Globalisation and the Small Economy: The Case of the Netherlands

In this paper, we have examined the importance and implications of globalisation due to FDI for one particular small country: the Netherlands. Although it has limited resources and size, the Netherlands is home to the sixth largest outward FDI stock in the world, and also is one of the most important destinations for inward FDI activity. Its location advantages are, inter alia, a function of its de facto market size, given its central location within the EU, and its well developed infrastructure. Furthermore, the growing competitiveness of the service sector in the Netherlands plays a pivotal role. Other small economies can benefit from the Dutch experience, by investing in improving their competitiveness, since usually their activities are concentrated in only a few sectors. The need to maintain and upgrade their location advantages, by adopting new technologies and upgrading their created assets, is central to their survival.