Despite impressive growth in employment after 1985, the Netherlands still trailed many Western European economies in terms of GDP per capita. Six barriers, including lack of competition and obstacles to business development, stifled output and employment growth.
In terms of productivity, Dutch housing is at international standards though it lags when it comes to output. Less restrictive though environmentally sound land designation policies could help improve output.
While the payment services part of the Dutch personal financial services sector has achieved world-class productivity, the rest of the sector has seen more mixed results. Overall, the sector could be characterized as being "efficient though not innovative."
The Dutch food processing sector has surpassed most world leaders in terms of productivity, especially in processing bulk foods. In view of increasing global competition, however, the Netherlands needs to focus on premium food processing.
The public transportation sector accounts for 10 percent of personalized motor transport in the Netherlands. Lack of market competition has led to low labor utilization rates. More flexible work and compensation rules, an improved competitive environment, and better service levels could all lead to higher productivity rates.
Per capita output in the Dutch retail sector is 60 to 80 percent lower than in the U.S. More productive formats, such as chains and cybershopping, could push the sector ahead, especially if the government adopts measures to stimulate competition.
The software sector in the Netherlands lags behind the world's leaders, mainly because of weak demand, lack of experienced high-tech financiers, no critical mass, and lack of access to the U.S. market.
A suggested 15 percent improvement in output would imply an annual economic growth rate of 3.3 percent and lead to the net creation of 150,000 new jobs a year. The Netherlands could achieve these results by lowering specific barriers.
Removing Barriers to Growth and Employment in France and Germany The main barriers to growth have been product market regulations that stifled innovation and high minimum wages that discouraged hiring.
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Boosting Dutch Economic Performance Despite impressive growth in employment after 1985, the Netherlands still trailed many Western European economies in terms of GDP per capita.
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