Multinationals account for 30 percent of economy

© Hollandse Hoogte / Berlinda van Dam
In 2016, multinational enterprises generated 30 percent of the 635 billion euros in value added. A major part is attributable to foreign multinationals (113 billion euros; 18 percent) and a smaller part to Dutch multinationals (78 billion euros; 12 percent). This is reported by Statistics Netherlands (CBS) on the basis of supplementary statistical research into multinationals and non-multinationals which was funded by the Ministry of Economic Affairs and Climate.

The share of multinationals in the Dutch labour costs was approximately equal to the share in the value added. The share was larger in total economic output (39 percent) and in total profit (32 percent). This economic performance was achieved with relatively low employment (22 percent in the total of 7 million FTEs).

In 2016, there were 23,700 multinational enterprises in the Netherlands, of which 10,300 were Dutch and 13,400 were foreign. This is 1.4 percent in the total of 1.75 million enterprises, ranging from single proprietorships to global conglomerates. A multinational is an enterprise with ultimate control over businesses in two or more countries. A Dutch multinational is a company under Dutch control with subsidiaries abroad. A foreign multinational is a company under foreign ultimate control.

Share occupied by multinationals, 2016
 Dutch multinationals (%)Foreign multinationals (%)Rest of economy (%)
Production value14.524.760.9
Value added12.317.869.9
Wage costs13.416.370.3

Many resources spent on innovation, R&D

In a bid to strengthen their competitive position both at home and abroad, multinationals spend a relatively large number of resources on research and development and on technological innovation, among other projects. R&D concerns strategic and fundamental research while innovation focuses on the development of new or strongly improved products and/or processes. Multinational enterprises account for 41 percent of total domestic expenditure on R&D (14.1 billion euros); this is more or less equivalent to the amount spent by educational and government institutions. Furthermore, multinationals occupy a share of 39 percent in R&D-related employment (altogether 131 thousand FTEs).

Multinationals are relatively more focused on technological innovation than other enterprises. In addition, they are relatively more likely to make use of government incentives towards R&D and innovation. They are also more inclined to work with partners (both at home and abroad) in the field of innovation.

R&D at multinationals, 2016
 Dutch multinationals (%)Foreign multinationals (%)Rest of economy (%)
R&D expenditure23.217.459.4
Employment created by R&D21.018.061.0

Cooperation in export chains

By definition, multinational enterprises have foreign connections, as they have subsidiaries or a parent company beyond Dutch borders. This international network is one of the main contributors to their strong import and export position; after all, a large chunk of their output is directly sent abroad. As for non-multinationals, in particular independent small and medium-sized enterprises (SMEs), these are much more domestically focused. Nevertheless, they still obtain global reach serving as suppliers to multinationals. For example, over half of the export revenues - value added earned through exports - by non-multinationals can be attributed to exports via other businesses, the multinationals in particular. This could be a medium-sized car roof manufacturer who supplies to a large car manufacturer who subsequently exports cars abroad.

Export revenues, direct or indirect from supplies to exporting companies, 2016
 Direct exports (bn euros)Supplies to Dutch multinationals (bn euros)Supplies to foreign multinationals (bn euros)Supplies to rest of economy (bn euros)
Dutch multinationals30.
Foreign multinationals53.
Rest of economy48.614.923.819.1