Over the past few days, the question of how business-friendly Denmark’s municipalities really are has come under scrutiny, including in this publication.
The debate is based on an annual survey by the Confederation of Danish Industry (DI), which provides both a very concrete and, at the same time, somewhat blurred picture of which municipalities make it onto the podium and which trail at the back when companies describe the reality of doing business in their municipality as they see it.
At first glance, the ranking may look like a definitive answer. Look a little closer, however, and it is more like a calculation with several unknowns.
The questionnaire was sent to DI’s own members as well as non-members in the industries represented by the organisation. The part of the ranking based on companies’ assessments therefore reflects the views of those businesses that chose to respond.
In Lolland, that means 50 companies, and the survey does not show how they are distributed by sector or company size.
What carries the most weight?
Compared with the total number of active companies in Lolland, Guldborgsund and Vordingborg municipalities, the number of responses corresponds to between 1.8 and 2.4 per cent. That is an important detail to bear in mind when reading that Lolland Municipality has fallen to 82nd place, while Guldborgsund ranks 58th.
The number of responses is only one part of the equation, however. The survey is based on 15 questions put to companies and 26 statistical indicators. The answers and indicators are grouped into four categories, each carrying a weight of 25 per cent, regardless of what the companies themselves believe the municipality should prioritise most highly.
Another piece of DI’s business-friendliness puzzle is that the survey does not say whether the same companies responded this year as last year. Given the relatively small number of responses on which the survey is actually based, that would be relevant to know. Even modest changes in the group of respondents could have an impact, particularly because the gaps between some positions in the ranking are extremely small. Just 0.0032 points, for example, separate Stevns in 74th place from Svendborg in 75th.
That does not mean the results can simply be dismissed, nor can it be concluded that a municipality’s position near the top or bottom is solely due to these factors. But it does mean that large year-on-year movements should be interpreted with more caution than the ranking itself might initially suggest.
Neither the municipality, DI nor we in the media should give readers the impression that 82nd place alone tells them what it is like to run a business in Lolland. Behind that apparent precision lie methodological choices, statistical indicators and just 50 local voices.
