Dutch competitiveness: ‘We must innovate to win’

What impression does Draghi's report leave on you?
Van Bree: ‘The report confirms something we already knew: our economy needs a boost. The importance of the report lies primarily in its urgency. It is a wake-up call for both Europe and the Netherlands. We need to invest more structurally in innovation, education, and knowledge development. At the same time, collaboration is crucial to increase labor productivity. For the Netherlands, there are opportunities in scaling up startups more quickly, making smart use of public funds, and attracting private investors. At the European level, strengthening the defense industry also offers significant opportunities.’
Zegveld: ‘What I find very striking is the enormous potential in the Netherlands that we are leaving untapped. Our companies and knowledge institutions are incredibly knowledge-intensive, but they do not share that knowledge nearly enough. Developing new knowledge is important, but applying that knowledge economically and socially is where the problem often lies. By connecting knowledge better and using it jointly, we can accelerate innovation and form a strong chain that will structurally strengthen the Netherlands' competitiveness.’

What do you hope will change as a result of the TNO report on Dutch competitiveness?
Van Bree: ‘We translated Draghi's three main themes – the innovation gap, sustainability, and dependence on other countries – to the Netherlands. We see that the growth of our labor productivity is slowing down. Our R&D spending also lags behind that of other countries, we perform below the average of OECD countries and do not meet the target of spending three percent of GDP on R&D. We are particularly behind in private R&D spending, because we have relatively few large tech companies.’
‘Although we are one of the leaders in venture capital and digitization, we should not be too self-congratulatory, as we are highly dependent on other countries. The TNO report recommends investing in innovation and scaling up by making targeted investments in deep tech, clean tech, defense, ICT, and infrastructure. We can also make better use of strategic procurement. The government is actively involved. The National Technology Strategy identifies ten key technologies that contribute to earning capacity and leadership. The Ministry of Economic Affairs aims to achieve the target of three percent of GDP in R&D within five years. Peter Wennink's investment agenda can also serve as a concrete compass for future choices.’
Zegveld: ‘The great benefit is that all these initiatives can reinforce each other. Innovation is high on the political agenda and is no longer a party issue, but a societal theme. Ten years ago, innovation was not taken very seriously. Now everyone realizes that it has a direct impact on our earning capacity, employment, and strategic autonomy.’

How can we become less dependent on other major powers and at the same time strengthen our position within Europe?
Van Bree: ‘The Netherlands must prepare for the fact that dependence on countries like China can pose significant risks. It is essential that we increase our own strategic autonomy without closing ourselves off completely from international cooperation. Europe offers opportunities: by undertaking joint projects, for example in defense and high-tech industry, we can accelerate innovation and strengthen our earning capacity.’

What concrete steps need to be taken to improve our position and competitiveness?
Van Bree: ‘The Netherlands still has a relatively limited basis for a robust technological strategy. Government incentives are sorely needed and while they are to some extent already in place, we are not making sufficient use of them. Capital must be attracted and the preconditions must be properly arranged. Companies need clarity and the space to do business. The National Technology Strategy can serve as a catalyst, with key technologies such as AI, quantum technology, data science, and process technology. Ultimately, it is the joint responsibility of the government and the business community to bring this agenda to life.’
Zegveld: ‘Many companies are preparing, but are struggling with financing, regulations, and other factors. Our advice is: do not wait. The government provides direction with funds and tenders, but companies themselves must proactively invest. If you cannot invest in R&D yourself, then collaborate with supply chain partners or knowledge institutions. It is a matter of courage and action.’

Apart from capital, what preconditions are needed to improve the business climate?
Zegveld: ‘The regulatory burden in the Netherlands hinders innovation and entrepreneurship. Measures are now in place to reduce this. Specifically, the government wants to revoke or amend five hundred regulations before the summer. Consistent policy is also crucial; without clarity, companies do not dare to invest. This should also be the focus of the national elections. Everyone, including entrepreneurs, must dare to step out of their comfort zone. At TNO, we have done just that and set up TNO Ventures to support deep tech startups in their initial growth phase with licenses, participations, and investments. In the Netherlands, we are lagging behind in the upscaling of deep tech, which means that promising technologies are not reaching the market. With this approach, we also want to push our boundaries and contribute to strengthening the Dutch innovation capacity.’

Only one-fifth of Dutch deep tech startups grow through scale-up. What is needed to improve this?
Van Bree: ‘A robust ecosystem is essential. The government can create conditions, offer room for experimentation, and make funds available, while also attracting private investors. We particularly advocate for targeted investments in the public financing of private R&D rather than a generic innovation policy. This is all the more opportune now that the National Growth Fund is being phased out. We could opt for a limited number of themes - the aforementioned key technologies - because we cannot be good at everything. It all hinges on market creation and a clear future perspective. The government's 3% action plan offers nine options to stimulate public and private investment, thereby giving deep tech startups better growth opportunities.’
Zegveld: ‘A concrete example is 6G Future Network Services. This is an alliance of sixty ICT companies, the semiconductor industry, and research organizations, which aims to give the Netherlands control over the development of its own 6G networks. The first round has freed up €61 million. If companies get on board, new services will emerge and our earning capacity will grow. The government can also act as a launching customer. Take GPT-NL, an AI language model co-developed by TNO. Using reliable Dutch data, we want to set a standard for safe and responsible AI use. If the government embraces this and thereby endorses it, validation will be created that can create a new market.’

Gas and electricity are more expensive in the Netherlands than in neighboring countries. This calls for harmonization of the energy market.
Van Bree: ‘The Netherlands is doing well in the field of sustainable energy, but the returns will only be visible in the longer term. In the short term, we lack the price compensation that exists in other countries. Our net rates are also higher, we pay more taxes, and there is an additional CO₂ levy. This makes it difficult for large industries to compete.’
Zegveld: ‘This inequality must disappear, otherwise large companies are at risk of leaving. Investing in green chemistry is good, but this sector is dependent on bulk chemistry and other larger chemical companies. If the big players leave, green companies will lose their foothold. We still lack sufficient insight into the interdependencies within the chain.’

The Netherlands is heavily dependent on the import of critical raw materials. How can we ensure greater control?
Van Bree: ‘We are over-dependent on countries such as China, which makes security of supply a major risk. We need to make our production, processing, transport, and logistics more resilient and tap into alternative sources. A certain degree of sovereignty over raw materials and other resources is essential.’
Zegveld: ‘Sovereignty does not mean that we have to produce everything ourselves. It is about maintaining access to materials that strengthen earning capacity and societal protection through European cooperation and smart agreements. Geopolitics is not only about economics, but also about quality of life.’

The Netherlands has a number of multinationals that are crucial to the global value chain. Why should we treasure them?
Zegveld: ‘Every country has a few so-called control points. In the Netherlands, ASML and the seed breeding companies Rijk Zwaan, Bejo Zaden, and Enza Zaden are examples of control points. ASML has a key global position in the chip industry, and our seed companies are essential to the international food chain. Seed breeding represents even more value than gold. An entire ecosystem has been built around these companies. To avoid becoming too dependent on these parties alone in the future, the National Technology Strategy also aims to create control points in emerging value chains for key technologies. In short, our goal is to create multiple ASMLs.’

How can better cooperation within our own country and with European member states generate social impact? And how can executives and supervisory board members of Dutch companies contribute to this?
Van Bree: ‘The national investment agenda and Wennink's agenda offer perspective primarily because they approach challenges from an ecosystem perspective. Public and private parties collaborate, each from their own role. The government is both a driver and a player in that network. This is also how DARPA, the research institute of the US Department of Defense known for its disruptive innovations, operates. We also need such a radical innovation policy. Executives and supervisory boards can translate our recommendations into their own strategies and invest in later growth stages of startups. Deep tech, clean tech, ICT, and defense are sectors in which the Netherlands can become stronger, thereby increasing both strategic autonomy and economic growth. It is now up to companies to take action.’
Zegveld: ‘Companies do not have to go it alone. You do not necessarily need a large AI budget; you can also collaborate within the value chain. Of course, investing involves risks. Entrepreneurs are used to taking risks. Now is the time to act. Ten years ago, innovation was still a loaded word; now it is widely accepted. Innovation delivers returns and social value. You have to get involved to win, not only to avoid  to lose. The Netherlands has enormous potential – but it will only come to life if we take real action now.’

This interview was published in Management Scope 09 2025.