The Netherlands is a small country with a long and interesting history. Over the centuries, the Netherlands has managed to develop into a rich and wealthy country. This made me wonder “why is the Netherlands so rich?” and how did the Netherlands become so wealthy?
The reason behind the high GDP of the Netherlands is their ingenious innovations and investments that supported and boosted their economy. Plus, the Rotterdam seaport makes the Netherlands a center of trade which greatly positively impacts the country’s economy.
This brief answer may not quench your curiosity about the secret behind Netherlands riches. Therefore, I highly suggest you read on till the end to get the full picture.
Not only is the Netherlands wealthy as a nation, but the Dutch population is one of the richest in the world. To be exact, the Netherlands is the 14th richest country in the world.
The GDP of the Netherlands as of 2020 is € 47.496 ($ 58.341). This is the number you get when you divide the “gross domestic product (GDP)” by the number of inhabitants per country.
Top 14 richest countries in the world (2020 rankings):
|#8||United Arab Emirates||69,435|
|#12||Hong Kong SAR||64,928|
The average annual salary of the Dutch population is around € 36,500 ($ 44.831). It can increase or decrease based on an individual’s age or type of work. (These figures are before tax deduction)
The average monthly salary of a person is around € 2.816 ($ 3.459) but there are of course big differences in monthly salary depending on what type of work someone is doing. (These figures are before tax deduction)
The standard of living is high in the Netherlands because it is a wealthy nation. This also ensures that matters such as healthcare and infrastructure in the Netherlands are properly arranged.
But also in the Netherlands, some people have to live on minimal income and even depend on, for example, the food bank or other authorities.
You might be wondering how the Dutch with their small country became one of the world’s wealthiest countries. Let’s take a look at some of the possible reasons.
The Netherlands is a trading country:
The Netherlands is a small country, but a huge country when it comes to trade and export of products.
The Dutch have been doing this for centuries, the Dutch East India Company was even the largest trading company in the world and the first multinational company ever seen.
The port of Rotterdam is one of the most important trading places in the Netherlands and makes the Netherlands an important trading center worldwide. It brings in millions of euros in revenue each year, this makes it very important for the Dutch economy.
The Netherlands earns the most money from exporting products such as machinery, chemicals, tomatoes, cucumbers, apples, pears, tulips, Gouda cheese, and many more. This income is important and strengthens the economy of the Netherlands.
The Dutch are also famous for exporting cocoa and popular beverage brands, Amsterdam, the capital of the Netherlands even has the largest cocoa export port in the entire world.
The Netherlands is the center of the world’s most economically stable region in the world. It is surrounded by rich and powerful nations such as Germany and Belgium that depend on the Rotterdam port.
Other countries like Luxembourg, Denmark, and France also invest in the trade and finances of the Netherlands because of the seaport.
Not only do the imports and exports of the Netherlands depend on this port, but the trade of many other European countries depends on it.
For example, most of the raw materials that support the German industry come through the port of Rotterdam.
The port of Rotterdam is very important for the Dutch economy:
The Netherlands is the second biggest agricultural country:
The Dutch locals and their neighbors may joke about the flatness of the Netherlands. But each and every square meter of the flat fertile earth of the Netherlands is put to great use. Because of this, the Netherlands is a giant in the field of agriculture.
Right after the USA, the Netherlands is the second on the list of largest exporters of agricultural products in the world.
The Dutch rake in billions of euros (94.5 billion euro or 116 billion dollars in 2019) in revenue by exporting agricultural goods. It is the number one exporter of agricultural products in Europe.
The humid climate and fertile flat land of the Netherlands make it perfect for agriculture. The Dutch farmers have also been doing it for many centuries and became really good at it.
This is why the exported fruit and vegetables from the Netherlands are very popular in other countries around the world.
(Click here to read our article about "why the Netherlands exports so much food").
The Netherlands has a well-developed industry:
The Dutch industry is very well developed, even though the Netherlands itself has few sources to use. There are no mines in the Netherlands from which raw materials can be extracted, for example for the metal industry.
The majority of the raw materials used in the Dutch industries are imported. But what makes the industrial sector of the Netherlands so great is that the Dutch have a lot of knowledge about how to make things.
The Dutch produce everything that they need. The Netherlands imports raw materials at affordable rates and turns them into exports of high-quality goods, produced in their well-developed industries.
With companies like Philips, is the Netherlands home to giants of the tech and electronic industry. But also some of the biggest chemical-industry companies like AkzoNobel are housed in the Netherlands.
All these big companies bring in a lot of money to the Dutch economy and create many job opportunities for people in the Netherlands. All of this contributes enormously to the prosperity of the Netherlands in general.
The Netherlands invests in new innovative technologies:
The Dutch reap the benefits and will keep on reaping the benefits of their smart investments. The nation has large investments in the sectors of medicine, technology, education, green energy, novel agricultural tools, and products.
The Dutch investments in what really matters are the driving force of its economy. In the future too, their smart investments will keep the Netherlands ahead of other nations.
Eindhoven, a Dutch city, is part of the area which is considered one of the most promising and innovative places in Europe. No wonder that the well-known Dutch technology company Philips also comes from Eindhoven.
Moreover, the success of the education, health, and other industrial sectors that make the Dutch economy so stable, is a result of smart investments.
As a result, the Netherlands remains at the top in terms of knowledge and therefore manages to bring a lot of trade and money to the Netherlands. Which of course creates more employment.
The Dutch spirit of entrepreneurship:
From an early age, the spirit of entrepreneurship is instilled in the Dutch. The Netherlands is so rich because of the entrepreneurial spirit of the Dutch people.
Few of the best universities in the world are found in the Netherlands. The world-class well-rounded education offered by the Netherlands produces highly skilled individuals.
The educational institutions of the Netherlands focus on producing creative pupils who can think out of the box. That is why there are so many start-ups here, with smart new ideas to conquer the world.
Most Dutch start-ups conduct business on the internet. Like this, the Netherlands creates highly skilled and entrepreneurial spirit-driven individuals who collectively move the economy forward.
The thriving tourism sector of the Netherlands:
The Netherlands is a tourist haven, and your Euro Trip will be incomplete without visiting it. It is 20th on the list of most visited places in the world. Amsterdam, the capital city, is one of the most visited destination cities of Europe.
Moreover, the rich history, unique architecture, various tourist spots, and laid-back nature of the locals attract tourists to Amsterdam from all over the world.
Each year during spring and summer, the capital is teeming with tourists. In 2019 alone, around 20 million foreign tourists visited the Netherlands. In addition, 26 million Dutch people went on holiday in their own country.
In 2019, the Dutch tourism industry generated no less than 32 billion euros (39 billion dollars) and there were 813,000 Dutch people employed in this sector.
The tourism industry alone contributes 4.4% of the total economy of the Netherlands. Hence, although the tourism industry is a small sector in the economy of the Netherlands, its contribution cannot be overlooked and is getting bigger each year.
In 2019 the Dutch tourism industry generated 32 billion euros:
Clever immigration policy:
What makes the immigration policy of the Netherlands so clever, is that it accepts mostly highly-skilled immigrants who drive the Dutch economy.
Getting a working visa for the Netherlands is super easy for any highly skilled worker. The simple procedure of getting a working visa is the Dutch way of welcoming and building a skilled workforce of immigrants.
Innovative immigrants not only contribute to the Dutch economy but also make it more competitive. Skilled immigrants with local innovators move the Dutch economy forward.
The wealthy economy of the Netherlands is the result of the contribution of the Dutch people throughout the centuries. The resilient and entrepreneurial spirit of the Dutch people is the reason why the Netherlands is so wealthy.
I hope you found the answer to “why is the Netherlands so rich?” in this article. As mentioned, there are still people in the Netherlands who depend on the food bank and other authorities.
Let's hope that this will eventually no longer be necessary due to the emerging economy.