In 2011, the Dutch government – in consultation with the private sector and knowledge institutions – designated nine sectors as trend-setting for the Dutch economy within the framework of a new national industrial policy. These are referred to as the key or top sectors.
More so than all other sectors, top sectors are primarily export-oriented. Of all Dutch goods exports, 39 percent originate from these top sectors. These sectors are also knowledge-intensive. In the total expenditure on R&D by private enterprises and institutions in the Netherlands, a share of 74 percent was attributable to top sector enterprises. At the same time, the top sectors account for higher CO2 emissions than the rest of the economy: 72 percent of total CO2 emissions by the Dutch private sector. These and other figures have been included in a (Dutch only) dashboard on top sectors.
Faster output growth in top sectors
The production value in the top sectors increased at a faster pace than in the rest of the economy. In 2016, the total output by top sectors amounted to 446 billion euros, or 12 percent more than in 2010. The rest of the economy had 8 percent output growth over the same year.
Between 2010-2011 and 2014-2015, the production value in the top sectors saw two distinct peaks. In both cases, this was largely on account of growth in the sector High Tech systems and materials. This is also the largest sector in terms of output, value added and employment. Another contributor to the most recent one of the two peaks was Agri-food. Since 2014, most top sectors - except for Energy - have seen stronger growth than the rest of the economy. Developments in the latter sector weigh on the overall growth in the top sectors. Hence, this news release also presents developments among the top sectors excluding Energy. A large share of the Energy top sector consists of enterprises in energy production and supply; these can be found in the sub-sector Natural gas. As natural gas exploitation was officially reduced by the government as of 2014, output in this sub-sector has declined.
The production value and value added in this news release are shown at constant prices. This means for example that the production value is expressed in prices for goods and services dating from 2010. As a result, production values can easily be compared over time as the focus lies solely on volume developments.
Value added growth in top sectors lagging behind
Over the past three years, gross value added created by the top sectors has grown at a slower pace than in the non-top sectors. Gross value added is equivalent to output value minus the monetary value of intermediate goods and services (intermediate consumption). Last year, the value added by the top sectors amounted to 148 billion euros, i.e. 4 percent up on 2010. The value added by the rest of the economy grew twice as fast by 8 percent.
Here as well, the sector Energy is seen to have a strongly negative impact on the overall development of top sector industries. Without this sector, developments among the top sectors would have maintained a similar pace to that of the rest of the economy.
Life sciences & Health sector shows fastest growth
Last year, the value added in the sector Life sciences & Health was 25 percent higher than in 2010. Because this is the smallest among the top sectors (with a value added of 6 billion euros), such developments make only a limited contribution to overall top sector growth. Another rapidly growing sector was Agri-food (22 percent). In several top sectors, the value added shrank between 2010 and 2016. In the sector Energy, the value added declined from approximately 24 to 19 billion euros, i.e. by nearly 19 percent relative to 2010. As this is a large sector, the negative development has a strong overall impact. Again, the reductions in natural gas output are reflected here.
High Tech creates highest value added
Around one-third of the value added created by all top sectors combined comes from the sector High Tech systems and materials, where the value added is 48 billion euros. The production value in this sector is also the highest by far. This is followed by the sector Logistics with a value added of 25 billion euros, nearly half of that in High Tech. The sectors contributing the lowest value added are Water and Life sciences & Health. The summed value added of the individual top sectors is not equal to the total gross value added of the top sectors industries; this is due to the fact that some enterprises belong to more than one top sector, causing their value added to be counted twice in those instances. The total value added for all top sectors has been corrected for such double counting. This also applies to other indicators such as R&D, employment and output.
Highest R&D expenditure in High Tech
In 2015, three-quarters of all R&D expenditure by enterprises and institutions towards their own research came from the top sectors. High Tech systems and materials spent the most with 4 billion out of 6.8 billion euros in total R&D expenditure. This was followed by Chemicals and Life sciences & Health, both at around 800 million euros.
Greatest job creation in High Tech
Between 2010 and 2016, employment in all top sectors combined rose by 43 thousand to a total of 1.4 million man-years. Half of the total number of jobs created by the top sectors was attributable to the top sector High Tech. In this sector in 2016, the number of man-years increased by 21 thousand relative to 2010. This is also the largest top sector in terms of employment, with 467 thousand employed persons in FTEs. Employment also grew considerably in the sectors Creative industries and Energy when measured in absolute numbers, with 16 and 14 thousand employees respectively.
The top sector Energy is capital-intensive and has relatively few employees. Labour productivity in this sector is by far the highest among all top sectors. A relatively small group of enterprises generates a relatively high value added. Most job losses were seen in the top sector Logistics, where employment declined by 17 thousand man-years.
Many independent entrepreneurs in Creative industries
The top sector Creative industries has equal numbers of independent entrepreneurs and employees. This is also the sector with the highest share of independent entrepreneurs. The second largest share is seen in Agri-food, where the number of independent entrepreneurs is roughly half the number of employees. The majority of those working in other top sectors are employees.