BENELUX FILE: Learning from the Dutch

by Alan Dickey

European governments hoping to revitalise manufacturing industries could learn from the Netherlands, whose `polder’ economic policy is being hailed as one of the world’s best.

The polder model takes its name from the Dutch polders, expanses of land reclaimed from the North Sea, which must be permanently maintained, calling for people to work closely together without argument.

The economic model is similarly based on cooperation and friendly discussion. Its has five main characteristics: modesty, multi-linguality, tolerance, pragmatism and flexibility. Many believe it could be introduced internationally as Japanese industrial practices were in the 1980s.

But in the Netherlands there is some scepticism about whether the model will work elsewhere.

`Germany, for example, which is very hierarchical and where employers and unions are very polarised, could benefit from our method,’ said professor Thomas Thijssen, head of the Anton Dreesman Institute for Infopreneurship at the University of Amsterdam. `However, in Silicon Valley, where there is a very open market between ideas, talent and money, and very little government intervention, it would not work.’

Alfred Kleinknecht, professor of innovation economics at Delft University, is a critic of the model. He believes wage restraint – an implication of the policy – is harmful, and has evidence to show that it can almost halve productivity growth per worker.

`Dutch GNP growth has been hardly higher than the EU average,’ he said. `The favourable employment record is almost exclusively due to lower labour productivity.’

`The polder model can put the brakes on creativity and individuality so that everything becomes averaged-out,’ said professor Thijssen. `It should not be overestimated.’