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New WEF report: Netherlands lagging behind in entrepreneurship

A detailed examination of the relationship between entrepreneurship and the competitive position of economies – prepared by a research team headed by Professor Henk Volberda from Rotterdam School of Management, Erasmus University (RSM) – has revealed that the Netherlands is still lagging behind its neighbours. The World Economic Forum (WEF) report Leveraging Entrepreneurial Ambition and Innovation: A Global Perspective on Entrepreneurship 2015, published today, found a strong link between a highly competitive economy and ambition among early-stage entrepreneurs. But the Netherlands is no match for France, Portugal and Norway; they made better use of entrepreneurial growth capacity.



 

“The Netherlands achieved a high score as a competitive economy, but this offers no guarantee of a strong entrepreneurial climate,” said Professor Henk Volberda. He emphasised that the most competitive economies are often not the economies with the largest number of new business creators, but economies that achieve an advantage from a smaller concentration of highly-developed entrepreneurs.

The principal findings in the report are:

Employees don’t need to be entrepreneurial because the Netherlands has a strong competitive position

Despite its strongly competitive position and high standard of living, the Netherlands is lagging behind in entrepreneurship. Cultural and political factors play an important role in this. The Dutch have a high degree of risk aversion and focus on job security, resulting in a preference for stable careers and giving low priority to entrepreneurship.

Employees in large companies are less likely to become entrepreneurial

The number of workers starting entrepreneurial activities is relatively low in the Netherlands. According to Volberda, this is not unusual in extremely competitive economies but it’s worth noting that the Netherlands also achieved a low score for intrapreneurship, which means few entrepreneurial activities are being organised by employees in large companies. This could indicate that large companies provide insufficient flexibility for entrepreneurial workers and are failing to inspire innovation.

Dutch entrepreneurs' growth potential lags behind neighbours

The growth potential of Dutch entrepreneurs trails behind that of countries such as Germany, Ireland and Denmark. Although, like these countries, the Netherlands achieved a low score for early-stage entrepreneurial activities, these countries achieved a considerably higher score in respect of growth potential and the creation of new employment by entrepreneurs. Consequently, WEF classified the Netherlands in the ‘Neutral Economy’ category for achieving a lower-than-average score for almost all aspects.

Entrepreneurs should offer more new products and services

The Netherlands trails high-scoring countries such as Chile, South Africa and Columbia, and also trails behind its neighbours and sits in 18th place in the league table for innovative entrepreneurship.

Dutch government must set more specific objectives for stimulating entrepreneurship: more growth and innovation and fewer individual entrepreneurs with no employees.

The current Dutch government stimulates entrepreneurship through education, subsidies and tax breaks. According to Volberda, the research clearly demonstrates that generic stimulation of entrepreneurship is less effective than targeted stimulation. The government should target high-growth entrepreneurs whose workforce and turnover grow rapidly, and knowledge-intensive entrepreneurs who can introduce innovative products and services to the market. The rapid growth of individual entrepreneurs with no employees resulted in a better score for early-stage entrepreneurship, but it failed produce a better score for ambitious and innovative entrepreneurship. Given that the Netherlands is in the top 10 of advanced competitive economies, no contribution to additional growth and innovation will be gained from a further increase in the number of early-stage entrepreneurs with no employees. Economic growth and employment will only be achieved by ambitious and innovative entrepreneurs.

INSCOPE Research for Innovation is the host institute of the WEF. Henk Volberda, Professor of Strategic Management & Business Policy at RSM and director of INSCOPE, was head of the Dutch research team. www.inscope.nl

Rotterdam School of Management, Erasmus University (RSM) is a top tier European business school and ranked among the top three for research. RSM provides ground-breaking research and education furthering excellence in all aspects of management and is based in the international port city of Rotterdam – a vital nexus of business, logistics and trade. RSM’s primary focus is on developing business leaders with international careers who carry their innovative mindset into a sustainable future thanks to a first-class range of bachelor, master, MBA, PhD and executive programmes. RSM also has offices in the Amsterdam Zuidas business district and in Taipei, Taiwan. www.rsm.nl

 

For more information on this press release, please contact Prof. Henk W. Volberda on +31 6 1297 2233 or by e-mail at hvolberda@rsm.nl; or Marianne Schouten, Media & Public Relations Manager for RSM on +31 10 408 2877 or by e-mail at mschouten@rsm.nl.

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