THE HAGUE, April 23 (Xinhua) -- The Netherlands' industrial sector faces growing challenges as a worsening investment climate and rising energy costs push companies to relocate abroad, announce closures, or implement layoffs, according to a new study by the Dutch Organization for Applied Scientific Research (TNO), published on Wednesday.
The report, commissioned by the Economic Affairs Committee of the Dutch House of Representatives, warned that the Netherlands is losing ground to other European nations in productivity and competitiveness.
"The Netherlands is facing a major challenge in increasing productivity and strengthening its competitive position," TNO said.
The Dutch industry in particular is in trouble, it said, noting that last month, two major chemical companies in Rotterdam's port - LyondellBasell/Covestro and Tronox - announced factory closures, resulting in hundreds of job losses.
"Regulatory pressure in the Netherlands has increased significantly and in some areas is stricter than EU regulations," TNO wrote. "In addition, energy costs in the Netherlands are much higher than in other EU countries and the United States."
Dutch companies pay some of the highest electricity prices in Europe, averaging 95 euros per megawatt-hour, compared to 45 euros in Germany, 56 euros in Belgium, and 32 euros in France, it said. "All this leads to a poorer investment climate, less business confidence, less innovation and weakening or even departure of business."
"Industrial companies in R&D-intensive industries are moving their activities abroad due to the deterioration of the investment climate," it said, adding that new start-ups have insufficient possibilities to grow.
While the Netherlands boasts one of Europe's top digital infrastructures, TNO cautioned that the country remains heavily reliant on the United States for data storage.
To maintain its competitive edge, the report urges continued investment in digital infrastructure and greater support for European initiatives to reduce dependence on U.S. technology.
"In order to maintain a strong Dutch position, it is important to continue investing in digital infrastructure. European initiatives must be stimulated more to be less dependent on the U.S.," TNO wrote.
