Ozempic-maker Novo and wind giant Orsted made Denmark rich. Are the boom times now over?

Copenhagen – At their heights, Denmark’s corporate champions seemed untouchable. Novo Nordisk, long known mostly as an insulin maker, was Europe’s most valuable company in 2024, after riding a surge of demand for Ozempic and Wegovy. That followed the success of Orsted, the world’s largest offshore wind developer, which in 2021 was celebrating record valuations and racing to expand internationally as governments poured money into green energy.

Now, those triumphs look fragile. On Sept 10,

Novo announced 9,000 job cuts

– more than half in Denmark – after losing its lead in the US weight-loss drug market to rival Eli Lilly. Orsted has been forced to scrap multi-billion-dollar projects, take heavy write-downs and raise new cash amid soaring costs, supply-chain snags and Mr Donald Trump’s war on offshore wind. Both companies have suffered steep valuation losses, and the investor euphoria that once defined them has largely disappeared.

The turbulence at these two giants hasn’t just rattled investors and executives. Novo’s setbacks have sent tremors through Denmark’s government ministries, pension funds and households. Economists are warning of lower growth, and there are fears Denmark is facing a so-called “Nokia risk” – a reference to how Finland ended up in a downward spiral after the country’s overdependence on the company left it exposed when the iPhone came along.

The bad news from both companies “comes at a time when consumer confidence is already very low, and many Danes are deeply concerned about the economy”, said Mr Las Olsen, chief economist at Danske Bank. “This very bleak sentiment could easily get worse,” he added, and weaken consumption. 

No place in Denmark is more of a seismograph for Novo’s fortunes than Kalundborg, the industrial town that hosts the drugmaker’s main production site. Locals not only fill Novo’s factories, but also invest heavily in the company itself. Mr Michael Rasmussen, who runs the nearby Meny supermarket, said the stock’s recent plunge has weighed on residents.

“Right now, it’s really taking a psychological toll,” he said. “That, of course, affects some people when it comes to immediate decisions like buying a new kitchen, a new car, or other big consumer goods.”

The dominance of Novo and Orsted – as well as shipping giant Moller-Maersk, Lego and Carlsberg – speak to Denmark’s role as a breeding ground for name-brand companies. While revenues of the country’s 10 largest companies corresponded to about 20 per cent of its gross domestic product (GDP) in the 1980s, that number is now around 45 per cent, according to Dr Martin Jes Iversen, a researcher in business history at Copenhagen Business School. That’s transformed Denmark into one of the world’s richest countries as measured by GDP per capita.

Yet the risk embedded in this dynamic is becoming more visible. Novo and Orsted’s troubles in the US market have become a liability both for them and for Denmark. While Denmark’s economy is fundamentally strong and diverse – and its public finances solid – the stumbles of these corporate giants threaten to undermine government spending and its self-perception as a small nation that punches above its weight economically.

It’s an overstatement to say that Denmark’s economy relies on Novo, but not by much. The success of Ozempic and Wegovy helped drive GDP growth well above the country’s European peers. Thanks in part to the drugmaker, the government has raised future revenue estimates several times since 2022, resulting in more than 100 billion kroner (S$20 billion) in additional available funds through the end of the decade.

Within Denmark, Novo was directly responsible for one-fifth of the country’s private employment growth in 2024, while its billion-dollar investments in expansion projects and new factories in cities including Kalundborg, Hillerod and Odense have invigorated the housing, infrastructure and service sectors in those areas. Novo’s parent foundation has also funnelled some of the company’s profits into record-breaking grants for research and social projects in Denmark, including developing the country’s first artificial intelligence supercomputer.

Having grown accustomed to living off the fat of Novo’s profits, Denmark has become vulnerable to “lifestyle creep,” said Dr Herman Mark Schwartz, a University of Virginia professor of politics who studies small states reliant on single firms. That happens when nations, like people, increase their spending as their income grows, giving them farther to fall should their fortunes suddenly change. 

Denmark’s surplus had been driven by surging employment numbers, bolstered by workers brought in from abroad, and on tax revenue from overseas production. Novo is a key driver of both. The problem, however, is that the underlying dynamics can change quickly and are hard to anticipate, cautioned Dr Carl-Johan Dalgaard, head of the country’s fiscal watchdog. Government officials halved now the country’s growth forecast for the year and predicted that demand for labour would soften, citing Novo’s lagging sales as a main reason.

The report reflected Novo’s own weakened outlook. In the past year, the company has lost about 60 per cent of its market value, battered by intensifying competition, US copycats and doubts about its pipeline. Novo’s board fired its Danish chief executive in May and replaced him with a long-time executive from its international organisation, Maziar Mike Doustdar, who implemented a hiring freeze on non-essential workers and revoked job offers for new hires before enacting this week’s cuts. The company has cut its profit outlook three times in 2025.

Orsted doesn’t weigh as heavily on Denmark’s economy as Novo, but its crisis runs deeper and strikes directly at the country’s image of itself as a global leader in green energy. Wind supplies account for roughly 60 per cent of Denmark’s electricity, the highest share in the world, and Orsted is seen as the face of these efforts. 

Once a coal-heavy utility that ran Denmark’s energy infrastructure, Orsted began a dramatic shift in the late 2000s, pivoting to offshore wind and expanding internationally. After growing in Europe, it entered the US – a move that proved disastrous, as spiralling costs, supply chain delays and regulatory hurdles have forced the partially state-owned company to abandon projects, book hefty writedowns and rethink the pace of its growth.

In August, Orsted shares plunged by a third when it announced a US$9.4 billion capital raise, with half coming from the Danish state. Less than two weeks later, it was dealt another blow when the Trump administration issued a stop-work order on a nearly completed US$6.3 billion offshore wind project that Orsted was developing off the coast of Rhode Island. The company has since challenged the decision in court. 

The government has reassured Danes that it can afford the one-off capital infusion – a view supported by economists – and described it as largely an accounting exercise, with funds that had previously been held in cash now moved into assets. Still, with the stock losing billions on paper, having fallen more than 80 per cent from its 2021 valuation, the move has drawn fire from opposition parties who view it as a step too far in the name of green energy. It’s sparked debate over how far taxpayers should go in propping up national champions, and whether the state’s close ties to the company have given the US political leverage over Denmark. 

Orsted’s difficulties have also accelerated the narrative that Denmark’s energy future may not rest solely on wind. After a tender for offshore wind projects failed, the government was forced to add billions in subsidies. It delayed a landmark hydrogen pipeline to Germany. And perhaps most surprising to Danes, nuclear energy, once a taboo, is now gaining public support, with the government undertaking a review of its three-decade-old ban.

“The illusion that it would be so much better and cheaper to rely only on wind has quietly burst,” said Mr Steffen Frolund, energy speaker at the opposition party Liberal Alliance. BLOOMBERG