Regional Business Development Centres

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The Regional Business Development Centres Program was a Danish initiative to support entrepreneurs and SMEs through five centres in different regions of the country.
What are the main aims and objectives?

The Regional Business Development Centres program aimed at increasing awareness among Danish entrepreneurs and small businesses of their growth potential, by helping them identify and exploit growth opportunities. To do so, Regional Business Development Centres were set up to provide a range of business support services in collaboration with private and public sector providers. The program was also part of wider efforts to reorganize local governance, which included a move towards a regionalized system to support business development and economic growth. The vision was to address the regional dimension of growth by responding to local and regional business needs while contributing to national growth targets.

How does the program work?

The Regional Business Development Centres offered a range of services designed to support businesses at various stages of their growth and development. The Centres focused on addressing identified weaknesses in the capabilities of start-ups and SMEs, and on facilitating future growth. Here are some of the key services they provided:

Business Support and Advisory

  • Free and Impartial Advice: The centres offered free-of-charge, impartial advice to companies planning to enter new markets or strengthen their sales in existing markets. This includes guidance from International Business Advisors who help companies grow and navigate export activities.
  • Growth and Development Support: BDCs provided strategic sparring on challenges and opportunities, leveraging consultants with solid business experience and providing technical advice for digitalisation. 

Networking and Collaboration

  • Access to Networks: Businesses using the hubs gained access to a vast network of public and private support services, which can significantly aid in moving their business forward. This included connections facilitated through the Trade Council.

Regional Development and Coordination

  • Decentralized Business Promotion: The BDCs ensured a decentralized approach to business growth, focusing on regional differences and specific needs. This effort is coordinated by the Danish Board of Business Development, which aims to create coherence across state and municipal sectors.
  • Cluster Development and Tourism: The centres also work on strengthening clusters and improving coherence within tourism efforts, thereby supporting local and regional economic strengths.

The Regional Business Development Centres were the predecessors to the Denmark's regional Business Hubs, which currently serve as one-stop-shops for local business development support, and provide an entry point to national entrepreneur support programs.

What is the overall cost?

There is currently no information available on the overall cost of the program.

How was it implemented?

This program spanned the 2007-2018 period.

The Ministry of Business and Growth was responsible for the program's strategy, and the Danish Business Authority was responsible for national implementation.

Ultimately, however, the Regional Business Development Centres were managed locally.  When the five regions were formed in 2007, each of them established a Growth Forum with the active participation of regional stakeholders and local authorities and governments. This Growth Forum oversaw the establishment, development and management of the Regional Business Development Centres.

A new framework was signed between Local Government Denmark (KL) and the Ministry of Business and Growth for the period 2016-2020. After the formal closure of the Regional Business Development Centres, six regional Business Hubs were established in January 2019.

What impact has been measured?

Results by 2013: An evaluation undertaken in April 2013 by the Iris Group for the Danish Business Authority concluded that the five Regional Business Development Centres had different competences and priorities, but that, in general, they fulfilled their role as business advice centres for the different private and public stakeholders.

Results by 2014: The Regional Business Development Centres conducted 2124  company growth assessments (their core service) nationwide, almost 6% above the target set.

Results by 2015: A performance assessment carried out by the Danish Business Authority found that the Business Development Centres had contributed to creating 1305 jobs from 2013 to 2015. The evaluation estimated that the economic return on the investment made by the municipalities (DKK 98 million in 2013, approximately EUR 13 million) was DKK 5.07 for every DKK 1 invested (Danish Business Authority, 2016).

As part of this evaluation, companies were also asked to assess the assistance received from the Regional Business Development Centres. Some 93% reported that it had had a high or moderate positive effect on their firm’s development. As with previous evaluations, the assessment found that companies who used the Regional Business Development Centres continued to outperform similar ones that did not. This was true for growth in employment, turnover and exports, although the differences between the Regional Business Development Centre users and the control group was narrower than the previous year for the first two variables. Some 60% of companies using the Regional Business Development Centres experienced growth in employment (10% more than in the control group), while 5% more companies than in the control group experienced turnover growth.

Results by 2016: The Centres conducted 2146 growth assessments, and 88.2% of these were referred for further advice to private or public sector specialists. Another 3181 enterprises were served by the Regional Business Development Centres in another manner that year. These figures showed a small increase over the previous year (0.5% increase in growth assessments conducted; 1.5% increase in referrals for further assistance; 0.3% increase in more general interactions). Another 3385 companies participated in other Regional Business Development Centre activities, such as conferences and workshops.

What lessons can be learned?

The alignment challenge:

The alignment of the national strategy defined by the Ministry of Business and Growth with the concrete actions and business support offered by the Regional Business Development Centres at the regional level required coordination among:

  • The Danish Business Authority, in charge of the program at the national level,
  • Local and regional government authorities, in charge of business support and promotion in their region; and
  • Regional Business Development Centres managers.

To address this challenge, a multilevel governance framework was defined and adopted for the program, with both top down and bottom up contributions. This notably involved regular meetings bringing together the Danish Business Authority and the five Regional Business Development Centres.

Coordination and efficiency challenges:

In 2017, the government established the Commission on Simplification of Danish Business Promotion to revise the structure of the Danish business-support system. The Commission recommended bringing all business development support under a single umbrella to increase clarity for entrepreneurs and improve efficiency as well as further decentralizing support and anchoring it at the local level. Following this consultation, business promotion efforts were reorganized in 2018 as a two-level system:

  • At the national level, the Danish Executive Board for Business Development and Growth sets national strategic objectives.
  • At the local level, six Business Hubs were created as one-stop-shops centralising local business development support and providing an entry point to national programs (European Commission, 2019; European Commission, 2018).

Previously, there were two entry-points for local business support: basic business support was provided by municipalities while Regional Business Development Centres offered support to growth-oriented entrepreneurs.

In 2018, the five existing Regional Business Development Centres were closed, and soon after were six Business Hubs were created. Some resources and staff were transferred from the defunct Regional Business Development Centres. A digital platform was also introduced as part of the reform.

Another initiative addressing coordination challenges for the Business Hubs is the co-operation agreement signed between nine municipalities to form of a cross-municipal collaboration under the auspices of the Business Hub, bringing together all business support and simplifying the regional landscape.

Lessons for other ecosystems:

Overall, the Regional Business Development Centre program was successful in providing businesses to local firms and promoting job creation and supporting firm development. However, the business development service system was still deemed complex and was further simplified through the transition to the Business Hubs program. Based on the experience of the Regional Business Development Centres, some key factors can be identified for similar programs to be successful:

  • Initiatives seeking to implement regional one-stop-shops should seek to involve local stakeholders in the governance and strategic development of the hubs. The local ownership of Regional Business Development Centres was positively perceived by local authorities and was thought to help adapt the offer to the local context.
  • Set aside resources to gather feedback on user experience in different centres as well as monitor longer-term impact of support on firms. The use of control groups to evaluate impact on firms was a strong feature of the Regional Business Development Centres evaluation design.
Notes + Additional Context

Read more about the program in the OECD’s International Compendium of Entrepreneurship Policies (2020)

CURATED BY

Sarolta Borzasi

Director for Government + Investor Engagement
Embassy of Hungary London
United States