According to a comparison done by the World Economic Forum (WEF) the Netherlands now has the most competitive economy in Europe. Worldwide, only Singapore, the United States and Hong Kong are more competitive.
The Dutch economy has achieved this status because of its agile economy, which is the result of “an entrepreneurial culture, flat organisations and growth of innovative companies”, according to researchers quoted by nu.nl.
How did the Netherlands become the best economy in Europe?
“There are more and more innovative companies in the Netherlands that realise growth and embrace disruptive technologies and new business models,” says Henk Volberda, professor of strategic management at the University of Amsterdam. “Dutch companies have also become much less hierarchical and can more easily adapt to economic dynamics.” The Netherlands also scores high thanks to great infrastructure, high-quality IT facilities, stable government policy, a highly educated workforce and excellent healthcare (though maybe that is about to change, with 11 hospitals failing a financial stress test).
Lack of innovation is a problem
Despite all this good news, there does seem to be a problem with innovation in the Netherlands- it is only the tenth most innovative country in the world. Germany, the US and Switzerland occupy the top three spots in this ranking. And why is the Netherlands not as innovative as other countries? According to Volberda, both the government and the business community are not investing enough in research.
Skilled workers are going abroad
There is also a problem with the labour supply in the Netherlands. Companies have problems finding highly qualified staff for higher positions. Many highly qualified Dutch people are moving abroad to work, where they can earn more money. According to Volberda, this mismatch between supply and demand inhibits economic growth. This can be partly helped by teaching children about business and innovation in schools.
What is coming next?
Financial changes may be coming, as the current monetary policy of the European Central Bank has reached an end. This policy was to push interest rates further down to stimulate the economy, but it seems that this policy is no longer working. Given that developed economies like the Netherlands benefitted the most from this, it will be interesting to see what effect the change will have.
What do you think about the Dutch economy being the best in Europe? And what can we do to improve innovation? Let us know in the comments below.
Feature image: @lifeof_jochem/instagram. If you want to see more of @lifeof_jochem’s photos, check out the awesome photos he took for our Rotterdam photo report! They really show the amazing urban planning and skyline of Rotterdam.