The Dutch economy shrank by 3.8% in 2020 due to the coronavirus pandemic. In particular, the 8.5% decline in the second quarter was of historic proportions (the highest since World War II and significantly higher than the 3.6% decline during the 2009 crisis). In the third quarter of 2020, however, the economy already showed a strong recovery and growth of 7.8%. The main role was undoubtedly played by government support measures, which, for example, contributed to the fact that the number of bankruptcies and related job losses remained relatively low, even 14% lower than in the same period of the previous year.
From an international point of view, the Dutch decline in 2020 can be assessed as moderate; this is due to the fact that the restrictions here were less severe and the government was relatively quick to adopt them. In addition, the Dutch economy is less dependent on tourism and the degree of digitization is at a high level here – the country was already at the forefront of working from home and online shopping before the pandemic.
The main measures to support the economy were subsidies for wage costs, income support for self-employed entrepreneurs and compensation of fixed costs for companies. The Netherlands spent around €27 billion on these three measures in 2020; in 2021, these three main measures should together represent approximately EUR 7 billion.
Some restrictions on the economy will partially remain in place until the end of 2021; their release will subsequently provide an impetus for 2022, when the central bank expects GDP growth to reach 2.9%. At the end of 2022, the Dutch GDP should thus reach a level 1% higher than at the end of 2019.
Post-COVID-19 opportunities for foreign exporters
Automotive
The automotive industry of the Netherlands represents a complex value chain, starting with the supply of raw materials and ending with the supply of automotive components. It also includes a wide range of research service providers. The sector consists of 300 companies, research and educational institutions, while the main foreign customer is, as in the case of the Czech Republic, Germany. Only two final manufacturers operate in the Netherlands – DAF and VDL NedCar.
In recent years, there has been a significant growth in the number of passenger cars, there are business opportunities for subcontracting production equipment. The key vehicle technologies in the future are ICT and software, integration into more complex systems is taking place.
A key feature is the advent of electric cars (as of 31 December 2020, 297,000 electric cars were registered in the Netherlands, of which 182,000 were fully electric). These trends are closely related to green mobility (energy from renewable sources, zero emissions) and smart mobility (connectivity, automation and advanced assistance systems). In connection with the advent of electric cars, there are opportunities especially in the area of supply of charging station systems.
Energy industry
The Dutch government is consistently implementing the transition to renewable energy sources, all coal-fired power plants are being gradually closed, and gas extraction in Groningen is expected to end by 2026. The most important trend is the decentralization of energy sources, i.e. more smaller sources in more places. Investments are aimed at supplies for wind power plants (onshore and offshore), submarine cables, distribution networks, biomass boilers and cogeneration units.
The potential is offered for those Czech companies that are able to participate in the ongoing changes of the Dutch energy market: ecological liquidation of coal-fired power plants; reducing dependence on natural gas (for example, by building energy-neutral houses and buildings); building new renewable energy sources – wind and solar power plants and sources using biomass; increasing the number of electric cars and expanding networks supporting their operation.
The share of renewable sources in total energy consumption reached the level of 9% in 2019 – this still very low figure indicates that in the near future there will be significant changes due to the Netherlands’ energy commitments in relation to renewable sources (the government target is this share by 2023 increase to 16%).
Chemical industry
The Netherlands is the sixth largest supplier of chemical products, with 400 companies covering the entire supply chain in the country; out of a total of 25 leading global companies in the chemical sector, 19 of them operate in the Netherlands (BASF, AkzoNobel, DSM, Shell). The country is home to world-class development and research institutions, the success of the sector lies in the integrated approach of public-private partnerships and open innovation.
The Netherlands is the fifth largest producer of chemicals in Europe and the tenth worldwide. The sector consists of corporate clusters that are interconnected, thus bringing together large companies with small and medium-sized enterprises, as well as newly founded companies of recent university graduates. There are a total of six chemical clusters in the Netherlands: Delfzijl, Chemelot, Zeeland, Rotterdam, Amsterdam and Emmen.
ICT
The Netherlands is considered one of the most advanced markets in terms of internet usage, it is the most connected country in Europe and also has the highest connection speeds. 60% of key ICT companies (Microsoft, Cisco, Interxion, Infosys, Huawei, Oracle, Intel, IBM, Verizon) operate here, as well as a center for the computer games segment (Guerrilla Games, Perfect World, Kixeye, Activision Blizzard).
Amsterdam is home to AMS-IX (Amsterdam Internet Exchange), the world’s second peering center; Eindhoven has the highest concentration of IT ever (the most intelligent square kilometer) and Enschede has the largest IT institute within the University of Twente.
According to allcountrylist, the Netherlands is a leader in cyber security – The Hague Security Delta is the largest security cluster in Europe, comprising more than 300 public and private organizations. It can also be applied in the field of ICT services (antivirus protection, integration of information systems and networks, security systems).
Healthcare and pharmaceutical industry
The Netherlands urgently began to produce its own protective medical equipment only in connection with the pandemic, on the contrary, virology is traditionally at a high level (AstraZeneca production plant in Leiden). Due to the strong local healthcare and pharmaceutical industries, there are opportunities for cooperation in other areas as well, for example translational and regenerative medicine, genomics, oncology, nanotechnology, imaging and monitoring technologies.
The country is home to 420 biopharmaceutical companies and 3,100 health and life sciences research organizations. The sector employs 65,000 workers and is home to major multinational companies, led by the most prominent company in the field, Philips (further e.g. MSD, Amgen, Genmab, Astellas, GlaxoSmithKline and Medtronic). Healthcare expenditure represents 11% of GDP – this is one of the supported key sectors, the public-private partnership model is widespread in research.
The Netherlands is one of the most concentrated life sciences regions worldwide, with Amsterdam becoming the new seat of the European Medicines Agency (EMA) thanks to Brexit.
Agricultural and food industry
After the USA, the Netherlands is the second largest exporter of agricultural products worldwide, with more than 4,000 companies operating in the field. Fifteen of the twenty most globally significant companies have their production or research facilities here (Nestlé, AB In Bev, Coca-Cola, Unilever, Heineken, Cargill, Kraft Heinz, etc.). The country exports fruits, vegetables (the largest exporter is seed potatoes) as well as its renowned dairy products.
There is a significant research and development base – research institutes, health universities and public-private partnerships, home to the top-ranked global agricultural university Wageningen. Last but not least, horticulture, which uses the most modern technologies (energy-neutral greenhouses) for its production, is important.
