Private sector more cautious about investing in knowledge and know-how

02/03/2012 15:00

Due to the economic crisis, the Dutch private sector invested less in knowledge and know-how in 2009 than in 2008. Although the economy showed signs of recovery in 2010, investments in knowledge and know-how did not improve. Private sector investments were at the same level in 2010 as in 2009. The importance of investing in knowledge and know-how has waned.

Half of investments in knowledge

The Dutch private sector invested nearly 44 billion euro in knowledge in 2010, i.e. about 50 percent of all Dutch private sector investments. More than half of knowledge investments are made in improvement of organisational structures and trademarks. The private sector also invested nearly 44 billion euro in knowledge and know-how. Knowledge investments performed better than other types of investments. Other Dutch private sector investments made in 2010 were approximately 0.5 percent down from the level in 2009.

Knowledge investments by type

Knowledge investments by type

Knowledge investment as a percentage of the GDP in decline

Investments in knowledge as a percentage of the gross domestic product (GDP) fell to 7.4 percent over the past decade and are currently back at the level of 1990. GDP is defined as the market value of all officially recognised final goods and services produced within a country’s borders in a given period of time. Not all investments in knowledge and know-how were cut. With 1.3 and 0.8 percent of the GDP respectively, investments in software and company training courses remained at the same level.

The growing importance of investing in knowledge and know-how in the latter half of the 1990s (8.6 percent of the GDP) was almost entirely offset during the period 2000-2010.This development is in sharp contrast with the ambitions of the Netherlands to position itself as a knowledge-based economy. The estimate for the first six months of 2011 shows that knowledge investments still grow less rapidly than the GDP.

Proportion of knowledge investments in total investments by sector

Proportion of knowledge investments in total investments by sector

Sector business services invests most in knowledge and know-how

The sector business services invests most in knowledge and know-how, accounting for nearly a quarter of all knowledge investments. Within business services, over 80 percent of all investments made by the sector are in knowledge and know-how. This is mainly due to investments in economic competence, e.g. improvement of organisational structures and trademarks.
If the Dutch economy shifts further towards a services-based economy, investing in knowledge and know-how is expected to become increasingly important. This does not apply to R&D investments which are predominantly made within the sector manufacturing industry.

Murat Tanriseven and Erik Veldhuizen

Source: The Dutch growth accounts 2010