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In Utrecht 13% of the working age population is employed in brain business jobs

dec 11, 2018

Netherlands a hotbed for research and development
In most European countries, employment in highly knowledge-intensive firms are focused in the capital region. Not so in the Netherlands, where Utrecht actually outperforms Amsterdam.

In Utrecht 13% of the working age population is employed in brain business jobs, compared to less than 12% in Amsterdam. Both regions are European top-performers.

Cost of labor for knowledge-workers an increasingly important competitive issue to tackle for knowledge-intensive businesses.

According to The Geography of Europe's Brain Business Jobs, the latest report from the European Centre for Policy Reform and Entrepreneurship (ECEPR), supported by NC Advisory AB, advisor to the Nordic Capital funds, Utrecht and Amsterdam are both hotbeds for 'brain businesses' – companies that compete through their brain power and expertise.

The new study, which is aimed at businesses and investors making a strategic choice about where to locate or invest, shows that 13.0% of the working age population of Utrecht and 11.7% of that in Amsterdam are employed in highly knowledge-intensive companies. This is more than Amsterdam, Brussels, Vienna and Berlin.

On average across Europe, 5% of the working age population are employed in knowledge-intensive jobs.

Dr Nima Sanandaji, President of the ECEPR, said that the overall trend is that Central- and Eastern European countries are catching up to Northern and Western Europe. "We already see that countries such as Estonia, Czech Republic, Hungary, Slovenia and Latvia have all surpassed France in brain business jobs concentration."

Weaknesses and strengths
In terms of industry, the Netherlands has a number of strengths. The main strengths lie in research and development (R&D) as well as head offices & management. In these two areas, the concentration of Brain Business Jobs is above two times the European average. Except Denmark, no country has as high concentration of R&D jobs as the Netherlands. Only Belgium has a higher concentration of head office and management employment. In both areas, the Netherlands is only narrowly behind the first-place holder.

In advertising & market research, the Netherlands has the highest share of working age population employed in all of Europe. Design, advertising and market research as well as programming are other strengths. On the other hand, the Netherlands lags behind the rest of Europe when it comes to areas such as high-tech manufacturing, telecom and IT services.

Regional differences
The region with the highest concentration of employment in highly knowledge-intensive firms in most European countries is the capital region. In the Netherlands however, Utrecht with a total of 99,514 Brain Business Jobs has a higher concentration (13.0%) of the workforce. In terms of concentration, Utrecht scores above Oslo, Helsinki, Brussels, Vienna, Madrid and Berlin.

The capital region of Amsterdam has a higher total of 197,870 Brain Business Jobs, but a lower concentration (11.7%). Noord-Brabant with 110,178 Brian Business Jobs (7.5%) and Zuid-Holland with 160,365 Brain Business Jobs (7.4%) are other strong regions. The lowest share is found in Zeeland, with 6,887 Brain Business Jobs (3.2%) followed by Drenthe with 10,835 Brain Business Jobs (4.0%). The challenge for the Netherlands is to climb to the very top of the European Brain Business league, and to strengthen its underperforming regions.

Dr Sanandaji explains: "In a time when Europe is rapidly moving towards a knowledge-intensive economy, it is important for regions to develop brain business jobs. These jobs are the driver for future economic well-being, and need to evolve not only in the capital region but throughout the country."

New competitors
Europe is increasingly a skilled-based economy, with growth happening where the brains are. A new generation of IT-specialists, engineers and other knowledge workers are emerging from the universities of Central and Eastern European countries. While some of these talents do move to places such as Amsterdam, Zurich and Bern, many settle in the capital regions of their home countries.

Cost of living a major obstacle
The key for the success of knowledge-intensive industries is to attract talent. Regions with a very high cost of living face a disadvantage. Here firms must pay high wages for programmers, engineers and the like. This is a challenge for already rich regions such as Utrecht and Amsterdam.

Dr Sanandaji explains: "The study finds that knowledge regions with lower costs of living and correspondingly lower wages have a competitive advantage. Bringing down the cost of living is key for long term performance, since it affects the cost of business for hiring a skilled programmer or engineer. Increasingly, we will see that individuals rather than moving to Amsterdam and Zurich will stay in places such as Bratislava, Budapest or even Bucharest and sell their services on the international market. Much like China became the manufacturing hub of the world, the capital regions of the Central and Eastern European nations are becoming the new brain business centres".

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