21 November 2025

The Central Planning Bureau (CPB) examined the status of the process of creative destruction in the Netherlands. Creative destruction is the process by which old, less innovative businesses are continuously replaced by new, innovative businesses and is thus the engine of economic growth. The study shows that this engine in the Netherlands, as in many other countries, is sputtering. Various indicators point to a weakening of the process of creative destruction in the Netherlands. We use company and employee data from 2007 to 2023 to investigate the functioning of different parts of the process: business and job dynamics, productivity, and innovation activities.

Main Findings

  • Business dynamics have slowed mainly because fewer new companies have been established since 2008. Moreover, the share of employees working at young companies has sharply declined. Job dynamics are also decreasing: fewer jobs are created and destroyed. Job and business dynamics are declining across almost all sectors, size classes, and age groups. A notable exception is the export sector, where dynamics have remained stable.
  • Productivity growth is slowing, and productivity differences between high- and low-productivity companies are increasing in all sectors. The most productive companies remain leaders longer, while followers and potential entrants are increasingly less able to close the gap.
  • Innovation activities are increasingly concentrated among larger and older companies. Especially existing companies contribute to total innovation efforts; new entrants contribute little.
     

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