Entrepreneurial Opportunities - The Netherlands/India

ENTREPRENEURIAL OPPORTUNITIES THE NETHERLANDS/ EU-INDIA Lecture april 2010 Ajmer

Content of the Lecture
Introduction
What is entrepreneurship
Trade relations India-European Union
Trade relations India-Netherlands
About the Netherlands
Entrepreneurship in the Netherlands
Dutch-Indian Relations

Introduction Dr. Sharda S. Nandram
25 million people of Indian Origin are living outside India, 2 % of India’s population
GOPIO (I am the co-chairman of the Women Council)
see next graph

Jodhpur, India 1901 Suriname 1966 Netherlands 1985

India calling 2009. India-Europe Business Partnership Summit, September 30-October 03, 2009, Brussels, Belgium:
KPMG report:
“ in fact the crisis has presented an opportunity for greater collaboration since it is only joint effort that can finally pull the world economy out of a recession. Fostering deeper ties between the emerging/developing countries and the developed countries can play a significant role in this regard.”

Similarities EU-India:
World’s leading democracies
Seek ways to take advantage of globalization
Development of skills and strategic partnerships
Demographic profile leads to synergistic relationship
EU: 27 states/ India: 28 states
EU: technology, creating regulations for positive business environment

Trade relations India-European Union EU is India’s largest trading partner Biggest foreign investor Opportunities: Agro and food processing Diamond, gems and jewellery Education Fashion Financial services IT Infrastructure Energy Pharmaceutical, biotech and health care Dr. Sharda Nandram, the Netherlands

Trade relations India-European Union Opportunities: Tourism Hospitality Telecom Media and entertainment All in terms of cost advantage, talent, labor cost Dr. Sharda Nandram, the Netherlands

Trade relations India-European Union Synergy EU and India: Due to ageing population there will be a shortage of young workforce in EU India on the other hand has the advantage of a young demographic profile The median age in EU is 40 years The median age in India is 25 years Dr. Sharda Nandram, the Netherlands

Trade relations India-Netherlands
The Netherland is currently India’s third largest investors

About the Netherlands
The Dutch system of government is based on the Constitution, which lays down a number of guiding principles regarding:
-the monarchy;
-representative democracy;
-the rule of law (including fundamental rights) and;
-decentralisation and unity.
12 provinces
Head: queen Beatrix
12% of the population is entrepreneur

Dutch Employment rate
Employment rate 78%
In 2008, nearly half of 15 to 64-year-old Dutch worked on a part-time basis.
The proportion of part-timers is much lower in other EU countries.
The Netherlands (48%) is followed by Sweden with 26 percent part-timers. With 25 percent, Germany is in third place. The average rate of part-timers for the EU is nearly one in five.

Top 10 Dutch innovative Businesses
Schering-Plough, manufactures several pharmaceutical, founded in 1851, merged with Merck
NXP, semiconductors, founded 50 y ago by Philips, about 29,000 employees working in more than 30 countries and posted sales of USD 5.4 billion in 2008
OCE, 1927, printing,́ active in around 100 countries with workforce of 22,000, reveneus 631 Million Euros
KPN/Getronics, 1950, ict, telecom., recently big reorganization
Thales,1922, production plant for mechanical naval gunfire control systems, 2000 people

* Top 10 Dutch innovative Businesses
DSM, 1902, innovative products and services in Life Sciences and Materials Sciences, annual net sales of € 9.3 billion and employs some 23,500 people worldwide
Philips, 1907, Electronics, in 100 countries, 150 prod.units, 121.000 employees
Shell, 1830, group of energy and petrochemicals companies, 102,000 employees, more than 100 countries and territories
Unilever, 1930, nutrition,174 000 employees
ASML, 1984, provider of lithography systems for the semiconductor industry, sales and service organizations in 16 countries, 5000 employees, annual turnover, 2,5 billion

More about the Netherlands
It is also called Holland (Dutch)
The Netherlands is compared to India 1:94
Geographically it is a low-lying country, with about 27% of its area and 60% of its population located below sea level
It is known for its windmills , tulips , clogs , delftware , Gouda cheese , visual artists , bicycles , and in addition, traditional values and civil virtues such as its social tolerance . The country has more recently become known for its liberal policies toward drugs , prostitution , homosexuality , euthanasia and abortion

Dutch Flower auction Aalsmeer
'The world marketplace for flowers and plants' Every day Bloemenveiling Aalsmeer sets the world price for flowers and plants. This happens by bringing supply and demand together by means of the auction clock- a fascinating process during which large and small batches of flowers are sold within fractions of seconds. Each day, 19 million flowers and two million plants are sold through 13 clocks at 'Bloemenveiling Aalsmeer'. It takes place within an area of almost one million m2. This means that Bloemenveiling Aalsmeer has the largest trade building in the entire world!

The Bicycle
Holland is very famous for the 20 million bicycles zigzagging around the country.
Holland has the highest bicycle density in the world.
There is a steady rate of 800 thousand stolen bikes per year. So lock it or lose it!

THE TUK TUK COMPANY IN AMSTERDAM (FOUNDED FEW YEARS BACK): FOR 2,5 HOURS 5000 RUPEES (SEE NEXT PICTURE) Dr. Sharda Nandram, the Netherlands

The Windmills
The Dutch built windmills for many centuries.
In that time the mills were developed for corn milling, land drainage, saw milling, and in fact all manner of industrial purposes . Despite this widespread use, Dutch mills are in may ways quite primitive - using canvas sails, and turned to wind by hand.
The number of remaining windmills is about 1150.

The Dutch population by age

The Dutch population
In total, 16,5 million people
Relatively small piece of land
The growth in the population continues to slow down
An increasingly healthy generation aged 65 and above
Therefore an ageing population with fewer and fewer working people who are required to support an increasingly large group of senior citizens.

Entrepreneurship in the Netherlands
SME count for large part of the employment
Family businesses play an important role
Many one-man businesses
A high number of major Anglo / Dutch companies: Royal Dutch Shell, Unilever, Reed Elsevier, Logica/CMG, Corus, Reckitt Benckiser

Entrepreneurship in the Netherlands source CBS, The Hague
January 1 2008, 800 companies
Most of these companies are active in commercial and business services.
Relatively most new companies in 2007 were established in the sectors construction and business services.
More than 10 thousand new construction companies, mainly one-man businesses
The number of companies in business services rose by 12.5 thousand.

Economic centres Source: CBS, The Hague
Most companies are located in and around the large cities.
On 1 January 2008 28.5 percent of all companies in the Netherlands were located in the agglomerations of Amsterdam, Utrecht, Rotterdam and the southeast of North Brabant. These areas account for 27.5 percent of Dutch inhabitants.

Entrepreneurship in the Netherlands Source: CBS, The Hague
Nearly half of these newcomers were management consultancies.
Another 2.5 thousand companies were active in computer and IT services, and 1,200 new mail order companies were established. The latter grew by relatively most in 2007: 40 percent.

The ten oldest family businesses in the Netherlands Source: prof.dr. Roberto H. Flören Flören & Jansen (2007) 1545 Touwfabriek G. van der Lee Rope making 1572 Tichelaars Aardewerk- en Tegelfabriek Ceramics 1660 Klokkengieterij Petit & Fritsen Bell foundry 1662 Van Eeghen Groep Traders 1680 Bavaria Brewery 1691 Nolet Jeneverstokerij-Distilleerderij Distillation 1695 De Kuyper Distillation 1696 C. de Koning Tilly Medications 1700 Vergeest Metaalbewerking Metallurgy 1703 Joh. Ensched é Printing

Family businesses in the Netherlands

Family businesses in the Netherlands Source: prof.dr. Roberto H. Flören

Family business definition Source: prof.dr. Roberto H. Flören
A single family owns more than 50 percent of the shares or certificates
A single family is able to exercise considerable influence on business strategy or succession decisions
Majority of Board of Directors or Board of Advisors are from one family
If started < 10 years ago => more family members owning part of the business or working in the business

Key statistics Source: prof.dr. Roberto H. Flören
Family business are responsible for:
45% of total employment and
50% GNP
29% of S&P 500 are family businesses
More profitable than non-family business

Why are family businesses successful? Source: prof.dr. Roberto H. Flören
Long-term horizon
Efficient decision making process
Sound knowledge of ‘ the business ’
Family reputation at stake
Loyal personnel towards visible CEO
High solvability
Overlap family and business

Globalisation and the Netherlands Source: CBS, The Hague
Globalisation is – for the Netherlands as well as for many other countries – often still a phenomenon of regionalisation
The Netherlands' position in global competitiveness has strengthened, placing it among the world's top ten
The vast majority of Dutch trade and foreign direct investment (FDI) takes place within the European Union. However, this does not imply that other countries are insignificant
The global economic playing field continues to change, in recent years especially China, India and Brazil have emerged as important business partners

In principle, emerging markets provide such opportunities for all advanced economies
However, the Netherlands may benefit extra from these markets, given its function as gateway to Europe
Goods for the European hinterland pass through the Netherlands in the form of re-exports and transit trade

Even though the added value of re-exports and transit trade is relatively low – for every euro of re-exports 10 cents is added to the Dutch GDP, while
The added value for a euro transit trade is only 1.5 cents – the huge transport flows from the emerging markets through the Netherlands to Europe may contribute significantly to the Dutch GDP

At the same time, the rise of emerging markets is also sometimes considered a threat for the Netherlands, as Dutch industry and traders may have to compete with those from emerging markets
In the past, competition from abroad has lead to major shifts in the Dutch economy. Large parts of the leather industry, the textile industry and the shipyards have left the Netherlands

Export from The Netherlands Source: CBS, The Hague
Important export products were machines for the semiconductor industry and computers.
The exports to the emerging markets consisted for a large part of re-exports
Other European countries exported relatively more to emerging markets than the Netherlands (compare 9.3 percent for the Netherlands with 13.6 percent for the other EU-15 countries, i.e. the EU-14)

The comparatively small share of emerging markets in total exports of the Netherlands can be explained by the important role of the Netherlands as ‘gateway’ to Europe
Dutch manufactured products are more often destined for the European market
This is partly a reflection of the composition of the exports of Dutch produced goods

Agricultural products and mineral fuels have a higher share in the exports of Dutch domestic products than in the exports of the EU-14 countries
In particular, agricultural products are often locally produced in emerging markets, or may be bought from countries that are geographically closer
The EU-14 countries export relatively more machinery and transport equipment

Composition of Exports Source: Holland Trade (in ML Euros)
1 Animal feed and live animals 42,095 2 Beverages and tobacco 6,049 3 Raw materials, inedible; not including fuel 18,257 4 Mineral fuels, lubricants 57,967 5 Animal and vegetable oils and fats 3,959 6 Chemical products 62,045 7 Manufactured goods 35,446 8 Machinery and transportation equipment 106,974 9 Miscellaneous manufactured goods 32,864 10 Other goods 1,923

Import to the Netherlands Source: CBS, The Hague
The Netherlands import goods from emerging markets for its domestic market and the European hinterland, whereas other European countries mainly import goods for their domestic markets. This illustrates the Dutch‘gateway to Europe’ function

Composition of Dutch Imports Source: Holland Trade (in ML Euros)
1 Animal feed and live animals 26,685 2 Beverages and tobacco 3,069 3 Raw materials, inedible; not including fuel 13,903 4 Mineral fuels, lubricants 60,826 5 Animal and vegetable oils and fats 3,360 6 Chemical products 44,668 7 Manufactured goods 38,970 8 Machinery and transportation equipment 101,862 9 Miscellaneous manufactured goods 37,542 10 Other goods 952

Dutch Investment Source: CBS, the Hague
In 2007, the Dutch direct investment position in the emerging markets was worth 47 billion euro
Compared to other EU countries, Dutch firms have invested relatively more in emerging markets, particularly in Brazil, China, India, South Korea and Poland
Of the largest European countries, only Germany invested as much as the Netherlands in emerging markets, whereas the United Kingdom invested far less

The Netherlands vs Emerging markets Source: CBS, The Hague
The Netherlands have a strong comparative advantage in plants and flowers and tobacco
Emerging markets have a strong comparative advantage in footwear and apparel
the comparative advantage of the Netherlands in nickel and articles thereof is a comparative advantage in trade, as almost all Dutch exports in this product group consist of re-exports
Emerging markets are more likely to be trading partners than competition for Dutch firms

Relevant partners for trading in The Netherlands
The Netherlands Foreign Investment Agency, NFIA, can assist businesses contemplating investment in the Netherlands
Holland Trade
EVD
NICCT

6 Reasons to Invest (NFIA): Source: EVD
Strategic location in Europe
-possibility to serve markets within the current and future European Union, the Middle East and Africa
-accessibility and an excellent infrastructure

Investment in the Netherlands Source: EVD
International business environment
-long Europe's trading crossroads
-good choice to locate an operation (f.e. European headquarters, a Shared Services Centre, a Customer Care Centre, a distribution and logistics operation, or an R&D facility)
-world-class business partners
-international outlook
-open attitude to investment

Superior logistics and technology infrastructure
-The Port of Rotterdam is the world's third largest seaport
-Amsterdam Schiphol Airport is recognized as one of the major business hubs in Europe and has garnered over 100 international awards over the last couple of decades
-one of the most 'wired' countries in the world
-dynamic force in electronic commerce
-modern technology

Highly educated, multilingual and flexible workforce
-highly educated
-flexible
-motivated workforces
-multilingual

Quality of life
-high standard of living
-Lower housing costs compared to West-EU

Fiscal climate
-for international companies it has a more attractive
-The corporate tax rate has been lowered to 25.5 percent; well below the EU average
-dividend tax has been reduced from 25 percent to 15 percent
-a patent box with a 10 percent tax rate on income from innovations has been introduced

DUTCH-INDIAN HISTORICAL RELATIONS Source: changing images: lasting visions
400 years of Indo-Dutch relations, 16 th -18 th centuries Dutch traders in India, brought a wealth of Indian Knowledge to the Netherlands (textiles and spices)
Collaborative R&D in the fields of agro-technology, biotech, pharma, healthcare, alternative sources of energy, It.
Pandit Jawaharlal Nehru visited The Netherlands as the first Prime Minister of India in 1957 with Ms Indira Gandhi. He admired the spirit of William of Orange for his struggle against foreign domination (f.e France, Engeland in the 17 th century.

DUTCH-INDIAN HISTORICAL RELATIONS Source: changing images: lasting visions
HRH Prince Claus, the late husband of HM Queen Beatrix had a deep interest in India. He built an institutional framework for the Indo-Dutch relations in 1981.
HM Queen Beatrix first visit to India was as Crown Princess in 1963.
In 2007 the Queen visited India with HRH Crown Willem-Alexander and HRH Princess Maxima

Indo- Dutch relations
Dutch Prime Minister Balkenende visites India in 2006. his interest lies in India’s multi-culturalism, technical talent, acuity for innovation.
India’s interest lies in the technical expertise and world class technologies in many areas
There are about 120 Dutch companies in India with a strong presence
Also academic ties esp recently in business, except for the interest in Indology as a study

Indo- Dutch relations
Hortus Indicus Malabaricus: Brahmans shared their traditional knowledge of botanical welath with Dutch Nobleman Van Reede
The great Dutch master Rembrandt was fascinated by Mughal court paintings. He copied 22 Mughal miniatures by way of drawing
Dutch diamond cutters helped in recutting the Koh-I-Noor for the Britisch
There are about 20.000 persons of Indian origin from India and 160.000 from Suriname.

DUTCH-INDIAN CULTURAL RELATIONS Dr. Sharda Nandram, the Netherlands

HRM Beatrix in India, 2007

H.R.M. Beatrix with President Pratibha Patil, in India 2007

H.R.M Beatrix, his son and daughter in Law with Min-Pres Manmohan singh

ENTREPRENEURIAL OPPORTUNITIES INDIA-NL
List 5 Business Ideas that would fit in the Netherlands/ Europe- India context

Interesting to read
India Calling 2009 report of KPMG, India-Europe Business Partnership Summit, Sept 30-Oct 03, 2009, Brussels
Changing Images: lasting visions: India and The Netherlands Nieuw Amsterdam uitgeverij, 2008 Embassy of India, The Hague, The Netherlands
CBS Statistics on the internet
Interesting institutes: NIA, FCCI, NICCT, IBC.
2008 was the India cultural year in the Netherlands.

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