Government targets major investment in research and development to boost innovation

The Netherlands is lagging behind other countries when it comes to innovation. To improve this, the caretaker Cabinet presented a plan of action after the weekly council of ministers meeting on Friday. The target is to invest 3 percent of the gross domestic product (GDP) in research and development. To achieve that, nearly 15 billion euros in public and private investment is still needed.

The target deadline is set for 2030. Two-thirds of the investments are to come from private investors and companies, the rest of it will come from the education sector, knowledge institutions, and the government. Currently, the Netherlands is investing 2.2 percent of its GDP in research and development.

The Cabinet has suggested nine courses of action. This involves, among other things, mobilizing institutional investors such as pension funds, whose capital can help start-ups grow into scale-ups. In addition, the Cabinet aims to establish a platform to attract “knowledge-intensive companies” to the Netherlands or support their expansion within the country.

“In the Netherlands, we have bright minds and skilled hands driving business and work, but we're not getting enough out of innovation,” said caretaker minister Vincent Karremans (Economic Affairs, VVD). “That’s why we need to take action to bring our specialized knowledge to market more often and more effectively, increase public and private investment, and grow the number of knowledge-intensive companies in the Netherlands.”

A national investment institution will also be established, which will provide more financial possibilities for companies. In the Tweede Kamer, the lower house of Dutch parliament, there has been a long-standing interest in establishing a national investment bank. This could help address the bottlenecks many companies face when trying to finance investments that only pay off in the longer term.

Earlier this month, the caretaker Cabinet announced plans to merge the finance institutions Invest-NL and Invest International. The Cabinet believes that these two state-owned enterprises can offer more to Dutch businesses together than they can individually.

Business organizations VNO-NCW and MKB-Nederland already viewed this as “an important next step toward the creation of a national investment institution.”