The Netherlands is lagging behind comparable countries in terms of labour market productivity, with growth largely attributed to the economy’s reliance on cheap, flexible labour, according to researchers at TNO.

To improve productivity, the researchers say there is need for greater investment in research and development (R&D), a focus on high-growth sectors, the adoption of labour-saving technology, and enhancing workforce skills.

“Investment in R&D contributes to higher labour productivity,” said researcher Thijmen van Bree. “And this is essential for a strong economy and maintaining good public services.”

The research team analysed the impact of international trends, such as an ageing population, on productivity statistics, as well as factors specific to the Netherlands. For instance, since 2014, workers in the Netherlands have been working longer hours, while in most similar countries, the average working week has decreased.

A shift towards less productive sectors has also contributed to the problem, alongside the increasing reliance on cheap, flexible labour. “The Dutch are working more but are not more productive per hour,” the report states.

The European Union’s target is for 3% of GDP to be invested in R&D; however, the current figure in the Netherlands is around 2.1%.