The corona crisis has left its mark, causing a 2% contraction of The Hague's economy. Nevertheless, the decrease is the smallest among the four largest municipalities in the Netherlands. These are the findings of research conducted by The Hague University of Applied Sciences on behalf of the Municipality of The Hague.

The State of The Hague's Economy examines the trends and developments. The Hague University of Applied Sciences researcher Ayse Terzi sees a number of points of interest. “The extreme personnel shortages in the region are alarming.” City councillor for Economics Saskia Bruines responds to the research: “The economy in The Hague is bouncing back, but I am concerned about the still existing large mismatch in the labour market and the limited space for companies. The employment rate and labour productivity are relatively low, while on the other hand there is a huge shortage of personnel in various industries. This underlines the urgency of broadening The Hague's economy.”

Catching up in employment

Although The Hague's economy has been lagging behind that of the other three largest cities for a longer period of time, The Hague is catching up when it comes to employment. The study shows that unemployment figures are now on a downward trend. The unemployment rate in the second quarter of 2021 was 4.2%. That means unemployment in The Hague was lower than in Amsterdam (4.9%) and Rotterdam (4.7%).

Employment growth generated by new self-employed workers

The vast majority of growth in the city's employment is created by SMEs, a large proportion of which are new self-employed workers. The Hague has a relatively large number of self-employed people. Within this group, there is also a relatively high number of people with a long-term low household income. Dr Ayse Terzi: “There is a lot of momentum around these new businesses. For example, half of sole proprietors cease their activities after five years. That is worrisome if you look at the long term.”

Tight labour market

Entrepreneurs in The Hague are suffering from the tight labour market. They are increasingly unable to find suitable staff. There is a particular need for practically trained personnel. Staff shortages are extremely high in healthcare and engineering. Terzi: “Sufficient human resources are crucial for increased business activity and the growth of the regional economy.” Councillor Bruines adds: “The commitment to new energy may lead to more jobs. ImpactCity and Scheveningen Harbour, for example, offer many opportunities for companies working with wind, geothermal and maritime energy. Industries such as construction, commerce and logistics have plenty of growth opportunities.” The new city government can use the findings of the study for the new economic implementation agenda.