Vincent Karremans, minister of Economic Affairs in the Dutch caretaker government, has set out a nine-point plan to reverse the country’s innovation lag. While the Netherlands is one of the three leading EU countries in terms of innovation – thanks to its leading research, high-quality training programmes, high degree of digitalisation and strong public-private partnerships – it places only ninth in terms of investments in innovation.
The Netherlands currently invests 2.2% of its Gross Domestic Product (GDP) in Research and Development (R&D), considerably less than leading countries such as the US, South Korea and European peers including Belgium (3.3%), Germany (3.1%) and Sweden (3.6%). Despite past ambitions to make up lost ground, the Netherlands joins a group of countries including France (2.2%), Slovenia (2.1%) and the Czech Republic (1.8%) whose investments have for years remained stubbornly below the 3% threshold.
Two thirds private, one third public
Without support, the rate of investment in the Netherlands will drop to 2%. Raising that level to 3% requires €14.9 billion in public investment. On 11 July, the Dutch Council of Ministers approved the ‘3% Action Plan’, setting out a range of measures that will lead to 3% of Dutch GDP being invested in R&D by 2030 – in line with EU goal. Two thirds of the funding will be from private investors and businesses, and one third will be sourced from the public sector as well as education and knowledge institutes.
No choice but to stay ahead
Compared with other countries, the Netherlands is falling short when it comes to making targeted investments in cyber and economic resilience. A lack of innovation leads to dependencies and puts a brake on businesses’ growth. This has an incisive impact on jobs and economic security, posing a long-term threat to the country’s ability to pay for public services such as healthcare and national security.
Minister Karremans: ‘We need to earn our money before we can spend it. The Netherlands has no shortage of dynamic businesses and talented people, but we’re failing to capitalise on all that innovation on our doorstep. That’s why we need to optimise marketing channels for our specialist knowledge, raise public and private investments and increase the number of knowledge-intensive companies in the Netherlands.’
Karremans has therefore put forward a nine-point plan, made in collaboration with businesses and knowledge institutions, for structural improvements to Dutch R&D investments.
The nine-point plan
- Establish the National Agency for Disruptive Innovation (NADI);
The Dutch government will set up a new public-sector organisation that will be the first to purchase innovations. This is similar to the approach used by other national governments to scale breakthroughs such as the internet, GPS and mRNA technology. - Set up R&D launch platform;
This platform aims to attract knowledge-intensive companies to the Netherlands or enable them to expand in the country by removing barriers to access to talent, space or innovation schemes, for example. - Mobilise €3 billion in institutional capital for R&D-intensive scale-ups;
A lack of funding is holding back start-ups from transitioning into scale-ups. To improve access, the government will focus more on mobilising institutional investors such as pension funds. - Improve access to experimental facilities for tech start-ups and scale-ups;
This focuses on providing affordable access to high-quality experimental facilities for various key technologies, such as the AI factory in Groningen. Its aim is to accelerate development and scaling among growth companies. - Stimulate knowledge valorisation;
Entrepreneurship projects, spin-offs and policies such as standardised deal terms at knowledge institutions will substantially increase the number of promising research ideas that evolve into successful companies and applications. - Increase the availability of technical talent and labour-saving technologies;
Investments in sectoral and regional programs like the Microchip Talent Strengthening Plan and Techkwadraat will systemically address the shortage of technical talent. - Establish an EU co-financing facility;
This is a structural facility through which the government will co-finance innovation and technology at national level. The Netherlands currently has no budget and is therefore missing out on key EU funding. - Optimise innovation schemes;
This will optimise existing schemes such as the Tax Credit for Research and Development (WBSO) and Public-Private Partnership (PPS) allowance in order to accelerate and facilitate more targeted corporate investment in R&D. - National Investment Institution;
This public investment institution will focus on innovation, technology and earning capacity, so that companies that are currently ineligible can access funding.
Topsector ICT’s view
Topsector ICT welcomes Minister Karremans’ 3% R&D Action Plan. After all, R&D investments are pivotal to the health of the Dutch economy. Key Digital and Information Technologies such as AI, Cybersecurity Technologies, Neuromorphic Computing and Quantum Technology represent not only income channels in tomorrow’s economy, but also potential sources of innovative solutions to major societal challenges. This thinking is also reflected in the government’s Mission-driven Innovation Policy and National Technology Strategy. Topsector ICT is coordinating Action Agendas for two of the ten key Digital and Information Technologies: AI/Data and Cybersecurity Technologies.
In her lecture at the Royal Netherlands Society of Engineers (KIVI), Jeannine Peek, figurehead of Topsector ICT, argued that the Netherlands needs to start viewing digital innovation more as a transformation. She explained how digitalisation must be taken more seriously: ‘Taking digitalisation seriously means making structural investments in R&D amounting to around 3% of GDP. That’s the least we need to remain a leading and competitive knowledge economy not just in Europe, but globally. There also needs to be a budget to facilitate a digital transformation – just like the energy transition.’
Topsector ICT welcomes the measures in the nine-point plan to reinvigorate the Dutch innovation landscape. The plan will improve the country’s earning capacity, economic resilience and technological independence.
Next steps
Minister Karremans will be working with all partners to refine the plans.