10 Ps for making the Netherlands the most prosperous country on earth

20-01-2015

Speech by VNO-NCW Chairman Hans de Boer at the 'Big Improvement Day 2015'

The Netherlands as a business
We cannot define a strategy for the Netherlands without first mentioning all the international uncertainty and misery around us. Those outside influences are penetrating our borders, our society. It is vital to be aware of them, but they should not paralyse us and stop us from taking action in matters that we control and that contribute to our country's long history as an open, modern, tolerant, and – last but not least – prosperous society. So...

Growth and jobs
"My fellow countrymen…!!!", the Netherlands is more enterprising than ever and tops the world league tables in many fields. Nothing stands in the way of our becoming the most prosperous country in the world, except perhaps our always calling ourselves a "small" country and therefore failing to think big. We're selling ourselves short, because focusing on prosperity and growth is highly feasible and necessary. It's not about money; it's about jobs and being a modern, sustainable, open society. And so it helps when two job-seekers – let's call them Peter and Achmed – have two or three job openings at their disposal, instead of only one. Growth and jobs are vital components of an inclusive society, especially in an international context that can cause disruptions on a national level.

Managing the Netherlands like a business
To achieve this, we have to work harder at managing the Netherlands like a business. In terms of macro policymaking, it is Frankfurt and Brussels that control the main instruments. Domestic policymaking therefore has to focus more on the micro level. The underlying conditions have to be favourable, of course, but every entrepreneur knows that the market is the source of success. "You have to pull strings, not push them." As a business venture, the Netherlands is well aware of changing markets and competition, but also of its own exceptional position and strength. The Netherlands is, furthermore, a business that feels accountable to all its stakeholders, not least working people. And as for the future, only sustainable growth offers a guarantee of jobs and job growth.

The 10 Ps: a strategy for ambitious growth
It is against this background that VNO-NCW has identified an outspoken, ambitious growth target for the Netherlands, specifically that we become the most prosperous country in the world. And given that background, we can develop a practical national strategy, fit for a business, and based on the age-old marketing Ps. I have turned them into a sort of "Ten Commandments".

  1. The first P stands for people. For VNO-NCW, this means the people who live and work in the Netherlands. They should prosper here, feel challenged and appreciated, and build their futures here. And it is indeed a challenge, because there are only a few regions in the world that count, and that's where you need to fit in.
     
  2. The second P stands for the position of the Netherlands in the world, because "the world is the market in which the Netherlands must earn its prosperity". We must gain global acknowledgement and recognition as an exceptional country in which to live, work, invest and do business. As Europe becomes more uniform in nature, it takes extra effort to persuade Asians or Americans who want to invest in the EU that they should do so in the Netherlands instead of in one of the bigger countries. Positioning is absolutely essential in this regard, because it can set our country apart from the rest.
    But how do we do that in practical terms? How about hosting the 2025 World Expo here, or bidding to host the 2028 Olympics? Perhaps we should organise a Rembrandt Lecture on Peace and Prosperity and invite world-famous thinkers or doers to stand in front of The Night Watch and offer their vision on the subject to a global audience. Maybe our development aid policy should focus on emergency relief and see to it that the Netherlands is one of the first identifiable teams to arrive on the scene of every disaster and to apply its logistical expertise in support of generous help. The world must and should know that we are special, an open, modern and sustainable society.
     
  3. That brings me to the third P, which stands for products (and services) that the Netherlands takes to the international market. We make innovative choices in this context that have proven themselves commercially. I am referring to our Dutch top sectors policy, in which we want to emphasise the practical side by focusing on real-time export targets. More specifically, we want to push agricultural exports from 90 billion to 150 billion euros, and achieve the same in other sectors as well. And we are doing this through a tightly organised trade promotion network.
     
  4. The fourth P stands for price levels in Dutch society. All sorts of prices are important, for example the energy costs in our petro-chemicals industry. But there is a more general element that drives up prices and impedes spending: the high tax rate and tax wedge. Our income tax system is especially in need of an overhaul. To nudge ourselves more into line with neighbouring countries, we argue for a tax rate of 35% on incomes up to 100,000 euros, and a new top tax rate of 45% for incomes in excess of this figure. If the public sector bears the entire cost of financing this, then 18 billion euros will be shifted from the government's coffers to people's wallets. That is, in fact, much less than the amount that has been diverted into a heavier tax burden at the public's expense since 2001. This operation is good for our competitiveness, for domestic spending, and for job growth. Panic has set in at the Ministry of Finance, but this doesn't need to be accomplished in a year's time. Determine the timeline and work towards it over the course of several years.
     
  5. This brings us to the fifth P, which stands for people in the labour market. Our labour market approach in the years ahead should concentrate on a level playing field in the EU and a marginal tax wedge. Working should yield greater rewards, especially for the middle class). Our attention is additionally focused on
    • The 100,000 jobs plan for people with a long history of unemployment
    • Developing the market for personal services, for example in health care
    • Excellence in training and education
    • Attracting and retaining talented international workers.
  6. The sixth P stands for place and ports. Our old mainport policy must recover the lustre of 25 years ago:
    • The combination Air France-KLM-Schiphol has given the Netherlands a vast number of highly valuable direct flights to destinations around the world. Extra care is needed to secure this enormous advantage for our investment climate. There are plenty of competitors, and it is important that Dutch interests continue to be served within the Air France-KLM partnership.
    • Mainport Rijnmond also has plenty of rivals as a logistical, petro-chemical and business services complex. It's been there so long that we take it for granted, but now we have to fight for it.
    • And a new development has the Netherlands becoming a data and ICT hub stretching from Amsterdam to Delfzijl. This tremendous opportunity affords us the chance to secure a place for ourselves in the new world of ICT.
  7. The seventh P stands for project-driven approach. It's time to enhance the Dutch policymaking culture with projects that flesh out the general trends indicated. These projects will create prospects, encourage the public to spend, and stimulate businesses to invest. Once again, it pays to pull strings and not just push matters along by focusing on the underlying conditions. That's why VNO-NCW is advocating growth projects like the 2025 World Expo, based on the theme "sustainable living and working in a delta region". It would allow the Netherlands to showcase itself to the rest of the world, but the main purpose is to drive important investment projects in our own country. Examples include shortening the timeline for the Delta project or creating a series of mudflats in Lake Markermeer. Of course, it is riskier to organise a project than publish a policy document. But that's part of the game. No guts, no glory.
     
  8. -10. The eighth, ninth and tenth Ps stand for PPP, or public-private-partnership as nurtured by the Netherlands and manifested in specific projects. These are our partnerships with the public sector and other organisations in what The Economist has called "public spiritedness".

Striking gold
The Netherlands has struck gold with its place, product, positioning and its tradition of public-private partnerships. Let's work together in a spirit of enterprise and achieve great things. Let's make the Netherlands a country whose economy and society serves as inspiration, both at home and abroad.