University of Phoenix
When a country decides on something that they are going to produce this product has to set them apart from other countries. A country bases their product on factors such as how much it costs them to produce it and if it sets them apart from the competition. A comparative advantage is the driving force of production for every country. In this paper we will discuss comparative advantage, abundant factors in the production of certain products, recommendations for the country to specialize in, and industries the country of my choice protects (if any).
For the purpose of this paper I have chosen to explore the Netherlands and their comparative ...view middle of the document...
With that in mind we are back to the comparative advantage The Netherlands has over other countries. An article I read online pertaining to the comparative advantage and the Dutch states that “we have identified three important clusters in the Dutch export patterns, namely the flowers and bulbs cluster, the agriculture and food cluster and the chemical cluster. The strength of these clusters is rather persistent over time. The underlying factors explaining the success of these clusters are primary products and technology. It is interesting to note that these products are distinctive for the Dutch comparative advantage in world trade and that the Netherlands is an important contributor to the world exports in these products. The products that add most value to the total Dutch export magnitude though, do not belong to these three clusters. These are products like electrical machinery and office machines. The fact that the important products out of the Dutch national export- basket are different than the products with which the Netherlands distinguishes itself in terms of comparative advantage in world trade is explained by the role of the Netherlands as a transit port for Europe” (Globalisation and the Dutch Economy, 2007). The point I wanted to make with that quote was that even though a country is thought to be popular for one product might not be their entire comparative advantage. For the Netherlands to be high in comparative advantage in electrical machinery and office machines they have to have a very highly skilled labor force. The technology of the Netherlands goes way back, they have been using windmills for water and farm use for many years.
Based on comparative advantage I would suggest that the Netherlands specialize in the flower industry, cheese and fish industry, and the windmill industry. I made these suggestions because they are known for their flowers. During certain times of the year they have fields of tulips and is a mass producer of bulbs. This will give them the advantage over other countries because there are pictures of the tulip fields and almost all consumers know of their flowers. My suggestion for the flower industry is already in use because they have been specializing in that for awhile. Next I suggested the cheese and fish industry. I suggest this because they are known for their cheese. If you google “dutch cheese” you will get information about their cheese market called “Alkmaar Cheese Market” which is a huge cheese market where people can bid on the cheese of their choice. Fish are also prominent in the Netherlands as they are right by the sea. If you ever get the chance to go to the Netherlands you will be amazed at all the fish carts that are around selling fresh fish. The article I read earlier stated that they already specialize in the food industry but did not specifically...