The Netherlands in Top 10 of World’s Most Competitive Economies
Although the Netherlands dropped from 4th to 6th place in this year’s Global Competitiveness Report, it remains in the top 10 of most competitive economies in the world, ranking 3rd in Europe.
Image: ©Europe Container Terminals BV, Rotterdam / Holland Toolkit
The World Economic Forum (WEF) published its Global Competitiveness Report for the fortieth year. The report grades 140 economies based on 12 pillars: institutions, infrastructure, ICT adoption, macroeconomic stability, health, skills, product market, labor market, financial system, market size, business dynamism and innovation capability. The top 3 spots of 2018 are filled by the US, Singapore and Germany.
The lower ranking is partly due to the new way the World Economic Forum researched the world’s economies this year. The organization used 98 indicators to rate the economies. However, only 34 of those indicators were used in last year’s survey. Unlike previous years, the 2018 edition gathered its information more on hard data. It did also focus on new concepts such as how businesses embrace disruptive technologies (like blockchain or Artificial Intelligence (AI)), entrepreneurial culture and social trust.
The new research methods were not the only reason for the drop in ranking. The country also underachieved in a few pillars and factors within them – like investment in R&D, flexibility on wage determination and complexity of tariffs.
In the case of underinvesting in R&D, this score can be improved if the country focuses more on new technologies like AI, Big Data and robotics – according to economic researchers. Also, the current policies are not centralized and focus on preserving the established sectors rather than concentrating on new sectors, said professor Henk Volberda of Rotterdam’s Erasmus University.
Performing well in general
Despite the slight downturn in ranking, the Netherlands performed well, in general, taking first place in macroeconomic stability, alongside third place in business dynamism and fourth in infrastructure and institutions.
Overall, it can be said the Netherlands has the perfect climate for competition and innovation, an infrastructure of the highest quality, a strong macroeconomic policy and an efficient government with good functioning institutions. It is the right location for entrepreneurial aspirations.