The Danish city of Odense became the Mecca of the new robot boom

Invest in Odense cases, Robotics

Leading German business newspaper Handelsblatt published an article about Odense, December 16th 2018:


This is an English translation:


By Axel Höpner 16.12.2018

In the meantime more than 100 Cobot start-ups have settled in Odense. A founder and a unique ecosystem have made this possible. 

Odense. The high-tech world would look different today if Esben Østergaard in the USA had liked it better. As a young man, the technology nerd had sold his furniture and settled in southern California to develop robots in the USC Robotics Lab. But Østergaard didn’t feel well. “I missed Europe and its values,” he recalls in an interview with the Handelsblatt.

And so the cosmopolitan Østergaard, who was born in Iran and grew up in the Philippines for a time, went back to the tranquil Odense on the Danish island of Funen and developed his Universal Robots as one of the very first robots, a completely new type of robot that everyone talks about today: small, easy to program, can be used right next to humans.

“Østergaard’s work has made it possible for robots to work in applications and industries previously considered unthinkable,” said Jeff Burnstein, head of the American Robotic Industries Association, praising the Danes when they recently received the Engelberger Robotics Award, considered the “Nobel Prize for Robotics”.

Today, investors, scientists, young talents and competitors make the pilgrimage to Odense. There are now more than 100 start-ups there. “We are the Silicon Valley of robotics,” says taxi driver Flemming Haldy proudly as the passenger takes him to the next robot company.

The success story in Northern Europe has made two things possible: On the one hand, there is a unique ecosystem from whose beginnings Universal Robots also profited. The origins go back to the Maersk Group, which once built ships in Odense. The company was interested in robots for use at the shipyard and later donated generously to the university. There was already great robotics expertise when Østergaard studied there.

And today Cobot pioneer Østergaard himself is the great role model for all who came after him. Together with Kristian Kassow he founded Universal Robots in 2005, two years later the first prototype was finished. To date, the company is the world market leader in collaborative robots with a turnover of around 170 million dollars this year. The robot arms are used, for example, in the electronics industry to pass parts to employees or to place mobile phone batteries in a test station.

Growth rates of 50 percent and more are also in sight for the coming years, he told the Handelsblatt. It was only after some delay that the large robot manufacturers such as ABB, Kuka and Fanuc tried to gain a foothold in the new market.


Founder in a frenzy of ideas

The success of Universal Robots set a precedent. University graduates come up with new ideas and are eager to start their own business. Mikkel Christofferson listens to a three-digit number of ideas every year. He has been managing the start-up hub Odense Robotics for a good four years.

16 start-ups have already gone through the incubator. In the early start-up phase, the organization helps with initial contacts to investors, in a workshop the start-ups can build prototypes. “Three quarters of our companies are successful,” says Christofferson proudly.

Denmark got its chance because the Cobots opened up a completely new segment in the booming robotics industry. According to estimates by the IFR industry association, collaborative machines currently account for only three percent of the robot market. But by 2025 it should already be 34 percent of a market worth 25 billion dollars.

The newcomers from Odense for the market leader Universal Robots see themselves well prepared for the increasingly tough competition. Christofferson believes that the environment in Denmark makes the young companies resilient. Since they come from a small country and do not have a large domestic market, they would have to be particularly innovative and customer-oriented. In addition, there is investment capital in Denmark, but certainly not as abundant as in other regions of the world. Therefore, the companies are forced to burn little money.

For a long time there were only a small number of world-class Danish companies. There’s Lego and the wind industry, for example. But in the high-tech industry only Østergaard showed that you can get really big from Denmark. In 2015, he sold Universal Robots to US electronics specialist Teradyne for an impressive $285 million.

Such a success awakens fantasies and shows what is possible. “Universal Robots is the big role model for all of us,” says Kristian Skaarup. The CEO is currently passing through the incubator Odense Robotics in Odense with his start-up Lorenz Technology.

The young company with currently a dozen employees develops drones for security companies. The aircraft are to fly over company premises on patrol. “We’re where the collaborative robots were four, five years ago.” His company could become a second Universal Robots.


Model Universal Robots

The sale of Universal Robots to Teradyne showed young entrepreneurs what is possible. A start-up in a new market that was valued at a three-digit million amount. But when the somewhat shaky Østergaard with his three-day beard says: “I’m not interested in money”, it seems credible even when you look at his simple suit, over which he just spilled his coffee. A little irritating: The initials “TV” are sewn into the Universal Robots shirt he wears. Oh, he took over the shirt from Thomas Visti when he left the company to found Mobile Industrial Robots.

“I’m an academic nerd,” says Østergaard about himself. In his spare time he takes care of his three children intensively. What does he do to clear his head? He’s studying quantum physics. He had sold Universal Robots because the Danish Growth Fund needed an exit.

There is probably also a point from which it is difficult to make a young company from Denmark whole, very big. The marketing power and worldwide sales channels of a global corporation like Teradyne can be helpful here. That the Americans are serious is also shown by the fact that they took over Mobile Industrial Robots (MIR) for 121 million euros in the spring.

MIR is the company of Thomas Visti, who was one of the first employees at Universal Robots, and whose shirts Østergaard orders. By taxi it’s ten minutes from the light, concrete, glass and wood dominated Universal Robots headquarters to MIR, the second big success story in the Odense cosmos.

MIR sees itself as the market leader in its segment of autonomous, mobile robots for logistics within factories. In 2017, the company had a turnover of ten million euros, which is now expected to double again and again. “The market will be huge”, Visti is convinced that it could become even bigger than that for collaborative robots.

MIR’s own robots drive almost silently through the small production hall. The developers have named some of them Hal-9000 or Johnny 5. If a human gets in their way, they slow down, as do the collaborative arms of Universal Robots.

With the help of Teradyne, they should now become even smarter and sell themselves even better. After all, MIR mainly has large customers who invest in automation. “They want to be sure that a company will still exist five years from now,” says Visti.


City makes itself attractive for entrepreneurs

The entrepreneur owns a fitness centre and a wine bar in Odense. It is important that the city becomes more attractive, after all, it should attract talent from all over the world. Although the graduates from Odense are highly qualified, the university alone can no longer meet the enormous demand for specialists.

Much has already happened. “The city itself is to become a magnet for talent. In recent years, 60 new cafés and restaurants have opened. The Michelin testers also come by here from time to time,” says Joost Nijhoff. The director of Invest in Odense has his office at City Hall.

When he looks out the window, he sees a huge construction site. The expressway, which used to cut the city centre into two parts directly past the city administration, has already disappeared. A new district will be built – soon the new, small and large rooms, apartments, the high-rise and hotel and business complex will merge naturally with the existing city, enthuses Nijhoff.

His office is part of the ecosystem. After the closure of the shipyard in 2012, the city took money into its hands to promote future technologies. Since 2014 alone, 165 million Danish crowns have been invested. Facebook is currently building a new data center in the city, and competitors of Universal Robots such as Fanuc and ABB have also established themselves. Unemployment is still comparatively high at five percent as a result of the structural crisis following the closure of the shipyard. But skilled workers are in short supply. Company and city advertise with the campaign “We are robot heroes” for the brightest minds.

Many of them can be found on the grounds of the University of Southern Denmark. Those who are interested in robotics, and there are many of them, want to have seen the room where Østergaard assembled his first robot arm – today a rather inconspicuous storage room.

The Robo-Cluster builds bridges between institutes and the research departments of companies. “Everybody knows everybody here, everybody’s in dozens,” says cluster manager Morten Nielsen. Odense has a good reputation with young people abroad. “It’s a nice town, the university has a nice campus. So why not just check out Odense?”


More range, more resilience

Enrico Krog Iversen is confident that enough talent can be attracted. He is – besides Østergaard and Visti – the third member of the team. He was once on Universal Robots, too. And now he’s setting up a supplier for the industry.

His company OnRobot has just merged with Perception Robotics (USA) and OptoForce (Hungary). While OnRobot manufactures the electric grippers that are mounted directly on the robot arm, OptoForce and Perception Robotics specialize in sensors that play an increasingly important role. Further acquisitions are planned. “I can imagine taking over another seven or eight smaller companies within the next 12 to 18 months,” says Iversen.

Consolidation is just beginning in the industry – and OnRobot, as the new company is called, wants to play a leading role. “In four to five years, we want to be 50 times as big as we are today,” explains Iversen. Sales are expected to rise from five to 250 million euros.

The sale of Universal Robots, explains Iversen, has released a lot of capital that will be reinvested in robotics. Universal Robots co-founder Kristian Kassow did not retire after the sale. The passionate robotics engineer founded his own company and developed with Kassow Robots in Copenhagen a seven-axis collaborative robot.

At this year’s Automatica industry get-together, he presented the three-person model family. More range, more load-bearing capacity, faster movements – that’s what it’s supposed to offer. “We are currently delivering the first robots,” reports Sales Manager Dieter Pletscher. “We want to become a relevant player in the market.” Thus the family of Danish robot manufacturers who are conquering the world market has grown again by one member.

So many threads end at Østergaard and Universal Robots again. The founder, who became world champion in robot football in 1998, is also a kind of corporate philosopher. With passion he can tell the story of robotics, from Leonardo da Vinci’s robot in 1495 to far into the future.

His major theme is industry 5.0, which he understands as the trend “to give production a more human touch again”. Classic robots are only unsurpassed in the production of standardized products.

They needed support – human creativity – for a made-to-measure product. Østergaard is convinced that the future belongs to the tandem of man and robot. And that is why the market for collaborative robots could even become larger than that for classic robots.

And so Østergaard is a technology optimist. Technology, he says, has created many problems. “But we can also save the world through technology.”


© Handelsblatt GmbH. All rights reserved.