Discuss about the Business Entrepreneur for GEM Netherlands TEA.
Entrepreneurship development is leading changes and growth across various countries and across nations. In the light of entrepreneurial development the Global Entrepreneurship Monitor (GEM) was set up to access and monitor progress of each and every country on its entrepreneurial developmental scale (van Stel 2014). Countries were allocated scores according to Total early-stage Entrepreneurial Activity (TEA) with one being the lowest score. Netherland is a country with a TEA of 6th in 26 GEM scores which is relatively low (Wennekers 2009). The government of the country is devising strategies and tactics in order to overcome the shortfalls and to up its index in levels of entrepreneurial development. The country is recommended to initiate and adopt programs that can promote entrepreneurial development in their country such that business and related activities flourish in its country. The report analyses the various facts of the country in regards to its population, ethnic set-up, languages spoken, GDP, poverty levels, import- export trades and various other factors in order to assess the reasons behind its low scores. Then the various macro level analysis for the country is done in regards to its political, social, economic, environmental, legal and banking for recommending a suitable strategy for the country in order to promote entrepreneurship. At the end of the report there are various initiatives and programs suggested that might be adopted by the government in order to get substantial results in the area of entrepreneurial development (Span 2014).
Population of a country plays a dominant role in determining the entrepreneurial index. The greater the population of a country the more is the demand for various goods and services hence entrepreneurs crop up in order to cater to those needs by establishing a business. Netherland’s population according to 2016 estimates is 17,000,059 (Jacobs 2009). The population density of the country is 408.1/km2 mi. The country has a stable population, which is growing but it has a considerable ageing population. The country has a substantial amount of youth population but it is not growing as expected which in turn affects the entrepreneurial index.
Ethnic make-up and primary languages spoken
Netherland ethnic groups consists of 78.3% Dutch, 5.9% nationality from other European countries as, 2.3% Turkish, 2.2% Moroccans, 2.1% Indo, 2.0% Surinamese, 0.8% Caribbean and 6.4% other nationality.
The national and official languages spoken in the country are Dutch, English, Frisian,and Papiamento. Some recognized regional languages of the country are Limburgish, Dutch Low Saxon (Vasta 2007).
The nominal GDP estimate of 2016 of Netherlands is US$762.521 billion and per capita GDP is US$44,828. The country ranks 17th in the world in terms of nominal GDP and 15th in per capita GDP (Kubiszewski 2013). The purchasing power parity GDP (PPP) of the country as per 2016 is US$856.265 billion which ranks it 27th in the world. The per capita GDP PPP of Netherlands is US$50,339 that ranks 15th in the world.
Poverty level and cost of living
The levels of poverty and cost of living is on a sharp rise in Netherlands from 2011 according to reports published by Statistics Netherlands. However the growth weakened in 2013 and further in 2015,but there is poverty concentrated in major cities of Netherlands (Dutch Retrieved on 16th August, 2016). As per reports 2014 will have 717,000 households with substantially low income which constitutes 10.1% (Knoema 15th August, 2016).
Netherland exports refined petroleum, crude petroleum, computers, packaged medicaments, petroleum gas and so on. The country’s export amounted to US$525 billion in the year 2015 (Atlas Retrieved on 16th August, 2016). The imports of the country amounted to US$552 billion consisting of telephones, crude and refined petroleum, petroleum gas and computers. The country mainly exports to Germany, United Kingdom, Belgium-Luxembourg, Italy and France. The country imports from United States, Russia, China, Germany and Belgium-Luxembourg.
Ease of Doing Business (World Bank Ranking)
The ease of doing business world ranking for Netherlands is 28 amongst 189 economies (Doing Retrieved on 16th August, 2016). The parameter ease of doing business is a comparative parameter that combines staring a business, dealing with its various permits, electricity, registration of its property, paying its investors, taxes and so on.
Ranking with neighbouring or regional countries
Netherlands ranks at 14th in Global peace awards and its rank is quite high compared to its region in terms of Human Development Index (HDI) (HRD Retrieved on 16th August, 2016). When compared to Norway, Switzerland, Denmark , it ranks below but compared to other countries in the region or in the world it ranks substantially high.
Netherlands has absolute comparative advantage in terms of petroleum gas, petroleum production. It manufactures various petroleum products at significantly high cost advantage leading to economies of scale and hence exports these products to various parts of the world.
Reasons for low levels of entrepreneurship
Netherland lags behind tremendously in its entrepreneurial activities due to lack of innovation. Individuals in Netherlands are reluctant to innovate new processes, technologies, skills, methods, products and services. There are no innovation driven program to support and uphill the cause of entrepreneurial development. There needs to be tremendous efforts from the government and Chambers of Commerce to foster the entrepreneurial developmental skills amongst individuals such that they are able to start their own ventures.
Issues for low level of entrepreneurship
Netherlands has been a constitutional monarchy and a system of parliamentary democracy prevails in the country. The country has a ranking of 10th in being the most democratic state in the world. The government of the country has minimum level of interference in business and commercial activities (Middleton 2010).The government and the country has immense number of jobs that has often been seen as a hindrance to the growth and development of entrepreneurial activities.
The social pattern of Netherland is absolutely amicable and similar to westernized developed countries. Netherland is a peaceful country where individuals have easy-going life-styles and enjoy stress free environment. The individuals have high family bonding as well as family values that binds their culture together. The taste and preference of their society can be compared to that of a developed country. Individuals have a high disposable income, high level of social security and the employability rules are favourable in nature . All these factors makes individuals less motivated for being an entrepreneur (Van der Donck 2008).
The economic conditions of Netherland are stable with stable rate of inflation and Euro as currency. The country enjoys a favourable trade deficit and it does not have any substantial loans outstanding from world financial institutions like IMF or the World Bank (Beugelsdijk 2010). The country has a stable banking system and monetary markets that determine the stability and growth of its financial markets. The country has a stable taxation systems and commercial set-up that promotes setting up of entrepreneurial businesses. The majority of the individuals are employed in various job roles across the country with a stable pay scale and structure which inhibit the growth of entrepreneurial activities.
Netherland conforms to all necessarily environmental standards and has adopted major ISO norms in its various industries (Cambra-Fierro 2008). The country adopts stringent practices regarding air, water and ground pollution, recycling issues, carbon footprints and soon. Its industries need to adhere by the obligatory ISO norms and practices in order to function in Netherlands. The country has adopted sustainable practices in all aspects of business especially in production and manufacturing industries. The entrepreneurs that sets up their business in the country not only needs to adhere to the several practices but also needs to prove by documented credentials that they have conformed to such practices. Conforming to ISO norms and environmental practice requires substantial investment which is always not available to start-up firms (Pettenger 2007).
Technological aspect plays a significant role in development and progress of a country and its various activities. Netherland enjoys a highly developed technological systems and IT infrastructure that promotes trade and commerce activities. The technological environment of Netherlands is governed by various IT rules and regulations that safeguard and protect interest of consumers. Hence there is immense flow of information and high degree of e-commerce activities that takes place through secured portals (Kern 2008). Entrepreneurs can substantially benefit from the high level of technological ambience prevailing in the country.
Legal and Banking
Netherland has a stable judiciary system and legal structure that governs its various laws of the land. The legal framework of the country promotes safety and social security that makes life amiable for individuals to reside peacefully in the country (Jeucken 2010).
The banking system of Netherlands is quite robust with the presence of a wide number of national banks with a huge dominance of international bankers as well. The banking infrastructure of the country is governed by stable rate of interest and easy loan availing facilities for small and medium businesses. The banking system supports entrepreneurial environment (Pierce 2010).
Strategies for increasing Entrepreneurship
Netherland significantly lags behind in its entrepreneurial activities and there needs to be initiatives that promote development of such activities in the country. The country’s population requires to be provided a thrust such that they can indulge themselves in entrepreneurial ventures. Serious initiatives and encouragement as well as financial, monetary and philanthropic guidance is required that can motivate for taking a venture. Initiatives that develop risk-taking capabilities amongst individuals needs to be planned, a program can be designed such that it covers all necessary approaches to entrepreneurial development. These initiatives need to be strategized and implanted by either the government or by the Chambers of Commerce (Kelley 2012).
Rise in entrepreneurial activities requires substantial changes in vision of individuals and changing their mind orientation to think in a different manner altogether. Hence applying and taking initiatives and programs for entrepreneurial development can lead to significant results.
Required changes in government
The present government in Netherlands is reluctant towards the growth and rise of entrepreneurship in the country. The government needs to change its mind set and take a proactive role in determining and planning initiatives for various plans and programs. The government can conduct specific programs and provide benefits as well as ideas in fields that can significantly be developed by entrepreneurs. The government can also enable various financial as well as technological know-hows regarding various businesses that have good potential and opportunity for growth in the country.
The infrastructure development that is required in Netherlands for promoting entrepreneurial skills is management programs and institutes. Land or office premises for setting up of the new ventures, financial loan for start-up ventures at a significantly low rate compared to the market. Low rate of taxes in the initial years for entrepreneurial ventures. Technological infrastructure is an important aspect of any entrepreneurial development as globalization of businesses has led to rise in e-commerce activities. For any new age business it is important to have a good and efficient supply chain management. For a good supply chain the basic needs is having transportation infrastructure present (Szirmai 2011). Hence transport infrastructure plays an important role in any business especially in entrepreneurial ventures.
Entrepreneurial development in Netherlands can be done systematically when the country adopts a proper program that supports its development. A program that will focus on initiatives taken for entrepreneurship development like providing low interest rate on start-up ventures loan, guidance in areas where businesses can be set-up easily and so on. There needs to be a major initiative in regards to inculcating innovation amongst individuals such that they are able to foster the spirit of entrepreneurial development.
Any other factors
The other factors that might be conducive to entrepreneurial development are easing off environmental norms, making tax rates lows or providing tax-rebates. The other actors can also be
Netherland is a nation that is peace loving and a sizable amount of the population is indulged in various kinds of jobs. Lack in development of skills and tactics in creating innovative strategies and products has led to the country lagging behind in entrepreneurial development. The government has to devise strategies and policies such that the major part of the population is bale to undertake innovative attitude and establish ventures of their own. These programs need substantial support from the government in terms of financial help. Innovation developmental programs will also help the country establish a wide variety of ventures in different areas and industries. The political, social, economic, technological and legal framework of the country is quite stable and offers robust opportunities for creating and establishing businesses. Hence individuals can prevail the existing opportunities and capitalise on them such that they are able to establish a competitive advantage in every fields and up the country’s TEA score in GEM lists. These various endeavours if adopted by the government of the country can greatly benefit and result in substantial lifting of the TEA score in the GEM lists of countries for entrepreneurial development.
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