Reaching Companies in Benelux, Europe’s Unexpected Powerhouse

The Benelux (Belgium, the Netherlands and Luxembourg) was founded as a customs union in 1944 and became a full economic union in 1958, well before the European Union. Although small in size the three countries have a GDP that is as big as the total GDP of all Eastern European countries combined.  Despite the relative small size of each individual country, the Benelux forms the 3rd largest source market for FDI projects in Europe.

With almost 30 million inhabitants the Benelux is home to a large number of well-known multinational companies, but also has a vast base of strong, innovative and creative SME companies that have a very international outlook.

Sieb Hoogstra is founder of Colors Inc., a Brussels-based consulting firm established in 2005, that supports governments and economic development organisations with their international business attraction from the Benelux. Colors Inc. has established relationships with a wide network of governmental bodies and industry organisations, as well as companies ranging from startups to MNCs, across different sectors throughout the region. Over the last 20 years he has successfully worked with a few dozen EDO’s from America, Europe and Asia.

We asked for his insights on working with companies in the region. Here’s our conversation in brief:

Q: Innovation in the Benelux region is quite strong right now. Which sectors are driving the FDI outflows from the region right now?

A: There are indeed very strong technology clusters in each of the Benelux countries from which many new startups and scaleups grow that are looking abroad. The Benelux has a very diverse economy with many leading sectors.

To put the spotlight on some innovative sectors I can name some clusters. The Netherlands is the second largest agricultural exporter in the world after the USA. That a small country like the Netherlands has been able to achieve this, is because there is a world leading cluster on horticulture & agrotechnology.

Another strong sector has grown out the ecosystem around technology companies such as Philips, ASML and NXP. A very important cluster that has been created is high-tech manufacturing, which groups both the research and development as well as the total supply chain for the technology industry.

Belgium has a leading cluster on the marine and maritime industry that covers coastal defence, offshore energy and marine aquaculture. Interestingly, the four largest private dredging companies are from the Netherlands and Belgium. And with the two largest European ports - Rotterdam and Antwerp - within their borders, the whole hydrogen ecosystem is becoming very important, both in Belgum as in the Netherlands.

And for such a small country, Luxembourg has a surprisingly strong automotive and manufacturing cluster focusing on areas such as smart mobility and digital transformation.

Q: You do work for EDOs from different regions. As far as where Benelux companies are looking abroad, which global markets tend to be top of mind?

A: Europe is very often the first step for companies to go abroad, whereby Germany, the UK and France are most attractive as larger European markets. But nowadays, especially with tech companies, they go straight to global markets in the Americas, Gulf Region or Asia. The USA will always remain an important market for Benelux companies because of the size, one language and business-friendly environment. With the new IRA & Chips Act, the USA is even more in demand.

Q: These countries are all quite international with plenty of expats from around the world. Still, what cultural or language nuances should EDOs be prepared for in the region?

A: Even within the Benelux there are differences between the Netherlands and Belgium. Dutch people tend to be quite straightforward, which sometimes is considered rude, but we consider that giving your opinion helps things move on. In Belgium they will be more cautious.

The hierarchy within companies in the Netherlands is quite flat, which means that everybody gets to have their say in major decisions. In Belgium, there is more hierarchy and decision will be more top down.

And remember that although people speak English quite well, it is not their mother tongue and sometimes nuances will get lost. But in general I notice that Americans and the people from the Benelux work very well together, although it helps to have some ‘cultural translations’. That is another part of our role for our clients.

Q: In your view, what are the best ways to get in front of Benelux companies? Are they more digitally savvy than the rest of Europe?

 A: You will have to come with information that is of interest to their activity. Just “come and invest in XXX” will not work. You will have to see where the match is that you as an EDO offer to the company. The more you can support them with real information, data, introductions and other relevant material to their business, will help you to be successful.

To get to the right persons is not always easy and especially tech companies do not use email so much anymore. LinkedIn and Instagram are alternatives that can be used to get hold of people.

Q: What are Benelux companies reading mostly in your view? Any inside tips on where locals are getting their business and industry news?

A: There are the main business newspapers, Het Financieele Dagblad in the Netherlands, De Tijd in Flanders, L’Echo in Wallonia, which remain important sources for developments in the economy and industries.

In the Benelux companies like to work through cluster organisations. An industry cluster is generally a combination of business, knowledge institutes and government working together (the so-called Triple Helix). These clusters, often well established organisations, can be quite strong and effective and will also support the companies with their internationalisation.

Q: Sometimes we can all learn from what we shouldn’t be doing. What common mistakes do you see EDOs making when recruiting in Benelux?

A: You have to understand that, in the Benelux, we know the different USA states and the main cities in the USA, but we are not aware of all the different counties. Many EDOs come to Europe promoting a county nobody ever heard of, and even some large cities use the county name that is unknown in their promotion.

Also, do not come out on a mission during our summer holidays. People will leave for 2-3 weeks in summer in July and August. Especially between 15 July and 15 August, you will not be able to meet with everybody you want. The rest of the year you are very welcome! 

Based in Brussels with over 20 years of FDI and trade experience, Colors Inc. works both for corporate and government clients to help them get in front of potential investors for FDI and sell into new international markets.