The Netherlands is the third most competitive nation in the European Union according to the 2014 World Economic Forum’s Europe 2020 Competitiveness Report. The Netherlands has overtaken Denmark while moving up one place on the index from 4th in 2012 to 3rd in 2014.

The new ranking can largely be attributed to strong performances in the areas of smart and inclusive growth fuelled by an impressive university system, high levels of social inclusion and a robust ICT sector.

Purpose of the report

The World Economic Forum began measuring Europe’s performance in the areas of social and economic growth in 2010 with the launch of The Europe 2020 Competitiveness Report: Building a More Competitive Europe.

Now in the second edition of the series, the indices are constructed to track the progress of EU member states according to the themes smart growth, sustainable growth and inclusive growth.

These three axes form the backbone of the research and focus on pertinent issues relevant to the well-being of European citizens, including creating dynamic economic opportunities, promoting resource efficiency and enhancing social and territorial cohesion.

Index measures and methodology 

Based on the three overarching themes, the index is further divided into seven pillars, each with their own indicators, which are deemed vital to growth and job creation.

› Enterprise environment addresses opportunities for businesses, industry cluster development, entrepreneurship and access to finances.

› Digital agenda includes ICT readiness, ICT usage and ICT impact (access to services, patents, business model creations).

› Innovative Europe refers to expenditures on research and development (availability of scientists/engineers, cited scientific articles, university-industry collaboration, etc.).

› Education and training examines the quality and accessibility of the education system.

› Labour market and employment looks at labour market efficiency and labour participation.

› Social inclusion addresses issues related to the accessibility of healthcare, social safety nets and opportunities for social mobility.

› Environmental sustainability surveys issues of natural resource use and efficiency.

These factors are then assigned scores mined from a World Economic Forum database covering 148 countries to form the Europe 2020 Competitiveness Index.

The ranking is then determined by weighing the averages of factors composing these pillars (a value from one to seven), with higher values indicating better performance in that area.

The Dutch: strong ICT & education, low sustainability

The Netherlands’ ranking of third overall is a telling sign that the Dutch continue to be high performers in terms of both economic growth and social progression in Europe.

Placing third overall in the areas of smart growth and inclusive growth, the society thrives thanks to a world-class education system (2nd overall), willing and innovative use of ICT (1st overall), a friendly business environment (3rd) and a high-level of social inclusion (2nd).

However, the Netherlands falters when it comes to the availability of finances due to the relative difficulty of obtaining loans (9th overall) and in areas of environmental sustainability (13th overall).

The report commends the Netherlands for its astute efforts in managing income disparity and reducing poverty and unemployment.

Concluding, the researchers encourage the Netherlands to explore "flexicurity" models to mitigate some of the rigidities currently hampering the labour market while continuing to invest in the areas of research and development, ICT and education.

Top 10 competitive European countries
 

For more information, read the full report.