December 13, 2021

National Productivity Board 2021 annual report

Productivity growth has been declining for several decades; not only in the Netherlands but in many European countries. During the corona pandemic, productivity growth has dropped even more. At the same time, considerable investments have been made in digital technology.

The corona pandemic has had a major impact on productivity in the Netherlands, but also in other European countries. Labour productivity and total factor productivity (TFP) fell sharply in 2020. The services sector was hardest hit by the lockdowns aimed at containing the spread of the coronavirus.

Investments in intangible capital are the focus of this Annual Report. These have risen sharply as a share of GDP in the Netherlands since the 1990s. This increase has led to the Netherlands overtaking the frontrunners, namely the United Kingdom and the United States. Firms in the service sector are making more intensive use of this type of intangible capital and are thus the drivers of the increase.

Intangible capital is closely linked to digital technologies, which have been used relatively extensively during the lockdowns. Many workers were forced to work from home during the corona pandemic and met online. In sectors such as education, healthcare and retail, lockdowns necessitated the adoption of digital technologies. As a result, the use of these technologies in the Netherlands increased sharply.

We thank Statistics Netherlands for input on this report.

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