The Netherlands faces €12bn R&D funding hole as productiveness stagnates
The Netherlands should produce 10 new expertise and market leaders over the subsequent decade, based on Vincent Karremans, its caretaker minister of financial affairs, because the nation faces a €12bn annual funding hole in analysis and growth (R&D).
Talking on nationwide radio, Karremans warned that with out decisive motion, “there can be no sturdy Netherlands”.
The bold goal responds to alarming productiveness knowledge outlined within the authorities’s R&D motion plan and productiveness agenda, which reveals that Dutch R&D spending has stagnated at simply 2.2% of GDP – properly beneath the European goal of three% – and threatens to fall even additional to 2% by 2030.
In the meantime, the Netherlands has slipped from fourth to tenth place on world competitiveness rankings between 2022 and 2025.
Productiveness development has stagnated at simply 0.4% yearly over the previous decade, in contrast with 1.5% between 1974 and 2013.
“We should make investments now in tomorrow’s incomes capability,” Karremans emphasised in an interview with Pc Weekly on the Dutch Digitalization Day, held in The Hague this week.
The urgency extends past economics, with an ageing inhabitants and Nato’s 3.5% GDP defence spending requirement, and the Netherlands desperately wants increased productiveness to preserve public providers and safety. capabilities.
Strategic focus replaces scattergun method
The federal government’s response marks a basic departure from conventional Dutch financial coverage. Quite than the long-standing method of “watering all of the flowers”, Karremans is exploring focused help for 5 or 6 industries the place the Netherlands can genuinely compete globally.
“Dutch financial coverage has at all times been about supporting all sectors equally,” he defined throughout the current tech convention, organised by Topsector ICT and NLdigital. “However this broad method means we don’t really excel anyplace, and are being overtaken by international locations that do make strategic decisions.”
The coverage change consists of extending the federal government’s flagship startup programme, Techleap.nl, for one more three years till 2029, with renewed deal with scaling deep-tech corporations. Mixed with new fiscal incentives for worker share participation in startups from January 2027, the federal government goals to create an ecosystem able to nurturing the subsequent technology of corporations, equivalent to ASML and Adyen.
Innovation paradox undermines potential
Regardless of world-class universities and analysis establishments, the Netherlands suffers from what the stories describe as the “innovation paradox” – glorious scientific output that fails to translate into industrial success. Whereas Dutch analysis ranks among the many world’s finest by way of educational influence, the nation generates comparatively few college spin-offs and struggles to scale startups into substantial corporations.
Just one Dutch firm, ASML, seems among the many world’s high 50 R&D traders, spending roughly €3bn yearly. Particular person US and German opponents, equivalent to Apple and Volkswagen, every make investments greater than €20bn yearly, exceeding the mixed R&D spending of the whole Dutch personal sector.
This slender basis reveals a deeper systemic drawback: the Netherlands lacks the circumstances to nurture extra corporations of ASML’s calibre. The Dutch authorities has responded with a complete nine-point R&D motion plan, designed to extend analysis funding structurally by 2030.
The technique operates alongside three key tracks: boosting R&D spending amongst present corporations, facilitating the institution of research-intensive ventures, and enhancing the circumstances for modern companies. Particular measures embrace exploring a Dutch equal to the Protection Superior Analysis Tasks Company within the US, establishing an R&D launch platform to take away limitations for rising corporations, and mobilising €3bn in institutional capital from pension funds.
Different parts goal essential bottlenecks, together with increasing entry to experimental services and testing environments, bettering information switch from universities to the market, addressing the scarcity of technical expertise and making a nationwide European Union (EU) co-financing facility for European expertise programmes. The plan additionally consists of upgrading the innovation toolkit and doubtlessly establishing a nationwide funding establishment with better monetary firepower.
Structural limitations threaten competitiveness
A number of bottlenecks require pressing consideration. The financing bottleneck significantly impacts deep-tech startups requiring funding rounds of €50m or extra, forcing many promising Dutch corporations to hunt funding overseas and sometimes relocate within the course of. This relocation risk has prompted Karremans to advocate tailor-made help on the highest ranges for companies with the potential to turn out to be the subsequent ASML or Adyen.
“We have to take a look at what’s required at nearly ministerial stage,” he mentioned. “Eradicating limitations, easing rules and analyzing what fiscal measures these corporations want. The federal government should cease constraining entrepreneurs, as is commonly skilled now, and turn out to be way more facilitating.”
Latest coverage modifications underscore this dedication: an further €200m for the European Tech Champions Initiative, bringing complete participation to €300m, plus a €250m blended finance instrument for scaling corporations. This consists of addressing concrete obstacles that hinder corporations abroad, equivalent to community congestion that stops enlargement, labour shortages that restrict development and bureaucratic procedures that gradual innovation. To deal with these points, the cupboard plans to eradicate or scale back the regulatory burden of 500 guidelines earlier than summer time 2026.
The labour scarcity displays a deeper structural drawback. The Netherlands produces simply 15.4 Stem graduates per 1,000 residents aged 20–29, considerably beneath the European common of 23. This scarcity significantly impacts quantum expertise, biotechnology and synthetic intelligence – exactly the areas the place a future financial benefit can be decided.
The nationwide chip expertise strengthening plan exemplifies the federal government’s response, aiming to coach 38,000 further technicians whereas constructing stronger industry-education connections. Comparable programmes are being developed for different strategic expertise areas, supported by enhanced worldwide expertise recruitment and retention measures.
Nevertheless, demographic actuality complicates these efforts. “One in 4 folks on this room can be retired in 15 years,” Karremans warned throughout the Digitalization Day convention. “As a result of ageing, there’ll quickly be far fewer individuals who finally should do way more work.”
Political continuity stays essential take a look at
The technique consists of establishing a nationwide EU co-financing facility to take part in European expertise programmes that generate €1.79 in personal funding for each public euro spent. This technological dependency creates strategic vulnerabilities.
With out sturdy home innovation capability, the Netherlands turns into more and more uncovered to produce chain disruptions and expertise export restrictions, as demonstrated by current semiconductor commerce tensions between the US and China. The Ukraine battle has additional highlighted the dangers of technological dependence on doubtlessly hostile nations.
“We will’t compete with China or America by ourselves,” mentioned Karremans. “However a coordinated European method offers us actual strategic weight in essential applied sciences.”
Maybe most critically, success requires sustaining dedication throughout political cycles. The untimely termination of Nationwide Development Fund rounds 4 and 5 demonstrates how coverage instability undermines confidence within the personal sector. The deliberate Productiveness Council goals to offer continuity by providing annual coverage suggestions no matter altering political circumstances.
Whether or not the Netherlands can preserve such long-term focus stays the last word problem. The nation has slipped from fourth to tenth place on world competitiveness rankings between 2022 and 2025, whereas its opponents have accelerated their investments in expertise. Reaching a 3% GDP in R&D spending by 2030 would require almost doubling personal sector funding.
Success relies upon not simply on authorities funding, however on creating circumstances the place 10 new market leaders can genuinely emerge and thrive.
When pressed on coverage continuity, Karremans was characteristically direct. “Enterprise doesn’t cease for politics,” he mentioned. “The financial system doesn’t cease for politics. So, you should preserve going.”
