National Dutch entrepreneurship - the case of Dutch royal house led commercial delegations : Investigation of the effect of royal led economic missions on the Dutch economy.

Business Studies MASTER THESIS

National Dutch Entrepreneurship - The Case of

Dutch Royal House Led Commercial Delegations

Investigation of the effect of royal led economic missions on the Dutch economy

Student: Kim Klijnsmit Student number: 10322507 Supervisor: Dr.Tsvi Vinig MSc Business Studies: Entrepreneurship & Innovation

Kim Klijnsmit 2

Abstract

The effect of royal led economic missions on participating companies in the Dutch economy has driven controversial discussions. Scholars have mostly focused on researching the effect of economic missions in the promotion of export, with the result of creating little consistent evidence. The impact of these missions has proven difficult to qualify, let alone quantify. This thesis adds to the literature by examining the overall effect the economic mission has on the partaking company and the role the Dutch Royal House plays in the event as a national entrepreneur. So far, no model can be found that examines the monarchy in light of its exact influence on such a visit. Through means of a survey, 65 Dutch managers following economic mission participation have been questioned. According to the empirical findings, respondents agree that the presence of the Dutch Royal House has a positive influence on a mission yet what the exact influence is has not analogously been determined. The empirical findings also show the unique finding of all 65 respondents agreeing with the continuance of the organization of economic missions, accentuating its importance as an added-value tool of commercial diplomacy.

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Table of Content

2. Research Question & Objectives ... 9

3. Theoretical Framework ... 11

Finding Relevant Literature ... 11

Starting with Entrepreneurship ... 12

Schumpeter’s Definition ... 12

Entrepreneurial Characteristics ... 12

Contemporary Entrepreneurship Theory ... 13

A Quick View on Historical Thinking ... 14

The Management of Dutch Paupers... 17

History of Dutch Royal Led State Visits ... 17

When is a Visit a State Visit? ... 18

Dutch State Visits and Economic Missions ... 20

An Overview of The Dutch Monarchy ... 22

Corporate Branding ... 23

Communication On Behalf of the Monarchy ... 25

Commercial Diplomacy ... 25

Research in Commercial Diplomacy ... 26

The Effect of Tools of Commercial Diplomacy ... 26

Small Medium-Sized Enterprises vs. Large ... 28

Match-making Program ... 28

The Effect of the Presence of the Monarchy ... 29

Economic Mission to Brazil ... 30

4. Conceptual Model ... 31

5. Methodology ... 33

Research approach ... 33

Data Collection ... 34

Stage 1 – Archival Research ... 34

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Stage 3 - Questionnaire ... 35

Sample description ... 36

Design ... 37

Data Analysis ... 37

6. Results & Analysis ... 38

General Findings ... 38

Firm Profile ... 38

The Dutch Royal House ... 39

Economic Mission ... 41 Objectives ... 41 Activities ... 42 Outcome ... 44 Monetary value ... 44 Non-Monetary Value ... 45 Economic Contribution... 46 7. Statistical Analysis ... 47

Size versus Activities... 47

Size versus Outcome ... 48

Size versus The Dutch Royal House ... 48

Trust ... 49 8. Conclusion ... 50 Discussion ... 51 9. Limitations... 54 10. Future Research ... 56 11. References ... 57 12. Appendix ... 62

State visits of former Queen Beatrix between 1980 and 2013 ... 62

Survey ‘Economische missies geleid door de Nederlandse Koninklijke familie’ ... 63

Email to Participants ... 67

Confidentiality Statement ... 69

Email conversation with Quaedvlieg ... 70

Interview Questions for Interview Quaedvlieg ... 70

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List of Figures

Figure 1: Conceptual model highlighting the different dimensions of an effective economic mission Figure 2: Sector company found in

Figure 3: Total composition of sample Figure 4: Number of contracts closed

Figure 5: Distribution of financial/non-financial result

List of Tables

Table 1: Share of a number of countries in world and European trade* (in%), 1980-1999 Table 2: State Visits/Economic missions held over the last 10 years

Table 3: Dutch Monarchy

Table 4: Measurement of value of The Dutch Royal House or Government Representative during economic mission (%)

Table 5: Purpose of Economic Mission

Table 6: Scale of importance of activities to engage in during an economic mission Table 7: Turnover increase subsequent to economic mission

Table 8: Correlation between importance of EM activities and size of the organization Table 9: Correlation between monetary value factors and size of the organization Table 10: Hypotheses

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1. Introduction

Over the past 33 years, the Netherlands has organized high-profile state visits and economic missions involving hundreds of business people, high-level government officials, and often the Dutch Royal House herself. Press releases from the Dutch government associated the missions with millions of euros in new business deals in the form of contracts, letters of intent and memorandum of understanding. Whether an increase of monetary value, may be greater or smaller than the reported figures, a mission can generate cultural, political and social capital that later leads to transactions succeeding to the ones announced during the missions. This view is reflected in the following statements made subsequent to the 2012 economic mission to Brazil, Minister’s Lilianne Ploumen reports ‘This was a great week. Many of the 157 companies that participated in the largest Dutch economic mission in history, signed agreements, contracts and letters of intent’ whereas former Prince Willem-Alexander, who was part of the economic mission, explains ‘The future will show the extent of the actual value generated by the mission’ (RTL Nieuws, 23 november 2012).

On the negative side, Pieter Klaas Jagersma (2005) argues ‘It is time to stop economic missions. They do not create any demonstrable effect on trade patterns and therefore have nothing to do with export promotion. Real entrepreneurs do not need economic missions, state visits or the Dutch Royal House.’ Under a less skeptical perspective, dual-nation firms like Anglo-Dutch oil giant Royal Dutch Shell (RDSA) and Unilever (UL) who have the option of traveling with the Dutch Royal Family explain that the royal bump will only take you so far, says Wim van de Wiel, spokesman for Royal Dutch Shell. ‘In the end, it is still up to us to prove ourselves’ (CNN, 2013).

I subject these competing views of state visits and/or economic missions to empirical scrutiny through the questioning of 65 Dutch managers who have been on a state visit or a larger economic mission from 1980 to 2013. By asking what their objectives were to join in on a visit, their experience and outcomes, or more specifically if there was an increase in turnover after their participation, and closing what their exact view was on the presence or absence of the members of the Dutch Royal Family on a visit, an attempt will be made in measuring the effectiveness of Dutch state visits on the partaking company.

The impact of these visits has proven difficult to qualify, let alone quantify. It appears to hang in platitudes like “it is the lubricant for international business” or “it opens all doors” yet according to the majority of scholars who have investigated this matter little or no tangible benefits have been reaped (Spence, 2003; Head and Ries, 2010; Wilkinson and Brouthers, 2000a; Moons and van Bergeijk, 2011; Ruiter, 2005). This master thesis fits within a larger literature that attempts to measure the different effects of missions. While by a large proportion believed to be the most effective, researchers have found it challenging to find substantial evidence of its positive effect on trade. The main branch of the literature examines missions in the light of their effect on export, however this

Kim Klijnsmit 7 thesis will focus mostly on qualitative outcomes experienced. Currently, there is no universal definition of a royal led economic mission found in scientific literature and therefore a clear reference to this concept will therefore not be found in this master's thesis. An operational definition of a Dutch economic mission will be based on the composition of participants and the purpose of the mission. Most importantly, the scope of this study is to review the objectives and effectiveness of Dutch Royal House commercial led delegations and therefore research will be abated to this subject in matter.

International entrepreneurship is of great importance to the Dutch economy, both for Dutch entrepreneurs abroad as for foreign entrepreneurs in the Netherlands. It creates prosperity and contributes to economic security and stability. Hence, it is of no surprise that there is a public interest in the use for diplomatic instruments to help Dutch entrepreneurs abroad as well as foreign entrepreneurs in the Netherlands. The shift of global economic power towards the East, intensifying competition and global challenges such as climate change and scarcity of resources force governments to reconsider their commercial diplomacy (Okano-Heijmans and Ruel, 2010). Therefore, it is all the more vital to make commercial diplomacy as a central feature of a countries foreign policy. However, the opposition to Queen Beatrix’s visit to Oman in 2012, demonstrates that a strategy attaching great importance to the promotion of commercial benefits through diplomatic means does not come without controversies.

Why might physical presence of the monarchy matter for international entrepreneurship and eventually the nation’s economic health? Even in the globalized world of today cultural, political and bureaucratic obstacles are often more persistent than is believed to be. Differences between countries and political systems may be enormous and for this reason, economic missions led by the Dutch Royal House are widely used to neutralize these clashes. Stability, continuity and a national focus is provided as the head of state remains the same even as governments change. The presence of the Dutch Royal House grants the mission a certain status and systematically screams more success than a mission of a lower calibre. Needless to say, the Dutch Royal House opens up opportunities to come into contact with influential companies and foreign government officials and thus enables Dutch companies to enter circles that they would not be able to get in by themselves. Evidently, the use of the Dutch Royal Family, in a dignified capacity, is incalculable. However, the supportive evidence on the presence of a head of state to deliver advantages during commercial delegations reinforces the interest in finding out whether their presence also eventually stimulates the welfare of the Dutch economy.

Since acceding to the throne in 1980, Queen Beatrix has undertaken fifty-four state and official visits. She makes on average two outgoing state visits per year – making her one of the most widely travelled Dutch monarchs in history. Given that international travel activity seems to have strongly increased over time (Nitsch, 2007) the number of state visits made per year by the Dutch Royal House has on average remained stable within this period. This comes of no surprise as a lot of money, time and effort are invested in the preparation and execution of these visits. Unfortunately,

Kim Klijnsmit 8 estimates on the costs of a state visit have not been issued which has made it all the more become an ongoing discussion in the Dutch society. The lack of insight into the level of cost of such visits makes it difficult to believe its positive effect and can be said to be the underlying premise in the debate of this subject. The question is really, how successful are state visits? Does the Dutch Royal House contribute to this success rate? Or do they perhaps play as an inhibitor?

In the next section, the research question and objectives of this master thesis will be defined. Considering that this thesis is written from an entrepreneurial perspective, chapter 3 will start by clarifying the concept and provide a foundation that state visits are driven for. A quick view on Dutch history, the Dutch monarchy, Dutch economic missions and Dutch state visits will be made followed by provision of background and analysis of the available literature on the topic commercial diplomacy and specifically the effectiveness of economic missions. Corporate branding literature will depict the means by which a royal family can be seen as a corporate brand vital for business development. The gaps in the literature will be illuminated and will lead to a conceptual model of royal led economic missions. The model will be a guide to the data gathering that is described in the methodology section. Findings will be presented in the results and thereafter statistical analyses will be conducted to critically analyze the relationships between the various variables found in the conceptual model. Finally, the conclusion summarizes the results and discusses their policy implications.

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2. Research Question & Objectives

The general framework in which this master thesis belongs is national Dutch entrepreneurship. This broad context will be narrowed down to describing the effectiveness of a state visit and the way in which the Dutch Royal House stimulates this effect based on the assumption that they are analogously engaging in the promotion of entrepreneurial activity.

Although comprehensive research has been undertaken on the subject of state visits and/or economic missions, it is still rather confined and is to some extent partial. In my view, much of the attention in literature has been focused on how economic missions promote export. In this case this was too challenging to quantify and therefore focus will be put on the overall effect the state visit and/or economic mission has on the partaking company and the role the Dutch Royal House plays in the event. No model can be found that examines the monarchy in light of its exact influence on such a visit. The institution of the monarchy is diminished or excluded and therefore this research is designed to answer the question:

What is the monetary and non-monetary value of a state visit and/or economic mission on the partaking company led by the Dutch Royal House in an entrepreneurial context?

As can be read on the title page, the title of this work is: ‘Investigation of the effect of royal led economic missions on the Dutch economy’. The commercial delegations led by the Dutch Royal House have helped create commercial monetary economic value or needless to say they have stated to be a contribution to the economy but the extent of this value is still unknown. As this is too difficult to enumerate, this study has been simplified to scrutinize the effect on the company itself. The effect that each company experiences individually, collected becomes a sum of the input on the welfare of the Dutch economy.

The research objectives derived from this research state the following:

1. To define national entrepreneurship and explore the analogy between the subject and the activities pursued by the Dutch Royal House.

2. To constitute the different types of economic missions defined in terms of the Netherlands. 3. To identify findings in existing theory on effectiveness of a state visit and/or economic

mission.

4. To examine the extent to which the Dutch Royal House can be regarded as a corporate brand. 5. To identify the companies who partook in an economic mission between the year 1980 and

Kim Klijnsmit 10 6. To analyse the participating companies and categorize them according to firm characteristics. 7. To evaluate whether the participation of a state visit and/or economic mission (to Brazil)

brings monetary and/or non-monetary value to the partaking company.

8. To compare whether this value is similar for small, medium and large enterprises.

9. To contribute to the existing literature on the effectiveness of an state visit and/or economic mission.

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3. Theoretical Framework

This chapter will summarize relevant literature findings on state visits and/or economic missions, effectiveness of such, corporate branding and the role of the monarchy in these visits. To be able to answer the research question, these notions will be clarified and explained which in turn will help identify the gaps in the existing literature.

As noted, currently there is very little scientific literature on state visits and/or economic missions. A clear reference to these notions will therefore not be found in this master's thesis. Based on the composition of literature found, a definition will be formulated that will in succession be of reference to the ‘Dutch state visit/economic mission’ and therefore be applicable for the empirical part of this thesis.

Finding Relevant Literature

In this literature overview, studies from various sources have been gathered to come to relevant and reliable conclusions. The (predominantly academic) literature has been used to create a foundation that the conceptual model will be based upon. From the literature, presented variables and influences on the partaking company of a state visit have been fundamentally clarified and combined. Searching for and obtaining literature was conducted through various means. Firstly, the keywords and phrases ‘handelsmissie, Koningshuis, economische missie, economische missie en gevolg, monarchie’ as well as a derivative and translated version of them were identified and used to obtain a first impression of the existing literature. The search terms have been used to get a complete picture of a state visit and/or economic mission. Zooming in on the effectiveness in turn highlights the activities through which a state visit is executed and places the topic of interest, the Dutch Royal House, into context.

It is evident that the amount of literature on state visits and/or economic missions is rather limited and therefore the literature reviewed in this thesis is quite a complete overview of what has been explored as well as set as accessible information to the public. The search using the term ‘economic mission’ yielded 12 relevant papers after applying selection and cross referencing. Although there has been little academic research conducted on this matter, the topic remains to many highly inquisitive. Based on a couple of newspaper articles and press releases and their date of publication, it can be concluded that this is still a relatively new field of interest and a questionable one. “Stop nou eens met die handelsmissies” and “Wat kost het Koningshuis per jaar?” are two articles that have been written which represent the curiosity of Dutch citizens and which question the Dutch Royal House. Han de Ruiter shoots back and explains that if small medium enterprises participate on an economic mission that success is certainly insured, in his article “Handeslmissie Spanje: opbrengst 20 miljoen.” In the article “Goed Mikken met Economische Missies” Filip Abraham finds a middle

Kim Klijnsmit 12 way and makes a distinction between successful economic missions and those that fail based on five factors. In addition, it is essential to notate that most of the positive written articles on a state visit and/or economic mission have been sponsored by governmental parties.

Starting with Entrepreneurship

Considering that this thesis is written from a national entrepreneurship perspective and this being the underlying theme, the concept will be clarified and the strong analogy between the subject and the activities pursued by the Dutch Royal House will therefore become apparent.

Schumpeter’s Definition

The word entrepreneurship is a mixed blessing and its meaning continues to evolve. Beginning with Schumpeter (1934), who has provided one of the most influential ideas about entrepreneurship, it can be viewed as a force of “creative destruction” - a state at which a new venture and all its related ventures effectively render existing products, services, and business models obsolete set off by a chain reaction by successful entrepreneurship. He identifies in the entrepreneur the force necessary to drive economic progress, carrying out “new combinations” and thereby helping economies that would otherwise become static, structurally immobilized and subject to decay. Most importantly, Schumpeter sees the entrepreneur as an agent of change within the larger economy ascribing to their role a paradoxical impact, both disruptive and generative. He defines these entrepreneurs as innovators who implement entrepreneurial change within markets, where entrepreneurial change has 5 manifestations:

1) the introduction of a new (or improved) good 2) the introduction of a new method of production 3) the opening of a new market

4) the exploitation of a new source of supply

5) the re-engineering/organization of business management processes

Schumpeter’s (1934) definition of entrepreneurship therefore places an emphasis on innovation; that is market opportunities are recognized and exploited through use of innovative approaches. Further building on the foundation laid by Schumpeter, who grounds entrepreneurship within a system, entrepreneurship is viewed as creating market disequilibrium from its original equilibrium position by generating innovations, i.e., as disruptive - bringing change to the market to a greater or lesser degree.

Entrepreneurial Characteristics

Based on Schumpeter’s theoretical base, the entrepreneur is one whom is attracted to the suboptimal equilibrium, seeing embedded in it an opportunity to provide a new solution, product, service, or

Kim Klijnsmit 13 process. Whilst others see this condition as an inconvenience to be tolerated, the reason that the entrepreneur sees it as an opportunity to create something new, stems from the unique set of personal characteristics he or she brings to the situation - inspiration, creativity, direct action, courage and fortitude. These characteristics are essential to the process of innovation.

In preparation for the research to be reported below in qualifying the Dutch Royal family as a carrier of entrepreneurial characteristics, a complete list of traits attributed to successful entrepreneurs as proposed by McClelland (2011) will be given. Competencies which are characteristics of successful entrepreneurs are 1) proactivity, 2) achievement orientation and 3) commitment to others (McClelland, 2011). Under these competencies, McClelland names entrepreneurs as leaders who are initiative and assertive, sees and acts on opportunities, enjoys taking personal responsibility for their decisions and enjoys feedback on their performance, very efficiency orientated, likes to plan systematically, develops procedures to ensure that work meets standards of quality, and recognizes the importance of business relationships.

Contemporary Entrepreneurship Theory

Contemporary theory recognizes entrepreneurship as a necessary ingredient for stimulating economic growth and universally associates entrepreneurship with opportunity. The OECD states ‘policies to foster entrepreneurship are essential to job creation and economic growth (OECD, 2003). Successful small enterprises are the primary engines of job creation and income growth, strong government support for entrepreneurship has therefore become a crucial strategy for economic development. Support from government can range from capital incentives to accustomed tax policies to export promotion programs also known as economic missions. The economic missions are one of the preferred policies by SME’s since they require a “entrepreneurial management style” (Spence, 2003).

Coming back to national entrepreneurship, policies introduced by governmental parties vary per country and are unique based on their economic, social and institutional infrastructure. It is in the interest of all governments to implement policies to encourage entrepreneurship. Furthermore, different levels of entrepreneurship may stem from how influential the culture is in encouraging entrepreneurship within the community. According to the Global Entrepreneurship Monitor, more than 80% of Dutch adults believe that starting a business is considered a desirable career option and about two-thirds find that entrepreneurs have a high level of status and respect. In addition, the role of entrepreneurship in the economy and the specific nature of entrepreneurial activity depend on the level of economic development of an economy. In contrast to factor-driven economies and efficiency-driven economies, the Netherlands is an innovation-driven economy which means that its service sector strongly expands and its industrial sector evolves in terms of variety, R&D and knowledge intensity (World Economic Forum, 2011). The level of per capita income is used to classify countries along

Kim Klijnsmit 14 these stages of economic development. As a small country with an innovation-driven economy, the Netherlands is identified as most developed (GEM,2011) which ultimately has been impacted by its historical export spirit.

A Quick View on Historical Thinking

Overall, it is evident that the policies introduced up till this point in time on top of the Dutch culture and its economic development have influenced the level of entrepreneurial activity in the Dutch economy today. A quick view in the history of the Netherlands will be taken to understand how this development took place.

The discovery of America by Columbus in 1492 and the voyage of the Cape Good Hope by Vasco da Gama in 1498 opened the door to intercontinental trade. In the 16th century, Spain and Portugal were in control of the world seas. The Spanish focused on trade with America while the Portuguese focused mainly on South Asia. Not only till the 17th century, did other Western European countries join, especially the Netherlands and England started to maintain the busy trade routes between Europe, America and Asia. The Netherlands made use of its location, simply laying exactly at the junction along the European coast to the Iberian Peninsula and the Baltic Sea region (De Vries and Van der Woude 1995: 414).

The Dutch East-Indian Company (VOC), formed in 1602, knew soon to conquer a leading position in trade in southeast Asia while the West-Indian Company (WIC), formed in 1621, focused on trade with Africa and America. The intercontinental trade in goods consisted of agricultural products such as sugar and cotton from America, spices (such as pepper and ginger), silk, tea and coffee from Southeast Asia, and metals from Japan and Persia. The Dutch distinguished themselves from the rest by not only transporting goods to and from their own country but also between other countries – carrying cotton from India to Indonesia and China, silk from China, India and Persia to the Philippines and Mexico and slaves from Africa to America and Asia (Landes 1998:145). At the same time the Netherlands established itself to be a staple-market economy whereas goods from all continents were brought to be distributed across the rest of Europe. This led the Dutch Republic to achieve dominance in world trade in the 17th century and set the stage for the era of explosive economic growth that has been called the Dutch Golden Age.

Eventually, by the middle of the 17th century, the Dutch republic was the greatest maritime power of the world, and Amsterdam was Europe’s financial center. It was an era of world trade, the United East India Company, economic growth, wealth, silver, regents, cultural and religious diversity, science and art – the main basis on which the modern state of the Netherlands is founded (de Vries et al., 1995). In the golden age the Dutch Republic was a country of entrepreneurs (Gelderblom, 2008). Large-scale commercial agriculture and fisheries, market-oriented manufacturing and low-cost shipping services combined with military and commercial effort achieved through one of several

Kim Klijnsmit 15 factors - being a society of entrepreneurs - allowed the country to capitulate a position of economic and technological leadership. For example Cornelis Cornelisz. van Uitgeest, a farmer and millwright, built the first wind driven saw mill which in turn stimulated and enabled the growth of Dutch shipbuilding – one of the most important contributing factors to worldwide trading (de Vries et al., 1997).

During the 18th century, the Dutch market began to shrink due to the rise of the British economy and a shift of trade, causing Amsterdam as staple market to experience more competition from other ports. The Napoleonic wars and the French invasion marked the end of the dominance of the Netherlands as trading nation. The ban that Napoleon proclaimed on trade with England reduced international trade to a fraction of its former level. In a span of 60 years, the volume of foreign trade (import and export) which amounted to 80% of the national income decreased to less than 30%. The beginning of the Dutch trade crisis can be attributed to two factors: protectionist measures by other countries (while the Netherlands hardly implemented barriers on the importation of goods) and a lack of competitive export products (Horlings, 1995).

In the 19th century the Dutch export package was too one-sided with too much emphasis on tropical and agricultural products and therefore the Netherlands did not benefit from the strong growth of the trade in industrial products. Because of this the composition of Dutch trade changed considerably. The share of tropical agricultural products fell sharply and the share of industrial products grew which was related to the dismantling of the Government Cultures in the Dutch East Indies and the rise of the Dutch industry. Thus during this period, the first Dutch multinationals were formed which are till date some of the largest Dutch companies: Royal Dutch / Shell , Van den Bergh and Jurgens (now Unilever) , Enka (now Akzo Nobe) and Philips. This enabled foreign trade to become more convoluted with the production structure of the Dutch economy.

The outbreak of the First World War greatly affected Dutch foreign trade and marked the end of globalization and expansion of international trade. Dutch export was affected more than other countries as the guilder was expensive compared to other currencies. However between 1950 and 2000 the share of Dutch trade grew considerably as the Netherlands benefited from the growth in world trade and their share of exports and imports GDP increased.

Furthermore, it can be stated that the Dutch share in world trade over the past 50 years has been stable and that changes can be attributed to differences in prices between total production and trade. Recent decades have been characterized by the entrance of new countries in the field of international trade, specifically countries from East-Asia such as China, Hong Kong, Singapore and Taiwan. It is important to note that the Netherlands has been able to keep its share in world trade up to standard even though a great number of countries have entered the trade market in recent decades. This makes it all the more interesting to consider how trade performance in the Netherlands compares to that of its neighboring countries. It becomes visible through the table below, that since 1980, the

Kim Klijnsmit 16 Netherlands' share in world trade declined slightly, from 3.8 percent to 3.4 percent. In the same period, the share of Europe in world trade dropped at approximately the same rate, therefore enabling the Netherlands to maintain its trading position within Europe. Within Europe, it was the former communist countries that lost their field in trade significantly.

Table 1: Share of a number of countries in world and European trade* (in%), 1980-1999

Adam Smith described in 1776 in “Wealth of Nations”, how Holland in the 18th century, thanks to international trade, belonged to one of the wealthiest nations in the world. For centuries the Netherlands has been a leading trading nation. Although it does not occupy the dominant position it had in the 17th and 18th century, it still has a relatively strong market position for the small open economy that it is – with 0.25% of the world’s population and less than 1% of global production, it accounts for 3.2% of global trade (Wetenschappelijke Raad voor het Regeringsbeleid, 2003).

Kim Klijnsmit 17 The Management of Dutch Paupers

King William I was proclaimed the first king of the United Kingdom of the Netherlands in 1815. Having ruled for 25 years, The Kingdom of the Netherlands experienced great economic progress under his reign. King William I was a forceful character, interested primarily in economics and he proved to be an avid entrepreneur. He stimulated trade, shipping and industry through founding of a set of corporations to which he entrusted aspects of his sovereignty. These corporations were created through Royal Decrees and were a specific delegation of royal sovereignty.

The United East Indies Company was made profitable and the cotton industry was created. There was a shift from a mainly agrarian based economy to an industrial one. The King was able to contest pauperism and instil industry in workers mainly through putting in place corporate actors which inculcated “productive virtue” in paupers through self-funding commercial strategies - the industrialization program Nederlandse Handelsmaatschappij (NHM) was founded (Schrauwers, A.,2011). This enabled the King to utilize the corporate form to govern economically thereby avoiding parliamentary opposition and remove the cost of the management of pauperism from the national budget. The result of this was that the King was able to evolve the capitalistic transformation of the sovereignty and economic corporations were able to realize increased autonomy.

Named the “merchant-king” as the “visible hand of the market”, King William I has left a trademark as an important character in Dutch history of entrepreneurship. He invested in successful corporations and encouraged entrepreneurship which aided in reviving the stagnant economy. Entrepreneurial businessmen increasingly adopted strategies and practices developed by the royal corporations to instil the industry (Schrauwers, A., 2011). This and other pieces of the Dutch history only illuminates that the notion of Dutch royal entrepreneurship was set as a foundation to develop on and that the interest of the leader was placed behind those of the citizens for the benefit of the nation.

History of Dutch Royal Led State Visits

State visits form an integral share of the tasks of a modern monarch. This, however, has not always been the case. Approximately 200 years ago, the first Dutch incoming state visit was reported (Koninklijk Paleis Amsterdam, 2013). King William I, in 1815, received his first state visit from Russian Tsar Alexander I. The state visit, as it is recognized today, is stated to be primarily an achievement of the 19th century. In the preceding centuries, it was a rare occasion for heads of state to meet, except for on the battlefield. Only in the Napoleonic era, did this commonality become more frequent. This occurred, for instance, among others in Vienna at the congress for monarchs, where emperors and numerous queens were present. European monarchs continued to visit one another throughout the 19th century. The construction of the railway system reduced the travel time between

Kim Klijnsmit 18 city capitals making means of transport more comfortable and the visit attractive to pursue. The first state visit, in modern sense, took place in 1840 led by Queen Victoria and Prince Albert to Lodewijk Filips in Paris and to Emperor Napeleon III in London. These visits carry similar characteristics to that of a traditional state visit and therefore by definition include a welcoming ceremony, military parade, state dinners and an exchange of gifts between the heads of state. By the end of the 19th century, they had become a fixed routine for the heads of state.

Before the First World War, state visits were used to tie diplomatic and military bonds. English King Edward VII’s visit to Paris and French President Poincaré’s visit to St. Petersburg were clear manifestations of the alliance being formed between Britain, France and Russia. After the Second World War, state visits were often labeled as the reconciliation between countries. In subsequent visits, the promotion of trade became a clear objective to initiate a visit. Throughout Queen Wilhelmina’s reign, Netherlands was somewhat diplomatically neglected seeing as she did not favor state visits and therefore only visited France, Denmark and Belgium. In contrast to her successor, Queen Juliana made several outgoing state visits per year.

Protocol and ceremonial aspects of former state visits have remained. The time of Dutch state visits dragging dining tables, table linen, cutlery, tableware and servants from the Netherlands to foreign nations, however, is over. After Queen Beatrix’s state visit to the United Kingdom in 1982, she abolished this custom and as a substitute began to offer cultural performances. In other words, even state visits adapt through time and so does their purpose. Ambiguities in the classification of a visit as a state visit will become clear in the following section and their purpose will be elaborated on.

When is a Visit a State Visit?

‘It's quite difficult to draw a difference, but the technical difference is a higher ceremonial content.’ (Foreign office spokesman for CNN, 2003)

Implicitly, the concept of a state visit and economic mission should be clear-cut, however an overall definition of a state visit and economic mission is yet to be formulated. State visits are important, characterized by their major ceremonial and diplomatic protocol and formality, they serve as the highest form of diplomatic contact between two countries (Nitsch, 2007). A formal invitation from one head of state to another with consult from the governmental influences (Johnson, 2003). They are viewed as being effective - cement and mark the further development of bilateral long-standing relations (Nitsch, 2007; Ali, 2003). The website of the Dutch Royal House defines a state visit as follows ‘A state visit is made by the head of state of a country to the head of state of another country. It is the highest form of a visit that is taken on an international level with the aim of strengthening the relations between the countries.’

Kim Klijnsmit 19 As effective as they are, state visits only take place occasionally as they are time-consuming and expensive (Nitsch, 2007). In 2010, the Dutch Royal House made two outbound state visits and held zero inbound state visits. Outbound state visits entail a formal visit to the Netherlands by a head of state from overseas and vice versa. For the Netherlands, outbound state visits are more popular than inbound state visits having been almost on twice as many outbound than on the latter. Coincidentally, in the existing literature, outbound visits are the central topic and in this thesis most relevant to our interest.

Secretary of International Economic Policies at VNO-NCW, Winand Quaedvlieg, describes a state visit as a visit with the presence of a head of state and by this means business is spoken of at a meaningful level. The biggest difference does not lie between a state visit and an economic mission but between an economic mission and a trade mission. An economic mission, in the Netherlands, can be part of a state visit. During an economic mission the core lies at “policy discussion”, whether at the table government to government or government to business. In the Netherlands, the Dutch Cabinet has made a distinction between various forms of economic missions. In sum I distinguish between the three existing types of visits:

 Economic missions under the leadership of the Royal House / members of the Cabinet. The main purpose of the mission is on socially responsible business practices. It is structured and prepared by the Ministry of Foreign Affairs several times a year.

 Economic missions organized by private sector associations. Confederation of Netherlands Industry and Employers (VNO-NCW) and the Netherlands Council for Trade Promotion (NCH) liaise with one another to organize missions to developing countries with an emerging market.

 Economic missions as element of the business-related instruments run by the Ministry of Foreign Affairs. Prepared by the division, Transition Facility, to turn development relationships with developing countries (Vietnam and South Africa for instance) into economic partnerships.

Quaedvlieg (2013), in addition, makes the distinction between an economic mission and a ‘round table discussion’ as a form of a state visit. In an economic mission, more corporations and more managers are present than in a ‘round table discussion’ for instance. Only a couple corporations, namely between ten to twenty larger corporations, are allowed to join in on such a discussion as important political, trade and investment matters are discussed at a high level. Therefore it is without question that the queen is always present at a ‘round table discussion’ yet she doesn’t always have to

Kim Klijnsmit 20 lead the conversation. The government, the location’s embassy together with VNO-NCW make an analyses, prior to the visit, on which companies are most eligible for the discussion, followed by their willingness, leads to a formation of a focus group. Questions important for the selection are ‘Which companies have interest in the specific country, which are already present there and who would like to do business there?’ The subsequent step is to ask the chosen corporations if they have strategic questions they would like to have answered. ‘It can’t be bullshit about permits and so forth but more like what is going to happen in the next 5 years in this country, what do the Dutch want from this country, port investments, pipeline construction, in other words big things. Opportunity analysis’, Quaedvlieg explains. The idea is to discuss the most important issues, in specific policy matters, with a group of influential parties to reach a higher level of cooperation. This is made evident in the evaluation made by Ploumen (2013) , who describes in her letters to the Second Chamber of the State’s General, that an important part of the state visit to Brunei in 2013 was the ‘round table discussion’ joined by 11 Dutch CEO’s of leading corporations. All were given the opportunity to present themselves directly in front of government representatives.

Both in economic missions and ‘round table discussion,’ focus is on economic relations, sooner rather than later, but the signing of contracts usually only comes after a couple of months, especially in the case of a ‘round table discussion’. The main focus lies in the refinement of the economy of the Netherlands and ultimately to create more business in foreign countries. Because there is no tangible evidence made, like the finalization of a number of contracts, this has made it difficult to investigate whether these visits are of any value. Results of these visits have also not yet been systematically tracked, making it even harder to measure.

Dutch State Visits and Economic Missions

Former Queen Beatrix has begun to lead many state visits and/or economic missions throughout the world to promote the grand duchy of the Netherlands as an investment center. Her first mission in this capacity, in 1981, took her to Luxemburg.

Before analyzing the relationships between state visits led by the Dutch Royal House and its contribution, it was imperative to control for the actual purpose of a visit given the overwhelming majority of foreign travels made. Travels by politicians are for example visits other than state visits and although in principle associated with economic issues do not classify as a state visit. As mentioned there are differences between state visits, working visits, trips with semi/official character or private visits (Nitsch, 2007). Some are clearly unrelated to the economy (such as attendance at ceremonies) yet are still in company of the Dutch Royal House.

Every year state visits are organized several times a year, among others by the Cabinet. Data on travels of all varieties of state visits reported in the House reports have been agreed to be made public by the Minister of Foreign Trade and Development Cooperation in which the Dutch Royal

Kim Klijnsmit 21 House participates on behalf of the Cabinet. A list of all fifty-four state visits led by the Dutch Royal Family have been published yet those in the form of an economic mission have not been classified. A complete overview of these missions is lacking as there is no list of destinations or other information on economic missions. Mainly what can be found on the internet dates only till 2006. Whether this is due to sensitivity of the topic and the companies of interest or simply the absence of technology, it can be assumed that this exact list and complementary data does not exist.

Based on the House reports and other sources, I will now identify the trips made that classify as a state visit in the form of an economic mission.

Table 2: State Visits/Economic missions held over the last 10 years

1993 Switzerland 1993 Iceland 1994 Jordan 1995 Czech Republic 1995 Indonesia 1997 Poland 1999 China 2003 Chile 2005 Austria 2007 Turkey 2007 & 2011 Germany 2008 USA 2009 Mexico 2010 Norway 2011 Qatar 2011 Vietnam 2012 Brazil

2012 United Arab Emirates

2013 Oman

2013 Brunei

The above list can be classified as a state visit, officials visit, round table discussion or larger economic missions.

Kim Klijnsmit 22 An Overview of The Dutch Monarchy

Dutch Monarchs

King William I 1815–1840

King William II 1840–1849

King William III 1849–1890

Regent Emma 1890–1898

Queen Wilhelmina 1898–1948

Queen Juliana 1948–1980

Queen Beatrix 1980–2013

King Willem-Alexander 2013–

Since 1814, the Netherlands is a constitutional monarchy, a form of government in which the king or queen acts as a head of state and his or her powers are regulated by the Constitution of the Netherlands (ProDemos, 2012). The Constitution is the foundation of the Dutch political system. The monarch governs according to the constitution – that is, according to rules, rather than according to his or her own free will and falls under ministerial responsibility. This act of means was led by political showdowns, in history, between the parliament (de Staten-Generaal) and the Dutch monarch - establishing the parliament as the highest political body and subordinating the monarch to the will of the parliament (ProDemos, 2012).

In the Netherlands, the monarch, as head of state, is an official member of the government. Nevertheless, the king has no political responsibility whatsoever. Article 42 on the Constitution of the Netherlands: (1) The government shall comprise the King and Ministers (2) The Ministers, and not the king, shall be responsible for acts of government. As a constitutional monarch, the monarch and the Royal Family are not expected to take any political stances and must remain politically neutral. The constitutional monarchy separates the Head of States ceremonial and official duties from party politics. Stability, continuity and a national focus is provided as the head of state remains the same even as governments change. They are purely a ceremonial and symbolic function making the role of the monarch limited. Daily matters and management lie in the hands of the vice-president (Koninklijkhuis.nl, 2013). On April 30th, 2013 King Willem-Alexander became head of state of the Kingdom of the Netherlands. Since then, he has been on nine official visits for international debut as the new Dutch Royal king (RTL, 2013). The monarchy is a symbol of nationhood and the “marque” of the Kingdom of the Netherlands (Greyser, 2006).

As mentioned governments change, monarchs typically serve nations longer than democratically elected heads of state (Nitsch, 2007). Therefore it is of no surprise that monarchs are all members of an exclusive club, royals feel connected to one another, even though enormous

Kim Klijnsmit 23

countries and political systems differences may be apparent. Autocratic rulers may dislike democracies but look up to royal titles. If King Willem-Alexander wishes to go to Riyadh, the Saudi King will want to see him that very night. This would be a different case if it were, say, the president of Italy. Hence, the head-of-government lies with the Prime Minister, and it is the monarch that leads state visits to foreign countries.

Corporate Branding

Some monarchies have existed for over hundred years and hence are a widespread and important phenomenon. As a case in point, abdicated Queen Beatrix, has by any branding measure immaculate credentials. An opinion poll illustrated that over the last couple of years the popularity of the abdicated Dutch Queen has risen – of those surveyed 81% indicated to be ‘very satisfied’ with her while in 2011 this was 77% (Ipsos Synovate, 2012). Her brand loyalty and thus favorability from Dutch citizens has been at a high level for some considerable time, over 60% in the last decade. Now on the throne Queen Maxima, remains to be the most favorable member of the royal family with 62% of the vote followed by Beatrix (52%) and Willem-Alexander (34%) (Ipsos Synovate, 2012). Examining the Dutch monarchy through the lens of corporate branding has the potential to offer meaningful insights for comprehending the institution of the monarchy and its role that it can employ in a state visit.

Monarchs stimulate substantial public interest and curiosity which can for example be backed up by the US, who have although never been a monarchy, they are fascinated by monarchs and monarchy and have therefore become a target market for many products with royal endorsements (Balmer et al., 2005). In November 2003, the US president went on a state visit to the UK and spoke of the visit as follows:

‘

It is irrefutable that there is merit in scrutinizing the monarchy from both marketing, entrepreneurship and a branding perspective and yet this has rarely been done. An exception is the work of Greyser et al. (2006) depicting that royal families can be an example for businesses when it comes to branding. Much of the attention in the literature and popular media has been focused on individual monarchs, treating them as “celebrity brands.” Celebrity brands such as Queen Elizabeth, Prince William and Princess Kate Middleton as well as a figure such as the Pope have created their own “personality brands” and gained a highly reputation that has helped them to achieve their individualistic characteristics as a celebrity (this year TIME magazine has named Pope Francis the person of the year). The monarchy as a whole, however, would be an institutional brand. Greyser et al. (2006) explain in their study that monarchies can be seen as corporate brands. A corporate brand is an

Kim Klijnsmit 24 invaluable tool for attracting key constituencies such as customers, employees and most importantly investors. They define a monarchy as a symbol of nationhood and has a target market of a wide range of stakeholders. In that respect, they almost behave like corporations themselves and while even though monarchs are individuals a royal family can be considered as “a firm”. The scholars have explored the marketing aspects of monarchies and noted to have both visual and verbal marketing-oriented characteristics. Balmer et al. (2005) put the monarchy into context and gave it the following descriptive characteristics allied with the characterization of a brand. Later in this thesis, these will be compared with the Dutch monarchy of today.

- Represents the country and be a symbol, “trademark” for the country

- Serves as a symbol of stability, impacting domestic society and helping to provide a positive environment for foreign investments.

- Engenders meaningful, sometimes significant, economic value derived from tourism (eg palace visits, past and present royal venues, etc.)

- Generates revenue for its broad range of endorsed products/services (‘By appointment of...’), and through the visibility and status of ‘royal’ designated entities.

Alongside this, five essential elements (‘royal five Rs’) are identified that need to be present when the monarchy is viewed through a branding lens. These are made up of the elements - royal, regal, relevant, responsive and respected. The former being an inherent element of all monarchies while the latter four are amenable to being managed. In short, they can be described as follows.

Royal: The head of a monarchy is set apart from his or her fellow countrymen as is the immediate family.

Regal: Acting in a royal manner; what you should and should not do. A monarch’s behavior should not be un-regal. To be regal differs from monarchy to monarchy, based on its history (‘what we have done’), traditions (‘what we do, and how’) and culture (‘what the people expect and accept’).

Relevant: To have an affinity with a variety of stakeholder groups in a variety of settings. Responsive: The changing political, economic, social, ethical, economic and technological

environment requires evolutionary change which is important to the monarchy and its institutional continuity.

Respected: Given by the consent of the people (where, de facto , real sovereignty resides), it is a necessity for the monarchy to be respected.

Sufficient amount of attention should be given to each of these elements as well as in their orchestration to retrieve a monarchy that distinguishes it from others. These elements will reflect the

Kim Klijnsmit 25 national mores and precepts. In the Netherlands, openness and informality are key characteristics while in the British monarchical tradition royal ceremony and protocol is more elaborate and formal. ‘In England, the Scandinavian and Dutch monarchies are sometimes described as bicycle monarchies, meaning it is possible to see a monarch on a bicycle as well as in a Rolls Royce …’ (Elisabeth Tarras-Wahlberg) (Balmer et al.,2005, p144).

The “role” the monarchy plays in business development, both on behalf of domestic firms overseas and for foreign investment in the home country can be constituted as one analogy to corporate brand marketing. Monarchies have multiple stakeholders represents another analogy. Further suggested evidence of analogous corporate brand marketing elements, as already mentioned above, is that while monarchs are individuals, the Royal Family is often considered “a firm.” Although, individual monarchs personify the monarchy, it is likely that there are numerous individuals involved in management and support and whom also fulfill tasks. Former minister Jan Pronk calls Beatrix the ‘CEO of the Netherlands who takes her job very seriously indeed’ (NRC, 2013). She would in this case be the CEO of the firm, the Dutch monarchy would be her managing partners. She carries entrepreneurial traits that have allowed her to be capable of doing so.

Communication On Behalf of the Monarchy

The monarchy relies on communication to maintain and improve its public support, making the aspects of reputation and image vital. It has a high symbolic character that has helped serve as roots that shape a country´s identity and can be seen as a great strength in the creation of visibility to foreign places. There has been much questioning in the relevancy of monarchies, especially in the 21st century, and therefore it is necessary to communicate its identity and values among a country´s citizens (Greyser et al, 2006). This is important to mention as it sheds light on the fact that in order to have a presence and presentation to the rest of the world, the Dutch monarchy is first obliged to manage and reinforce its relationship with the Dutch people as public approval and support are essential in its ongoing performance. Confidence in Willem Alexander has grown, having been King for less than a year, trust in the former crown prince has increased from 59% to 69% (Ipsos Synovate, 2013). As noted, the monarchy has assets that corporations do not possess. They are the symbol of a country and have the opportunity to communicate the Crown´s and the country´s core values in various desirable ways to promote these values. One of these initiatives being business development both at home and in foreign areas (Greyser et al.,2006).

Commercial Diplomacy

There has been growing public interest in the diplomatic support of entrepreneurs both operating in the Netherlands as well as Dutch national entrepreneurs abroad. As a result, commercial diplomacy has

Kim Klijnsmit 26 become a central feature of a countries foreign policy. However, a strategy of promoting commercial benefits through the use of diplomatic means has been seen as controversial in some quarters of Dutch politics. Case in point is Queen Beatrix’s visit to Oman in 2012, whereby the Dutch opposition party raised concerns about the Netherlands monarchy involvement in commercial matters with foreign sovereignties.

Research in Commercial Diplomacy

Finally, the literature on the effect and value given by a state visit and or economic mission were scrutinized in order to later come to an understanding if the absence of the Dutch Royal House would have any effect on these contributions. Several studies have explored and developed this emerging area of research (Wilkinson and Brouthers 2000a; Spence 2003; Nitsch 2007; Head and Ries 2010; Heuts and Poel 2010; Creusen and Lejour 2011; Moons and Van Bergeijk 2011) and in general all indicate that missions have a positive impact yet they individually have constituted diverse definitions of a mission. In addition, what the positive impact is diverges according to the perspective one has chosen to take.

The Effect of Tools of Commercial Diplomacy

While economic missions are mostly believed to be effective, some researchers have found it difficult to find substantial evidence of its positive effect. To assess the claim made by the Canadian government that economic missions generate tens of billions of dollars in new business deals, Head and Ries (2010) have concluded in their study, with the use of bilateral trade data, that Canadian economic missions have small, negative and mainly insignificant effects. Furthermore, Wilkinson and Brouthers (2000a) have found a negative correlation between economic missions and high-tech export growth but state ‘Trade shows and missions are two types of programs that are believed to be amongst the most effective when the government is actively involved’ (Wilkinson and Brouthers 2000b, p725). Van Bergeijk (2009) views their ideas with skepticism as their research done cannot be generalized since it only has a US based perspective. In their recently conducted meta-analysis on the effect of economic diplomacy, Moons and van Bergeijk (2011) have not found supporting evidence that trade shows and missions are the most effective tool of economic diplomacy. They do, however, support the notion that embassies and consulates, state visits and dedicated Export Promotion Agencies are significantly more effective than trade missions/shows.

According to the research findings by Heuts & Poel (2010), through an economic mission companies will experience the following benefits 1) growth of their (international) network, 2) more insight on market opportunities in the country of concern, 3) exchange of knowledge between companies or institutions and 4) strengthening and enlargement of brand image in the sector in which

Kim Klijnsmit 27 they are active. Nevertheless, relations made with other Dutch companies during the mission can also be an essential asset for the participants. Contact between companies even continues after the mission takes place. Heuts & Poel (2010), in addition, note the benefit of economic missions in limiting the cost of failure which enables the company to verify opportunities and capabilities before committing significant resources. About one in five companies in the study stated that participation in an economic mission led to an improved export performance yet it remains difficult to determine a causal relationship between the two factors as also concluded by van Bergeijk (2009). Creusen and Lejour (2011), like Heuts and Pool (2010), have also conducted a study in the effect of economic missions for Dutch companies. They have concluded that the presence of government support offices abroad, especially in middle-income countries, and the tool, economic missions, stimulate Dutch firms to enter export markets in these countries and thus the overall growth of export volume. The presence of political representation and their value will be discussed more extensively in the following section.

Nitsch (2007), up till now, has made the most comprehensive analysis on the effect of state visits with political representation. Using a gravity approach to analyse France, Germany and the US, he concludes that a state visit increases bilateral export by 8 to 10%. Because the results show a strong but short-lived effect of visits on bilateral exports growth, Nitsch (2007) recommends to make repeated visits to a country. However, this often seldom happens as state visits only take place rarely given their expensive nature (Nitsch, 2007).

Van Leenputten (2007) presents a more extensive overview, similar to the topic of this thesis, researching the effect of economic missions on foreign investments led by the Belgian Royal Family. He studies this effect by analysing 97 Belgian companies who partook on an economic mission between 2002 and 2004. His main findings was that signing contracts should not be a prime goal, but that they function as a trust building medium, leading up to concrete business deals. Most importantly, he notes that since 'contacts with potential partners' is so vital for the Belgian companies during an economic mission ,the presence of Prince Philip is essential for its success.

In addition, further evidence is given by The Dutch House of Representatives whom explain in their received letters signed by the Ministry of Foreign Affairs that a state visit is of a wealthy part in the broadening and deepening of economic relations. Dutch CEO’s are given the opportunity to present themselves directly to government representatives. This offers them a vital platform in an economy where the government plays a central role (Ploumen, 2013) Useful bilateral discussions at various levels take place which further assists the increase of cooperation. Companies can take note of the planned economic developments of the host country and thus become aware of the possibilities therein for the Dutch business industry. Finally, state visits contribute to improved prospects for Dutch companies in the hosted countries and fulfil Dutch economic interests appreciated by all parties.

Kim Klijnsmit 28 Small Medium-Sized Enterprises vs. Large

Heuts & Pool (2010) also examine the impact that structural characteristics of the firm can have on the effect of success following economic mission participation. They mention that for smaller companies (SME’s) whom attend for the first time, the learning curve is steep. Learning’s from larger companies, with extensive experience in attendance of missions, are valuable for the knowledge regarding international trade or simply business conduct of the visiting country. Related to this notion is the work completed by Spence (2003) whom defines an economic mission as a program with the aim of encouraging SMEs to enter or expand into foreign countries when their experience with the market is still limited. In other words, economic missions are to be carried out to enhance inexperienced SMEs economic development in foreign markets. Consistent with these findings, Ruiter (2005) challenges the idea that economic missions have barely to any effect on larger companies and that it is limited to that only to SME’s. He is convinced that large Dutch companies such as Philips and ABN AMRO are not dependant on an economic mission to be able to arrange their foreign business affairs. They often already have history set in that market, an international network or a brand that can open doors. For small and medium - sized enterprises, with the largest untapped (export) potential, this however is a completely different story. These entrepreneurs have innovative products and ideas but no network and no experience in foreign markets. In the wake of an economic mission the entrepreneur is given guidance in their preparation which allows them to come into contact with the right people in a given period of time. With the current economic circumstances, the internationalization of SMEs is essential in the stimulation of job creation for the economy (Ruiter, 2005).

Match-making Program

It has been argued by Ruiter (2005) and Heuts and Pool (2010) that the quality of the matchmaking-programs that are organized during missions play a large factor in its success and effect on the participating company. The choices and coordination’s of the organizing institution, the intake interviews with companies and their own preparations are key determinants in the making of a high quality matchmaking-program as Heuts and Pool (2010) have demonstrated. The practical character of an economic mission involving SMEs and the Ministry of Economic Affairs in combination with individual matchmaking, is the means for bringing companies together to do good business (Ruiter, 2005). After proper preparation and intake from an organizing institution a matchmaker is provided the necessary new contacts to start in a new market. As a consequence, companies are able to talk to at least five potential investors in one weeks’ time that show mutual interests. This is consistent with the study “Zakendoen kent geen grenzen” conducted by Koninklijke Vereniging MKB-Nederland (2004) indicating that one out of five Dutch companies signed a contract succeeding a mission. The study, in