Business interests lauding the welfare state?

Friis Larsen agreed, adding that it did not take long for Danish employers to realize that they were not going to be able to compete with other countries, like India, China, and, closer to home, eastern European countries like Poland.

“I think when people started to see what was beginning to happen in terms of outsourcing, we realized that we had to concentrate on those industries where we are competitive, and those are generally high-skill industries, like IT and health care. We are only 5 million people, and we’re not going to be able to run on oil forever, so we said, ‘If we are going to survive we better smarten up.’”

Niels Ploug, an economist and the head of social statistics at Statistics Denmark, the statistical arm of the Ministry of Economic and Business Affairs and the Danish equivalent to the U.S. Bureau of Labor Statistics, said that there was a conscious decision made in the 1990s to promote full employment without using low-wage work (to be discussed in a  future article in this series). “The only other alternative, that we knew of then or that we know of now, is to increase the qualifications of the workforce and then try to mold the private sector around those qualifications,” he said.

Ploug said that both businesses and politicians keep a weather eye on education statistics in Denmark, because it’s the most telling measure of what the prospects are for the economy. “When we see dips in education scores, that is very concerning,” Ploug said. “It will often lead to an evaluation of how much we are spending, and where we could be more effective.”

As of 2007, the last year that statistics were available, Denmark spent more as a percentage of its GDP on education than any other OECD country. The World Economic Forum’s Competitiveness Index, which is compiled from a combination of national statistics and survey data, ranks Denmark fourth out of 213 countries in terms of its high school education enrollment rate. On the same measure, the U.S. ranked 45th in 2010.

Business leaders and advocates emphasized that Denmark still faces substantial challenges in the coming years, which have been exacerbated by the global financial crisis, the European debt crisis (Denmark’s currency is pegged to the euro, though it is not in the euro zone), and an increasing downward pressure on wages due to immigration from eastern European countries like Poland. According to Muntzberg, these challenges will require an increased commitment to creating high value-added jobs and educating the workforce to fill them. “It has never been more important to have a well-educated workforce,” he said. “It becomes more vital every year.”

“Education reform is constantly on everybody’s lips,”  Bosse said. Despite the high public investment and high enrollment rates in Denmark, falling scores in math and reading have businesses worried.

“It’s very difficult to recruit the best educated workers from other countries, because of the high taxes,” Muntzberg said. “So we need to be sure that we’re training competitive workers here.”

Proposals have recently been floated to lengthen the school day to accommodate more math and science class-time without cutting back on other areas of instruction, like arts and sports. Some, like Bosse, believe that schools need to employ greater use of technology in the classroom to encourage learning and to facilitate interaction between students and teachers outside the classroom.

But others, like Ploug, caution against reading too much into test scores in Denmark’s case, because the country has such a strong tradition of vocational work.

“I worry sometimes that if we focus too much on improving academic performance, we might result in diverting funds from job-skills training that we do very well,” Ploug said.

Though views are mixed about what the best policies are for continuing to increase educational attainment over time, there is one thing that Danes from all sectors seem to agree on — whichever methods are employed, they will not be cheap.