OECD Reviews of Innovation Policy: Netherlands 2014

2014 – The OECD Review of the Netherland’s Innovation Policy is part of a series of OECD country reviews of innovation policy. It was requested by the Dutch authorities, represented by the Ministry of Economic Affairs and the Ministry of Education, Culture and Science and was carried out by the OECD Directorate for Science, Technology and Industry (DSTI) under the auspices of the Committee for Scientific and Technological Policy (CSTP). 

Purpose

The purpose of this review is to obtain a comprehensive understanding of the key elements, relationships and dynamics that drive the Dutch innovation system and the opportunities to enhance it through government policy. 

Method

This review was drafted by a group of OECD employees and associated consultants from various countries. The review draws on the results of a series of interviews with major stakeholders of the Dutch innovation system, and a background report commissioned by the Dutch authorities.

This background report was prepared by TNO (Strategy & Policy, S&P). In addition, the Netherlands’ Ministries of Economic Affairs and of Education Culture and Science provided a staff paper. 

Some assessments & recommendations

Boost innovation to meet economic and societal challenges

The Netherlands has one of the most advanced economies in the world. But there is a need for productivity gains and more export to the expanding markets. Therefore innovation is a key to future growth and competitiveness.

The high quality of her human resources and excellent universities, puts the Netherlands is in a good position. Further improvements in innovation policies and performance can help to realize the ambition to place the Netherlands in the top five knowledge economies globally. 

Enhance the benefits of the top sectors approach

The new top sectors approach based on public-private partnerships is well suited to achieve alignment of strategies and pooling of resources. However, the impact could be enhanced by ensuring a strong representation of smaller and entrepreneurial companies, and by transferring valuable experience and policy lessons to other sectors. 

Strengthen business capabilities for world-class innovation

The Dutch business sector as a whole invests less in R&D and in knowledge-based capital than is the case in other advanced innovation systems. It would be important to broaden the base for innovation and engage firms in sectors that, relative to other advanced systems, collaborate little with knowledge institutes and conduct little R&D.

Rebalancing the system of R&D tax credits with a sufficient focus on competitive, well-designed direct support instruments (e.g. for joint R&D projects with knowledge institutes) would be better suited to longer-term and more ambitious innovation and would also serve the needs of SMEs subject to liquidity constraints.
Improving the environment for experimentation by young firms is important and includes further improvement in product market regulation, e.g. as regards licensing and permits; improved labour market regulation, notably rules as regards permanent contracts; and stronger financing for innovative firms. 

Maintain world-class public research, particularly in universities

Policy should continue to nurture high-quality research performed in the public sector. This involves maintaining healthy funding streams for fundamental research.

The changes in the funding regime for Universities and Institutes for applied research (PRI’s) are improving links with industry. However, they also carry risks: universities and PRIs require core funding to maintain a healthy knowledge base and to perform their primary roles in the provision of skills and of public goods. Government will need to strike a balance and avoid cutting too much in core funding. 

Improve valorisation and skills

The strong focus on commercialization by the Dutch government is welcome, but should not detract from the other important contributions that university research makes to the economy, particularly for the development of skills that diffuse across the economy.

Co-ordination in the Human Capital Agendas of the Top Sectors and the Technology Pact could help improve responsiveness to labour market demand for science and engineering graduates.

Strengthening the research capabilities of universities of applied sciences (UAS, ‘Hogescholen’) would be well-timed as they could bridge the divide between firms with little or no innovation experience and world-class research universities and institutes for applied research. This will require greater levels of government investment in UAS research capabilities, and the strengthening of links between nascent research activities and existing teaching programmes. 

Reference

OECD (2014), OECD Reviews of Innovation Policy: Netherlands 2014, OECD Publishing. https://dx.doi.org/10.1787/9789264213159-en 

A pdf. of the full report is attached. 

Theme: Innovation & Innovation capabilities

Sector:

Source: Report