Running head: COLOMBIA vs NETHERLANDS COMPETITIVENESS

Colombia´s competitiveness compared to The Netherlands

Politécnico Grancolombiano
 ABSTRACT

Nowadays in the international scope there are quite several aspects that determine how a country

or an economy can be differential from the other one, as we could see through out the

development of the Globalization course it is important to also take into account that the

economic indicators such as GDP (Gross Domestic Product). Inflation, unemployment rate,

interests and even balance of trade are not the only economic indicators that will determine

certain growth or development in social, cultural, political and economic terms or that will

determine how an outsider of a country can see from its perspective the productivity and

competitiveness of certain economy according to some specific indexes and reports that

measures the level of competitiveness and innovation, trying to give a comparison between two

completely different economies as The Netherlands and Colombia.

 INTRODUCTION

Taking into account his is why through out the development of this text we, as future

professionals in international business pretend to give a thorough and investigative article about

why can a country become more competitive trying to achieve higher positions in the different

indexes and indicators; besides the economic ones, that are going to be identified and briefly

explain stating some kind of comparison between two completely different economies, thus in

order to give an explanation of the possible and notable gap between those economies as well as

some key facts that might be the ones that are determining the fact that developed countries have

always been more globally recognized for their improvements and great development in terms of

globalization and competitiveness.

The idea is to make a comparison between two completely different economies such as The

Netherlands and Colombia. In today’s world either in the national and international scope there

are quite several aspects that determine how a country or an economy can be differential from

the other one, this is why it is important that us as a future professional in International Business

to take into consideration some other factors besides the economic ones such as GDP, inflation

rate, unemployment rate, among others; this is why we consider it is important to state that

besides those indicators there are some others that might not precisely be indicators as a whole

but that determine the economic development in terms of globalization and competitiveness

taking into consideration some of the main indexes or reports of the Globalization and

Competitiveness
Global Innovation Index

Before we start making a comparison between those two economies it is important for the reader

to be aware of the key data of each country in terms of economy as well as culture, politics and

even social; in order to have data that will probably support the fact of the huge differences for

each country.

The Netherlands also known for its history as Holland, it has a system of constitutional

monarchy and its capital is Amsterdam. The Netherlands has 16.x4 million inhabitants and its

currency is the European “dollar” Euro, their official language is Dutch, It is one of the funding

members of the European Union in 1950 along with Germany, Belgium, France, Italy and

Luxembourg and it is also important to take into consideration that it belongs to the Schengen

area (known as the area where border control has been abolished for people, capital, goods and

services to move freely throughout its whole member states “26 nations.

The Dutch economy is the sixth-largest economy in the Eurozone and is noted for its stable

industrial relations, moderate unemployment and inflation, a sizeable trade surplus, and an

important role as a European transportation hub (“The Netherlands: Country Overview,” 2012).

To talk about its industry the Dutch economy it primarily consists on food processing, chemicals,

petroleum refining and electrical and electronic machinery, it also has a well growing

agricultural sector in terms of plants and cutting flowers. In terms of logistics it is quite

important to take into the fact that it is one of the most known countries in terms of infrastructure

and logistics having the port of Rotterdam as one of the busiest and biggest in the continent.

The Global Innovation Index (GII)  aims to capture the multi-dimensional facets of innovation

and provide the tools that can assist in tailoring policies to promote long-term output growth,
improved productivity, and job growth (“History of Global Innovation Index,”N.D) Since 2007

the World Intellectual Property Organization from no on WIPO is an agency of the USA created

to encourage creative activity to promote the protection of Intellectual property around the world.

In his 9th editions it is now measuring just 128 countries different from its last version (141

economies) around the globe. The Index measures two different main sub indexes such as:

Innovation input (institutions, Human capital & research, infrastructure, market sophistication,

Business sophistication) innovation output (Knowledge & technology outputs, creative outputs.

Here we present a summary of the principal scores and ranking of The Netherlands as well as for

Colombia for each indicator of the GII, in order to be able to give a kind of support of the

reasons to explain why does The Netherlands has a better performance in the innovation index as

well as in its innovation performance as a whole

THE NETHERLANDS INNOVATION

INPUT
Overall score 58,3 9
Indicators SCORE RANKING
Institutions 91 8
Human capital
55,3 17
&Research
Infrastructure 62,1 12
Market sophistication 58,1 18
Business sophistication 53,7 9

Source: Global Innovation Index (GII 2016 report). Own elaboration

INNOVATION
THE NETHERLANDS
OUTPUT
Indicators SCORE RANKING
Knowledge &
44,1 16
Technology
Creative 61 6
 Source: Global Innovation Index (GII 2016 report). Own elaboration

COLOMBIA
INNOVATION INPUT
Overall score    
Indicators SCORE RANKING
Institutions 58,2 71
Human capital
27,9 80
&Research
Infrastructure 52,5 35
Market sophistication 49,4 40
Business sophistication 30,8 70

Source: Global Innovation Index (GII 2016 report). Own elaboration

COLOMBIA INNOVATION OUTPUT

Indicators SCORE RANKING

Knowledge & Technology 21,2 82
Creative 27,9 68
Source: Global Innovation Index (GII 2016 report). Own elaboration

Nowadays The Netherlands is well recognized globally by being one of the most productive in

terms of international logistics taking into account that it has one of the best scores in

infrastructure and having the 4th biggest port in Europe (Port of Rotterdam) however it is not

only in terms of logistics but also in terms of productivity and competitiveness, throughout the

years the European countries have been leading the main indexes and The Netherlands it is not

the exception.

In terms of innovation The Netherlands has different advantages and strengthens that are quite

relevant for the way the score in the indexes. The Netherlands has a strong export performance

regarding its condition with the last named port of Rotterdam, it has a efficient and successful
performance in the long-term, the Dutch firms have strong technological abilities, it has a highly

developed infrastructure, great performance in innovation regarding the solid institutions and a

supportive business environment, it also has an innovative approaches, design and delivery of

innovation. Taking into account some of the previous strengths named above it is important no

list the strengths that Colombia has in order to establish the main differences.

According to the OECD Colombia´s strengths, it is quite political committed to the development

of education and participation rates as well as his commitment to enhance innovation as a

sustainable and inclusive driver of development, confidence, enthusiasm and willingness to

innovate among the national STI policy leadership in departmental and municipal levels, strong

political commitment to grow the Colombian digital economy and the deployment of a fiber

backbone throughout the country (OECD, 2014).

As we can see, taking into consideration some of the main strengths of both countries it is

important to notice that there are quite several aspects that widens the gap between the developed

and developing economies. One of the main reasons we consider Colombia and The Netherlands

in terms of competitiveness are so different is that if we look at the main strengths as well as

their scores in every single indicator of the GII we can see that Colombia´s main strengths are

aimed to improve his performance in innovation in order to make it sustainable and inclusive

with confidence and willingness, Colombia has the attitude and purpose of creating and

implementing some great policies, rules and laws that can improve and encourage Colombia

people to make innovations and to have the capability of inventing in order to make Colombia´s

development even better tan it is, but we believe that thanks to corruption these policies have

been disrupted and modified and they are never implemented because Colombia tends “To

preach but not to practice”. So how does The Netherlands achieve his innovation goals in the
short and long term? It probably is because of the fact of their culture, the European countries

different from Colombia have always had the tradition of doing what they indeed promised to do,

to achieve and accomplish whatever they want to do and of course to follow every protocol and

law they need to, thus the country can develop and improve his performance in every single

economic, cultural, political and social aspect.

Global Competitiveness Index

The Global Competitiveness Index is an indicator that measures the state of the productivity and

prosperity in 140 countries, there are some economic issues included such as lower economic

growth, lower productivity growth and high unemployment but also social aspects like

geopolitical tensions, conflicts around the world and the humanitarian crisis that some countries

have to face, however, others positive developments contrasts and in that sense is possible to

identify the level of innovation not only in developed countries but also in developing economies

which had a growth of almost 5% versus 1.3% of advanced economies for the 2013. [ CITATION

Kla15 \l 9226 ]. This report made by the World Economic Forum is the base for many countries

due to it includes a detailed profile of each country and support the efforts of the governments to

establish transformation in terms of competitiveness.

The ranking has a deep evaluation of the topics mentioned before and give a score for every

country, the two countries analyzed, the Netherlands and Colombia are in the 5 and 61 position

respectively. The Netherlands has been in the first places for many years, although the

improvement is not as higher as others, it as a constant growth demonstrating the deep efforts to

maintain the country as one of the most innovative, the areas in which the country has a strong

performance are education, infrastructure and institutions. Colombia has ranked many places
thanks to a strong improvement in the financial market and a better score in business

sophistication. [ CITATION Kla15 \l 9226 ]

The Global Competitiveness Reports 2016-2017 includes other controversial issues as the “rising

of income inequality, political tensions and a general feeling of uncertainty about the future”

[ CITATION Ric16 \l 9226 ] and economic aspects as the fall of prices of commodities, increasing

external imbalance and the government finances. Other critical issues were decreased like the

poverty and violent conflict. In this report the Netherlands gained a place being in the 4 place

and Colombia maintains in the same position. The Netherlands had a special consolidation in

terms of its scientific research institutions and a close relation between private sector and

universities, topics that are completely related with the growth of competitiveness in any

country. As Porter mentions in his article, the result of productivity drivers is the involvement by

4 main actors: the government, the private sector, the academia and other institutions. [ CITATION

Mic09 \l 9226 ]

One of the biggest differences between both countries is that the Netherlands count with the

support of the European Union with the generalized policies that every integrant have to fulfill,

the European model “provides better social cohesion policies but demonstrates weakness in

providing the right conditions for gainful employment for larges shares of its population”

[ CITATION Wor12 \l 9226 ] in that sense it shows the results of cooperation and agreements not

only in economic issues but also in social aspects. However, despite of integration in Latin

America of free trade areas, America is far to have generalized policies as in Europe; most of the

Latin American countries have to face similar pillars and for this reason was created the

Competitiveness Lab Latin America with the objective to identify common topics, making
physic and virtual meetings, development of investigation, agreement of regional

recommendations and the publication of annual reports. [ CITATION Mar151 \l 9226 ]

Social Innovation Index

According with the Theoretical, Empirical and Policy Foundations for Social Innovation in

Europe (TEPSIE), the social innovation index refers to any new action that benefits the society

improving the quality of life through access to power and resources. This index includes as

products as services, practices, processes and laws, when it meets any social need and its benefits

covers a whole group and not only a few people.

In that context the comparison between the Netherlands and Colombia shows a huge gap

between both cultures and societies because the Netherlands is better than Colombia in respect of

this index.

The Netherlands has a different interpretation of The Guide to Social Innovation (European

Commission 2013) definition of social innovation: ‘The development and implementation of

new ideas (products, services and models) to meet social needs and create new social

relationships or collaborations’, they interpret social innovation as the improvement at working

practices. Actually in front of United Kingdom the Netherlands lacks of a strong policy about

this topic.

Colombian people are good entrepreneurs but usually his environment of entrepreneurship in

Colombia is a little disorganized, instead according with Alexander Rinnooy Kan, the Dutch

have an entrepreneurship tradition and volunteer ship, but they are much more organized so it is

a strength to their permanent growing and their economy development, so if Colombia had more
entrepreneurs and a more organized entrepreneurship environment could diversify and boots its

economy.

The social innovation index report demonstrate the impact of that gap, because while the

Netherlands is ranked at 16, Colombia is ranked at 25, even when this number doesn’t show a

huge gap by itself, the reality and practices of each country is different, Colombia has a huge

potential, but Dutch management is much more efficient and effective.

REFERENCES

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