South Sea Islands lagging behind in entrepreneurship

Out of Denmark’s 98 municipalities, Lolland is ranked 95th in terms of newly established businesses in the second quarter of 2024. Guldborgsund is ranked 87th, and Vordingborg sits at 80th. This is according to a new report from the data and analytics company Experian.

In the second quarter of 2024, 21 new businesses were established in Lolland Municipality, 40 in Guldborgsund, and 34 in Vordingborg. In comparison, in Gentofte Municipality, Denmark’s top performer, 176 new businesses were established in the same period.

Far below national average
While the absolute number of new establishments is low in the three south sea municipalities, the picture looks even worse when adjusted for population size. Lolland has a business creation rate of only 0.63 businesses per 1,000 adults, while Guldborgsund stands at 0.80, and Vordingborg at 0.89. In comparison, Gentofte Municipality has a rate of 3.00 businesses per 1,000 adults. The national average, which includes both urban and rural areas, is around 1.5 according to Experian’s report.

Far below national average
While the absolute number of new establishments is low in the three south sea municipalities, the picture looks even worse when adjusted for population size. Lolland has a business creation rate of only 0.63 businesses per 1,000 adults, while Guldborgsund stands at 0.80, and Vordingborg at 0.89. In comparison, Gentofte Municipality has a rate of 3.00 businesses per 1,000 adults. The national average, which includes both urban and rural areas, is around 1.5 according to Experian’s report.

Demographic challenges
One of the reasons for the low business creation rate in the south sea islands is the area’s specific demographic structure. Lolland and Guldborgsund municipalities are among the most aging regions in Denmark, with a large proportion of the population over 65 years old. This affects the labor market and entrepreneurial spirit, as fewer people are in the workforce or at an age where they typically embark on new business ventures.

Additionally, many people in the area are out of the labor market for various reasons. These can include social challenges, lower educational levels, or simply the fact that young, educated individuals are moving to larger cities where job opportunities are better. This leaves a significant portion of the population without the necessary drive or resources to establish new businesses.

Not the whole picture
In Business Lolland-Falster, CEO Mikkel Wesselhoff agrees that the south sea islands face demographic challenges:

– We recognize that the lower establishment rate is a challenge for the region. This is partly due to the area’s demographics, with a high proportion of older citizens, says Mikkel Wesselhoff, who, however, believes that Experian’s report doesn’t present the whole picture:

– The report from Erhvervshus Sjælland shows that more new businesses are being created on Lolland-Falster than before. Lolland Municipality had its highest number of newly started businesses in several years in the second quarter, with 67 new businesses. That’s a 42 percent increase in just two years. Guldborgsund Municipality is very stable, with 80 to 100 newly established businesses each quarter, Mikkel Wesselhoff explains.

Initiatives launched
– We can also see that the newly started businesses on Lolland-Falster are performing better and have a higher survival rate than in the rest of the country, says Mikkel Wesselhoff.

Business Lolland-Falster reports that several initiatives have been launched to promote entrepreneurship. These include collaborations with local educational institutions to strengthen the entrepreneurial culture among young people.

– We are convinced that by creating the right framework and support, we can foster a stronger entrepreneurial culture in Lolland and Guldborgsund. Entrepreneurship is an important engine for innovation, job creation, and economic growth, and therefore it is a key focus area for us, says Mikkel Wesselhoff.