The Netherlands has fallen three places to number eight in the latest World Economic Forum ranking of the world’s most competitive economies.

In the 2012 edition, the Netherlands had risen two places to number 5, much to the satisfaction of government ministers.

Erasmus university professor Henk Volberda, who is in charge of the Dutch research, said the Dutch decline is the largest of any top ranking country.

‘The badly performing financial markets and continuing concerns about the instability of the Dutch banks’ are among the reasons for the Dutch downgrade, Volberda said.

In addition, the lack of credit for companies and private individuals is also hampering the Dutch economy, he said.

Education

‘The Netherlands is not able to sufficiently profit from the more positive economic climate because of the badly-performing jobs market and the lack of sustainable investment in innovation and education,’ he said in an emailed statement.

This is despite the ‘fantastic Dutch infrastructure’ in terms of healthcare, excellent public services and efficient markets.

Switzerland, Singapore and Finland lead the ranking and are examples of innovation-rich economies, the World Economic Forum report stated.

Germany, the Netherlands’ near neighbour, has risen to fourth place. In particular, the country’s decentralised innovation strategy has born fruit. The US completes the top 5 line up.