Government measures to reduce the number of foreign workers coming to the Netherlands will have a major impact on employment and drive some companies to partially relocate abroad, according to the latest edition of the Dutch Innovation Monitor.

Companies faced with restrictions on employing people from the EU and elsewhere will try to replace them with Dutch workers, energy efficiency measures and retraining existing staff. However, around 25% say they will be forced to move production elsewhere and a further 25% say they may have to scale back.

Companies that rely on low-skilled workers are more likely to focus on robotization and recruiting Dutch workers, while those that employ highly skilled foreigners are more likely to shift some production elsewhere, the monitor said.

Around half of all Dutch firms have at least one foreign employee on their books.

The new government plans to introduce new, tougher rules for bringing in non-EU nationals into the country on highly-skilled migrant visas, as well as limiting international student numbers.

Employers in sectors which large international workforces have already warned that the new rules will hit their operations and may force them to move partly abroad, including Boskalis and ASML.

Economists and the chief of the government’s labour inspectorate have called for a rethink on the Dutch economy to reduce the demand for often low-skilled foreign labour.

In particular farming, the logistics sector and the meat industry have come under fire for contributing little to the economy but relying on low cost workers.

CPB researcher Gerdien Meijerink told the Parool in April that the influence of government economic policies on the number of migrant workers is greater than assumed. “When talking about migration, you cannot separate it from economic policy,” he said. “Even now, for example, discussions on limiting migration mainly focus on legal measures and border controls.”