Amsterdam's goals of being a leading tech city rapidly slipping away: study
Amsterdam’s ambition to be one of the leading tech cities in the world is rapidly slipping out of reach. The Dutch capital ranks no higher than 28th worldwide, Parool reports based on research by data platform Dealroom.
Dealroom annually examines the value of tech companies, the level of tech investments, the amount of tech talent, and the number of new start-ups for the 325 most important tech cities in the world.
Amsterdam used to be in the European top three. Now, the Dutch capital is in seventh place after being overtaken by cities like Stockholm, Berlin, and Cambridge. Globally, Amsterdam is ranked 28th.
“We see Amsterdam slipping,” Peter van Sabben of Dealroom told the newspaper. “What many tech entrepreneurs, investors, and last year, also Peter Wennink, warned about is now coming true.”
“A healthy tech system is a flywheel, with successful entrepreneurs and employees reinvesting in new companies. In cities like London, Stockholm, and Munich, that works well; in Amsterdam, it falters.”
Several tech companies have partially or entirely left Amsterdam in recent years because it is easier to find talented employees and investment capital elsewhere. This is primarily due to tax measures that make it unattractive for tech companies to operate in the Netherlands and discourage tech workers from working here, according to Parool.
For example, it's fiscally disadvantageous to give employees stock options in addition to their salary, a common practice in the global tech industry. It is also fiscally disadvantageous in the Netherlands to invest in start-ups.
“How many times do we have to shout that we need to wake up?” Lucien Burm of the Dutch Startup Association (DSA) asked Parool. “Last year, we were already in a low position. Now, if you also take population size into account, cities like Ghent, Tallinn, Lausanne, and Copenhagen have already overtaken us. We are losing to cities we should be winning against.”
“More and more money from investors for early start-ups is disappearing abroad,” Burm said. And the startups are disappearing with them, according to the DSA’s semi-annual surveys. “Last year, a third of startups expected to leave within two years. Now it is already almost half.”
According to Van Sabben of Dealroom, another problem is that political ambition and reality are increasingly diverging. “The fact that Amsterdam does not want new data centers and does not allow existing ones to expand is a brake to the entire tech sector. Not only does this result in a lack of much-needed data capacity for developing AI applications and digital sovereignty, but it also sends a signal to tech companies that you do not take them seriously. Data centers are critical infrastructure for tech companies.”
Amsterdam banned new data centers due to limited power grid capacity and housing construction getting priority. Van Sabben isn’t convinced. “They think very differently about that in the rest of Europe. There, they know that you only solve such problems by stimulating innovation,” he said. “Amsterdam keeps clinging to the sentiment that the economic pie must be divided among everything and everyone. The old sometimes has to make room for the new.”
