How can we make economic growth more sustainable and more efficient? This is the question addressed in the first part of SDG 8. In the short term, economic growth leads to more material well-being. In the longer term, economic activities may be harmful for the living environment and people’s well-being.
Summary of results
- Trends for five indicators point to increasing well-being.
- The Netherlands is in the leader group of the EU for eight indicators.
- GDP per capita, resource productivity and median disposable income all show rising trends and high positions in the EU rankings.
- Hours worked per capita and gross fixed capital formation in tangible assets are also increasing. In terms of investment spending, the international position of the Netherlands is low.
Dashboard and indicators
The objective of SDG 8 is twofold. The first dashboard of SDG 8 focuses on making economic growth more sustainable and efficient, and addresses innovation, business and the environment. The second aspect of SDG 8, ensuring that everyone has decent work, is dealt with in a separate dashboard.
GDP is a measure of the size of a country’s economy; it can be calculated on the basis of production, income or expenditure. An increase in GDP usually results in greater material well-being in the short term, with higher median disposable income and higher individual consumption. But there is a downside, as economic activities can damage people’s welfare, living environment and well-being in the longer term. To produce goods and services, an economy needs input from capital, labour and raw materials. Are these deployed sustainably and productively? And how are profits and income distributed among citizens and businesses? Together, these factors determine how efficient and sustainable economic growth is.
For five of the 15 indicators in this dashboard, medium-term trends (2015-2022) are rising and green. These trends indicate a higher level of well-being and are moving towards the SDG goals. Only for consumer confidence has the trend turned towards a decrease in well-being.
On the international scoreboards, the Netherlands is among the leaders in Europe for eight indicators, while it is trailing at the back for just one indicator. The latter indicator, gross fixed capital formation in tangible assets, is important for future well-being.
SDG 8 Decent work and economic growth: economy and factors of production
Resources and opportunities17.3%13th816.415th€ 29,8003rd
Use€ 506th€ 1496th€ 10.902nd€ 5.881st€ 26,9635th
Resources and opportunities
Resources and opportunities relate to the volumes of labour, capital and knowledge used to produce goods and services, and options to subsequently buy or sell these goods and services for consumption or other purposes. Trends in this part of the dashboard are green: number of hours worked, capital formation in tangible assets and median disposable income are all rising. Internationally, the picture is mixed: in terms of hours worked per capita, the Netherlands occupies a middle position and in terms of median disposable income the Netherlands is at the top of the rankings. At first glance Dutch investment in tangible fixed assets is lagging, but this is partly because figures are not yet available for all countries. However, it remains a cause for concern, as it is an important indicator for future material well-being.
Use concerns the productivity and sustainability of the use of production factors, and consumption. Economic ratios can be used to measure this: labour productivity (value added per hour worked), knowledge capital stock, resource productivity and individual consumption are all relatively high compared with other EU countries. For resource productivity, the Netherlands leads the EU field: it uses resources more efficiently than all other EU countries, and efficiency is improving even further according to the rising trend for this indicator.
Outcomes relate to the rate, efficiency and sustainability of economic growth. While Dutch economic growth suffered from the impacts of coronavirus in 2020 and 2021, in 2022 it was mainly the war in Ukraine that affected the economy. Energy price rises rapidly pushed up inflation. In spite of this, the Dutch economy grew by 4.5 percent in 2022, according to the first estimate used for this monitor. This is slightly down on 2021 (4.9 percent). Household consumption was the main driver of economic growth in 2022. As the population is increasing, GDP per capita rose by relatively less in 2021 and 2022: 4.3 and 3.5 percent respectively. As the dashboard shows, the medium-term trend in per capita GDP continues to rise, and the Netherlands occupies a high position in the European rankings. Almost one-third of GDP is generated by exports; as the medium-term trend is downward, the Dutch economy seems to be becoming less dependent on its export trade.
The labour income share (LIS) shows us who benefits from economic growth: it represents the share of remuneration from labour in total earned income. An increasing LIS indicates that the share of income from labour in total income is rising, or that the share of operational profits of companies is decreasing. The Dutch LIS (76.5 percent in 2022) has a neutral trend. It should be noted that while the LIS includes all economic activities, for some sectors it has little significance: public administration and government services, for example, where profits equal zero. The international position in the dashboard is only indicative; comparison with other countries is difficult because definitions differ widely. However, the LIS for the Netherlands does appear to be relatively high.
Across the world, an average 8.2 tonnes of raw materials per capita were used to fulfil the needs of Dutch consumers in 2020 (the raw materials footprint). This figure, too, is indicative. CBS is currently working on methods to improve the calculation of this and other footprints.
Subjective assessment refers to the confidence consumers and businesses have in the economy and in their own financial situation. Economic and business cycle trends play a role here, but so does government policy: during the coronavirus pandemic, for example, struggling businesses received financial support to help them cope with the financial consequences of government measures. CBS has been measuring the level of confidence consumers have in the economy and the economic climate monthly since 1986. Consumer sentiment can fluctuate widely. In January 2000 Dutch consumer confidence reached a record high (36), and in September and October 2022 it hit its lowest ever scores (-59). In the course of 2022 consumers broke record after record in terms of how pessimistic they were about the economy and their own financial situation. This resulted is an average of -47 for the whole of 2022. There have been periods of extremely low consumer confidence in the past: during the credit crisis (2008 and 2009), the euro crisis (2011 to the beginning of 2014), and more recently the coronavirus crisis (beginning of 2020 to beginning of 2022) with long-term restrictive measures. At that time not only was consumer confidence low, but the economy also went into recession. That is not the case this time around.
Confidence among businesses shows a more positive picture than that of consumers. Dutch manufacturers were mostly positive in 2021 (8.3) and 2022 (6.6). This optimism put them among the leaders in the EU in 2022. In addition to producers in the manufacturing industry, confidence of all businesses in the non-financial sector was also positive in 2022, at 7.6.