Researcher at Aarhus BSS joins advisory group in checkup of Danish foreign policy

Philipp Schröder, a professor of economics at Aarhus BSS, Aarhus University, has been invited to join a new advisory group which will help undertake a comprehensive checkup of Danish foreign policy. He considers it an important task at a time when the world economy is in the middle of fundamental change.

It is essential that Danish foreign policy is continuously updated in order to adjust to a globalised world where, for example, the ability of business to tap into the world markets matters as much as ever. That’s according to Philipp Schröder, a professor of economics at Aarhus BSS, Aarhus University, and a newly appointed member of a group of experts who are to advise in a comprehensive checkup of Danish foreign and security policy. The group’s 20 members are to provide input to Ambassador Peter Toksøe-Jensen, who is to summarise the work with a detailed report to be handed over to the Danish government in May next year. We talked to Philipp Schröder, who was born in Germany and moved to Denmark a decade ago, about his expectations for the work in the advisory group and asked him what he considers the major challenges facing a small, open economy in a big, volatile world.

You have joined the group as an expert on external economic relations?

”You could also call it economic diplomacy. Of course, foreign policy is to a large extent about security and defence policies, but I’m very happy to see that the idea of economic diplomacy has also caught on even more in Denmark in recent years. For a small open economy such as ours, it’s an important pillar of our foreign policy.”

Why is economic diplomacy so important for Denmark?

”The Danish economy wouldn’t be the same if it hadn’t been able to link up with the global economy. It entails an understanding of our identity as a small open economy. For a small economy, the economic link to the rest of the world is probably more important than it would have been for larger economies.”

Is this the traditional way of viewing the issue in Denmark?

”Clearly, it’s become more prevalent during the years when I’ve been following Danish politics. There’s a broad recognition that globalisation is not something you choose. Globalisation is a fact, and it’s been good for Denmark. But it requires that the political establishment keeps a focus on this trend, and I believe that in recent years there’s been growing recognition that it makes sense to include economic and business interests in foreign policy making. We’ve seen that trend more and more, in other countries as well.”

Will the advisory group have a visible impact on foreign policy?

“I’m happy to see that there’s been a willingness to involve experts from both academia and civil society. That said, it’s not up to the experts to make decisions. The advisory group can help the politicians make an informed decision. That’s especially important in an issue of this complexity.”

What are the main challenges for Danish foreign policy if we look specifically at your area of expertise, economic diplomacy?

”The biggest challenge arises from the fact that the economic centre of gravity in the world is moving. It‘s been doing so for the past 10 to 15 years, and it’s been doing so in a very literal geographic sense. Originally, the centre of gravity was somewhere in the mid-Atlantic, between the United States and Europe. Today it’s moving towards Asia, and you have to deal with that. That’s my first point. My second point is about the way this globalised world is changing the way you do business. It’s not the same way as 20 years ago. Look at areas like outsourcing, the cross-border mobility of highly skilled professionals such as engineers and CEOs, or the cross-holdings of multinational corporations. It’s because of these changes that you need to think innovatively about the policy frameworks for business. It’s useful to also think carefully about foreign policy insofar as it affects commercial interests.”

Do you have any down-to-earth ideas about what you can do to be equipped to cope with these changes?

“Let’s pose this question: who links us to the rest of the world? Danish business does. The Netflix movie you watched last week and the smartphone in your pocket were both imported from abroad. It only works because we export something back, Lego bricks, for example, or consultancy services. It’s my hope that the new strategy for external economic relations will guarantee a suitable policy framework that will facilitate further links with the global marketplace.”