Novo Nordisk A/S is having a significantly larger impact on Denmark’s employment levels than initially thought, according to the country’s fiscal watchdog. This revelation has intensified concerns about the Nordic economy’s heavy reliance on the pharmaceutical giant.
The Economic Councils report on Tuesday highlighted that Novo Nordisk has been responsible for half of Denmark’s private-sector job growth, excluding the agricultural sector, since early 2023. This includes both direct and indirect employment contributions.
Novo Nordisk, renowned for its diabetes medication Ozempic and obesity treatment Wegovy, has become Europe’s most valuable company. Its success has had macroeconomic implications for Denmark, influencing interest rates and currency stability. In 2023, Denmark’s economy grew by 1.9%, but this growth would have been stagnant without Novo’s contribution.
The new employment data has stoked fears of Denmark following Finland’s trajectory during the Nokia Oyj era. Nokia significantly boosted Finland’s economy in the late 1990s, but its subsequent decline led to a nationwide economic downturn. Danish Economy Minister Stephanie Lose had previously dismissed these concerns, noting that Novo’s production facilities are largely based abroad, reducing its direct employment impact within Denmark.
In October, the fiscal watchdog had also suggested that Novo’s expansion would have a limited effect on employment, despite being a major driver of GDP growth. However, Tuesday’s report indicates that the pharmaceutical sector’s substantial GDP contribution has led to unexpected employment growth. The Economic Councils have now doubled their 2024 GDP growth forecast for Denmark to 2.6%, citing the pharmaceutical industry as a key driver. The report also raised the structural employment estimate.
Novo Nordisk is expanding its production capabilities to meet the growing demand for its drugs. The company is heavily investing in existing facilities and has recently received approval to construct a new factory in Denmark’s third-largest city. Chief Executive Officer Lars Fruergaard Jorgensen has downplayed comparisons to Nokia, emphasizing at a recent press briefing that the company’s pipeline of experimental medicines is poised to sustain future growth.
From early 2023 through March 2024, Novo Nordisk has created over 7,500 direct jobs in Denmark. Additionally, the Economic Councils estimated that Novo has indirectly generated 8,400 jobs through its suppliers and construction projects, a figure that is likely to rise with ongoing building activities.
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