The Netherlands has climbed back from eighth to fifth place in the latest edition of the World Economic Forum’s Global Competitiveness Report.

The Netherlands was last in fifth place – its highest ever position – three years ago.  The annual research covers 140 countries. In the Netherlands, the information was collated by the Inscope research institute at Erasmus University.

The Netherlands thanks its high ranking to its ‘excellent’ education system, efficient infrastructure, reliable government and a continual focus on innovation, the report says.

‘The Netherlands is one of the most advanced and innovative economies in the world with competitive and open markets,’ professor Henk Volberda, who led the research, said in a statement. The quality of its healthcare also has an impact and the quality of government and other official bodies contribute to the good, competitive climate.

Government policy in terms of macro-economics and reforms to the financial sector and jobs market had also improved this competitive position considerably, the professor said.

Nevertheless, both these aspects remain an ‘Achilles heel’. The way the financial markets operate, in which the Netherlands is ranked 31^st, is still at the level of 2007,  the report says. Banks may be in a better position financially but they are still reluctant to make loans to smaller firms and take risks on start-ups.

The labour market has also improved but the high cost of employing and sacking staff puts the Netherlands in 89^th place on that sub ranking. In terms of flexibility in setting wages, the Netherlands is in 131^st place.

The ranking is led by Switzerland, Singapore and the US. Germany has risen to fourth place and Finland has slipped from fourth to eighth.