The Netherlands must produce 10 new technology and market leaders over the next decade, according to Vincent Karremans, its caretaker minister of economic affairs, as the country faces a €12bn annual investment gap in research and development (R&D).
Speaking on national radio, Karremans warned that without decisive action, “there will be no strong Netherlands”.
The ambitious target responds to alarming productivity data outlined in the government’s R&D action plan and productivity agenda, which shows that Dutch R&D spending has stagnated at just 2.2% of GDP – well below the European target of 3% – and threatens to fall even further to 2% by 2030.
Meanwhile, the Netherlands has slipped from fourth to 10th place on global competitiveness rankings between 2022 and 2025.
Productivity growth has stagnated at just 0.4% annually over the past decade, compared with 1.5% between 1974 and 2013.
“We must invest now in tomorrow’s earning capacity,” Karremans emphasised in an interview with Computer Weekly at the Dutch Digitalization Day, held in The Hague this week.
The urgency extends beyond economics, with an ageing population and Nato’s 3.5% GDP defence spending requirement, and the Netherlands desperately needs higher productivity to maintain public services and security. capabilities.
Strategic focus replaces scattergun approach
The government’s response marks a fundamental departure from traditional Dutch economic policy. Rather than the long-standing approach of “watering all the flowers”, Karremans is exploring targeted support for five or six industries where the Netherlands can genuinely compete globally.
“Dutch economic policy has always been about supporting all sectors equally,” he explained during the recent tech conference, organised by Topsector ICT and NLdigital. “But this broad approach means we don’t truly excel anywhere, and are being overtaken by countries that do make strategic choices.”
The policy change includes extending the government’s flagship startup programme, Techleap.nl, for another three years until 2029, with renewed focus on scaling deep-tech companies. Combined with new fiscal incentives for employee share participation in startups from January 2027, the government aims to create an ecosystem capable of nurturing the next generation of companies, such as ASML and Adyen.
Innovation paradox undermines potential
Despite world-class universities and research institutions, the Netherlands suffers from what the reports describe as the “innovation paradox” – excellent scientific output that fails to translate into commercial success. While Dutch research ranks among the world’s best in terms of academic impact, the country generates relatively few university spin-offs and struggles to scale startups into substantial companies.
Only one Dutch company, ASML, appears among the world’s top 50 R&D investors, spending approximately €3bn annually. Individual US and German competitors, such as Apple and Volkswagen, each invest more than €20bn annually, exceeding the combined R&D spending of the entire Dutch private sector.
This narrow foundation reveals a deeper systemic problem: the Netherlands lacks the conditions to nurture more companies of ASML’s calibre. The Dutch government has responded with a comprehensive nine-point R&D action plan, designed to increase research investment structurally by 2030.
The strategy operates along three key tracks: boosting R&D spending among existing companies, facilitating the establishment of research-intensive ventures, and enhancing the conditions for innovative businesses. Specific measures include exploring a Dutch equivalent to the Defense Advanced Research Projects Agency in the US, establishing an R&D launch platform to remove barriers for growing companies, and mobilising €3bn in institutional capital from pension funds.
Other elements target critical bottlenecks, including expanding access to experimental facilities and testing environments, improving knowledge transfer from universities to the market, addressing the shortage of technical talent and creating a national European Union (EU) co-financing facility for European technology programmes. The plan also includes upgrading the innovation toolkit and potentially establishing a national investment institution with greater financial firepower.
Structural barriers threaten competitiveness
Several bottlenecks require urgent attention. The financing bottleneck particularly affects deep-tech startups requiring investment rounds of €50m or more, forcing many promising Dutch companies to seek funding abroad and often relocate in the process. This relocation threat has prompted Karremans to advocate tailored support at the highest levels for businesses with the potential to become the next ASML or Adyen.
“We need to look at what’s required at almost ministerial level,” he said. “Removing barriers, easing regulations and examining what fiscal measures these companies need. The government must stop constraining entrepreneurs, as is often experienced now, and become much more facilitating.”
Recent policy changes underscore this commitment: an additional €200m for the European Tech Champions Initiative, bringing total participation to €300m, plus a €250m blended finance instrument for scaling companies. This includes addressing concrete obstacles that hinder companies overseas, such as network congestion that prevents expansion, labour shortages that limit growth and bureaucratic procedures that slow innovation. To tackle these issues, the cabinet plans to eliminate or reduce the regulatory burden of 500 rules before summer 2026.
The labour shortage reflects a deeper structural problem. The Netherlands produces just 15.4 Stem graduates per 1,000 residents aged 20–29, significantly below the European average of 23. This shortage particularly affects quantum technology, biotechnology and artificial intelligence – precisely the areas where a future economic advantage will be determined.
The national chip talent strengthening plan exemplifies the government’s response, aiming to train 38,000 additional technicians while building stronger industry-education connections. Similar programmes are being developed for other strategic technology areas, supported by enhanced international talent recruitment and retention measures.
However, demographic reality complicates these efforts. “One in four people in this room will be retired in 15 years,” Karremans warned during the Digitalization Day conference. “Due to ageing, there will soon be far fewer people who ultimately have to do much more work.”
Political continuity remains crucial test
The strategy includes establishing a national EU co-financing facility to participate in European technology programmes that generate €1.79 in private investment for every public euro spent. This technological dependency creates strategic vulnerabilities.
Without robust domestic innovation capacity, the Netherlands becomes increasingly exposed to supply chain disruptions and technology export restrictions, as demonstrated by recent semiconductor trade tensions between the US and China. The Ukraine conflict has further highlighted the risks of technological dependence on potentially hostile nations.
“We can’t compete with China or America by ourselves,” said Karremans. “But a coordinated European approach gives us real strategic weight in critical technologies.”
Perhaps most critically, success requires sustaining commitment across political cycles. The premature termination of National Growth Fund rounds four and five demonstrates how policy instability undermines confidence in the private sector. The planned Productivity Council aims to provide continuity by offering annual policy recommendations regardless of changing political circumstances.
Whether the Netherlands can maintain such long-term focus remains the ultimate challenge. The country has slipped from fourth to 10th place on global competitiveness rankings between 2022 and 2025, while its competitors have accelerated their investments in technology. Reaching a 3% GDP in R&D spending by 2030 will require nearly doubling private sector investment.
Success depends not just on government funding, but on creating conditions where 10 new market leaders can genuinely emerge and thrive.
When pressed on policy continuity, Karremans was characteristically direct. “Business doesn’t stop for politics,” he said. “The economy doesn’t stop for politics. So, you have to keep going.”
