The Netherlands loses ground for using ICT to create economic growth

Today, Wednesday, 6 July, the World Economic Forum (WEF) launches the 16th annual Global Information Technology Report, which presents the world’s Networked Readiness Index. The index compares and ranks 139 global economies in terms of their ability to deploy information and communications technologies (ICT) for economic growth, innovation, employment and social well-being. Professor Henk Volberda from Rotterdam School of Management, Erasmus University (RSM) supervised the collection of Dutch data for INSCOPE, RSM’s specialist institute for researching innovation, which is a partner institute to the WEF. 

Professor Volberda presented the main findings of the report with his comments.

1. Singapore keeps top spot for deploying opportunities granted by ICT but the Netherlands drops two places down to sixth.

Singapore (1st), Finland (2nd) and Sweden (3rd) head the Networked Readiness Index. The Netherlands fell in the ranking for the first time in four years, down to sixth in 2016. According to Professor Volberda, this drop was “largely caused by the fact that the costs of access to ICT have risen in the Netherlands”. In addition, he stated that “rival economies such as the US and Norway have invested more in their ICT infrastructures and have made the adoption of digital technologies a greater priority.”

2. Dutch citizens are great users of ICT and Dutch companies increasingly embrace it – giving the Netherlands a significant economic and societal impact

The Netherlands stays in the top seven of countries where ICT has a significant economic impact. According to Professor Volberda, the Netherlands is “a launching market because Dutch citizens lead the way in terms of using the latest ICT developments. The Dutch population is ranked second for the number of households with a PC, third for broadband internet, fifth for the proportion of the population with internet access, and fourth for social media use.” Volberda also states: “Due to their quick adoption of ICT and the development of online business models, Dutch companies in particular can become internationally competitive, which results in new types of activities and new jobs being created. However, companies which are unable to incorporate ICT into their revenue models find themselves phased out increasingly quickly, which results in many jobs becoming redundant – this is the ‘winner-takes-all’ effect.”

3. Government must implement new legislation to maximise value generated by digital innovation

Digital technologies and innovations cause social and economic dynamics to change quickly. For example, the digitalisation and adoption of most recent ICT applications of Dutch companies results in increasing numbers of job redundancies. However, an increasing number of self-employed people depend on online platforms for their work. Professor Volberda argues in favour of better suited legislation and better protection for these people.” Without it, he feels, there will be a race to the bottom in the lower reaches of the Dutch labour market. In addition, the Dutch government must keep investing to improve computer skills in the Dutch workforce, particularly in the lower and middle reaches of the labour market.

4. Companies and government agencies not using opportunities from increasing computer skills in the population. Public-private partnerships may increase societal impact.

While the use of ICT in the Netherlands is increasing, the use of ICT in business and government agencies has remained at a constant level or has decreased. According to Professor Volberda, this implies the business community and government agencies are not capitalising on the opportunities afforded by ICT. Generally speaking, Dutch citizens are ahead of the pack when it comes to using new ICT applications, and Professor Volberda calls for “joint action by government agencies and the business community in order not to allow this gap to grow wider.” Partnerships between the public and private sectors might be the solution. The Nederlandse Rechtwijzer 2.0 is a good example. This online platform facilitates arbitration in disputes by offering legal information and professional legal support.

5. Innovation is increasingly done outside of R&D and patents. Digital business models are the main boosters for innovation. 

In today’s digital economy, it is becoming increasingly hard to attribute innovations to investments in Research & Development or to the number of patents awarded. Innovations are increasingly generated by digital technologies and business models which are almost free of charge. Take, for example, the computerisation of products and processes, block chains and the ‘platformisation’ of services such as Uber in various market sectors.

The full report (in Dutch) can be found here.

More information

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