In the late 1980s, there was still something almost heroic about the idea of Danish high technology. We were a small country, but we knew how to do certain things well. We had skilled engineers, flat organisations, a short distance between idea and decision, and a strong tradition of finding practical solutions to complex problems. When you do not sit on diamond mines or oil reserves, products born of human intelligence must be Denmark’s trump card.

That was the self-image many Danish companies carried with them into the world. We might not be able to compete on size, capital or domestic market, but we could compete on inventiveness, quality, credibility and adaptability. If the product was good, then our sense of international commerce would surely carry it out into the world.

In my forthcoming novel Starting From Scratch, the protagonist, Henrik Bertelsen, finds himself right in the middle of that story. He becomes director of marketing and sales in a newly established Danish technology company, Printonix, which has developed an advanced printer with international potential. The printer is not just another machine on the market. It is fast, flexible and conceived for a time when companies are beginning to digitise their document handling. And it is to be manufactured at the factory in Brøndby.

On paper, it looks set to become a Danish business adventure. The ambitions are high, and after a few initial difficulties — and who does not experience those? — sales begin to take off across Europe. With its large capacity, the printer is a gold mine for dealers, who can sell consumables and service contracts, and Henrik Bertelsen can soon note with satisfaction that they are far ahead of budget.

National Pride as a Business Strategy

A Danish company that develops an advanced technology product does more than generate revenue. It creates competencies, jobs and foreign exchange earnings. It is a story in which institutional investors and employees can proudly see themselves reflected. And one the business press is happy to write about.

It matters that you can say: “This was developed and manufactured in Denmark.”

In Starting From Scratch, that story is an important part of Printonix’s self-understanding. The company is not merely a trading company that imports and sells other people’s technology. It develops it. It builds it. It exports it. It is Made in Denmark.

But national pride becomes a strategic dead end when it is confused with competitive strength.

Customers do not buy a machine because it was made in Brøndby. They buy it because it solves a problem better, faster and preferably more cheaply than the alternatives. They care about reliability, service, price, performance and risk. Few customers are willing to pay extra for a nationalist self-narrative.

Success requires easy access to a network of subcontractors and specialised competencies, as no company can meet all the conditions on which its product depends. If it lacks that access, it cannot move quickly enough.

This is especially true when a startup such as Printonix has to move from prototype to industrial production and global sales.

Japan and the Difference Between an Idea and Operational Reliability

A good idea is not the same as a good product. A prototype can impress. A demonstration can excite. A sales pitch can open doors. But once the product is installed at the customer’s site, operational reliability is what counts.

The Printonix printer is technologically promising. It has features the market is asking for. It opens up new applications. It can do things its competitors cannot. But it also has an Achilles’ heel: the electrophotographic process, meaning the very method that must make the toner adhere to the paper. Here the company chooses to base itself on an alternative technology and regards precisely this as the key competitive parameter.

In the novel, Printonix therefore makes two fundamental mistakes.

The first is to believe that the very method by which toner is transferred to paper is a competitive parameter. It is not. The customer does not care about the electrophotographic process as long as the print is sharp, the machine operates reliably, and the price is competitive. For the customer, the technology behind the result is not interesting in itself. It is only relevant if it makes the product better, cheaper or more reliable.

The second mistake is to overlook where the expertise in this field is actually located. In the 1980s, the development and production of electrophotography has, in practice, moved to Japan. That is where the competencies, supplier networks, process experience and industrial capacity are concentrated. To believe that a small company in Brøndby can challenge that development on its own is naive.

For in the 1980s, Japan was not merely a low-cost country or a convenient subcontractor. In many areas, Japan had become the world champion of industrial refinement. Where the West had often possessed the original inventions, Japanese companies, once the patents expired, made them smaller, cheaper, more stable and easier to manufacture.

That was true of cars. It was true of electronics. It was true of cameras. And it was true of printers and copiers.

The Japanese strength did not necessarily lie in the first idea, but in systematic improvement. In the ability to make components, processes, subcontractors and production work together. In patience with quality. In respect for operational reliability. That culture transformed Japan, in many areas, from a component supplier into a systems supplier. Perhaps Printonix’s management should have thought a little more deeply about why the American tech giant HP had chosen to base its successful LaserJet on a product from Japan’s Canon.

For a Danish startup, it is tempting to believe that the great innovation lies in the concept. And customers can probably be persuaded to buy a concept. But what must be delivered is a reliable product.

China and the Temptation of Scale

If Japan represented quality, process and technological discipline, China, in the world of the novel, offered other temptations: short delivery times, low costs and scale.

In the late 1980s, China was beginning in earnest to open up as a manufacturing country. Shenzhen was not yet the global technology metropolis it would later become, but the development was underway. Factories were shooting up. Infrastructure, capital and labour were being gathered at a pace that was almost incomprehensible.

For a European technology company, the calculation is difficult to ignore. If production can be moved to China, costs can be halved. Delivery times can be reduced significantly. Capacity can be increased quickly. A product that is expensive to manufacture and difficult to scale at the Danish factory can suddenly become a far better business. Especially as transport costs from China to the major markets are falling day by day.

But this collides with the company’s self-narrative and the basis on which the institutional investors bought in. And it will make many employees redundant.

How does an organisation react when newcomers rightly point out that what was supposed to be the company’s core competence is no longer that? When exploiting the global potential requires a fundamental rethinking of the supply chain, the company’s organisation and its value base?

Will it, and can it, adapt — quickly enough?

Not Invented Here

What must a company absolutely be able to do itself? What can it profitably leave to others? When is outsourcing the right strategic move? And when is it the beginning of a critical loss of control?

There is no universal formula. But confusing pride with strategy is a dangerous instinct.

If Printonix’s real strength lies in the product concept, its understanding of future customer needs, the software, the paper handling and the distribution model, then it is not certain that it should also develop the most critical printing technology itself. Perhaps the wisest strategy is precisely to let others do that

This requires humility and managerial courage. For it is far easier to tell investors, employees and customers that you have everything under control than to admit that part of the solution lies outside the company. It is easier to hold on to the original story than to rewrite it.

But companies do not survive on stories alone. They survive on products that work, customers who stay, and timely decisions.

Starting From Scratch takes place in 1989, but the dilemma remains relevant. Today we discuss dependence on China, strategic autonomy, security of supply and reshoring production. Back then, companies faced the opposite movement: out into the world. Out to low costs. Out to scale.

Both movements contain the same challenge.

You must know what you yourself do best. You must recognise what others do better. And you must have the courage to change course before the market forces you to.

Globalisation’s First Storm

Today, we understand global value chains, outsourcing, nearshoring and geopolitical risk. We have the language for it. We have the experience. Furthermore, we have seen how dependence on distant production links can become both a strength and a weakness.

In 1989, much of this was still new.

Globalisation was not a term that routinely drifted across the lunch table in the canteen. But its mechanisms were already in full swing. Production, technology, capital, and markets were beginning to loosen their ties to national frameworks. A product could be conceived in Denmark, developed in Japan, manufactured in China and sold through distributors in Europe, the Far East and the United States.

Henrik Bertelsen stands in the middle of this new opportunity. He is not a technician. Nor is he the owner. He is a salesman, a manager and a strategic contributor. He sees the market respond positively. Likewise, he sees customers understand the product’s potential. But he also sees that the local technical reality cannot keep pace with the commercial enthusiasm.

Because the better the sales go, the greater the risk becomes. Every new order is both a victory and a future obligation. Every new distributor increases both the potential and the risk. Each machine delivered can become proof of success — or a future complaint.

Should the company take advantage of new opportunities in Japan and China to ensure stable quality, lower costs, and shorter delivery times, or should it insist on doing everything itself? And how do we finance the transition?