Dutch aerospace industry
The fact that the Netherlands is a partner in the JSF programme gives Dutch aerospace companies an opportunity to play a role in the development, production and maintenance of the JSF. Because this is a source of jobs, it was one of the main reasons why the government decided that the Netherlands should take part in the JSF programme.
The progress reports on the replacement of the F-16 and the acquisition of the JSF list all the various companies that have received JSF-related orders.
There are two types of contracts with Dutch companies:
- direct orders, i.e. a company is requested to supply a particular product or service;
- framework contracts. This means that no specific orders are placed. Instead, an intention is expressed to place orders in the future with the company with which the framework contract has been signed.
Remittances paid to the state
By participating in the JSF programme, the Netherlands is investing in the development and production of the JSF. Although these investments involve a higher level of expenditure than would be incurred in buying an existing aircraft, they also generate orders and jobs for Dutch aerospace companies. It was for this reason that the Dutch government signed a cofinancing agreement with the Dutch aerospace industry. Under the terms of the agreement, aerospace companies are obliged to remit a certain percentage of their turnover to the Dutch state. This covers part of the extra cost.
Employment and the JSF programme
In 2012, the Minister of Defence asked a firm of researchers called SEO Amsterdam Economics to assess the implications in terms of employment if the Netherlands decided either to continue with the JSF programme or to withdraw from it.
SEO Amsterdam Economics concluded that it was doubtful whether the JSF programme actually boosted job creation in the country as a whole. Although the JSF programme created turnover and added value for the companies working on JSF-related orders, there was not a noticeable impact on the level of employment. This was because the work on JSF-related orders displaced other forms of work: those companies that received JSF-related orders tended to attract staff working on other projects, e.g. Airbus. On balance, no new jobs were created.
A second conclusion was that, if the Netherlands were to withdraw from the JSF programme, aerospace companies would earn less turnover and create less added value from JSF-related orders. However, even this scenario would not have a noticeable impact on employment levels.
The CPB Netherlands Bureau for Economic Policy Analysi had also come to this conclusion in two previous studies (published in 2001 and 2009).