The SDGs: An Opportunity for Danish Businesses
SDG-Related Business Opportunities Could Be Worth DKK 400 Billion for Danish Businesses in 2030
The Sustainable Development Goals (SDGs) represent a set of 17 goals that meet the most pressing environmental, societal, and economical challenges facing the world today. The goals are interlinked, which means that lack of progress on one of the goals impedes progress on the others.
Businesses need the SDGs just as much as the SDGs need businesses. Businesses are dependent on people and planet, and they cannot succeed unless the 2030 Agenda is realized. Therefore, businesses need to engage in the successful achievement of the Sustainable Development Goals.
Achieving the SDGs is good business. The 60 fastest growing SDG hotspots could create new market opportunities worth DKK 80 trillion in 2030. If Danish businesses manage to seize a share of the new market opportunities within relevant SDG sectors, the potential SDG opportunity for Danish businesses would be worth DKK 400 billion in 2030, according to a report by Danida.
Emerging and Frontier Markets Hold Great Potential for Danish Businesses
Danish companies tend to pursue business opportunities in the developed markets in which they are already present. However, companies face fierce competition for growth in the advanced markets. In contrast, developing countries represent a market with tremendous potential. More than 75% of the growth in the world economy is currently driven by economic development in emerging and frontier markets.
Population growth, urbanization, and sustained economic progress in developing countries, alongside climate change and resource scarcity will increase the demand for sustainable solutions and innovation.
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Which Sectors Will Benefit from the 2030 Agenda?
The 2030 Agenda will create business opportunities across all sectors. The largest business opportunities are associated with the growing demand for sustainable housing and city solutions. Nevertheless, demand for sustainable development solutions within other SDGs sectors including food, energy, water, health and transportation will increase as well.
Nowadays, more than 85% of Danish exports within relevant SDG sectors are sold in developed markets in Europe and North America. Emerging and frontier markets only account for about 6% of Danish exports. Emerging and frontier markets are expected to account for approximately 28% of the global SDG value in 2030, while the European market is only going to account for about 15%. Therefore, to seize the opportunities created by the SDG hotspots, Danish companies need to reconsider their current market focus.
Can Danish Companies Overcome Market Barriers in Emerging and Frontier Markets?
Companies should reconsider the geographic scope of Danish exports and focus on emerging and frontier markets. The need for sustainable solutions will transform into demand due to economic and social development in these countries. Some Danish businesses are already successful in these markets and the need for Danish solutions is high.
However, there are numerous market barriers in developing economies. Therefore, it is recommended that Danish businesses should enter new markets in countries where Denmark has an embassy and well-established relationships and partnerships. Danish companies should focus on the 23 countries with which Denmark has developed ties, as shown in the infographic above. Together, these countries constitute a market with 3.3 billion people and a GDP of DKK 62 Billion.
By getting involved in the achievement of the 2030 Agenda and pursuing SDG-related opportunities in emerging and frontier markets, Danish companies can boost financial performance, while creating first-mover competitive advantage.
There are many organizations and agencies that can help Danish businesses cope with current market barriers in emerging and developing economies.
- Embassies including the Trade Council
- #dkaid including the Investment Fund for Developing Countries
- Danmarks Eksportkredit (EKF)
There is considerable SDG-related business potential for Danish organizations in emerging and frontier markets. However, it is up to companies to act now in order to unlock that potential.