- Dutch economy grew slightly post-contraction, but concerns arose from a drastic decline in business sentiment.
- Survey reveals decreased investment intentions, emphasising the urgent need for policymakers' attention.
- Prioritising company-led R&D is crucial for sustained innovation and economic prosperity.
Google Translated from Dutch to English. Here is the link to the original article in Dutch. The article was originally published on 21 February 2024.
After three quarters of contraction, the Dutch economy grew again in the last quarter of 2023 and economic growth will be higher this year than last year, although this does not require much.
Yet, I suffer from a lack of optimism regarding the longer term. Last week VNO-NCW and MKB-Nederland published the results of their National Business Climate Survey 2024 and that did not make me happy. When entrepreneurs are allowed to complain a little, they will. So it is not surprising that this survey reveals dissatisfaction. What is worrying though is that the results are spectacularly worse than a year earlier. 76% of respondents say the business environment has deteriorated in the last five years. Last year that was still 62%. No fewer than 82% are dissatisfied with the reliability and stability of politics and government. Last year that was 66%. 26% of companies say they will no longer invest in the Netherlands in the next twelve months, compared to 18% last year.
Where the hell is the sense of urgency?
Even more disturbing is that the 'sense of urgency' is completely missing. Politicians are concerned with themselves, with sustainability or the climate, but I hardly hear anything around me about our crumbling earning capacity. While companies, industry, and market forces are crucial to our prosperity in my view, I only hear people around me complain about this. Do companies perhaps have themselves to blame for this or is this a persistent, malicious narrative? I think the latter. More attention to the business climate is crucial for our future.
My favourite newspaper, the Financieele Dagblad, was doing well. If there is one newspaper that you expect to make a big splash after such a dramatic report, it is the FD. While De Telegraaf opened with it on Thursday morning, an article about it only appeared online at the FD on Thursday. Admittedly, on Friday the FD opened with the same cry for help from DSM as ASML had previously made, and in that article, the survey by VNO-NCW and MKB-Nederland was discussed.
Of course, we still have some companies worldwide that are riding high in the fastest-growing sector, technology. ASML comes first, followed by ASM, NXP, and BESI. And don't forget Adyen. In some cases, it has been years, but our leading technology companies largely have their origins in Philips. The old Philips was an incredibly innovative company. Philips' Natlab was renowned. Unfortunately, it no longer exists. I was in the area years ago and it turned out there was a movie theater in the building. Admittedly, we now have the High Tech Campus Eindhoven. And that's a good thing.
R&D at companies is more useful than at the university
Last week, there was an interesting article in The Economist about R&D and innovation. The article described the results of research showing that productivity-enhancing innovation is better served by R&D in companies than in universities. Commercialism forces scientists at companies to remain somewhat practically oriented, while academics are mainly concerned with publishing in renowned journals and obtaining citations.
Our country has a lot to offer: compactness, good infrastructure, bright minds, etc. But that gives us no guarantees. Traditionally, the Netherlands has also been characterised by an entrepreneurial spirit. If companies are as concerned about the business environment as they are now, something is going on and policymakers should take that message to heart. If they don't, we won't immediately be in a crisis. A continued weakening of the economic base is a slow process. As they say in English, it is a 'train wreck in slow motion'. Once the train derails there is no saving it. Oh Netherlands, mind your business.
