Amsterdam is in danger of fading back into the trailing pack when it comes to favoured locations for European businesses. In the 20th European Cities Monitor, the Dutch capital has been passed by Madrid and Munich. What's wrong with the climate in Amsterdam?

Amsterdam usually scores well in the annual list thanks to its favourable location: within easy reach of the "blue banana", the densely populated band stretching from northern England to Milan in Italy, which is visible from space and where most European commerce takes place.

The companies interviewed by international consultancy agency Cushman & Wakefield praise the language abilities of people in Amsterdam and the excellent connections. Not much has changed there: in telecommunication terms Amsterdam actually scored higher than last year.

Out of sight, out of mind
Despite this, Amsterdam has dropped form sixth to eighth place on the list, further behind London and Paris than ever. According to Elaine Rossall of Cushman & Wakefield the reason is that other cities have been spending more money recently improving their infrastructure and, crucially, their image:

"It's fallen primarily, I think, because of the improved perceptions of the cities of Munich and Madrid. They've also done a very good job in terms of promoting what they've been doing on an international scale. So it's the physical changes that have been taking place, but also the fact that the message is getting across to a wider business community."

The Dutch capital has failed in this respect: this year fewer companies said they perceived Amsterdam as a business city. Since 2006 Amsterdam has been running the expensive Iamsterdam campaign, in an attempt to attract more tourists and more companies.

The companies consulted were not convinced that Amsterdam has been doing its best to improve the climate for business. Asked which cities they regard as having done the most, Amsterdam actually ended up somewhere in the lower 50 percent.

High wages and pollution
It's not all about promotion, though. It is relatively expensive to hire personnel locally in Amsterdam - certainly compared with the eastern European cities on the list like Bucharest. And, Elaine Rossall points out, because of the economic crisis many businesses have been trying to make extra savings in their staffing overheads.

Then there are considerations like the environment and living conditions. This year Amsterdam dropped out of the top ten in the list of least-polluted European cities, and companies are dissatisfied about value for money when renting office space. That's despite the fact that the availability of space has improved.

Finally, there was a clear trend this year away from capital cities and towards regional giants like Birmingham and Munich. They are often more flexible with more space for the introduction of improvements. And there is often a healthy sense of competition with the national capital.

Unfortunately for the Netherlands, the European Cities Monitor does not tell us how Rotterdam is doing.
 

RNW translation