Reforming policies for the business sector to harvest the benefits of globalisation in the Netherlands

The Netherlands has strongly benefited from globalisation, which boosted international trade, cross-border investment and economic growth over the latest decades. Looking ahead, the Netherlands needs to shift the trade and investment orientation from traditional slow-growing markets to faster growing emerging economies, in order to keep reaping the benefits from globalisation. In addition, the ongoing globalisation will push companies to become more innovative and search for new activities. Against this backdrop, the government is reforming its policies for the business sector. This includes a targeted approach, where the government is attempting to strengthen key sectors to become even stronger players on the international scene. This approach, however, carries some of the risks of more traditional industrial policy, making careful policy design and evaluation important elements for successful implementation. The other building block of the new policies is a strengthening of framework conditions, which promises a more market-based development of comparative advantages, and which could be further strengthened by broadening the approach to include other policies, such as competition policies. This Working Paper relates to the 2012 OECD Economic Survey of the Netherlands (www.oecd.org/eco/surveys/netherlands).