Benchmarking the Netherlands. Benchmarking for growth

This is the fourth edition of the Ministry of Economic Affairs' publication 'Benchmarking the Netherlands', which aims to assess the competitiveness of the Dutch economy. The methodology and objective of the benchmarking remain the same. The basic conditions for economic activity (institutions, regulation, etc.) in a number of benchmark countries are compared in order to learn from the solutions found by other countries for common economic problems. This publication is devoted entirely to the potential output of the Dutch economy. In other words, its ability to achieve sustainable growth and create work over a longer period without capacity becoming an obstacle. This is important because economic growth is needed to increase prosperity in the broad sense and meeting social needs. Prosperity in both a material (per capita GDP) and immaterial (living environment, environment, health, etc) sense, in other words. The economy's potential output is determined by two structural factors: the growth of potential employment and the structural increase in labour productivity. Analysis by the Netherlands Bureau for Economic Policy Analysis (CPB) shows that in recent years the increase in the capacity for economic growth has been realised mainly by increasing the supply of labour and reducing the equilibrium unemployment rate. In view of the ageing of the population in the coming years and decades the supply of labour is unlikely to continue growing at the pace we have become accustomed to in recent years. According to a number of recent studies, to achieve a respectable rate of sustainable economic growth the aim will therefore have to be to increase labour productivity. To realise this we have to focus on for six pillars of economic policy: (1) human capital, (2) functioning of markets, (3) entrepreneurship, (4) spatial planning, (5) innovation, and (6) sustainability. These six pillars determine the course for economic policy aiming at higher productivity growth. Throughout the document several paragraphs are energy-related