The National Investment Institution as a catalyst for innovative technology

Six conditions for success
In late 2025, Peter Wennink, former CEO of ASML, starkly highlighted that the Netherlands has, for years, been underinvesting in breakthrough technologies. His report delivered the alarming message that the Netherlands is falling behind internationally, thereby jeopardizing both current prosperity and that of future generations. To prevent this, substantial investments must be made in four strategically important areas: digitization and artificial intelligence, security and resilience (defense), energy and climate technology, and biotechnology.
According to the cabinet, a new, yet to be established investment institution should play a key role in this effort. Private investors, too, recognize the added value of the NII. The crucial factor, however, is not so much the size of the fund, but rather how effectively the NII succeeds in enticing private investors to significantly co-invest in strategically relevant innovations. Six conditions are prerequisite:

1. Let investment decisions be led by the market
   Give the private market, as opposed to the government, the leading role. That may sound paradoxical for an institution financed with public funds, but it is crucial. While the government can designate strategic sectors, within that framework private parties must determine how they invest – in which companies, under what terms and at what price. In other words, the NII will step in as co-investor only when a proposal has a sound business case.
   This prevents the institution from becoming a bottomless pit into which taxpayer money disappears to finance politically attractive but economically unsustainable projects. Under the guise of ‘strategic relevance’ or industrial policy, a government might make choices that have no real chance of economic success.
   By making the market the driving force, there is a continuous assessment of whether a company has growth potential and whether the prospect of future returns justifies an investment. Linking investments to market players who bear risk themselves, increases the likelihood of investing in potentially successful cases, as the parties share the same interests.
   We can draw lessons from the National Growth Fund, where projects did not always have long-term prospects and, consequently, no prospect of follow-up financing. That is unfortunate, as it causes innovation to stall, even though the ideas and intentions were sound.
   
   
2. Strengthen every link in the financing chain
   In the discussion regarding the NII’s responsibilities, we must recognize that the financing chain for companies consists of links involving different types of investors and financiers.
   The prevailing perception in the public debate is that we have too few scale-ups, that a lack of capital prevents us from creating unicorns, and that promising startups are leaving for America where they can find sufficient investors. This perception is partly accurate. However, we must avoid focusing solely on this phase. The earliest phase of innovation also deserves attention, especially in the sectors that Wennink identifies as strategically important.
   The entire financing chain, therefore, is important.  This chain is only as strong as its weakest link. Each link, or phase of a company’s growth, presents its own specific challenges and thus requires a different type of instrument.
   In the early venture capital phase, the challenge lies in bridging long development periods and covering massive investments that individual funds and their investors often cannot shoulder on their own. The NII can strengthen these funds and make them more effective. Instruments for this purpose already exist, though cuts to their funding have been announced. In the next phase the challenge shifts to companies and funds needing to scale up.
   At the moment, scale-ups are often reliant on foreign capital. If Dutch funds finance this growth, intellectual property and jobs are more likely to remain in the Netherlands. The NII can play a pivotal role in this scaling-up phase by investing in these funds and companies.
   The NII can also play a role with mature companies. Private equity funds help them continue to grow, while infrastructure funds enable the large-scale application of technology. Sometimes banks are unable to participate at this stage due to the high risk involved. The NII can remove this barrier, for example, by providing loan guarantees.
   
   
3. Ensure stability and security of demand
   Furthermore, the success of the NII depends to a large extent on several non-financial conditions. First and foremost, investors need stable, consistent policies – whether industrial policy, tax policy, or the issuance of permits. Funds think in terms of ten- to twenty-year horizons and must be able to rely on the fact that (fiscal) regulations will remain in place for the long term. Investors can ultimately make do with even suboptimal policies, but uncertainty about whether those policies will still be in place in five years is disastrous.
   Second, the government can create certainty regarding demand. In strategically important sectors such as energy and defense, the government can act as a launching customer or use incentive measures to stimulate demand among businesses or consumers. This creates a financeable business case, which is crucial for both investment firms and banks playing a key role in financing mature companies and infrastructure.
   
   
4. Independent of politics
   It is crucial that the NII be able to operate independently of politics. With a clear mandate and its own budget, the NII will have the freedom to operate independently and professionally, without being stymied by  every political shift. At the same time, the NII must work closely with the market to maintain focus and be able to adapt to new developments.
   The precise structural form of this collaboration remains to be worked out. The key is to ensure that market knowledge and feedback are systematically organized, so that the NII uses that leverage to mobilize the maximum amount of private capital to address existing and future bottlenecks.
   
   
5. Build on proven instruments and schemes
   Fortunately, the Netherlands does not have to start from scratch. The government has, for example,  announced that Invest-NL and Invest International will merge to form the new NII. This makes more sense than setting up an entirely new organization. It takes time to build a track record and assemble an experienced team; an investment that has already been made in these existing institutions. The same applies to the well-functioning arrangements of the Netherlands Enterprise Agency (RVO), and the smaller, proven instruments such as the Seed Capital program. That program has been in existence for more than twenty years, was originally developed in consultation with the market, and continues to yield results.
   
   
6. Learning from abroad: governance and scale matter
   The Netherlands does not need to reinvent the wheel. Similar investment vehicles have been established by other countries. We can learn from the start-up phase in Finland, for example: there, the government threatened to play a leading role in investment decisions, until the market stepped in. This is precisely the crossroads at which the Netherlands now finds itself.
   France, Germany, and the United Kingdom have their own versions: Bpifrance, KfW (Kreditanstalt für Wiederaufbau), and the British Business Bank. Some of these organizations have been in existence for years. Their success, driven by their own budgets and governance structures, is noteworthy. Research shows a multiplier effect of typically two to four: every euro of public funds attracts two to four euros of private capital. It is no coincidence that France, Germany, and the UK are among the leaders in Europe when it comes to innovation activity. Furthermore, it is important that the NII has sufficient scale. With an investment target of 150 to 190 billion euro, as recommended by Wennink, the NII must be large enough to be meaningful – here, too, our neighboring countries can serve as example.

The NII as a catalyst for innovation
It is crucial for the Netherlands to build greater capacity in technologically promising fields. Just as elsewhere in Europe, the NII can be hugely impactful in the Netherlands. By making the market the driving force and having the government set the framework – while remaining at a distance from direct investment decisions. And, above all, by ensuring consistent long-term policy. Only in this way will the NII avoid becoming a bottomless money pit and instead serve as a catalyst for the innovative technologies the Netherlands needs to remain prosperous in the future.

This essay was published in Management Scope 08 2026.