Rating of Dutch business climate declines

Companies still rate the Dutch business climate as just adequate. Nevertheless, the Netherlands manages to maintain itself at the international top in terms of innovative strength. This is evident from the Monitor Ondernemingsklimaat 2024 commissioned by the Ministry of Economic Affairs (EZ). We list some points of interest in the field of innovation and sustainability.

Dutch business climate: a 6.0

Companies give the Dutch business climate an average of 6.0. The country consistently ranks in the global top 10 of countries with the highest competitiveness and innovation. Yet a downward trend has been visible since 2017/2018, and it continues this year. This is the second consecutive year that that rating has declined. In the World Competitiveness Ranking (IMD) in 2024, the Netherlands drops from 5th to 9th place, which is the biggest drop within the top 10. The biggest declines are seen in the ratings for energy infrastructure, talent availability, tax climate and supportive legislation.

Grid congestion is a problem

Grid congestion is indicated as a major problem for companies in the Netherlands. In many regions, companies are queuing up to get a connection to the electricity grid, which is essential for both the use of (renewable) electricity and the return of generated power. Currently, nearly 11,000 parties are waiting for a new or heavier connection, while more than 8,000 want to feed power back. At 6.1 MW, the demand for off-take capacity exceeds the demand for feed-in, which is at 4.0 MW. Although grid congestion is a regional problem, there is a shortage of capacity almost everywhere in the Netherlands, except in parts of southern Holland and the northeastern Netherlands.

Positive: digital connectivity greatly improved

Digital connectivity in the Netherlands is doing well. The network of business fiber connections has grown strongly over the past decade. According to the ACM's Telecom Monitor (2024), the number of business fiber connections via the fixed network increased from almost 62,000 at the end of 2012 to almost 118,000 at the beginning of 2024, a growth of 91%. The proportion of businesses with internet speeds of at least 100 Mb/s also increased sharply: for large businesses from 22% in 2011 to 87% in 2023, and for SMEs from 6% to 69% in the same period.

Fast and reliable digital connectivity is essential for a strong digital infrastructure. It promotes the adoption of innovative technologies such as artificial intelligence, Internet of Things, and big data analytics, and drives digital transformation within companies.

Good tax arrangement innovation

Companies are also generally positive about tax schemes that encourage innovation and sustainability. Innovation schemes in particular are well appreciated: 40% of companies find them somewhat to very attractive, while 27% find them somewhat to very unattractive. For sustainability schemes, the distribution is 35% positive versus 31% negative. The rest have a neutral attitude or no opinion.

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