Rabobank: Amsterdam’s economic growth fails to benefit residents
The business sector is not sufficiently engaged in solving societal problems, and the government is not effectively involving entrepreneurs in addressing these challenges, according to a new Rabobank report. As a result, the economic growth in the Greater Amsterdam area is not adequately benefiting its residents.
Rabobank argues that the tech industry, in particular, has significant potential to help tackle pressing social issues, such as the housing crisis. However, the sector is often overlooked or viewed too negatively.
“There is too little attention for the tech sector, or it is perceived too negatively,” said Erik Versnel, director of Rabobank Amsterdam. “Yet tech can be a massive engine for the economy and for solving societal issues.”
“Governments could implement a reward system for companies using artificial intelligence to solve urban challenges in education, healthcare, or sustainability,” Versnel suggested.
The economy of the Metropolitan Region of Amsterdam (MRA) consistently outperforms the rest of the Netherlands. However, the region has been falling behind in terms of broad prosperity, which includes social well-being and sustainability alongside economic growth.
Three years ago, Rabobank research already indicated that residents of Greater Amsterdam were not sufficiently benefiting from the economic expansion driven by businesses. Instead, economic progress has increased pressure on factors such as quality of life, job security, and housing.
Rabobank now warns that prosperity in the capital region is no longer aligned with its economic growth. This trend extends to other major Dutch cities, with Eindhoven as an exception.
Before the COVID-19 pandemic, Amsterdam and its surrounding areas appeared to be closing the gap in broad prosperity, with a faster rate of improvement than the rest of the country. However, in the past three years, progress has stalled, and the city now reportedly lags behind.
According to Otto Raspe, head of research at Rabobank, housing satisfaction in Amsterdam is declining more sharply than in the rest of the Netherlands due to the housing crisis. “But Amsterdam also lags behind in terms of social connections and civic engagement,” Raspe added.
While the challenges are not solely the responsibility of tech companies, the sector is often framed negatively in public debates. “Yet tech contributes substantial value, which is often less visible—such as in knowledge development and addressing social issues like sustainability, healthcare, and food,” Raspe said.
Some tech companies are already taking social initiatives on their own, such as Bird and Bunq through their People for People foundation.
“There is a gap between the government and businesses,” the report states. Governments rarely reach out to companies regarding social issues, while businesses that do engage often feel unrecognized for their efforts. According to Rabobank, communication between both sides needs significant improvement.
Businesses also bear some responsibility, according to Versnel. “Tech companies have traditionally been less organized among themselves. Their networks are often informal, and they rarely participate in traditional business associations like MKB Amsterdam or Oram. As a result, they are invited to discussions less often and rarely have a seat at the table.”
Striking a balance between economic and societal prosperity is crucial for the tech sector, Versnel emphasized. The industry often attracts talent because of Amsterdam’s high quality of life. “A company needs a pleasant living environment to stay competitive.”
Rabobank believes that tech companies could play a key role in addressing housing shortages. “Municipalities and project developers often struggle to finance new housing projects,” the report states. “The tech sector could help unlock housing projects for tech talent or students that would otherwise not materialize. There is ample capital within the tech industry, but it requires a different mindset from both the sector and the government.”
Rabobank is willing to take a leading role in this effort. “I am eager to finance such initiatives when they come to fruition, for example, through housing projects via BPD Woningfonds,” Versnel said.
The tech industry could also contribute more to digitalization efforts in education, healthcare, and mobility by collaborating more closely with schools, healthcare institutions, and transport providers.
In recent weeks, discussions about Amsterdam’s tech climate have flared up again. The city is one of Europe’s most important tech hubs, yet several companies have announced plans to relocate.
Tech firm Bird recently announced its departure from the Netherlands, while companies such as web bank Bunq and healthcare giant Philips have also moved parts of their operations elsewhere.
Much of the criticism from the tech sector is directed at national policies, particularly tax obstacles that affect employee compensation and startup investment. These barriers do not exist in many other countries, leaving local governments with little control over the situation.
According to Versnel, however, municipal and provincial governments can still advocate for better policies in The Hague. He pointed to last year’s efforts in Brabant, when tech giant ASML threatened to leave and successfully lobbied the Dutch government for support alongside local and regional officials. “That required significant organizational strength. We need to replicate that in the MRA,” he said.
