Quarter of Dutch businesses will realize growth abroad if gov't limits labor migration

If the new Dutch government implements the limits to labor migration it advocates, 24 percent of Dutch employers with foreign employees plan to realize their future growth abroad. Another 23 percent may scale down production in the Netherlands, according to the Dutch Innovation Monitor 2024, an annual study by the economics journal ESB and the University of Amsterdam.

About half of companies in the Netherlands employ people from abroad. The researchers asked them how they plan to respond to significant restrictions to labor migration the Schoof I Cabinet promised in its coalition agreement.

A significant proportion will look outside the Netherlands. Around a quarter percent said they’d realize their growth plans abroad. This especially concerns businesses with many well-educated employees (32 percent). Companies that recruit many knowledge migrants are also overrepresented in the quarter who said they’d downscale their activities in the Netherlands. And 17 percent said they’d move some or all of their activities out of the Netherlands.

After the November parliamentary election that was particularly hostile towards immigrants, highly-skilled foreign workers and their income tax break, international students, company recruitment abroad, and corporate tax benefits, big companies like ASML, NXP, Boskalis, and Van Oord threatened to move their future plans outside of the Netherlands. That set the outgoing Cabinet scrambling to keep these businesses, resulting in a 1.4 billion euro plan promising they’d have access to the resources, including workers, they need. ASML finally agreed to stay in Eindhoven and announced expansion plans that would create 20,000 jobs in the region.

The figures in this year’s innovation monitor show that many companies were not reassured by the outgoing Cabinet’s efforts and are keeping a wary eye on what the Schoof I Cabinet will do.

Still, the majority of businesses with foreign employees said they’d focus on what they can do in the Netherlands if the government pushes through its promised migration limits. 52 percent plan to recruit more Dutch workers despite the tight labor market and widespread staff shortages. 35 percent will focus on automation and robotization. And 28 percent plan to retrain or educate existing staff to fill the gaps they can no longer fill by recruiting abroad.

20 percent of businesses with employees from outside the Netherlands don’t have any planned measures for if the government restricts labor migration. This mainly concerns businesses that employ many practically educated workers from abroad.