Despite sound policies and institutions, Danish productivity has grown modestly over the past decade, both historically and in relation to other countries, contributing to weak economic growth and an erosion in competitiveness. An examination of the four potential drivers of this puzzle, namely competition, education, labour market flexibility and the size of the public sector, shows that there is room for improvement in all areas, calling for action on each of these fronts. This Working Paper relates to the 2012 OECD Economic Survey of Denmark (www.oecd.org/eco/surveys/denmark).