Our turn: From a small base the only way is up

Kare Schultz of Denmark's pharmaceutical giant Novo Nordisk reckons companies such as his had no choice but to become international. "Denmark being a very small country, they started exporting products out of Denmark many years ago," he said.

Today Novo Nordisk employs 13,750 people and is the world leader in diabetes care. It produces 44 per cent of the world's insulin, used to treat diabetes, and is also the biggest producer of devices used to inject insulin - many of them these days look like pens, to overcome people's fear of needles.

Denmark, with 5.2 million people, accounts for 36 per cent of its employees but less than 1 per cent of its sales.

The technique of treating diabetes with insulin, originally extracted from the pancreas of cows, actually began in Canada. A Danish doctor who suffered from diabetes, Marie Krogh, and her Nobel Prize-winning husband, August Krogh, bought the rights to make insulin in Denmark in 1922 and formed a company, Nordisk ("Nordic") Insulinlaboratorium.

Two years later two brothers who worked for Nordisk, Harald and Thorvald Pedersen, fell out with the founders and left to form Insulin Novo ("New").

The two companies, sited less than 10km apart, competed furiously for 65 years, establishing large research units and battling to be first to market new products. They merged in 1989.

Kare Schultz, Novo Nordisk's chief of staff and quality, said the merged company had not lost a single executive to jobs overseas, even though Denmark has one of the highest top income tax rates in the world (63 per cent).

"Mobility is over-rated," he said. "We see evidence that people are not truly mobile beyond the age of 25 because they have family and cultural associations."

Novo Nordisk fosters a sense of solidarity by ensuring that the pay gap between its highest and lowest paid workers is only a third of what it is in the United States.

"Our basic assumption towards our employees is that we need to give them a challenging place to work and some good values," Mr Schultz said. "There has always been a very informal, open and honest style in the company, with no barriers in the hierarchy in terms of communication and discussion.

"That maybe comes with being a small country. In Denmark we know we are a small country. We can only do good if we are smart and service-oriented."

The company has its share of controversy. As the self-proclaimed biggest biotechnology producer in the world, Novo Nordisk is running into growing public concerns about the safety of genetic engineering.

Mr Schultz said its activities were accepted because the company was always open about what it did.

Third World critics also charge that Western companies' increasing tendency to patent the results of medical research are just a new form of exploiting people in poorer countries, who often actually produce the products made with Western knowledge.

Novo Nordisk was one of a group of Western companies that recently took court action to stop South Africa producing generic anti-Aids drugs without paying royalties to them.

The companies dropped that case. But more clashes over who profits from knowledge are likely in the future.

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