish economy would have contracted by 0.1% in 2023. It is the seventh largest economy in the European Union.
Olsen stated that “Novo Nordisk’s extremely high rate of growth is due to its weight-loss drugs and are responsible for this economic growth rate.” “There’s a huge demand for these drugs around the world, Novo is building factories to meet this demand and provide a traditional export. The company’s efforts to expand manufacturing abroad are reflected in its domestic GDP figures. Novo Nordisk, despite not being the most labour intensive sector, creates jobs, pays more in corporation tax and provides a lot of returns to Danish shareholders.
The company’s patent will continue to last at least eight more years. This is why growth is expected to continue. It is important that policymakers do not rest on their laurels, thinking the economy is doing fine and there is no need to change anything.
Denmark’s economic growth was higher than the EU average and better than France, Germany Italy and Britain. Denmark’s performance in 2023 was only surpassed by Spain and the United States.
Nokia, for example, dominated the Finnish economy between 1998 and 2008, accounting for one quarter of its GDP. The rapid decline of Nokia with the advent of smartphones dragged the country’s economy down.
Novo Nordisk increased production of Wegovy in facilities like its Hillerod, Denmark plant
Maersk was Denmark’s biggest company at one time and accounted for a little under a fifth (or less) of the GDP.
Olsen warned that the Danish government should ignore the “unbelievable” growth of Novo Nordisk in order to maintain the economic goal of the country, “flexicurity”, which allows workers to switch between industries while still enjoying high levels of protection.
“Denmark’s economy has gone through transitions in the past, like the 1990s with the decline of the textile and shipbuilding industries. The authorities handled this well, as new industries emerged where the old ones failed. Olsen stated that it is vital to maintain this.