EMCC European Monitoring Centre on Change

Early Warning

Denmark
Phase: Management
Typ:
  • Response to COVID-19
  • Advice
  • Support of companies' growth
  • Support of SMEs
Zuletzt geändert: 20 October, 2020
Ursprünglicher Name:

Early Warning

Englischer Name:

Early Warning

Coverage/Eligibility

Early Warning is a counselling programme founded in Denmark in 2007 with the goal to help small and medium-sized enterprises (SMEs) get through a situation of crisis in the best possible way, and start a new course of growth. SMEs in Denmark are defined as companies with fewer than 100 employees. All SMEs in economic crisis risking bankruptcy are eligible to receive support through the measure. Ealy Warning is financed by Danmarks Erhvervsfremmestyrelse (The Danish Executive Board for Business Development and Growth).

Main characteristics

Early Warning is a collaboration between consultants, voluntary advisors and lawyers, each contributing with their unique knowledge. The objectives of Early Warning are (in no particular order):

  • to help viable companies get over the crisis and get into a new course of growth;
  • to close non-viable companies quickly and effectively, with the least possible loss for society, creditors and owners;
  • to affect the general stigma in relation to being crisis-stricken in the direction of 'American conditions', where going bankrupt is less stigmatised; 
  • to give the owners their faith back and a future without a lifelong debt. They are offered the opportunity to re-establish themselves in a human manner, in some cases with the opportunity to start a new company within a foreseeable future.

The first contact is made by the owner or the CEO. However, the contact to Early Warning might be a result of advice from a board, creditors or from a working spouse - because the decision to make contact can be very difficult to take.

Reponse to COVID-19

Since the beginning of the COVID-19 crisis the demand for Early Warning support increased significantly. The government has allocated an extra DKK 5 million (€0.7 million) to the scheme in order to secure the capacities and competences of Early Warning so that all companies facing a crisis that ask for support can access it without charge. 

Funding

  • Local funds
  • Regional funds

Involved actors

Regional/local government
Funding; Provision of advice through regional business centres.
Andere
Voluntary advisors.

Effectiveness

Two effect measurements have been made in 2015 in which Early Warning companies are compared to a control group. The measurements are purely statistical, based on filings to the state. The results show that Early Warning companies that survive are capable of maintaining or increasing their turnover, full-time equivalents and export. Early Warning companies that go bankrupt do it with less debt to the public sector than the corresponding control group (tax deducted from income at source and VAT).

A report from June 2015 informs that, over the previous five years, the allocation from the state to Early Warning has been DKK 7 million yearly (around €1 million). The number of voluntary consultants (executives, lawyers) is around 100.

 

Strengths

The strength of the scheme is to support company owners that can no longer overview the future situation of the company. The support is also given to avoid a large number of redundancies among the employees through proper treatment of the crisis, supported by professional business people.

In 2019 and in 2018 around 600 companies have received help from Early Warning. During the COVID-19 crisis the number has increased, but no statistics yet available (autumn 2020).

In 2016-2017, around 600 companies per year have received help from Early Warning consultants.

In the period 2013-2015, 1,334 new companies have asked for advice at Early Warning (eStatistik, June 2015).

Weaknesses

No information available.

Beispiele

Vebbestrup Minidozer; Western Shop; Hilbig Håndværk; Gundestrup mejeri og Bryggeri
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