The economics of being welcoming 

As the World Economic Forum publishes good news about the Dutch economy’s competitive strength, PHILIP HOFMAN reports that Holland's welcomeness to foreign workers is under pressure. As inter-national competition for skilled expats hots up, a professor and a business leader emphasise the impor-tance of being welcoming to foreign talent.

Holland has improved its economic competitiveness over the past year, according to the authoritative Global Competitiveness Report from the World Economic Forum (WEF). The Netherlands has moved up two places on the WEF’s Global Competitiveness Index, now ranking as the world’s 8th most competitive economy. The WEF says The Netherlands owes its top 10 ranking to the capacity of Dutch businesses to absorb new technologies quickly and convert these into productivity enhancements. Dutch companies are the third most tech-savvy in the world. Other factors making Holland competitive are its education system, which the report authors call ‘excellent’, its well functioning goods markets and the stable Dutch macroeconomic environment.

The example of Denmark
The study says The Netherlands could further improve its competitiveness by making the labour market more flexible - where Holland occupies a lowly 80th place. Another area it can improve in is innovation, as company spending on R&D lags behind leading countries such as the United States and Switzerland. Dutch universities and businesses will also have to collaborate much more closely, if The Netherlands wants to make innovation a true competitive strength. Professor Henk Volberda of the Rotterdam School of Management, one of the researchers who compiled the Global Competitiveness Index, also issued a warning for The Netherlands not to follow the example of Denmark, which tumbled from fifth to ninth place on the Global Competitiveness Index. Volberda blames Denmark’s descent on its tightening of immigration policies, which he says makes it more difficult to attract and retain highly skilled workers. Holland takes 11th place on this criterion, Denmark 23rd. ‘But rising xenophobia in The Netherlands, which had the strength of always being open to different ideas, can endanger that’, Volberda said to NRC Handelsblad. The professor’s comment is a clear reference to the possibility that the PVV party of anti-Islam politician Geert Wilders may be part of the next Dutch government. The PVV has outspoken views about immigration in its manifesto: ‘Work or get out. No job = no place in The Netherlands.’

Reducing the burden
Although the Dutch government has relaxed immigration rules to make it easier to attract highly skilled foreign workers in recent years, a report by SEO Economic Research says that ‘national admission policies have little impact on the choices of highly skilled migrants’. Skilled migrants choose a country largely on criteria such as salary and career prospects, as well as the perceived quality of life on offer. The SEO researchers say that the limited role of immigration policy in migrants’ preferences is partly explained by the fact that in many countries, including The Netherlands, the employer is responsible for arranging the necessary permits. To reduce the burden on employers and speed up the immigration process, the government has simplified immigration procedures for highly skilled workers in recent years. Nowadays, Dutch employers can set the wheels of the immigration procedure in motion before their new employee arrives. To ease and speed up the immigration process for new arrivals, Expat Centers have been set up in the last few years in cities like Amsterdam, Rotterdam and Leiden. Some other town halls have expat desks. When the migrant sets foot in Holland, one visit to the local Expat Center will yield a permit to live and work in The Netherlands, a citizen service number and a compulsory entry in municipal records.

Tax relief
The government claims that the streamlined procedures save employers 15% on administrative costs. Immigration criteria have become more inviting too. Highly educated migrants under 30 years of age are swiftly welcomed when they earn more than 35,997 Euros, or 49,087 Euros for anyone older - provided their employers sign a contract with the immigration service. For academics, the income requirement has been scrapped. Whoever has earned a masters degree in the last three years from a university recognised by the Dutch government, will not have to meet any income criterion, and can stay for a year to find employment or start a business. Once working in The Netherlands, they can enjoy ten years of tax relief, as employers may pay out 30 percent of the salary tax free. A poll of 1,200 highly skilled migrants from non-European countries conducted by SEO Economic Research shows that a large proportion likes life in Holland. 25 percent seek an extension of their temporary residence permit, 15 percent want permanent residency, while 40 per cent remain undecided. In terms of attractiveness for budding skilled migrants, The Netherlands takes third place after the United States and Switzerland, heading a close knit pack of Western countries such as Canada, Australia, Sweden and the United Kingdom. Still, a survey commissioned by the city of Amsterdam shows that about a quarter of expats leave the capital after only one year, citing a lack of hospitality and good manners as reasons to leave. Jack Steijn, chairman of Oram, an Amsterdam business association, summed up their plight in Het Parool newspaper: ‘One can get very lonely here’. Other gripes are that most government communication is offered in Dutch only, from instructions on parking meters to correspondence. In the face of mounting competition from Barcelona, Munich and Madrid, Steijn pleads for Amsterdam to be more welcoming to foreign workers. An idea perhaps, that can travel beyond Amsterdam.