The economic map of the Netherlands is becoming increasingly varied. While Greater Amsterdam expects growth of over 2%, industrial areas are shrinking. The culprit? There is a growing demand for specialized services and ICT, to which Amsterdam owes 25% of its economy. Meanwhile, regions like Southwest Friesland are struggling with shrinking manufacturing sectors. Even high-tech flagship Brainport Eindhoven is holding its breath as ASML has a “transition year”. This growing gap between regions raises questions about the future of the Netherlands’ economic landscape. Will the Randstad continue to shine while the rest fade away? Rabo Research (again) researched it.
Growing gap
The economic differences between regions in the Netherlands are greater than ever. Amsterdam, with its strong focus on ICT and specialist business services, leads the way with an expected growth of over 2% in 2024. This contrasts sharply with regions such as Southwest Friesland and Delfzijl, where manufacturing sectors are shrinking and economic stagnation is looming. Here, the decline in industry, agriculture, and logistics plays a major role.
What makes Greater Amsterdam grow so strongly? The secret lies in the economy’s diversification. With ICT and specialist business services accounting for 25% of the total economy, compared to 14% nationally, the region is more resilient to sectoral fluctuations. Moreover, cities such as The Hague and Utrecht also benefit from this trend, although to a lesser extent. These cities act as engines of growth due to their strong service sectors.
Industrial regions in trouble
On the other end of the spectrum, we see regions such as Brainport Eindhoven, which leans on industrial giants such as ASML. Although this region has historically experienced strong growth, ASML speaks of a “transition year with no revenue growth” for 2024. This reflects broader concerns within industrial regions, where engineering and other manufacturing sectors are under pressure from global economic uncertainties and changing market needs.
Broad prosperity is also important in addition to economic growth. Regions with strong service sectors tend to see better labor market development and broader prosperity. However, this does not mean that the benefits are evenly distributed. Labor market opportunities and income inequality remain challenging, especially in regions where traditional industries dominate and are less responsive to the service trend.
Diversification
What does this mean for the future of the Netherlands? The widening gap between service-oriented and industrial regions calls for an overhaul of economic policy. Possible steps include investing in the diversification of regional economies, supporting innovation in shrinking sectors, and promoting labor mobility. Only then can the Netherlands as a whole take advantage of future economic opportunities and reduce regional disparities, RaboResearch concludes.
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