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Holland Compared Facts and Figures, Winter 2016 GRONINGEN Groningen Leeuwarden FRIESLAND Assen DRENTHE NOORDHOLLAND NORTH SEA Zwolle Lelystad Head of State Capital Seat of government Administrative structure FLEVOLAND Haarlem OVERIJSSEL Amsterdam 's-Gravenhage (The Hague) GELDERLAND Utrecht ZUIDHOLLAND UTRECHT Surface area Location Arnhem Rotterdam GERMANY 's-Hertogenbosch Middelburg Official name Form of government Breda NOORD-BRABANT ZEELAND Eindhoven Number of inhabitants Number of inhabitants per km2 Monetary unit Languages Kingdom of the Netherlands Constitutional monarchy, parliamentary democracy His Majesty King Willem-Alexander, King of the Netherlands, Prince of Orange-Nassau Amsterdam The Hague Twelve provinces and the overseas territories of Aruba, Curacao and St. Martin. The overseas islands of Bonaire, Saba and St. Eustatius, all three of which are situated in the Caribbean, are ‘special municipalities of the Netherlands’ 33,800 km2 Western Europe, by the North Sea, bordering Belgium and Germany 16,958,611 (October 2015) 502 (October 2015) Euro Dutch, Frisian LIMBURG BELGIUM Maastricht UK GERMANY BELGIUM FRANCE 2 3 Content Page Foreword 6 1. General Information 8 2. Macro Indicators 14 3. Trade and Foreign Investment 24 4. Holland Digital Gateway 38 5. Top Sectors in Focus 48 6. Human Capital and Innovation 70 7. Infrastructure 84 8. Government 90 Source: Netherlands Enterprise Agency 4 5 Foreword Often referred to as Holland, the Netherlands has for centuries had one of the world’s most open economies. The Dutch engage in all forms of business all around the globe. There are few nations in the world that can link their economic and social development and success so clearly and distinctly to their physical environment as the Netherlands. Located in a low-lying delta at the confluence of three major rivers, the Dutch were faced with a challenging and risk-laden environment in which to settle and develop what would become one of Europe’s strongest economies. The Netherlands has recently risen from 8th to 5th place in the Global Competitiveness Report 2015–2016, published by the World Economic Forum. As the world’s fifth-largest exporter, second-largest exporter of agri-food products and eighth-largest foreign investor, the Netherlands occupies a prominent position when it comes to world trade. export are destined for Europe. The Netherlands is proud that in the first half of 2016 it will hold the Presidency of the Council of the European Union for the 12th time. To promote the well-being of all member states, the Netherlands envisages a European Union that is focused on the essentials, remains competitive and keeps innovating. The challenge is to make Europe stronger, by ensuring high levels of prosperity, freedom and security. The Netherlands welcomes its European colleagues and looks forward to constructive dialogues and inspiring results. Renée Jones-Bos Secretary-General, Ministry of Foreign Affairs The Netherlands has long had an open economy and 33% of our income is derived from trade. Europe is by far our most significant trading partner – more than three-quarters of the products and services we 6 7 1. Introducing Holland: A Sustainable Urban Delta As a country within a low-lying delta, The Netherlands has been faced with the enormous might of the sea from the outset. The age-old relationship with water has shaped the Dutch DNA. The typical Dutch approach is characterised by collaboration, cross-fertilization, and creativity. The Dutch are known for their pragmatic and integrated solutions. By working with nature, the Dutch have succeeded in creating sustainable solutions for the growth of their economy. Solutions that not only focus on practical issues such as urban planning, clean energy, drinking water, air quality, and waste management, but also on issues such as governance, tolerance and a fair society. Source: Netherlands Enterprise Agency 9 Brake on population growth Attractive place to live Population by age (2014) Quality of life (2015) 9,0 9,2 9,4 9,6 9,8 10 9,1 9,3 9,5 9,7 9,9 5 5 4 4 1 1 9.73 Switzerland Norway 9.57 Austria 33 Denmark 9.38 Luxembourg 9.36 Germany 22 1.1.0-19 13.1% 5. 5. Older Olderthan than79 794.3% 4.3% 0-1922.9% 22.9% 2.2.20-39 20-3924.5% 24.5% 3. 3.40-64 40-64 23.3% 23.3% 4. 65-79 13.1% Source: Statistics Netherlands, 2014. In total 17.0 million people live on the relatively small piece of land that is the Netherlands, which makes the country one of the most densely populated in the world. However, population growth is slowing down in the Netherlands, as it is in many other Western countries. This slowdown, together with an increasingly healthy generation aged 65 and above, has resulted in an ageing population. 10 GENERAL INFORMATION 9.51 9.31 Netherlands 9.22 Canada 9.22 Australia 9.11 Finland 9.02 Source: IMD, 2015. 7,5 8,0 8,5 9,0 Whether visiting for7 business or pleasure, the Netherlands is9,5home to10 a highly pleasant living environment. It currently ranks seventh worldwide in terms of quality of life. Leisure amenities are within easy reach and Dutch cities have much to offer, such as the centuries-old architecture of Amsterdam, Delft, Groningen and Leiden as well as cultural activities and world-famous museums such as the Van Gogh Museum and the Hermitage Amsterdam. Housing is also fairly affordable compared to other countries, according to IMD. In addition to the various international schools in the Netherlands, a large and growing number of schools (119 in 2013) teach in two languages (mostly Dutch and English). Finally, the Dutch healthcare system officially ranks among the world’s best. According to the Commonwealth Fund, the Dutch healthcare system is the best in the world in terms of quality, access, efficiency, funding and the healthy lives, on average, of the general population. GENERAL INFORMATION 11 One of the most competitive economies Global Competitiveness Index (2015-2016) Switzerland 5.76 Singapore 5.68 United States 5.61 Germany 5.53 Netherlands 5.5 Japan 5.47 Hong Kong, China 5.46 Finland 5.45 Sweden 5.43 United Kingdom 5.43 Source: World Economic Forum, 2015. 5,2 5,3 5,4 ,45 5,5 ,55 5,6 ,65 5,7 ,75 5,8 According to a number of international league tables published by renowned institutes such as IMD and the World Economic Forum, the Netherlands is among the world leaders when it comes to favourable business climate. There are numerous factors that form the basis for the favourable position that the Netherlands enjoys, including its open and international outlook, its strategic location in Europe, its well-educated, multilingual and flexible workforce, and the high level of labour productivity. The competitive fiscal climate, top-level physical and technological infrastructure and quality of life are key contributors to the country’s success. The Netherlands is thus an attractive location for companies seeking a European base and for those wishing to invest. Source: DSM N.V. 12 GENERAL INFORMATION 2. Macro Indicators The impact of the downturn in world trade as a result of the global economic crisis was immediately tangible in the Netherlands with its buoyant and open economy. However, the Netherlands continues to perform well on many fronts. For example, the Netherlands has one of the highest incomes per capita in the EU, Rotterdam is still Europe’s largest port and the Netherland’s high-quality ICT infrastructure ensures that the country remains the gateway to Europe. Source: Hannah Anthonysz/Rotterdam Image Bank 15 Sixth-largest EU economy High average income GDP in the EU (2014) GDP per capita (2014) 2,903,790 Germany 1,616,047 Italy 1,058,469 Spain 436,342 Sweden 412,189 Poland 402,270 Belgium Millions of euros. Source: Eurostat, 2015. 0 500.000 1.000.000 1.500.000 2.000.000 2.500.000 Netherlands 47,634.8 46,171.4 Sweden 45,152.5 Germany 44,985.5 Denmark 44,889.1 36,236.9 US dollars, corrected for Purchasing Power Parity. Source: OECD, 2015. 3.000.000 In terms of surface area and population size, the Netherlands is not a particularly large country and ranks 133rd and 64st worldwide. In stark contrast, the country’s economic performance ranks much higher. The size of the economy, or the Gross Domestic Product (GDP), is about 615 billion euros in 2014. The Netherlands has the seventeenth-largest economy in the world and the sixth-largest in the European Union. 16 MACRO INDICATORS 47,795.8 EU-28 328,996 Austria Ireland Austria 653,476 Netherlands 54,639.9 United States 2,142,022 France 57,246.3 Switzerland 2,217,872 United Kingdom 98,328.5 Luxembourg The Netherlands is one of the wealthiest nations in the European Union. The Dutch GDP per person employed is 47,146 US dollars (figure 2015, The Conference Board, 2015), in Luxembourg 50,499 US dollars and 42,123 in Germany. Compared with other, similar economies outside the European Union, such as that of Canada (50,488 US dollars), the Netherlands also performs as well. The high average income of the Dutch is the result of high labour productivity and a high level of labour participation. MACRO INDICATORS 17 High productivity per hour Prosperous, sustainable and enterprising GDP per hour, corrected for purchasing power parity (2015) Growth in GDP in % (2006-2013) Belgium 67 Switzerland United States 67 Sweden 2.0 1.8 Netherlands 65 Germany 1.4 Ireland 65 Austria 1.4 Germany 64 United States France 64 Belgium 1.3 1.0 Denmark 63 Netherlands 0,7 Switzerland 61 France 0.7 Sweden 60 Finland 0.7 Austria US dollars. Source: The Conference Board, 2015. 30 35 40 45 50 Source: Eurostat, 2014. 55 60 65 70 75 The working population in the Netherlands is highly educated, employees have an international outlook, and many speak more than one foreign language. This high level of education and the strong economic structure (enabled by the physical and the knowledge infrastructure, for example) allow employees to be productive. Labour productivity per hour is among the highest in the world. It is noteworthy that the Netherlands has combined this high level of productivity with a high level of labour participation, also among semi-skilled and unskilled workers. 18 MACRO INDICATORS 0.6 Euro area 56 0 0,5 1,0 1.5 2.0 Compared to many other EU Member States, the Netherlands has a highly open economy, which is why the country was hit hard by the sharp downturn in world trade in 2008 and 2009. When considered over a longer period of time, the Netherlands shows reasonable economic growth compared to other prosperous EU Member States and the US. This is a good performance for a highly developed economy with a high standard of living (see also GDP per capita). The structural reforms that have been implemented in areas such as the labour market and the social security system, have created conditions for potentially healthy economic growth that offers room for investments in knowledge and innovation, for example, so that the Netherlands will remain a prosperous, sustainable and enterprising nation. MACRO INDICATORS 19 Moderate inflation High labour participation rate Average annual inflation (2006-2013) Employment rates (2014) 0.4 Switzerland 1.5 1.6 1.1 Ireland 1.6 2.0 France 2.1 1.8 Netherlands 2.2 Euro area 2.2 1.9 2.3 2.4 Austria Netherlands 71.6 73.9 Denmark 73.6 70.6 Austria 72.6 70.4 72.0 68.4 2.0 United Kingdom 2.0 Finland 68.7 67.6 United States . 68,5 67.5 2.2 2.32.6 Belgium 74.0 72.2 Germany 1.8 Germany Denmark 74.9 75.7 Sweden 1.7 Sweden 75.879.7 Switzerland Average annual price increases as a percentage. Source: Eurostat, 2014. 66.3 65.7 OECD-countries Source: OECD, 2015. 0 The Netherlands enjoys a good reputation in monetary terms. Long before the introduction of the euro, price rises in the Netherlands were at a moderate level, thanks to sound monetary policies on the part of DNB (the Dutch Central Bank). The product and labour markets also operate relatively well, which helps to moderate price increases. According to the IMD (2015), the Netherlands ranks fifth worldwide in the fight against unfair competition. 20 MACRO INDICATORS 10 20 30 40 50 60 70 75,8 In the period 1990-2014, the level of employment in the Netherlands has increased by 30%. The strong growth in jobs is largely due to the structural economic reforms that have been implemented. The relative stability of the labour market - there are relatively few strikes in the Netherlands - can also be attributed to maintaining a favourable business climate. Thanks to the firm growth in employment, a large proportion of the potential working population is employed. Indeed, the proportion is considerably greater than the average of the OECD- and euro–area countries. MACRO INDICATORS 21 Many part-time employees Relatively low unemployment Part-time work (2013) Average unemployment (2006-2013) 39.9 Netherlands 25.4 Switzerland 4.8 4.9 Luxembourg 22.8 Germany 4.5 Austria 23.9 United Kingdom 4.3 4.4 4.3 Netherlands 25.1 Ireland 3.8 Switzerland 5.5 5.8 Denmark 5.9 Denmark 19.8 United Kingdom 6.96.3 Belgium 19.8 United States 7.3 Austria 19.3 Germany 7.3 14.5 Luxembourg 14.3 France 5 10 15 20 25 8.3 9.6 Measured as a percentage of the working population. Source: OECD, 2014. 30 35 37,1 A relatively high proportion of Dutch people work part-time. This is often a deliberate decision, allowing employees to combine work with caring for their family. From an international perspective, the number of people - and particularly women - in the Netherlands who work part-time is high: nearly 75% of all Dutch part-time workers are women. Nevertheless, the average working week for full-time employees is more or less on a par with most other Eurozone countries. The same applies to the number of hours worked in a year by full-time employees. 22 MACRO INDICATORS 7.8 8.4 Euro area Measured as a percentage of employment as a whole. Source: OECD, 2015. 0 7.5 Sweden 7.1 0 2 4 6 8 The rate of unemployment in the Netherlands is one of the lowest in Europe. From 2006 to 2013, an average of 4.4% of the potential working population was unemployed, while the corresponding rate in the euro countries was 9.6%. As a result of the crisis the unemployment in the Netherlands increased. In August 2015 it amounted to 6.8% (Eurostat, 2015), compared to an average of 11.0% in the euro countries. Moreover, youth unemployment is also still low in the Netherlands. In August 2015, the portion of Holland’s potential working population aged under 25 that was unemployed amounted to 11.2%. In the euro countries, the average was 22.3%. MACRO INDICATORS 23 3. Trade and Foreign Investment The Netherlands plays a prominent role in the world economy due to its exports, imports, attracting foreign investors, and investments abroad. Its favourable location in relation to the European hinterland and its world-class infrastructure – such as the Port of Rotterdam and Schiphol Airport – have helped the Netherlands become an important distribution centre. Source: Netherlands Enterprise Agency 25 Open economy World’s fifth-largest exporter of goods Dutch exports of goods and services Top 10 exporters of goods (2014) 5 6 10 7 8 15 Millions of US dollars 10 20 11 12 13 14 25 15 18 21 23 17 19 20 22 24 25 30 42 16 Share in world exports (%) China 44.8 1970 9 2,342,808 12.5 49.8 1975 United States 1,622,657 8.7 52.3 1980 Germany 62.1 1985 8.1 Japan 56.1 1995 1,508,346 2000 70.1 2005 69.6 683,846 3.7 Netherlands 672,426 3.6 83.2 2014 South Korea 573,091 France 566,656 3.1 Measured as a percentage of GDP. Source: CPB, 2015. 0 10 20 30 40 50 60 3.0 70 72,6 Italy 528,368 2.8 Hong Kong, China 524,065 United Kingdom 511,283 2.8 2.7 Source: World Trade Organisation, 2015 The Netherlands has traditionally always had an open economy and the level of trade with other countries is very significant. According to research carried out by the Netherlands Bureau for Economic Policy Analysis, the Netherlands earns some 33% of its income from the export of goods and services. In 2014, the value of exports was 83.2% of the Netherlands’ GDP. 26 TRADE AND FOREIGN INVESTMENT As the fifth-largest exporter of goods in the world, the Netherlands 23 the 18 occupies a prominent position 6when to world In212014, 8 it comes 11 13 16 trade. 14 19 7 a 9total 12almost 10 of 17 billion 20 US 22 24 25 Netherlands exported goods5worth 15 672 dollars, which is about 3.6% of the world’s total exports. The Netherlands is also a significant exporter of commercial services - exports of commercial services amounted to 189 billion US dollars (138 billion Euros) in 2014, which placed the country sixth in the world rankings. TRADE AND FOREIGN INVESTMENT 27 Strong in agri-food production Major importer of goods and services Top 10 importers of goods (2014) Top 5 exporters of agricultural products (2014) Millions of US dollars Share in world imports (%) United States 182,235 Millions of US dollars Share in world imports (%) United States 2,408,098 12.8 10.3 Netherlands 112,061 China 1,962,085 10.4 6.3 Germany 100,777 Germany 1,216,259 6.5 5.7 Brazil 87,890 Japan 822,251 4.4 5.0 France 81,187 United Kingdom 687,269 3.7 4.6 Source: World Trade Organisation, 2015. France 659,872 3.5 Hong Kong, China 600,613 3.2 Netherlands 588,051 3.1 The Netherlands is the world’s second-largest exporter of agri-food products. For decades, the Dutch agriculture sector has succeeded in maintaining its lead over international competitors through continual investment in innovation in agri-food value chains. The Netherlands is a hotbed of R&D in the area of agri-food, due largely to the excellent knowledge infrastructure and close collaborations between knowledge institutes, government and the private sector, the so-called “golden triangle”. Key R&D centres include Wageningen University and Research Centre (WUR), the Top Institute Food & Nutrition and the public-private innovation program FND+. Some 12 out of the 40 largest Food & Beverage companies in the world have R&D facilities located in the Netherlands. WUR is the foremost university in Europe in the field of agriculture, and second in the world, according to the Higher Education Evaluation & Accreditation Council of Taiwan. 28 TRADE AND FOREIGN INVESTMENT South Korea 525,563 2.8 Italy 471,659 2.5 Source: International Trade Organisation, 2015. As well as being a major exporter, the Netherlands also imports large quantities of goods: 588 billion-US-dollars-worth in 2014. With a about 3.1% share of the global total, the country is the eight-largest importer of goods in the world. The Netherlands is also a significant importer of commercial services - imports of commercial services amounted to 157 billion US dollars (118 billion Euros) in 2014, which placed the Netherlands seventh in the world rankings. TRADE AND FOREIGN INVESTMENT 29 Most significant trading partner: Western Europe Geographical destination of Dutch exports (2014) 5 5 4 44 5 6 66 Gateway to Europe Geographical origin of Dutch imports (2014) 7 7 77 Total Centroamérica y América del Sur Total Centroamérica yy América del Sur Total Centroamérica América 77 6 66 3 3 3 2 22 5 55 4 44 3 33 1 11 1. Europe 340.8 1. 1.Europe Europe 340.8 340.8 2. Africa 14.2 2. 2.Africa Africa 14.214.2 3. North America 21.5 3. 3.North North America America 21.521.5 4. Middle and 4. 4.Middle Middle andand South America 9.8 South South America America 9.8 9.8 5. Near and Far East 9.5 5. 5.Near andand FarFar EastEast 9.5 9.5 Near 6. Asia 34.3 6. 6.AsiaAsia 34.334.3 7. Oceania 2.6 7. 7.Oceania 2.6 2.6 Oceania Values in billions of euros. Source: Statistics Netherlands, 2015. The role of the Netherlands as a key distribution location is also indicated by the volume of import and export activities. Almost 79% of Dutch exports remain within Europe, especially Western Europe. Germany is easily the Netherlands’ most significant trading partner, followed by Belgium, the United Kingdom and France. 30 TRADE AND FOREIGN INVESTMENT 2 22 Europe 238.6 1. 1.1. Europe 238.6 Europe 238.6 2. Africa 14.1 2. 2. Africa 14.114.1 Africa 3. North America 28.4 3. 3. North America 28.428.4 North America 4. Middle and 4. 4. Middle andand Middle South America 15 South America 15 15 South America 11 1 Near and Far East 10.5 5.5. 5. Near andand Far Far EastEast 10.510.5 Near 6. Asia 74.8 6. 6. AsiaAsia 74.874.8 7. Oceania 1.5 7. 7.Oceania 1.5 1.5 Oceania Values in billions of euros. Source: Statistics Netherlands, 2015. The Netherlands has become a key hub for distribution in Europe because of its favourable location in relation to the European hinterland and the country’s world-class air and sea ports such as the Port of Rotterdam (Europort) and Amsterdam Airport Schiphol. The Netherlands is home to more distribution centres than anywhere else in Europe and has the largest inland shipping fleet in Europe. TRADE AND FOREIGN INVESTMENT 31 Dutch paints add a touch of colour to the world Biggest trading partner: Germany Composition of Dutch exports (2014) Composition of Dutch imports (2014) 9 9 9 10 10 10 1 1 99 9 1 10 10 10 11 1 22 2 33 3 2 2 2 3 3 3 8 8 4 4 8 4 7 7 7 1. 1.Food and livestock 55.9 Food and livestock 55.9 1.Beverages Food andand livestock 55.9 2. 2. tobacco 6.66.6 Beverages and tobacco 2.Non-edible Beveragesresources and tobacco 6.6 3. 3. 20.1 Non-edible resources 20.1 3.Mineral Non-edible resources 20.1 4. 4. fuels and oilsoils 73.1 Mineral fuels and 73.1 4.OilsMineral fuels and oilsand 73.1 5. 5. and fats of of animal Oils and fats animal and 5.plant Oilsorigin and fats of animal and 3.73.7 plant origin plant origin 3.7 Values in billions of euros. Source: Statistics Netherlands, 2015. 44 4 5 5 5 6 6 6 6. 6.Chemical products 75.8 Chemical products 75.8 Chemical products 75.8 7.6.7. Manufactured goods 37.6 Manufactured goods 37.6 Manufactured goods 37.6 8.7.8.Machinery and transportation Machinery and transportation 8. devices Machinery and transportation 114.7 devices 114.7 devices 114.7 9. 9.Other manufactured Other manufactured 9. goods Other42.8 manufactured goods 42.8 goods 42.8 10.10. Others 2.12.1 Others 10. Others 2.1 The Netherlands is the second-largest exporter of agricultural products worldwide, after the United States. Horticulture is by far the most important segment within the agricultural sector. Other significant Dutch exports include chemical products (e.g. Sikkens paint), machinery (e.g. ASML lithography systems) and vehicles (DAF trucks and Scania trucks). The Netherlands is also a well-known exporter of high-quality aerospace components and systems (Fokker), ships (IHC Merwede), yachts (Royal Van Lent Shipyard) and busses and car parts (VDL Group). 32 TRADE AND FOREIGN INVESTMENT 88 8 55 5 66 6 77 7 1. Food and livestock 35.8 1. 1.Food andand livestock 35.8 Food livestock 35.8 2. Beverages and tobacco 3.7 2. 2.Beverages andand tobacco 3.73.7 Beverages tobacco 3. Non-edible resources 13.4 3. 3.Non-edible resources 13.4 Non-edible resources 13.4 4. Mineral fuels and oils 83.7 4. 4.Mineral fuels andand oilsoils 83.7 Mineral fuels 83.7 5. Oils and fats of animal 5. 5.OilsOils andand fatsfats of animal of animal and plant origin 4.2 andand plant origin 4.24.2 plant origin 6. 6. 7. 7. 8. 8. Chemical products 51.5 products 51.5 6.Chemical Chemical products 51.5 Manufactured goods 37.3 goods 37.3 7.Manufactured Manufactured goods 37.3 Machinery and transportation andand transportation 8.Machinery Machinery transportation devices 109.0 devices 109.0 devices 109.0 9. Other manufactured goods 43.3 9. 9.Other manufactured goods 43.3 Other manufactured goods 43.3 10. Others 0.7 10.10. Others 0.70.7 Others Values in billions of euros. Source: Statistics Netherlands, 2015. In 2014, 16.3% of all imports into the Netherlands originated in Germany. Almost half of all products purchased by the Netherlands in Germany were related to chemical products and machinery. Of all of the cars imported into the Netherlands, more than 90% came from Europe, particularly Belgium, France and Germany. China (9.6% of total imports of goods) and Belgium (9.4%) were respectively second and third Dutch import partner. In 2014 the value of Dutch imports (of goods) was 382.7 billion Euros. TRADE AND FOREIGN INVESTMENT 33 Seventh-largest foreign investor in the world Main recipients of foreign investment in Europe (2014) Foreign investors in the world (2014) 6,319 United States China (incl. Hong Kong) Attractive for inward foreign investments 2,190 1,663 United Kingdom Germany 744 United Kingdom 1,584 France 729 Germany 1,583 Spain 722 France 1,279 Switzerland 682 664 Japan 1,193 Netherlands Switzerland 1,131 Belgium Netherlands 985 Russian Federation 379 Canada 715 Italy 374 Ireland 369 Spain 674 Most important foreign investors in the world, in billions of US dollars. Source: UNCTAD, 2015. 1k 2k 3k 4k 5k 6k Dutch businesses are truly international in their orientation. Dutch-based multinationals, such as AkzoNobel, Heineken, KPN, ING, Philips, Rabobank, Unilever and Shell have made substantial foreign investments in the past. The total amount of Dutch investments in other countries is considerable. In late 2014, investments overseas totaled in excess of 985 billion US dollars, making the country the eight-largest foreign investor in the world. 34 TRADE AND FOREIGN INVESTMENT 526 Stocks, in billions of US dollars. Source: UNCTAD, 2015. 200 600 1000 1400 1800 In 2014, foreign companies made inward direct investments worth 664 billion US dollars or 82.2% of the Netherlands’ GDP. As a result, the Netherlands is the world’s tenth-largest recipient of foreign investment. Foreign investors provide 15% of Dutch employment in the private sector (935,310 jobs). It is remarkable that a small country such as the Netherlands attracts so much foreign investment. In all, more than 6,300 foreign companies have established over 8,110 operations in the Netherlands. Among the many prominent international companies that have taken advantage of NFIA (the Netherlands Foreign Investment Agency) services as they located their operations in the Netherlands, are North American companies like Abbott Laboratories, Boeing, Bombardier, Cisco Systems, Dow, Eastman Chemical, Heinz, Medtronic, NCR Corporation and Reebok. They also include European companies such as Bosch, Danone, Siemens and RWE. Additionally, NFIA assisted a large number of companies from Asia and the Middle East in their location selection, companies such as Astellas, BenQ, Daewoo, Fujifilm, Giant, Hitachi, Huawei, ICBC, LG Electronics, SABIC, Samsung, Saudi Aramco, Tata Consultancy Services, Teijin and Yakult. TRADE AND FOREIGN INVESTMENT 35 Foreign Investors in the Netherlands What companies say about the Netherlands Strategic location “Opening a base at Schiphol is an important strategic move for easyJet. easyJet is already the second largest airline at Amsterdam one of Europe’s leading airports serving a large and growing aviation market with strong passenger demand both to and from the Dutch capital.” easyJet (UK) Digital Gateway “Now, this is just the European Headquarters, but it is a matter of time before this office will serve as the headquarters for Africa and the Middle East as well.” Netflix (USA) Superior logistics and technology infrastructure “Aside from the great infrastructure and the Netherlands excellent location in Europe, the Netherlands also appeals to us because of developments in the fields of smart cities, smart environments, and smart mobility.” Huawei (China) www.investinholland.com Source: Netherlands Enterprise Agency TRADE AND FOREIGN INVESTMENT 37 4. Holland Digital Gateway The Netherlands is a leading ICT innovator and a digital gateway to Europe. It has strong ICT infrastructure and an open innovation model that leads to high-level research. Moreover, the Dutch are keenly focused on cyber security and have developed various centres of expertise such as The Hague Security Delta. The Netherlands plays a key role in global Internet traffic. About a third of Europe’s Internet traffic with the US goes via the Amsterdam Internet Exchange. The quality of ICT infrastructure and security in The Netherlands makes it an attractive location for foreign investors: 25% are ICT related. Source: Netherlands Enterprise Agency 39 Holland’s ICT Playing Field The Dutch and ICT Strong in innovation, security and connectivity Metropolitan Amsterdam Regional cooperation and innovation in the area of transport, distribution, and data processing (new media, social sciences, data infrastructure). Dominant players: Amsterdam Start Up Delta, Amsterdam Internet Exchange (AMS-IX), Science Park Watergraafsmeer, SURF. Groningen Regional cooperation on focus areas big data and radio astronomy. Dominant players: IBM, Google, RUG, Astron. East Netherlands Regional cooperation on focus areas e-Health and human capital. Dominant players: Roessingh Institute, TU Twente, health care institutions, businesses in the Health Valley. The Hague The Hague Security Delta (HSD), largest security cluster in Europe. Public and private innovation in cyber security. Dominant players: Hague Security Delta Campus, Twente Safety & Security (TS&S), Dutch Institute for Technology Safety & Security, Brabant (DITSS). 40 HOLLAND DIGITAL GATEWAY Eindhoven Regional cooperation on focus areas human capital and big data for industrial processes. Dominant players: ICT-driven companies such as Philips and various high tech suppliers, TU Eindhoven, Brainport. •The Netherlands is an international internet hub. It has the most competitive internet market and the second highest online connectivity in the world. 98% of households are connected to (broadband) internet compared to the European average of 62%. •The Dutch are active internet users: 91% of Dutch aged 16-74 compared to average 75% of Europeans in same age group. 75% of Dutch between 16-74 years have basic ICT skills. The European average is 59%. •Businesses from within and outside Holland invest in data centres and fibre optics connections in Holland, due to the country’s good digital infrastructure. •As a result, a third main-port of large economic importance has come into being: the digital hub. This hub has created 140,000 jobs (Research by Deloitte. In comparison, Schiphol airport has 166,000 jobs and the Port of Rotterdam, 184,000.) •For further economic growth, The Netherlands continues to invest in economic opportunities in the cyber domain and to stimulate research there •In addition, the Netherlands is committed to renewing laws and regulations that limit restrictions to digital innovation and growth. •The Netherlands actively supports the adoption of international internet standards and open and secure international internet hosting. •COMMIT is the biggest ICT research project in The Netherlands, including 100 ICT companies, users and universities, working together. HOLLAND DIGITAL GATEWAY 41 42 HOLLAND DIGITAL GATEWAY HOLLAND DIGITAL GATEWAY 43 Everyone’s into ICT Most advanced ICT economies (2015) Singapore 6.00 Finland 6.00 Sweden 5.80 Netherlands 5.80 Norway 5.80 5.70 Switzerland United States 5.60 United Kingdom 5.60 Luxembourg 5.60 Japan 5.60 Source: World Economic Forum, 2015. 7,5 7,6 7,7 7,8 5,5 5,6 5,7 5,8 5,9 6 8,5 Research done in 20158, by the WEF into network readiness, awarded Holland an excellent score: 4th place (in 2013 and 2014) in a list of 143 countries. The WEF-Networked Readiness Index (NRI) is one of the most comprehensive and authoritative assessments of the impact of ICT on competitiveness of nations and the well-being of their citizens. The NRI assesses the preparedness of an economy to fully leverage ICT in terms of: (1) ICT infrastructure, cost of access and the presence of the necessary skills to ensure an optimal use; (2) Uptake and use of ICT among governments, business and individuals; (3) Business and innovation environment, and the political and regulatory framework; and (4) Economic and social impacts accruing from ICT, and according to the International Telecommunication Union, the Netherlands ranks 7th among the world’s most advanced ICT economies, above countries such as Japan and the U.K. ITU’s ICT Development Index ranks 166 countries according to their level of ICT access, use and skills. 44 HOLLAND DIGITAL GATEWAY HOLLAND DIGITAL GATEWAY 45 Leading the field in broadband Number of broadband connections (2013) 44.9 Switzerland 40.4 Netherlands 35.6 40.0 Denmark 37.6 33.9 France 33.5 Korea 32.8 Norway United Kingdom 31.9 37.0 35.8 32.4 Iceland 37.5 35.2 30.4 Germany 34.8 30.3 Belgium 34.4 Measured per 100 inhabitants. Source: OECD, 2015. 28 29 30 32 33 34 35 36 37 38 39 40 41 42 43 44 In December 2013, the Netherlands had the second-highest number of broadband connections per 100 inhabitants in the world. Almost every household in the Netherlands can be reached by a cable or DSL connection. With the world’s largest digital data distributor, the Amsterdam Internet Exchange (AMS-IX), the Netherlands also has an outstanding data connection network, which is essential for businesses such as banks, insurers, internet-based companies and computer and advertising companies. Source: Netherlands Enterprise Agency 46 HOLLAND DIGITAL GATEWAY 47 5. Top Sectors in Focus In its economic policy, the Dutch government is focussing on nine business sectors that are key to Holland’s international trade and investment. These are sectors that are leading the way in innovation and sustainability, collaborating with Holland’s knowledge institutes on worldclass research and development. Expertise and products from these Dutch sectors is on demand around the world. Together, these sectors are the drivers of the Dutch economy. Source: Netherlands Enterprise Agency 49 ‘Future Shapers Top 100’ – Innovation by Holland How is Dutch innovation shaping the world’s future? The ‘Future Shapers Top 100’ (source Accenture/RTLZ) is a reflection of the innovative strength of businesses, knowlegde institutes and governmental organisations in the Netherlands. The innovations illustrate Dutch creativity, entrepreneurship and endurance. As a model Sustainable Urban Delta, the Netherlands has answers to a wide range of challenges facing the world today. Global challenges, Dutch solutions. The ‘Future Shapers Top 100’ is a joint initiative of the public and private sector. See all the innovations at: http://toekomstmakerstop100.nl/innovations. Source: SolaRoad 50 TOP SECTORS IN FOCUS 51 Agriculture & Food Sector World-leading supplier of agri-food products •Holland is the world’s 2nd largest exporter of agricultural products, after the USA. Together with the USA and Spain, Holland is one of the top 3 exporters of vegetables and fruit. •The total value of Dutch agricultural exports was 80.7 billion euros in 2014. •In 2012 the Dutch agri-food industry contributed 48.7 billion euros of added value to Dutch GDP. •The Netherlands is the largest exporter of tomatoes and potatoes in the world. In 2013 the Dutch agrifood sector exported tomatoes to the value of about 1.8 billion US dollars. •Four out of the world’s top-30 food and beverage companies WORDT Three out of the world’s top-25 food and beverage companies. •The Food Valley region, centred at Wageningen University and Research Center, is one of the most authoritative agri-food and nutrition research centres in Europe. Wageningen University occupies the first place in the European ranking, and the second place worldwide in the QS World University Rankings by Subject 2014, in the category Agriculture & Forestry. •NIZO food research owns the largest food testing pilot plant in Europe and is open to the entire food and ingredient industry. •Holland is one of the world’s leading developers and manufacturers of food processing machinery. Dutch industry produces 80% of the world’s capacity of poultry processing machinery, and a substantial amount of cheese production machinery. •Dutch agricultural entrepreneurs use efficient and sustainable production systems and processes, resulting in a productivity that is five times higher than the European average. •Amsterdam is the largest cocoa port in the world. Source: Netherlands Enterprise Agency TOP SECTORS IN FOCUS 53 Chemical Sector Chemical portal to Europe •The chemical industry is one of the leading business sectors in the Netherlands, making a significant contribution to the economy. In 2013, the turnover was 57 billion euros. •The Netherlands is the world’s 5th ranking chemical exporting country. In 2013, Dutch chemical exports were valued at some 75 billion euros. •Holland is one of Europe’s leading suppliers of chemical products and services. •The competitiveness of the Dutch chemical industry lies in its internal and inter-company integration. Chemical companies work together on innovation and production, and take advantage of regional clustering. • The Netherlands hosts 16 of the world’s top 25 leading chemical companies, including BASF, AkzoNobel and Shell. •Holland is also home to world-class R&D institutes for fundamental and applied research such as TNO, Delft University, Twente University, Wageningen University and Eindhoven University. •Within the strong chemical community, the Dutch have formalized and structured the approach to co-operation. This is done with formal, long-term public-private partnerships (such as BE-Basic, the Institute for Sustainable Process Technology and the Dutch Polymer Institute) as well as through ‘open innovation’ in so called Centres for Open Chemical Innovation (COCI). The five COCIs are Chemelot; the Green Chemistry Campus; Plant One; Biotech Campus; and Green Polymer Application Valley. •In the area of advanced materials (polymers, composites, etc), the Netherlands consistently punches above its weight, producing world-renowned innovations in materials such as Twaron, Dyneema and Glare, as well as the folding tires for the automotive industry. Source: Netherlands Enterprise Agency TOP SECTORS IN FOCUS 55 Creative Industries Masters in architecture, design, fashion and gaming •Holland’s creative industry ranks among the world’s top 10 in terms of trade figures, jobs and registrations of brands and patterns. • The annual turnover of Dutch creative industries is 32.8 billion euros. •Dutch architects are commissioned to design prestigious buildings around the world such as the Mercedes Benz Museum in Stuttgart, the CCTV Headquarters in Beijing and Battery Park in New York. Renowned Dutch architects/agencies include Rem Koolhaas (OMA), Francine Houben (Mecanoo), Ben van Berkel and Caroline Bos (UNStudio). •Holland has a long tradition of interior design, epitomized by Rietveld’s furniture designs. Marcel Wanders is currently one the world’s best known furniture designers. •Dutch fashion designers with international acclaim Viktor & Rolf, Spijkers and Spijkers, Iris van Herpen, Jan Taminiau and Marlies Dekkers. World-famous Dutch fashion brands include G-Star, Sandwich, Gsus and Supertrash. •Holland is the world’s 3rd largest exporter of television formats. TV producers such as John de Mol, Endemol and Eyeworks are the creative engine behind some of the world’s most popular TV shows, such as The Voice, Big Brother, Deal or No Deal, Obese and So You Wannabe a Popstar. •The Netherlands is a world-leading developer of computer games including serious games such as VStep’s Ship Simulator. Famous Dutch leisure games include Killzone and Age of Wonders. •The Netherlands is a pioneer in the area of dance music and large dance events such as Sensation. Dutch DJ Hardwell was voted world’s best DJ 2013 and 2014, and prior to that DJ Armin van Buuren was voted the world’s best DJ for five years. Source: Netherlands Enterprise Agency TOP SECTORS IN FOCUS 57 Energy Sector Innovative, sustainable energy solutions •The Netherlands is a major natural gas producer and the source of advanced gas technology. Besides it is also Europe’s leading gas broker and a strategic gas hub. The country produced 84.9 billion cubic metres (bcm) in 2013; gas exports amounted to 67.3 bcm. •The distribution network for gas is the densest in Europe and of a very high standard. •The Dutch have unmatched capacity to cope with seasonal fluctuations in gas demand, providing north-western Europe with much-needed flexibility. •Holland has an international reputation for research in renewable energy, for instance in the field of solar energy, with institutes such as FOM and ECN, as well as various universities. The Dutch team from Delft University of Technology has won the World Solar Challenge, the biennial competition for solar cars, in 2001, 2003, 2005, 2007 and 2013. •The Dutch have leading expertise in offshore wind energy, co-combustion of biomass in coal-fired power plants, pretreatment methods of biomass, the use of landfill gas, and the use of heat pumps combined with heat and cold storage. •There is extensive experience in the field of energy efficiency due to a long tradition of multi-annual voluntary agreements on energy efficiency between Dutch industry and the government. This has made Dutch industry one of the most energy efficient in the world. • 7.5 million tons of municipal waste is converted in 13 efficient and clean waste incinerators to power, heat and reusable resources from the ashes. •The Netherlands is establishing itself as leader in green gas. ‘Green gas’ technology, the gasification of biomass, has been patented by Dutch energy company ECN. •The Netherlands plays a key role as a major oil-refining centre in Europe, with an extensive supply network of ports, storage facilities and pipeline connections playing a critical role for oil supplies to the continent. Source: Netherlands Enterprise Agency TOP SECTORS IN FOCUS 59 High Tech Sector New technologies for health, mobility, energy and security •Holland’s high-tech sector is a world leader in the development of new technologies and materials for use in communication systems, aircraft and automobiles, medical devices, energy generation and semiconductor production. •Dutch companies invented WiFi, the CD and the DVD. Bluetooth was invented by Dutchman Jaap Haartsen. And high-tech equipment from Dutch companies are used in 90% of all silicon chips produced worldwide. •The Netherlands is strong in nanotechnology research. Dutch publications in nanotechnology are the most frequently cited by patents, compared to all other countries in the world. The country ranks 3rd in citation impact. •The Netherlands is also world leader in designing, developing and making high-tech equipment and micro/nano components. Characteristic features of this equipment are: highly intelligent (embedded systems, software, sensors); very precise (nanoelectronics, high precision manufacturing), and highly efficient (mechatronics and smart electronics) •Dutch multinational ASML is the world’s leading provider of lithography machines for the semiconductor industry. •In 2012 the export value from the HTSM sector was 45 billion euros, and the added value 42 billion euros. •The Netherlands has a world-leading position in the design and manufacture of milking robots. •In 2014, Tech United, a team from the Technical University Eindhoven (TU/e), became World Champion Robot Soccer for the second time at the RoboCup 2014 in Brazil. Source: FL Noun Solar Team TOP SECTORS IN FOCUS 61 Horticulture Sector World’s leading supplier of flowers, plants and trees •The Dutch horticulture sector is a global trendsetter and the undisputed international market leader in flowers, plants, bulbs and propagation material. •A quarter of the world trade in horticultural products (24%) is in Dutch hands. Holland has a 52% share of the worldwide trade in floricultural products, making it the dominant global supplier of flowers and flower products. Some 80% of all flower bulbs traded worldwide come from the Netherlands, the majority of which are tulips. •The sector is the number 3 exporter in nutritional horticulture products. •Dutch horticultural innovations include intelligent greenhouses that can float on water, moving platforms, robots, innovative lighting, water and waste recycling, and greenhouses that generate more energy than they consume and thus contribute to a reduction in CO2. •Of the approximately 1,800 new plant varieties that enter the European market each year, 65% originate in the Netherlands. In addition, Dutch breeders account for more than 35% of all applications for community plant variety rights. •The Dutch are the world’s largest exporter of seeds: the exports of seeds amounted to 1.6 billion dollars in 2014. •In 2014 the Netherlands was the world’s second largest exporter (in value) of fresh vegetables. The Netherlands exported vegetables with a market value of 7.8 billion US dollars. Source: Netherlands Enterprise Agency TOP SECTORS IN FOCUS 63 Life Sciences and Health Sector Helping to advance health worldwide •The Netherlands ranks 4th worldwide in patent applications for medical technology and 9th in patent applications for biotechnology. •With approximately 375 innovative life sciences companies clustered within a 120 mile radius, Holland is the most geographically concentrated region in the world when it comes to creating economic and social value in Life Sciences and Health. •Expertise in healthcare infrastructure is characterised by a turn-key plus approach: Dutch companies are able to cover all aspects from hospital design & engineering, financing, waste management, medical equipment etc. while paying special attention paid to energy efficiency and ‘healing environments’. •In 2011, Brainport Eindhoven’s Brainport region was named the world’s most intelligent ICT and health cluster. •The excellent medical research infrastructure is strongly focused on translational research in the different medical fields such oncology, cardiovascular, immunology and neuroscience. •The Netherlands is a global market leader in mobile health care, which enables the Dutch to contribute to rural health care in developing countries around the globe. •The industry annually exports around 37 billion euros in total of which 25 billion euros is pharmaceutical and the rest medical technology and medical and laboratory instruments. •The sector invests over 2 billion euros in R&D in the Netherlands each year and is becoming a globally recognized stronghold of open innovation. It already accounts for 2.5% of GDP. •Philips is the world leader in medical imaging and patient monitoring; DSM is a biomaterials leader. •The Dutch public-private partnership model, such as the Netherlands Genomics Initiative (NGI) and the three top institutes (TI Pharma, CTMM and BMM), have set an international standard. Source: Netherlands Enterprise Agency TOP SECTORS IN FOCUS 65 Logistics Sector Strategic gateway to Europe and the world •The Netherlands was ranked 2nd in the 2014 World Bank global Logistics Performance Index (based on terms of efficiency and effectiveness of its customs, quality of transport, IT infrastructure for logistics and ease and affordability of shipping). •The Port of Rotterdam is the world’s 8th-largest and Europe’s largest port with a throughput of 445 million tons in 2014. From the Port of Rotterdam, all major industrial and economic centres in Western Europe can be reached in less than 24 hours. • In 2013, Schiphol won the ‘ACI EUROPE Best Airport’ award for the fourth time. Amsterdam Schiphol Airport won the award for Best Airport in Europe for the 20th time at the 2015 Asian Freight & Supply Chain Awards. At the 2014 World Airport Awards air travellers voted Amsterdam Airport Schiphol the Best Airport in Western Europe. •According to the World Economic Forum, the quality of the Dutch infrastructure is among the best in the world, reflecting excellent facilities for maritime, air, road and railroad transport, ranked 1st, 4th, 2th and 7th, respectively in 2015. IMD Business School ranked the Netherlands first worldwide in 2015 with regards to the quality of its water transport infrastructure. •Dutch inland shipping accounts for 54% of all trade shipping in Western Europe. The Dutch fleet is, with 7,000 vessels, the biggest and most modern in Europe. 79% of all containers transported via inland navigation in the EU-28 countries passes through Dutch territory. •Over 1,000 American and Asian companies have centralised their European distribution activities in the Netherlands. The country hosts over 20 million square metres of distribution centres. •The Netherlands has the third cooling and freezing storage capacity in the EU. Source: Netherlands Enterprise Agency TOP SECTORS IN FOCUS 67 Water Sector World leaders in hydraulic engineering, water treatment and shipbuilding •The Dutch are renowned for their integrated water management and multi-disciplinary approach that balances social, economic, environmental and engineering needs (‘Building with Nature’). Dutch companies are involved in the sustainable development of low-lying urban agglomerations such as Jakarta and Bangladesh, and coastal development in areas such as Dubai, Vietnam and Romania. •40% of the freely accessible market for water management is in Dutch hands. •The Dutch Delta Works are listed in the Guinness Book of Records as the largest flood defence project in the world. With almost 16,500 kilometres of dykes and 300 structures, the project is one of the most extensive engineering projects in the world. The Oosterscheldedam is the largest single tidal barrier in the world, at 9km in length. •The Dutch invest heavily in innovation and R&D through publicprivate partnerships. These include renowned institutes such as Deltares, MARIN, Wetsus and KWR Watercycle Research Institute. TNO and large Dutch private firms are also recognised for their water R&D. •In the field of water technology and maritime technology, the Netherlands ranks 8th worldwide for global patents. •The Dutch began using innovative waste water treatment techniques in the 1970s. Some 99.9% of Dutch households have access to clean, entirely chlorine-free drinking water. Additionally, the level of recycling of industrial waste water is high, and this recycled water is of such high quality that it can be used in the food and beverage industries. •The Dutch maritime cluster comprises 12 sub sectors and 12,000 companies, which employ 224,000 employees. The cluster has a strong international focus: 60% of the seagoing ships produced in the Netherlands are destined for export. Source: Netherlands Enterprise Agency TOP SECTORS IN FOCUS 69 6. Human Capital and Innovation Dutch products are ‘typically’ highly innovative. The Netherlands provides solutions to keep rising water levels in check, create islands in the sea and make waterways navigable. Apart from solutions for use in the natural environment, the Dutch also have the knowledge and the skills to develop products such as navigation systems with worldwide appeal (TomTom). This capacity to innovate is evidenced by the large number of patents that are applied for every year, and by the presence of several world-renowned knowledge and research institutes in the Netherlands. Source: Netherlands Enterprise Agency 71 Well-educated working population Dutch schoolchildren are second in the EU Education level: upper secondary education (2012) PISA Score United States 89 Singapore Sweden 88 Hong Kong, China Switzerland 86 South Korea Germany 86 Japan Finland 85 Taiwan Austria United Kingdom 78 Canada Denmark 78 Netherlands Ireland 73 Switzerland Netherlands 73 Germany 0 10 20 30 40 50 60 70 543 540 535 529 522 519 518 515 Measured as PISA scores (points). OECD average = 500. Source: OECD, 2013 80 90 The internationally-oriented working population of the Netherlands is well educated, with many people able to speak more than one foreign language (European and their languages - European Commission, 2014). According to the EF English Proficiency Index 2014, the Netherlands ranks second out of 63 countries. In addition to English, and in comparison with neighbouring countries, a good proportion of the population also speak German and French. Besides, according to the OECD the Dutch labour force is well equipped for the dynamic, fast changing IT-society of the 21e century (OECD Skills Outlook 2013). In comparison to other OECD-countries the Dutch employees have leading positions at literacy proficiency, numeracy proficiency and proficiency in problem solving in technology-rich environments. Moreover, according to the European Commission, the Netherlands has a world-class vocational education and training (VET) system, with built-in mechanisms to adapt to current and future skills needs so that training is more demand-driven. Furthermore, compared to many other EU member states, life-long learning is commonplace in the Netherlands: adults regularly engage in further education in order to continually improve their skills and knowledge levels. 72 HUMAN CAPITAL AND INNOVATION 554 Finland 83 Measured as percentage of population (25-64 years old) that has attained upper secondary education. Source: OECD, 2014. 555 500 510 520 530 540 550 Dutch schoolchildren achieve good scores in the OECD Programme for International Student Assessment (PISA): fifth place within the OECD and second in the EU. The PISA survey is conducted every three years among 500,000 school pupils across 70 countries, and evaluates the capacity of 15-year-old schoolchildren to understand and solve academic problems. Moreover, according to the OECD the Dutch labour force is well equipped for the dynamic, fast changing IT-society of the 21e century. In comparison to other OECD countries, Dutch employees have leading positions in literacy proficiency, numeracy proficiency and proficiency in problem solving in technology-rich environments. HUMAN CAPITAL AND INNOVATION 73 Fourth most prosperous country Entrepreneurs create dynamism Human Development Index (2014) Number of entrepreneurs (2009) 0.9440.971 Norway 0.933 Australia 0.917 Switzerland 0.915 Netherlands 0.914 United States Germany New Zealand 0.911 0.910 0.963 11.611.9 Netherlands Belgium 11.411.5 EU-27 11.311.5 Ireland 9.9 11.4 United Kingdom 9.7 11.4 0.902 Germany Singapore 0.901 Finland Denmark 0.900 United States 14.4 1212.3 Canada Canada Source: United Nations Development Programme, 2014. 12.2 Australia 8.8 9.8 8.5 9.3 6.9 9.3 Measured as a percentage of the working population Source: Statistics Netherlands, 2012. ,58 ,69 ,60 ,61 ,62 ,63 ,64 ,65 ,66 ,67 ,68 ,69 ,70 ,71 According to the UNDP, the Netherlands ranks 4th place worldwide with regard to prosperity. In determining ‘prosperity’, the UNDP takes into account a country’s GDP as well as other aspects of human well-being, such as life expectancy, public health, literacy levels and educational standards. Of the 186 countries listed in the UNDP index, the Netherlands ranks 4th. 74 HUMAN CAPITAL AND INNOVATION The Dutch have always been well known for their entrepreneurial spirit, which is reflected in the country’s large number of entrepreneurs: 11.9% of the Dutch working population is self-employed. The Dutch government promotes start-ups because they create economic vitality and innovation and because they challenge existing firms, giving them the incentive to adapt and continue to innovate. HUMAN CAPITAL AND INNOVATION 75 Worldwide innovation index: fifth position Most innovative countries (2014) 64.8 Switzerland United Kingdom 62.4 Sweden 62.3 60.7 Finland Netherlands 60.6 United States 60.1 59.2 Singapore 57.5 Denmark 56.9 Luxembourg 56.8 Hong Kong, China Source: INSEAD, 2014. 4 4,1 4,2 4,3 4,4 4,5 4,6 4,7 4,8 4,9 The Netherlands scores well on the Global Innovation Index (GII) 2014. The GII ranks 143 countries on parameters such as ‘institutions’, ‘human capacity’ and ‘business sophistication’, so as to arrive at a global innovation ranking for each country. The Netherlands scores particularly well on parameters such as ‘knowledge diffusion’, ‘online creativity‘ and ‘creative goods and services’. According to the Innovation Union Scoreboard 2015 (IUS) the Netherlands ranks fifth in the EU (European Commission/UNU-MERIT, 2015). The IUS distinguishes between 3 main types of indicators (enablers, firm activities and outputs) and 8 innovation dimensions (as human resources, research systems, finance and support, intellectual assets), capturing in total 25 different indicators. Source: Layar 76 HUMAN CAPITAL AND INNOVATION Modest R&D expenditure Home-grown knowledge multinationals R&D expenditure (2013) Top 10 innovative Dutch businesses (2014) R&D expenditure (millions of euros) 3.21 Sweden Denmark 2.73.05 Germany 2.94 2.7 3.7 France 1.8 Netherlands 1.8 Thales Nederland DAF Trucks 2.23 VDL Groep 1.98 1.7 United Kingdom Synthon 1.63 1,5 119 717 107.5 884 83 874 Measured as a percentage of GDP *= 2012 Source: Eurostat, 2015. 1 244.2 1486 NXP Semiconductors 2.28 1.9 Belgium 249 1384 Royal DSM 2.81 2.0 United States* 742 4013 Philips 2.81 2.6 Austria 799.5 4263 ASML 3.32 Finland R&D personnel (FTE) 2,0 2,5 3,0 3,5 3,8 Friesland Campina Rijk Zwaan 69.4 212 66 520 65 466 *Calculated by TW. Source: Technisch Weekblad, 2015. At 2.16% of GDP, Research & Development expenditure in the Netherlands is modest from an international perspective (EU-average was 2.07% in 2012). However, this can partly be explained by the Dutch sector structure because the services sector, which ‘naturally’ has a low R&D intensity, accounts for a relatively large share of the Dutch economy. Public-private partnerships in scientific research are a major factor, and the Netherlands is ranked sixth worldwide in this area, according to the Netherlands Observatory of Science and Technology (NOWT) (2008). 78 HUMAN CAPITAL AND INNOVATION The Dutch economy has a broad and solid base. Leading multinationals with worldwide operations such as AkzoNobel, ASML, DAF Trucks, Heineken, NXP Semiconductors, Philips, Shell and Unilever have their roots in the Netherlands. Dutch industry includes a large number of innovative and knowledge-intensive companies that enjoy a sound reputation the world over and that carry out a great deal of R&D (including the aforementioned multinationals). In addition, there are also many other global businesses that conduct R&D activities in the Netherlands, such as Danone, Dow and Yakult. HUMAN CAPITAL AND INNOVATION 79 Large base of knowledge and research A selection of knowledge and research institutes (2014) Budget in millions of euros Personnel in FTE 626.4 3028 TNO 140 550 ECN Deltares 104 FOM 102 819 1019 74 NLR TNO Organisation for Applied Scientific Research ECN Energy Research Centre of the Netherlands Deltares Institute for Deltatechnology FOM Foundation for the Fundamental Research on Matter NLR National Aerospace Laboratory KNMI Royal Netherlands Meteorological Institute MESA+ Institute for Nanotechnology MARIN Research Institute in Hydrodynamics and Nautical Research J.M. Burgers- Research School for Fluid Mechanics centrum TI Food and Public private partnership for interdisciplinary research Nutrition in food and nutrition 643 59.1 347 KNMI 51 MESA + Brainport Eindhoven Region is a top technology breeding ground for innovation and home to world-class businesses, knowledge institutes and research institutions. The five key target sectors are High Tech Systems & Materials, Food, Automotive, Lifetec and Design. Brainport Eindhoven Region is a powerful innovative player in a European and global context. It accounts for a third of all Dutch private R&D expenditure, and is one of Europe’s top three regions in terms of patent density. In 2011 the Intelligent Community Forum declared Brainport the world’s smartest region. In 2012 Fortune magazine suggested that this region could be the new Silicon Valley. 578 42.7 366 MARIN 30 60 J.M. Burgercentrum 28 177 TI Food and Nutrition Source: Technisch Weekblad Special R&D, april 2015. 0 1000 2000 3000 4000 Dutch universities score quite highly for teaching and research in a number of international rankings (see: www.vsnu.nl). Wageningen University (WUR), for example, is a global leader in green biotechnology, and Leiden University leads the way in the biomedical life sciences (see box). In addition, the Netherlands is also home to a significant number of renowned knowledge and research institutes such as ECN and TNO, which play an important role in the government-initiated public-private innovation programmes. 80 HUMAN CAPITAL AND INNOVATION Energy Valley is the energy cluster in the north of the Netherlands. The Energy Valley Region is an incubation zone for clean, reliable and innovative energy. The region is strategically positioned, centrally in the European gas and power grid, and directly at the North sea with excellent harbour facilities for transport of raw materials and offshore wind developments. Companies, knowledge institutes and governments work closely together to create a sustainable energy economy and new green jobs. Currently there are over 3,000 companies en 22,500 employees in the Northern energy cluster. HUMAN CAPITAL AND INNOVATION 81 Dutch scientists frequently cited Refreshing business approach Citation impact (2009-2012) Number of PCT-patent applications (2013) 1.63 Denmark 1.6 Netherlands 12,386 South Korea Ireland 1.44 France Finland 1.44 United Kingdom 1.42 Norway 17,927 Germany 1.49 United States 21,516 China 1.5 United Kingdom 43,918 Japan 1.56 Switzerland 57,239 United States 7,899 4,865 Switzerland 4,367 Sweden 1.37 Netherlands 4,198 Belgium 1.37 Sweden 3,960 Source: WTI2, 2015, data processing: Netherlands Enterprise Agency, 2015. 1,40 1,42 1,44 1,46 1,48 1,50 1,52 1,54 1,56 1,58 1,60 1,62 1,64 The citation impact score is a key indicator of scientific quality. The score refers to the number of times a scientist is cited by other scientists. These citations indicate how much they value each other’s work. The global average citation impact score is ‘1’. Dutch scientists are cited above the global average and claim third place in the world. Furthermore, Dutch scientists score highly for joint publications, which is evidence of the international significance of research taking place in the Netherlands. 82 HUMAN CAPITAL AND INNOVATION Source: World Intellectual Property Organisation, 2014. 75 85 95 105 115 125 135 145 155 165 175 185 195 205 210213 PCT (Patent Cooperation Treaty)-patents are patent applications that are registered with the World Intellectual Property Organisation (WIPO). The Netherlands is well represented in this area and is ranked ninth in the world (fourth in the EU). Patents are in many cases the result of R&D activities which, if successful, can lead to greater labour productivity and an advantage over foreign competitors. This high score means that Dutch industry is an attractive potential partner - one that is innovative, inviting and stimulating. HUMAN CAPITAL AND INNOVATION 83 7. Infrastructure The Netherlands has a number of key logistics hubs such as the Port of Rotterdam and Schiphol Airport, as well as a high penetration of broadband Internet. This provides the country with a sound physical infrastructure and consequently enables it to be a top performer in terms of logistics. Source: Amsterdam Airport Schiphol 85 Navigable inland waterways Strong in logistics Quality of water transportation (2015) Logistics performance index (2014) Netherlands 9.36 Denmark 9.19 Singapore 8.67 UAE 8.50 Sweden 3.96 Norway 3.96 8.44 United States Belgium 8.43 Japan 8,5 8,75 9 9,25 9,5 9,75 10 The Netherlands has a good physical infrastructure, with the world-class (main)ports and the navigable inland waterway system being prime examples. The extensive network of inland waterways has excellent connections to the waterways in the rest of Europe. The Netherlands has the best water transport infrastructure in the world. The country also has an extensive road transport network and is second in the world as regards road network density (IMD, 2015). According to IMD (2015), the Dutch energy infrastructure also scores well, taking the fifth place overall. 86 INFRASTRUCTURE 3.92 3.91 Source: World Bank, 2014. Harbours, canals, etc. Source: IMD, 2015. 8,25 3.95 Luxembourg Sweden 8 4.00 Singapore 8.72 Norway 4.01 United Kingdom 8.76 Iceland 4.04 Belgium 8.82 Finland 4.05 Netherlands 8.98 Hong Kong, China 4.12 Germany 3,8 3,9 4,0 4,1 4,2 The Netherlands’ strong position in terms of logistics is due to the favourable geographic location of the country, at the heart of Europe; a sound infrastructure that includes the Port of Rotterdam, the Port of Amsterdam, Amsterdam Airport Schiphol; and a sophisticated logistics sector. This is reflected in the World Bank Logistics Performance Index 2014, where the Netherlands is ranked second. The Netherlands came out on top in terms of the efficiency and effectiveness of its Customs and other border procedures, the quality of its transport and IT infrastructure for logistics, the ease of use and affordability of its shipping, and the level of professionalism in the Dutch logistics industry. INFRASTRUCTURE 87 Third-largest airport in Europe Largest port in Europe European airport traffic and transport (2014) Trans-shipment of goods (2014) 9,743 Cargo transport x1,000 tonnes Trans-shipment (in millions of tonnes) Passenger transport x1,000 passengers Containers (in millions of TEU) Frankfurt am Main Netherlands 2,051 Germany 444.7 Rotterdam 12.3 59,429 Paris Charles de Gaulle Belgium 1,896 France 199 Antwerp 9 63,749 Amsterdam Airport Schiphol Germany 1,633 Netherlands Hamburg 145.7 9.7 54,941 London Heathrow United Kingdom 1,499 Source: Port of Rotterdam, 2015. 73,375 Source: Schiphol Group, 2015. In 2014 Amsterdam Airport Schiphol was Europe’s fifth-largest airport in terms of passenger numbers and third in cargo volumes. In 2014 the Airport was welcoming 55 million passengers and processing 1.6 million tonnes of cargo. A total of 99 airlines offer direct flights from Schiphol to 323 destinations. This makes Amsterdam Airport Schiphol one of the four most important Main Ports (or hubs) in Europe. It is also one of the two European home bases of Air France-KLM and the SkyTeam alliance. In addition, Schiphol is an important contributor to the regional economy, providing direct employment for around 65,000 people at the airport. The contribution to the national economy amounts to about 26 billion Euros, and a total of 290,000 jobs nationwide. Amsterdam Airport Schiphol is part of Schiphol Group, an airport company active in the Netherlands and abroad. Schiphol is also renowned for its inspiring facilities for passengers and innovative technical solutions such as the extensive baggage handling system. The airport has won over 200 national and international awards since 1980. Recently, Schiphol was awarded for example Best Airport Western Europe 2014 (SKYTRAX), Best Airport 2012 (ACI Europe), Best Airport for Business Travellers 2013 (Business Traveller), Best Air Cargo Terminal Operator Europe and Cargo Airport Europe, Cargonews Asia 2012 and Best Airport in the world in Social Media, Simplifying Awards for Excellence 2013. Schiphol is home to a museum which is the first of its kind in the world and features exhibits that include paintings by Dutch masters from the Golden Age. It is also the first airport in the world with a library and an airport park. 88 INFRASTRUCTURE The port of Rotterdam is the largest port in Europe. The trans-shipment in Rotterdam added up to 444.7 million tons in 2014. The number of containers handled increased tot 12.3 million TEUs in 2014. In terms of total weight of goods trans-shipment, Rotterdam is the largest port in Europe. Businesses often choose to locate in-and-around the Port of Rotterdam because of its strategic location in north-west Europe, depth of its harbours, the many port facilities, and its excellent transport links with the hinterland. An entirely new freight railway route, the Betuwe Line, opened a few years ago, connecting the Port of Rotterdam with the German Ruhr valley. Many companies from America and Asia use Rotterdam as a base for the distribution of their goods throughout Europe. A significant number of large European distribution centres are located in the immediate vicinity of the container terminals, and these ensure that products can be dispatched efficiently to anywhere on the contingent or to overseas destinations, such as the United Kingdom, Scandinavia and the Baltic region. The combined activities of the port account for about 5% of GDP. In other words, five cents out of every euro are earned in the port. More than 90,000 people work directly for the Port of Rotterdam. Work on the ‘Maasvlakte 2’ project is almost completed. This historic land reclamation project has expanded the area of the Port of Rotterdam by 2,000 hectares (20%). Maasvlakte 2 provides Rotterdam with an excellent springboard for the future. Other Dutch ports are located near Rotterdam in the so called Drechtsteden including Zwijndrecht and Dordrecht, Terneuzen/Vlissingen, Amsterdam, IJmuiden, and Moerdijk. Some small ports are situated in Delfzijl, Den Helder, Harlingen and Eemshaven. INFRASTRUCTURE 89 8. Government The complex of buildings known as the ‘Binnenhof’ [‘Inner Court’] in The Hague is the seat of the Dutch government, which enjoys a good international reputation and functions effectively. The Netherlands is one of the most stable nations in the world with a competitive fiscal climate. Besides, government finances are relatively healthy. Source: Netherlands Enterprise Agency 91 Effective government One of the least corrupt countries Government effectiveness (2013) Corruption perception index (2014) 2.2 Finland Singapore 2.1 Denmark 9.4 92.0 Denmark 9.3 91.0 New Zealand 2.0 Finland 9.289.0 Norway 1.9 Sweden 87.0 9.2 Switzerland 1.9 Norway 9.086.0 8.986.0 Canada 1.8 Switzerland Netherlands 1.8 Singapore 8.9 84.0 Sweden 1.8 Netherlands 8,7 83.0 Liechtenstein 1.7 Luxembourg 8.7 82.0 New Zealand 1.7 Canada 8.7 81.0 Source: World Bank, 2015. 75 85 90 1 2 3 Source: Transparency International, 2014. 4 5 6 7 8 9 100 1 2 213 According to the World Bank, the government of the Netherlands is one of the most effective in the world, thus making it easier for companies to make medium and long-term decisions. The figures for government effectiveness capture the perceptions of the quality of public services; the quality of the civil service and the degree of its independence from political pressures; the quality of policy formulation and implementation; and the credibility of the government’s commitment to such policies. 92 GOVERNMENT 0 10 20 30 40 50 60 70 80 90 According to the Transparency International Corruption Perception Index, levels of corruption and nepotism in the Netherlands are among the lowest anywhere in the world. Among the aspects of corruption that were examined were the degree to which people in authority - such as Customs officers, police officers, politicians, judges and other officials – misuse their position for personal gain (financial or otherwise). IMD (2014) also concludes that bribery and corruption are rare in the Netherlands: the country ranks sixth worldwide. GOVERNMENT 93 Moderate level of government debt Competitive taxation climate Corporate tax rate on profit 2015 (%) National debt as a percentage of GDP (2014) 23.6 Luxembourg Finland 43.9 Sweden 84.5 Austria 89.4 United Kingdom 91.9 Euro area 95 France Source: Eurostat, 2015. 10 20 30 23.5 Austria 25.0 Netherlands 25.0 Luxembourg 29.2 Germany 30.2 Source: IMD, 2015. 40 50 60 70 80 90 The Netherlands was able to dramatically reduce its level of government debt in the years preceding the global economic crisis thanks to a stable economy and a reasonably stringent fiscal policy. In 2008, there was even a budget surplus for the third consecutive year. Dutch government debt as a percentage of GDP was higher than the EMU standard of 60% in 2014 (67.9%), but it was still well below the average for the Euro zone (91.9%). According to the CPB – Netherlands Bureau for Economic Policy Analysis – the budget deficit will amount to 2.1% of GDP in 2015 and 1.4% in 2016. The government debt will amount to 66.4% of GDP in 2015 (EMU-definition) and 64.5% in 2016 (CPB-forecast, September 2015). 94 GOVERNMENT 22.0 Denmark 74.7 Germany 21.2 Sweden 68.8 Netherlands 21.0 Switzerland 59.3 Finland 20.0 United Kingdom 45.2 Denmark 0 12.5 Ireland 0 10 20 30 40 50 60 70 79 The corporate income tax rate is 20% on the first 200,000 euros and 25% for taxable profits exceeding 200,000 euros which is well below the EU national average. Furthermore, companies can benefit from an effective tax rate of only 5% for R&D income from self-developed, patented, intangible assets and also from self-developed, unpatented, intangible assets which qualify for the WBSO subsidy. Other features of the Dutch tax system include a wide tax treaty network - the participation exemption which states that all benefits related to a qualifying shareholding are exempt from Dutch corporate income tax, and, finally, a 30% tax-break for highly qualified foreign employees. GOVERNMENT 95 Explanatory notes regarding this publication Sources This publication is intended to provide a concise and representative picture of the state of the Dutch economy. Every attempt has been made to carefully and judiciously select indicators from internationally renowned and reliable sources. In the case of most of the indicators, the Dutch economy has been compared with surrounding countries and the United States, many of which are similar in terms of their economic structures. Comparisons have also been made in a number of cases with other countries, such as with various worldwide rankings. Amsterdam Airport Schiphol www.schipholgroup.nl OECD www.oecd.org The Conference Board www.conference-board.org Port of Rotterdam Authority www.portofrotterdam.com Economist Intelligence Unit www.eiu.com Social and Cultural Planning Office of the Netherlands www.scp.nl European Commission www.ec.europa.eu Eurostat www.epp.eurostat.ec.europa.eu IMD www.imd.ch IMF www.imf.org INSEAD www.globalinnovationindex.org Ministry of Foreign Affairs www.government.nl/ministries/bz Netherlands Bureau for Economic Policy Analysis www.cpb.nl The Netherlands Observatory of Science and Technology www.nowt.nl The Netherlands Organisation for Applied Scientific Research www.tno.nl 96 Statistics Netherlands www.cbs.nl Technisch Weekblad www.technischweekblad.nl Transparency International www.transparency.org UNCTAD www.unctad.org United Nations http://comtrade.un.org/ United Nations Development Programme www.hdr.undp.org World Bank www.worldbank.org World Economic Forum www.weforum.org World Trade Organization www.wto.org 97 Other sources of information More detailed information is available on the websites below, almost all of which include sections in English. Information regarding innovation Benelux Office for Intellectual Property www.boip.int Netherlands Patent Office www.agentschapnl.nl/ octrooicentrum Statistics Netherlands www.cbs.nl Netherlands Enterprise Agency www.rvo.nl/innovatie Ministry of Economic Affairs www.government.nl/ministries/ez Trendwatchers for Innovation and Technology www.rvo.nl/en/nost Information regarding the labour market and higher education http://www.studyinholland.nl/ Statistics Netherlands www.cbs.nl Netherlands Bureau for Economic Policy Analysis www.cpb.nl Information regarding enterprise (including internationally), investing and partnerships in the Netherlands Ministry of Economic Affairs www.government.nl/ministries/ez Ministry of Finance www.government.nl/ministries/fin Netherlands Foreign Investment Agency www.nfia.nl Statistics Netherlands www.cbs.nl Netherlands Enterprise Agency, focus on sustainability, innovation and international www.hollandtradeandinvest.com www.rvo.nl Chambers of Commerce www.kvk.nl Association of Universities in the Netherlands www.vsnu.nl Netherlands Organization for International Cooperation in Higher Education www.nuffic.nl Ministry of Social Affairs and Employment www.government.nl/ministries/szw General information about the Netherlands Ministry of Foreign Affairs www.government.nl/ministries/bz 98 Statistics Netherlands www.cbs.nl 99 Information regarding Top Sectors Food Tech Holland www.foodtechholland.nl Dutch Federation of Agriculture and Horticulture (LTO) www.lto.nl Association of the Dutch Chemical Industry www.vnci.nl Dutch Design Fashion Architecture Programme (DFA) www.dutchdfa.com Dutch export platform for Dutch clean tech companies www.cleantechholland.nl 100 Energy Research Centre of the Netherlands www.ecn.nl Association of Suppliers of Environmental Technology www.vlm.fme.nl Holland High Tech Sector www.hollandhightech.nl Plantum (Dutch Association for Plant Propagation Material) www.plantum.nl Dutch Flower Auction www.floraholland.com Greenport Holland (Dutch Horticultural Association) www.greenportholland.com (Dutch only) Life Sciences and Health Sector www.lifescienceshealth.com Holland International Distribution Council www.hidc.nl Port of Rotterdam www.portofrotterdam.com Amsterdam Airport Schiphol www.schipholgroup.com Dutch Water Sector www.dutchwatersector.com Wetsus, Dutch Centre of Excellence for Sustainable Water Technology www.wetsus.nl Holland Shipbuilding Association www.hme.nl The Association of Dutch Suppliers in the Oil and Gas Industry (IRO) www.iro.nl and www.iro-noc.nl 101 Imprint 2016 Edition This publication, Holland Compared Winter 2016, is published by the Dutch Ministry of Foreign Affairs. For further information please contact the Dutch embassy, consulate or Netherlands Business Support Office in your area, or visit www.hollandtradeandinvest.com to learn even more about Dutch commerce. Editor-in-Chief Hielke Venema Economic editor Ron Hogenboom Gea Blok (assistant) English language editor Jacqueline Meeuwisse Editorial address Holland Compared Netherlands Enterprise Agency Intelligence Unit P.O. Box 20105 2500 EC The Hague The Netherlands Coordination Elles van Egmond Copyright Articles may be reprinted or reproduced only with acknowledgement of the source: Source: Holland Compared 2016 No rights may be derived from the contents of this publication. Photo front, source: Peter Hilz Source: Heerema Marine Contractors Nederland B.V. 102 Source: Energising the Future In the first half of 2016 the Netherlands holds the Presidency of the European Union for the 12th time. hollandtradeandinvest.com 106