Netherlands drops out of top 5 of world's best performing economies
The Netherlands is no longer one of the five best performing economies in the world, according to the World Economic Forum's rankings. In this year's ranking, the Netherlands came in sixth place, dropping two spots from last year's fourth, AD reports.
The best performing economy of the 140 economies tested is the United States. Singapore came in second place, followed by Germany and Switzerland. Japan completes the top five.
The Netherlands' two spot drop can partly be attributed to the new way of measuring. The 2018 ranking makes more use of hard data and also looks at the percentage of working women, diversity, growth of innovative companies and the extent to which companies embrace disruptive technologies. The Dutch economy dropped one spot thanks to the new method. With the old method, the Netherlands would be in 5th place.
But the Dutch economy also performed worse on a few key points, according to Professor Henk Volberda of the Rotterdam School of Management, who has been delivering the Dutch results to the WEF since 2004.
The Netherlands is particularly falling behind when it comes to innovation. Where countries like Israel, Sweden and Switzerland all spend over 3 percent of their national income on R&D, the Netherlands spends only 2 percent, putting the country in 19th place when it comes to innovation funding. This means that in the area of new technologies like AI, robotics, big data and blockchain, the Netherlands risks missing the boat, Volberda said to the newspaper. The problem lies with the existing top sector policy, he believes. "That focuses on established industries. A technology like blockchain is a danger for the big banks and logistics companies, but it can also be a great opportunity."
Another issue, paradoxically, is the flourishing economy. It creates problems on the labor market. "Companies have more and more trouble finding good staff and the existing staff often receive insufficient additional- or re-training", Volberda said. Companies in the Netherlands are also not very diverse when it comes to their male/female, or ethnic composition. "While it's been proven that diverse teams score better", Volberda said. "A company like Canada is strong in that."
These issues aside, the Netherlands is still one of the world's best economies. In terms of score, the Netherlands even did a bit better this year than last with 82 out of 100. "Only a number of other countries are doing better than we are and they are growing faster", Volberda said to the newspaper.
Strong points for the Netherlands are its world class infrastructure [4th in the ranking], healthy macroeconomic policy [1st], efficient government with well-functioning institutions [4th], and a well-trained workforce [6th]. Even the lagging field of innovation is not all bad. The Netherlands scored well in terms of number of scientific publications [8th], and the cooperation between industry, universities, and other knowledge institutes [5th].