The Hague’s economy grew faster than the national average in 2024. This is according to the fifth edition of the State of the Hague Economy , presented recently by the municipality of The Hague.
Further growth in earning capacity, population, and employment is also expected in the coming years. This year’s annual independent monitor was written by a group of researchers and academics from institutions including Erasmus University and Vrije Universiteit Amsterdam.
The monitor shows that The Hague remains attractive to residents, students, and entrepreneurs. Unemployment is relatively low, the population is growing, and there are many start-ups, particularly in sectors that align with the city’s profile, such as law, impact, digital security, and ICT. The city’s knowledge base is also expanding thanks to the establishment of South Holland universities.
Labor productivity remains low
At the same time, the study indicates that the long-term resilience of The Hague’s economy is under pressure. The labor market is tight and suffers from a mismatch between supply and demand. Furthermore, a large proportion of jobs in The Hague are in service-oriented and labor-intensive sectors, such as government, education, healthcare, culture, and business services. These sectors are crucial to the city’s functioning, but their low labor productivity could hinder future economic growth. Innovation, education, and technological support are essential to keep these sectors future-proof.
Power of the region
In the monitor, the researchers emphasize that the region is becoming increasingly important to The Hague’s economic strength. Many employees live outside the city limits, and businesses and knowledge institutions in surrounding municipalities complement The Hague’s economy. By collaborating even more effectively with neighboring municipalities, The Hague can benefit more from joint growth and innovations in the region.
Alderwoman Saskia Bruines is pleased with the economic growth, but emphasizes that there are also areas for improvement: “The Hague is vibrant and growing. With the significant presence of the national government, a thriving cultural sector, and numerous international organizations, we truly have a unique profile. This research shows that we must remain vigilant. A strong economy requires space for businesses, innovation, and talent. Consistent policy from the national government is essential to attract investment and businesses. We remain fully committed to a city where everyone can find work, where entrepreneurs have the space they need, and where everyone can benefit from economic growth.”
Alderman Nur Icar (SMEs, Employment) adds: “To address the mismatch between supply and demand in the labor market, it’s important that we facilitate opportunities for residents in the areas of retraining and upskilling. By investing in the development of our residents, we also directly contribute to innovation in The Hague’s SME sector and thus to the economy of The Hague as a whole. Naturally, improving business services will also remain our focus.”
Limited physical space
The researchers also highlight the vulnerability of the knowledge economy. Although The Hague boasts strong clusters, the growth of knowledge-intensive sectors is lagging behind. Foreign investment is declining, and The Hague is spatially constrained, leaving little physical space for businesses to expand or innovate.
Prof. Dr. Frank van Oort (Erasmus University Rotterdam): “Economic growth is beneficial, but according to the monitor, it doesn’t immediately translate into broad prosperity. Structural collaboration on this remains necessary. Finding a good balance between economic earning capacity, sustainability, and social challenges is characteristic of many large cities. “
The monitor and the scientific review can be read here .
Text & Image: Gemeente Den Haag
Translation: The Hague Online