Pim De Hertog, Leonique Korlaar, Matthijs Janssen, based on 2012 Country Report by Raquel Ortega-Argiles

ERAWATCH Country Reports 2013: The Netherlands

2014

Report EUR 26755 EN

European Commission

Joint Research Centre

Institute for Prospective Technological Studies

Contact information

Address: Edificio Expo. c/ Inca Garcilaso, 3. E-41092 Seville (Spain)

E-mail: jrc-ipts-secretariat@ec.europa.eu

Tel.: +34 954488318

Fax: +34 954488300

https://ec.europa.eu/jrc

https://ec.europa.eu/jrc/en/institutes/ipts

Legal Notice

This publication is a Science and Policy Report by the Joint Research Centre, the European Commission’s in-house science

service. It aims to provide evidence-based scientific support to the European policy-making process. The scientific output

expressed does not imply a policy position of the European Commission. Neither the European Commission nor any person

acting on behalf of the Commission is responsible for the use which might be made of this publication.

All images © European Union 2014

JRC91210

EUR 26755 EN

ISBN 978-92-79-39490-4 (PDF)

ISSN 1831-9424 (online)

doi:10.2791/95981

Luxembourg: Publications Office of the European Union, 2014

© European Union, 2014

Reproduction is authorised provided the source is acknowledged.

Abstract

The Analytical Country Reports analyse and assess in a structured manner the evolution of the national policy research

and innovation in the perspective of the wider EU strategy and goals, with a particular focus on the performance of the

national research and innovation (R&I) system, their broader policy mix and governance. The 2013 edition of the Country

Reports highlight national policy and system developments occurring since late 2012 and assess, through dedicated

sections:

national progress in addressing Research and Innovation system challenges;

national progress in addressing the 5 ERA priorities;

the progress at Member State level towards achieving the Innovation Union;

the status and relevant features of Regional and/or National Research and Innovation Strategies on Smart

Specialisation (RIS3);

as far relevant, country Specific Research and Innovation (R&I) Recommendations.

Detailed annexes in tabular form provide access to country information in a concise and synthetic manner.

The reports were originally produced in December 2013, focusing on policy developments occurring over the preceding

twelve months.

1

ACKNOWLEDGMENTS AND FURTHER INFORMATION

This analytical country report is one of a series of annual ERAWATCH reports produced for

EU Member States and Countries Associated to the Seventh Framework Programme for

Research of the European Union (FP7). ERAWATCH is a joint initiative of the European

Commission's Directorate General for Research and Innovation and Joint Research Centre.

The Country Report 2013 builds on and updates the 2012 edition. The report identifies the structural challenges of the national research and innovation system and assesses the match between the national priorities and the structural challenges, highlighting the latest developments, their dynamics and impact in the overall national context. The first draft of this report was produced in December 2013 and was focused on developments

taking place in the previous twelve months. In particular, it has benefitted from the comments

and suggestions of Andries Brandsma from JRC-IPTS. The contributions and comments from

Sander Kes from the Netherlands' Ministry of Economic Affairs and Jan van Steen of The

Ministry of Education, Culture and Science are also gratefully acknowledged.

The report is currently only published in electronic format and is available on the ERAWATCH

website. Comments on this report are welcome and should be addressed to jrc-ipts-erawatch-

helpdesk@ec.europa.eu.

Copyright of this document belongs to the European Commission. Neither the European Commission, nor any

person acting on its behalf, may be held responsible for the use of the information contained in this document, or for

any errors which, despite careful preparation and checking, may appear. The report does not represent the official

opinion of the European Commission, nor that of the national authorities. It has been prepared by independent

external experts, who provide evidence based analysis of the national Research and Innovation system and policy.

2

EXECUTIVE SUMMARY The Dutch knowledge economy is, in economic terms, among the better performing countries in the world. The share of the Netherlands in the total GDP of the EU28 is relatively high with 4.6% (2013). The GDP per capita is well above EU28 average: in 2010-2012 the PPS per inhabitant grew from €32,000 to €32,700 to €32,800. Due to the economic crisis, GDP growth varied: in 2012 there was a drop with 1.2% (to 599 billion) and for 2013 another -1.0% growth is expected. In terms of GERD as percentage of GDP, however, the Netherlands performs above EU28 average (2.16% in 2012). The R&D intensity of the business sector (BERD) in particular is relatively low (1.22% in 2012). GBAORD in percentage of GDP, on the other hand, is well above EU28 average (0.82% in 2012).

According to the Innovation Union Scoreboard 2014, the Netrlands is one of the ’innovation followers’, with innovation performance below those of the ’innovation leaders’ but above that of the EU27 average. Whereas the relative position of the Netherlands has been increasing in the past few years, 2013 marked a decline (corresponding with a drop from place five to six). According to the IU Scoreboard 2014, the Netherlands has relative strengths in ‘Open, excellent and attractive research systems’ and for “Linkages and entrepreneurship”. Relative weaknesses are in the category ‘Economic effects’ (especially knowledge-intensive services exports and sales share of new innovations). Although the current strengths are similar to the ones identified in the IU Scoreboard 2013, the weaknesses at that time where in ‘Firm investments’ and ‘Innovators’.

Structure of the national research and innovation system and its governance The most recent description of the research and innovation Dutch system can be found in the publication The Science System in The Netherlands: and organisational overview (April 2012). In this document the main points of the Dutch science policy are described (in which the Strategic Agenda for Higher Education, Research and Science presented in July 2011 plays an important role). The main actors and institutions in the Dutch science, research and innovation governance system are the Ministry of Education, Culture and Science (OCW) and the Ministry of Economic Affairs (EZ). The main bodies responsible for managing and implementing policies are the Netherlands Organisation for Scientific Research (NWO), the Technology Foundation STW, the Royal Netherlands Academy of Arts and Sciences (KNAW), and NL Agency (an agency of EZ). Additionally, the Advisory Council for Science and Technology Policy (AWT) advises the government and parliament on policy relating to scientific research, technology development and innovation in both at national and an international context. Finally, a Knowledge Forum has been established with the aim of strengthening interactions between senior civil servants and research institutions. In addition, The Netherlands has a large number of organisations that conduct research. A distinction can be made between: research universities (n=14), universities of professional education (n=47), research institutes (including private non-profit institutes) and companies. Secondly there are many public research institutes. Macro-economic context: In the National Reform Programme published at end of April 2013, the macro-economic outlook of the Netherlands is summarized. This picture looks pretty grim. It is reported that the Dutch economy is in recession for the third time since the outbreak of the financial and economic crisis in 2008, mainly as a result of low domestic spending. Structural growth in both the labour supply and labour productivity will be lower than it previously was. This is due to the ageing of the population and the slower pace of technological progress. Most recent signs, however, seem to indicate that the contraction of the economy is slowing down, mainly thanks to rising exports. The Stability Programme of the Netherlands (sent to parliament at the end of April 2013) as well reports on the macro-economic developments of the

3

Netherlands. It is mentioned that the slowdown in 2012 and 2013 has been caused by domestic spending. The only positive contribution to growth is exports. Private consumption had a negative effect on GDP growth. The low levels of corporate investment and housing investments have also contributed to the downturn. Overall political context: In September 2012, general elections were held and in November 2012 a new government coalition was established. Over 2012 and 2013 the general impression is that although government is working on structural reforms in various domains such as the housing market, General Old-Age Pensions Act (AOW) and supplementary pensions and various labour market reforms, progress is slower than anticipated. Government has invested considerably in support from social partners, which resulted in the so called Social Agreement of mid April 2013. This Social Agreement could not hide the complicated political situation the Dutch government is confronted with i.e. a majority in the house of representatives (Tweede Kamer), but a minority in the Senate (Eerste Kamer). Enterprise policy: In the Ministry of EA’s view, entrepreneurship is considered as crucial for wealth creation in the Netherlands. It is argued that societal and economic challenges demand for a policy that gives 'room for entrepreneurs'. Over 2011, several top teams (constituted by representatives from the industry, research institutes and government) contributed actively to the strengthening of the new enterprise policy. The government has implemented various actions based on the advice of these top teams. In total nine top sectors were identified. These top sectors build on the unique strengths of the Dutch economy. In March 2012 the then minister of Economic Affairs (Verhagen) announced that in 2012 government would invest 1.4 billion euro in Topsectors and this amount will increase to slightly over 2 billion euro in 2015. In order to carry out basic and applied research in the top sectors, 19 consortia have been established. In the so-called Top consortia for Knowledge and Innovation (TKIs) many existing research initiatives will be put together. The current government chose to continue the Enterprise Policy and its Top Sector approach. In December 2012 the minister of Economic Affairs informed parliament about the agreements made with the Top consortia for Knowledge and Innovation (TKIs). From this it was visible that industry is willing to invest €319 million (in cash) in these TKIs on the basis of which the government will provide a top-up (through a so-named TKI-allowance, for 2013 this will amount to 82 million euro. The most recent state of affairs is described in the Monitor Enterprise Policy which was published in October 2013. From 1 January 2014 onwards business can go to one place for all government matters related to doing business: ‘A one-stop-shop for businesses’ (in Dutch ‘het Ondernemersplein’). In this one-stop-shop for businesses, services of the Chamber of Commerce, Syntens and parts of NL Agency will be combined. In time, services of new parties, such as the taxation authority or municipalities will be included as well Higher education, (fundamental) research and science policy: In this policy domain continuation and stability more than large scale changes is the adagio and changes – at least in budgetary terms – limited. Probably one of the landmark changes is the last mentioned gradual shift from lump sum institutional funding in higher education towards performance based or competitive funding. This was well summarized in the National Reform Programme 2013 report. The 2013 national reform programme also sketches how the higher education, research and science policy has developed since the new government took office in September 2012, including how it contributes to the European Research Area: The Netherlands has competitive research financing, as requested by the Commission, through the funding provided through the NWO, and has had a system of international visitations for years. Other examples are the fact that all vacancies in the Dutch academic world are published on the international website Academic Transfer and a large number of Dutch universities have requested the ‘HR Excellence in

4

Research’ logo from the European Commission. There are also several initiatives regarding gender equality and gender mainstreaming in research (i.e. the charter ‘Talent to the Top’, the Dutch Network for Women professors, and several subsidies/programmes targeted at strengthening the gender dimension in research programmes). To improve the connection between education and labour market (especially within the Top Sectors) several Centres of Expertise (higher education) and Centres for innovative craftsmanship (vocational education) were established. In these centres students, teachers and businesses work together. At the moment there are 25 Centres of expertise and 18 centres for innovative craftsmanship. Most of these are situated at one of 34 campuses/campus initiatives The Netherlands host. Funding trends: Dutch expenditures on Research and Development (GERD) as a share of GDP have been increasing over the past few years. Whereas the 2.03% in 2011 was still roughly similar to the EU27 average, the 2.16% in 2012 is substantially above the EU28 average of 2.06%. In absolute numbers, this 6.5% increase amounts to a jump from €12.1 billion to €12.9 billion. However, the R&D expenditures funded by the business sector (BERD), amounting to 1.01% of GDP in 2011, is well below the EU28 average. Similarly, when looking at who performed R&D (rather than who funded it), Dutch businesses account for 56.6% of the total R&D expenditures versus a European average of 63% (2012). In the past Innovation Union Scoreboards, this has been the main indicator where the Netherlands are underperforming. Institutional block funding, as a percentage of total funding for national R&D performers, has been decreasing between 2005 and 2008 (77.6% to 72.2%). Nevertheless, it still exceeded the OECD mean of 62.4%. One notable effort on this account is the decision to make university funding more performance-based. In the budgets for 2012-2016, 7% of the core funding for universities will be competitive rather than block-funding. The major part (5% of total higher education budget) will be conditional funding, while the other part (2%) will be allocated selectively for education profiling plans. This excludes the leverage effect of the competitive funding provided by NOW and EU-programs. The share of funding that is provided by NWO and KNAW is largely based on program and projects proposals. Most of the budget for applied research is being allocated for research projects that fit within the thematic research and innovation roadmaps drawn up by triple helix organizations Top Sectors and TKI’s. With the introduction of the Enterprise Policy there is increasing budgetary importance of generic policy in the form of fiscal incentives for R&D. The Enterprise Policy aims to spur innovation by facilitating private R&D spending. In this respect, various predominantly fiscal measures have been adapted or newly introduced over the past year(s). The most important fiscal instruments are: the tax credit for R&D (WBSO), the tax relief for innovation (innovation box), and the Research & Development Allowance (RDA). The fiscal instruments are eligible to firms from any sector or size. Recognizing that especially small firms face problems with acquiring capital, there are several additional (non-fiscal) policies exclusively devoted to facilitate private R&D spending by SMEs: SME Innovation support Top Sectors (MIT); SME+ Innovation Fund, consisting of innovation credit (also available to larger businesses), seed capital and fund-of-funds; SME loan guarantee scheme, The Dutch Investment Agency (NII), Innovation Performance Contracts (IPC), micro-financing (by Qredits) and the Growth facility scheme.

Performance of the national Research and Innovation system Looking at the performance and dynamics within the Dutch innovation system, several major challenges can be identified: the valorisation of the (excellent) knowledge it is producing, the need to improve availability of funding for innovation (especially for small firms), the lack of

5

clarity in the innovation system (the multitude of institutes and the possible completion with private parties), addressing societal challenges and the exploitation of excellent students. The identified challenges are being addressed in several ways. For example, Better knowledge valorisation has been a key motivation for the introduction of the Enterprise Policy. Especially the creation of Top Sectors provides a structure for intensifying the role of firms in the innovation system. Their active role in developing innovation agenda’s for TKI’s ensures that policy support is directed to opportunities and challenges observed by firms. In addition, several of the instruments in the Enterprise Policy aim to support innovation by providing access to funding. In order to clarify and improve the role of public research institutes for applied research, the Ministry of EA published a vision report in July 2013. The report contains five action points: elaboration of the relation with private parties; focus on multi-annual research collaboration within Top Sectors; a shift from block funding to competitive funding; more focus on quality and impact; uniform governance structures. The Ministry of EA also emphasized once again the importance of addressing societal challenges. One way to yield solutions to these problems is by focusing the activities performed within Top Sectors. The innovation agendas which were signed this year have incorporated the topic of societal challenges in several ways. In addition, the Ministry of EA sees opportunities in European research programmes of the Horizon 2020 framework. For participation in these research programmes, focusing explicitly on grand challenges, co-funding is required. In addition to existing financing for collaborative research, a fund of €36 million (2014-2017) is made available for these purposes. The structural challenge with respect to education has received ample attention in the past few years. In particular the strategic agenda on Higher education, research and science (‘Quality in Diversity’) from 2011 marks an important step towards improvements on this account. National progress in innovation union key policy actions & ERA Regarding the national progress in innovation union key policy action and ERA priorities the following summarising conclusions can be made: More effective national research systems: Effectiveness and efficiency of the Dutch research system is being pursued by introducing competitive funding schemes. An open labour market for researchers: Several national initiatives can be found that are targeted at international mobility of researchers, such as the mobility grants by the Dutch Superior Research Council NWO. In addition, all vacancies in the Dutch academic world are published on the international website of Academic Transfer. Finally, doctoral education is under development in the Netherlands. Gender equality and gender mainstreaming in research: Both the research councils NWO and KNAW run programs devoted to encouraging women to pursue an academic career. Gender equality in research is actively supported by a variety of means (e.g. emancipation policy grants, FOM bridging subsidies, Aspasia Programme, LEAP!). Additionally, cultural and institutional change on gender is fostered by initiatives like Girls Day, the Charter Talent to the Top Foundation, and the Dutch Network for Women Professors. Optimal Transnational co-operation and competition: Apart from supporting participation in Horizon 2020, the Dutch government also encourages international research co-operation by contributing to international organisations (e.g. ESA, ESO, CERN, EMBL and EMBC). Of major importance in this respect is the creation of (and access to) large-scale research facilities. Finally, some of the competitive NWO- and KNAW-instruments support international research collaboration as well.

6

Optimal transnational co-operation and competition: The following efforts are relevant here: NWO research and actions that relate to national and international agendas for the period 2011-14, Top Sectors: 2013 update of Innovation Contracts, Joint Research Project Bio-based Economy, the Max Planck Institute for psycholinguistics research and Co-funding for participation in Horizon 2020 initiatives. Optimal circulation, access to and transfer of scientific knowledge: In the Netherlands, the scientific community and libraries are actively engaged in developing policies for open access. Circulation of knowledge is mainly supported by the Top Sector Policy (including the TKIs), the MKIB Innovation Scheme for Top Sectors (MIT) and the Centres for Innovative Craftsmanship and Centres for Expertise. International Scientific cooperation: there are several NWO grants with other countries: ERA-Net with Africa off Rica, a programmatic cooperation with India and China by the Joint Scientific Thematic Research Programme and China-Hé Programme on Innovation Cooperation. Maximising social and territorial cohesion: The four regions North, East, South and West are well on track in developing smart specialization strategies and especially Ministry of Economic Affairs and the Netherlands Environmental Assessment Agency (PBL) play a facilitating role. The currently mostly preliminary programmes seem to be more focused now and target only a small number of themes related to the challenges facing Europe. Getting ideas to the market: The multitude of policy schemes implies a wide availability of support for innovation and research. In addition, IPR are seen as important to the Dutch economy and to the overall innovation performance of the Netherlands. Important initiatives regarding public procurement are the recently established program Innovative Procurement Urgent (Inkoop Innovatie Urgent), the Small Business Innovation Research Programme (SBIR) and PIANOo.

7

TABLE OF CONTENTS

EXECUTIVE SUMMARY ............................................................................. 2 1 BASIC CHARACTERISATION OF THE RESEARCH AND INNOVATION

SYSTEM .................................................................................................. 8 2 RECENT DEVELOPMENTS OF THE RESEARCH AND INNOVATION

POLICY AND SYSTEM ............................................................................. 10

2.1 National economic and political context ................................................................. 10 2.2 Funding trends ......................................................................................................... 17

2.2.1 Funding flows ......................................................................................................... 17 2.2.2 Funding mechanisms .............................................................................................. 19

2.2.3 Thematic versus generic funding ............................................................................ 20 2.2.4 Innovation funding .................................................................................................. 21

2.3 Research and Innovation system changes ................................................................ 23 2.4 Recent Policy developments ..................................................................................... 25

2.5 National Reform Programme 2013 and R&I ........................................................... 32 2.6 Recent evaluations, consultations, foresight exercises ............................................ 33 2.7 Regional and/or National Research and Innovation Strategies on Smart

Specialisation (RIS3) ........................................................................................................... 37 3 PERFORMANCE OF THE NATIONAL RESEARCH AND INNOVATION

SYSTEM ................................................................................................. 39

3.1 National Research and Innovation policy ................................................................ 39 3.2 Structural challenges of the national R&I system ................................................... 40

3.3 Meeting structural challenges.................................................................................. 41

4 NATIONAL PROGRESS IN INNOVATION UNION KEY POLICY ACTIONS . 43

4.1 Strengthening the knowledge base and reducing fragmentation ............................. 43

4.2 Getting good ideas to market ................................................................................... 45 4.3 Working in partnership to address societal challenges ........................................... 46 4.4 Maximising social and territorial cohesion ............................................................. 47

4.5 International Scientific Cooperation ....................................................................... 47

5 NATIONAL PROGRESS TOWARDS REALISATION OF ERA ......................48

5.1 More effective national research systems ................................................................ 48 5.2 Optimal transnational co-operation and competition ............................................. 48 5.3 An open labour market for researchers ................................................................... 48

5.4 Gender equality and gender mainstreaming in research ........................................ 49

5.5 Optimal circulation, access to and transfer of scientific knowledge including via

digital ERA ........................................................................................................................... 49 ANNEX 1. PERFORMANCE THE NATIONAL AND REGIONAL RESEARCH

AND INNOVATION SYSTEM .................................................................... 50 ANNEX 2. NATIONAL PROGRESS ON INNOVATION UNION COMMITMENTS

51

ANNEX 3. NATIONAL PROGRESS TOWARDS REALISATION OF ERA ........... 56

REFERENCES ........................................................................................ 61

LIST OF ABBREVIATIONS ....................................................................... 63

8

1 BASIC CHARACTERISATION OF THE RESEARCH AND INNOVATION SYSTEM

The Netherlands - a unitary state - is a prosperous, densely populated country with 16.8 million inhabitants (2013) according to Statistics Netherlands, which amounts to 3.32% of the total EU28 population. The Dutch knowledge economy is, in economic terms, among the better performing countries in the world. The share of the Netherlands in the total GDP of the EU28 is relatively high with 4.6% (2013). The GDP per capita is well above EU28 average. In the period 2010-2012, the PPS per inhabitant grew from €32,000 to €32,800. Due to the economic crisis, GDP growth varied: while growth was moderate (1.8%) in 2008, it deteriorated heavily in 2009 (-3.7%) and then started growing again 1.5% in 2010 and 0.9% in 2011. In 2012 there was a drop with 1.2% (to 599 billion) and for 2013 another -1.0% growth is expected. In terms of GERD as percentage of GDP, however, the Netherlands performs above EU28 average (GERD = 2.16% in 2012). BERD in particular is relatively low (BERD = 1.22% in 2012). GBAORD in percentage of GDP, on the other hand, is well above EU28 average (GBAORD = 0.82% in 2012).

According to the Innovation Union Scoreboard 2014, the Netherlands is one of the ’innovation followers’, with innovation performance below those of the ’innovation leaders’ but above that of the EU27 average (i.e. less than 20% above but more than 10% below that of the EU27). Within this group, the Netherlands is, however, a ’moderate grower’ maintaining the level of the Innovation Union Scoreboard 2011. According to the IU Scoreboard 2014, the Netherlands has relative strengths in ‘Open, excellent and attractive research systems’ and for “Linkages and entrepreneurship”. It also appears in the top-8 innovation performers “Human resources”, “Finance and support” and “Intellectual assets”. While relative weaknesses in the IUS 2013 were found in “Firm investments” and “Innovators”, they are now in the category “Economic effects”. The Netherlands has experienced fast growth in “Non-R&D innovation expenditures”, “Community trademarks”, “International scientific co-publications” and “New doctorate graduates”. A strong decline is observed for “Knowledge-intensive services exports”. The business sector structure of the Netherlands is characterised by a number of strong sectors, i.e. the community services, business activities and the ICT sectors, electronic equipment and office machinery industries, the chemicals and the food industry and mining (natural gas & oil) and agriculture. A large part of R&D by Dutch businesses is performed by a limited number of large multinationals.

The structure of the national research and innovation system and its governance is presented in the figure below:

9

Figure 1. Structure of the national research and innovation system and its governance

Source: Erawatch Country Report 2012: The Netherlands.

The main actors and institutions in the Dutch science, research and innovation governance system are the Ministry of Education, Culture and Science (OCW) and the Ministry of Economic Affairs (EA). The main bodies responsible for managing and implementing policies are the Netherlands Organisation for Scientific Research (NWO), the Technology Foudation STW (an independent part of NWO), the Royal Netherlands Academy of Arts and Sciences (KNAW), and NL Agency (an agency of EA). Additionally, the Advisory Council for Science and Technology Policy (AWT), an independent body, advises the government and parliament on policy relating to scientific research, technology development and innovation in both at national and an international context.

The Netherlands has a large number of organisations that conduct research. A distinction is made between four main sectors: 14 research universities (including the Open University Netherlands), 47 universities of applied sciences (specialized in technical and vocational training), research institutes (including private non-profit institutes) and companies. Secondly there are many public research institutes. Some of them are financed by the NWO and the KNAW: both organisations take on the role of an umbrella organisation for research institutes that carry out basic and strategic research in various disciplines. The Leading Technological Institutes (TTIs) will become part of or have already been brought into the Top Consortia for Knowledge and Innovation (TKIs).

10

2 RECENT DEVELOPMENTS OF THE RESEARCH AND INNOVATION POLICY AND SYSTEM

2.1 National economic and political context

Macro- economic context

In the National Reform Programme published at end of April 2013, the macro-economic outlook of the Netherlands is summarized. This picture looks pretty grim. It is reported that the Dutch economy is in recession for the third time since the outbreak of the financial and economic crisis in 2008, mainly as a result of low domestic spending. The figures tell the tale here: “According to the first figures from Statistics Netherlands (CBS), the Dutch economy contracted by 0.9% in 2012. In the National Reform Programme for 2012, a contraction of ¾% was forecasted for 2012. For 2013 as a whole, the Netherlands Bureau for Economic Policy Analysis (CPB) forecasts a contraction of ½% of GDP, with a recovery anticipated only in the second half of the year. For 2014, GDP is expected to grow by 1%. The potential annual growth for the period 2013-2017 is estimated at 1.3% a year. Accordingly, potential annual growth is lower than it has been in earlier periods: 1.8% a year in the period 2003-2007 and 1.6% a year in the period 2008-2012. Structural growth in both the labour supply and labour productivity will be lower than it previously was. This is due to the ageing of the population and the slower pace of technological progress. The labour supply is expected to grow by 0.4% a year and labour productivity by 1.0% in this cabinet term” (p. 5). In a European perspective unemployment levels are still modest, but (official) unemployment levels have rose to 5.3% of the labour force in 2012 (and have continued to rise over 2013) and are expected to rise further in 2013 reaching its highest levels since 1996. Most recent signs, however, seem to indicate that the contraction of the economy is slowing down, mainly thanks to rising exports.1

The Stability Programme of the Netherlands2 – sent to parliament at the end of April 2013 as well – reports in more detail on the macro-economic developments of the Netherlands. In November 2010 the estimated average growth for the period 2011-2015 was 1.25%. However, the cumulative loss of growth in 2013 (that is 2011, 2012 and 2013) is actually more than 4%. It is mentioned that “the slowdown in 2012 and 2013 has been caused by domestic spending. The only positive contribution to growth is exports. Private consumption has, for years, had a negative effect on GDP growth. The low levels of corporate investment and housing investments have also contributed to the downturn. The expected GDP growth for 2014 of 1% is entirely due to increasing exports.” (p. 5-6). In December 2009 the excessive deficit procedure for the Netherlands was initiated. The report on the Stability programme for the Netherlands signals that “Disappointing growth has had an effect on the EMU balance. The negative growth adjustments are leading to significant shortfalls on the income side of the budget while, on the expenditure side of the budget, the spending on unemployment benefits has increased faster than was previously estimated. The recent intervention to rescue SNS bank is having a negative impact on the EMU balance in 2013 and this nullified the one-off windfall from the spectrum auctions in 2013.” (p. 6-7). It is also mentioned that Dutch government is fully committed to

1 See http://www.government.nl/issues/entrepreneurship-and-innovation/news/2013/08/15/dutch-economic-

contraction-slows.html 2 See Stability Programme (April 2013)

11

reducing the deficit structurally to less than 3% of GDP as from the beginning of 2014 and reference is made to housing agreement (mid February 2013 and the Social Agreement of mid April 2013).

Overall political context

In September 2012, general elections were held and in November 2012 a new government coalition was established. A new government comes with a new Coalition Agreements (this time under the title ‘Building bridges’) in which on a large variety of policy areas new policies and policy directions are announced. In the financial and socio-economic policies as announced in this Coalition Agreement three pillars stand out i.e.: sustainable economic growth, healthy public finances and a balanced distribution of income. Practically a large number of smaller and bigger reforms are announced in a.o. the area of social security and income (such as changes to the General Old-Age Pensions Act [AOW] and supplementary pensions), labour market, health, reforms of the housing market, etcetera. The Coalition Agreement also pays attention to the innovation and the education and research agenda. In the former essential elements are the continuation of the Top Sector approach in (specific) innovation policy, the continued involvement of NWO (see section 2.4) for distributing 275 million euro aimed at programmatic research in (and with) Top sectors, extra budget of 150 million euro for fundamental research (to an important degree to be used for tenders for Horizon 2020, 110 million euro for science-industry cooperation and (remarkable so, as the trend used to be in the opposite direction) the announcement that generic R&D subsidies to be lowered in the future. Further a Technology Pact 2020 is announced, a broader agreement between industry and educational institutions (at various levels) to spur technology and technological education (see section 2.4 for more details).

In the area of education and sciences large variety of measures and initiatives is announced ranging from the professional skills of teachers, to reorganization of the student loan scheme, (limited possibility) for more strict selection of students when entering some university studies and so on. Frequently used words are quality and excellence. The latter is in line with the 2011 strategic agenda on Higher education, research and science (Kwaliteit in verscheidenheid i.e. Quality in Diversity, published in August 2011). In both policy areas there are changes and continuity and the initiatives mentioned in the Coalition Agreement are policy intentions and not all will materialize. First comments by stakeholders were mixed. There is appreciation for the intention to invest extra in fundamental research and the continuation of the top sector policies. At the same time it is mentioned that no real (extra) investments in Higher Education are made and that all in all the available budget for innovation is decreasing (although on the latter opinions differ).

Over 2012 and 2013 the general impression is that although government is working on structural reforms in various domains such as the housing market, General Old-Age Pensions Act (AOW) and supplementary pensions and various labour market reforms, progress is slower than anticipated. Government has invested considerably in support from social partners, which resulted in the so called Social Agreement of mid April 2013.3 This Social Agreement could not hide the complicated political situation the Dutch government is confronted with i.e. a majority in the house of representatives, but a minority in the Senate. This is possibly best illustrated by the difficulty in getting a package of additional net spending cuts of €6 billion accepted that was announced when the new Budget was presented in mid-September. In his speech on the

3 The Social Agreement was also criticized by some because none of the 63 smaller and bigger measures it includes

secondary and tertiary education, R&D and innovation are completely lacking from this list.

12

presentation of the 2014 Budget4 the Minister of Finance pointed at the years of negative growth when he observed that “although the Netherlands is still one of the richest and most competitive countries in the world, in terms of prosperity we are back where we were in 2007”. He also mentioned the three central pillars of this government (sustainable economic growth, healthy public finances and a balanced distribution of income) and the measures taken to reform the financial sector, the housing market. Pensions, the labour market, health care system and the energy sector as well as legislative proposals that still need to be debated in parliament. In order to prevent the budget deficit to increase the 2014 Budget Memorandum includes additional net spending cuts of 6 billion Euro. In the weeks following the presentation of the budget it appeared that there was not enough political support for this package of spending cuts (as the current coalition has no majority in the Senate). Government invested in talks with 4 and later 3 out of the opposition parties to adapt the €6 billion additional net spending cuts package. A provisional agreement was reached on October 11th5 where substantial changes had to be made to almost all aspects of the package (i.e. labour reforms, education, social security, health, environment). It is still unclear whether there still is a need to find €650 million of additional net spending cuts yes or no. What is clear though, is that an additional €650 million will be invested in education in 2014, this was a clear demand from the smaller liberal party D’66 to support the whole package.

Having said all this, we present below the main lines of both innovation (or rather enterprise policy) and education, research and science policy subsequently. In practice they are intertwined as through its enterprise policies (most notably its top sector approach) the Ministry of Economic Affairs aims at focusing research efforts and funding to research that is relevant to these Top sectors for example. In higher education, research and science policies are partly geared towards these Top sectors for example. The foundations for both enterprise policy and higher education, research and science policies were laid in 2010/2011. For that reason the description of both starts there. More details of both are given in section 2.4.

Total government investments in R&D

It has been observed by Rathenau in its Total Research Funding overview 2011-2017 that the direct government investments in R&D in the Netherlands will decrease the next few years.6 From 2011 to 2017 a decrease from 5.0 to 4.3 billion euro is mentioned. Over the same period the indirect funding (mostly through tax measures) will increase from 0.9 billion to 1.2 billion euro. However, the overview is not completely in line with the overviews that government has send to parliament and the responsible Ministry of Education, Culture and Science urged to also include all innovation expenditures.7

When Budget 2014 were presented it seemed that ideas whether there were actual budget cuts on education, science and innovation were diverging as well, the more so as stakeholders are not always referring to the same data. An overview of investments made in research (and culture) and sciences is included in a new trend report by the Ministry of OCW.8

Enterprise policy

4 See http://www.government.nl/government/documents-and-publications/speeches/2013/09/17/speech-on-the-

presentation-of-the-2014-budget-memorandum.html, for a first overview of the major changes in the overall budget

(in English), see http://www.government.nl/government/documents-and-

publications/budgets/2013/09/17/budget-memorandum-chapter-i.html 5 See http://www.nu.nl/politiek/3599873/overzicht-begrotingsakkoord-2014.html 6 See Totale Onderzoek Financiering (TOF) 2011–2017. Updated version for 2014-2018 here. 7 See Kamerbrief bij TOF 8 See http://www.trendsinbeeld.minocw.nl/

13

Both research and innovation feature prominently in the Ministry of EA’s Enterprise Policy, which was introduced in the strategy documents “To the top: Towards a new enterprise policy' (February 2011), “To the top: Enterprise policy in action(s)” (September 2011).9 It includes both the plans regarding generic and more specific innovation policies, although the latter (most often referred to as the Top sector approach or policy) received most attention in the public and policy debate in the last few years.

In EA’s view, entrepreneurship is considered as crucial for wealth creation in the Netherlands. It is argued that societal and economic challenges demand for a policy that gives 'room for entrepreneurs'. Indeed, entrepreneurs - rather than the government - seize economic opportunities and creates economic growth, jobs and wealth. The government should not steer with rules and subsidies. Instead, it should ensure that companies have sufficient room to do business, to invest, to innovate and to export. The government strengthens the commitment to public-private collaboration between entrepreneurs, researchers and government in the top sectors. On balance, the new budget proposal shows a solid financial base under the top sector policy. Key elements in the current enterprise/innovation policy are:

less subsidies in exchange for more R&D tax incentives;

less and simpler rules;

broader access to corporate finance (credit facilities);

better utilisation of the public knowledge infrastructure by businesses - especially in the 'top sectors';

better alignment of fiscal policy, education policy, foreign policy and diplomacy with the needs of businesses - especially in the 'top sectors'.

The formal longer-term policy ambition is:

The Netherlands in the top 5 of knowledge economies in the world (in 2020);

Increase of Dutch R&D-expenditures to 2.5% of GDP (in 2020);

Creation of Top consortia for Knowledge and Innovation (TKIs) in which public and private parties participate for more than €500m, of which at least 40% is funded by the business sector (in 2015).

The basic rationale for the enterprise/innovation policy is that globalization and societal challenges (e.g. ageing, food security, scarcity of raw materials, reduction of biodiversity and climate change) not only create threats but also (economic) opportunities that can be seized by companies. This requires an excellent public knowledge infrastructure that is better aligned with the needs of the business sector and a business sector, which invests more in R&D and innovation. Furthermore, strong regional clusters are important because they contribute to the attractiveness of the Netherlands as a location for (foreign) knowledge-intensive companies. Therefore, the national and regional governments should collaborate more intensively. In the national R&I strategy, regional governments are invited to align their policy agenda (and budgets) with the priorities in national policy. Also the European level is considered as important, not only in terms of the internal market and a level playing field, but also in terms of aligning 'top sectors' in the Dutch economy with EU programmes for R&I (Horizon 2020).

Over 2011 and at the request of the Cabinet, several top teams constituted by representatives from the industry, research institutes and government, contribute actively to the strengthening of the new enterprise policy with the objective to increase the competitiveness and the knowledge

9 See http://www.government.nl/documents-and-publications/parliamentary-documents/2011/02/04/to-the-top-

towards-a-new-enterprise-policy.html and

http://erawatch.jrc.ec.europa.eu/erawatch/opencms/information/country_pages/nl/policydocument/policydoc_0

015 respectively

14

base of the Dutch industry. An important assumption is that Dutch companies are given the opportunity to do business, invest, innovate and export. The government has implemented various actions based on the advice of the top teams. In total nine top sectors were identified i.e. Agro-food; Horticulture and propagating stock; High-tech materials and systems; Energy; Logistics; Creative industry; Life sciences; Chemicals; and Water”. These top sectors build on the unique strengths of the Dutch economy. They are characterized by strong market and export positions, a good knowledge base, public-private collaborations and a potential to contribute to innovative solutions for societal challenges.

In March 2012 the then minister of Economic Affairs (Verhagen) informed parliament on how the Top sector policies are progressing and especially the contribution from industry (or private parties) and government. 10 In this letter the minister indicated that he needed to be able sign the (non-binding) innovation contracts with the representatives of the Top Sectors in order to secure their commitment. The minister announced that in 2012 government will invest 1.4 billion euro in Topsectors and this amount will increase to slightly over 2 billion euro in 2015. These are predominantly existing budgets that are used for top sector policies and where government has asked the Top teams to make proposals as how to use these existing budgets best.

Especially the top sector policy is widely debated. An important feature is that specific innovation policy is now more formalized (although there were predecessors of the Top Sectors, namely specific innovation programmes geared to strongholds in the Dutch economy as well) and integrated and no longer consists of collaborative R&D programmes, but customized policy packages for the nine top sectors. The customization also entails that barriers in terms of research, financing, regulation, trade promotion etc. are taken into account, meaning in practice a broadening of innovation policy.11 Another feature is that the top sectors themselves are heavily involved in shaping of the policies (i.e. top sector policies are to a large degree demand steered by industry) and have to contribute themselves considerably to the specific plans. A third feature, again showing the broadening of innovation policy, is that a clear link is made to human capital formation. For example all top sectors were asked to develop a human capital agenda (see section 2.4 for more details). Finally, there is a clear link with the regional dimension. Although regional-economic policy is no longer a priority at the central government level, a lot of regional development policies are developed at the regional and local levels. Increasingly these are linked to the Top Sector policies. In this context the Ministry asked Netherlands Environmental Assessment Agency (PBL) and Statistics Netherlands (CBS) to literally map the Top Sectors in the Netherlands12. The resulting maps link top sectors to typical regional notions such as Mainports (Logistics), Greenports (Horticulture and propagating stock), Brainport (High-tech

10 See Brief. 11 This is for example reflected in how the government mentions the top sectors approach in the National Reform

Programma 2013. Here it is stated that: “The principal aim of the top sectors approach – in terms of innovation and

research – is to promote closer cooperation between knowledge institutes, businesses and public authorities in the

programming of fundamental and applied research, with special attention to the challenges facing society in the near

future, including issues relating to sustainability. This will increase the applicability of scientific research for both

commercial and social purposes and thus increase the return on the public funds devoted to research. That effect

will be enhanced by the fact that the top sector approach incorporates elements of foreign policy, education policy

and policies to reduce the administrative burden. Another objective is to secure the active involvement of the

ministries and of regional and local authorities in the strategy, not only financially but also by using their

procurement policies to help meet the government’s target of devoting 2.5% of the public procurement budget to

the promotion of innovative solutions.” 12 See download het rapport (PDF, 12 MB) for the resulting study.

15

materials and systems) and the various regional valleys that have been used in regional policy documents over the past few years.

The current government, elected in September 2012, chose to continue the Enterprise Policy and its Top Sector approach. In December 2012 the minister of Economic Affairs informed parliament about the agreements made with the 19 Top consortia for Knowledge and Innovation (TKIs), the coordinating and programming vehicles for carrying out basic and applied research in the nine top sectors, following a bottom-up process with parties from the government, science and business communities to draw up thematic research and innovation roadmaps. From this it was visible that industry is willing to invest €319 million (in cash) in these TKIs on the basis of which the government will provide a top-up (through a so-named TKI-charge, for 2013 this will amount to €82 million.13 The most recent state of affairs is described in the Monitor Enterprise Policy which was published in October 2013. This we will describe in section 2.4 in more detail.

Overall the top sector policies are broadly supported, although not entirely undisputed. There are for example various economists who dispute the idea of sectors as unit of analysis (which is not exactly correct as most top sectors are in fact clusters) and the idea that government can pick winners in the first place. The policies were also criticized in the major business newspaper for its high transaction costs. Advisory councils have called for societal challenges to be taken onboard.

Higher education, (fundamental) research and science policy

The Netherlands has set itself the target of spending 2.5% of gross domestic product on research and development (R&D) by 2020. The government will pursue this ambitious target by implementing its new policy for the business sector ("Naar de Top") in 2012 and the Quality in Diversity strategic agenda ("Kwaliteit in verscheidenheid"), which presents a long-term scenario for higher education, research and science.

In this policy domain continuation and stability more than large scale changes is the adagio and changes – at least in budgetary terms – limited. The government has also decided to proceed with the Quality in Diversity (‘Kwaliteit in verscheidenheid’) strategic agenda, with its long-term perspective on higher education, research and science. The main elements of this strategy are (see pages 66-68):

Need for an overall quality improvement of the system as a whole. Most notably a reduction in the number of studies and tracks. Higher education institutes will be asked to specialize more, focus on their strengths and reduce the studies in which they perform poor.

Need to challenge excellent students more on the one hand and prevent students leaving without completing their studies on the other hand.

A better mix of education and research and the attention needed for teaching (the level of which in Professional Higher Education is too low and in academia research is seen as the priority activity over teaching).

Introduction of performance based funding of higher education institutes.

13 See http://www.rijksoverheid.nl/ministeries/ez/documenten-en-

publicaties/kamerstukken/2012/12/14/informatie-over-de-afspraken-in-de-topconsortia-voor-kennis-en-

innovatie.html.

16

Probably one of the landmark changes is the last mentioned gradual shift from lump sum institutional funding in higher education towards performance based or competitive funding. This was well summarized in the National Reform Programme 2013 report. Herein it is stated that “In response to the recommendations of the Veerman Committee for Future-Proof Higher Education in 2010 and the ensuing strategic agenda in 2011 and framework agreements, by the end of 2012 performance agreements had been concluded with practically every university and institution of professional education to improve the quality of education, to increase the completion rate among students, to promote institutional profiling and greater differentiation of teaching programmes and to strengthen valorisation. Financial consequences are attached to the performance agreements and actually meeting the performance targets. The funding model has been adjusted accordingly, with more than 7% of the funding of education based on the criterion ‘quality and profile’. The system of performance-related agreements will be evaluated in four years’ time.” (p. 26). It is foreseen that if this new way of financing works well for the period 2013-2016, the share of competitive funding will possibly increase to 20% in the next planning period 2017-2020.

The 2013 national reform programme also sketches how the higher education, research and science policy has developed since the new government took office in September 2012, including how it contributes to the European Research Area. “The Coalition Agreement provides that €275 million will remain available via the Netherlands Organisation for Scientific Research (NWO) for programme-related research for the top sectors. A further €150 million will be provided to strengthen fundamental research (€50 million of which will come from a realignment of priorities). A substantial portion of this sum will be used to facilitate participation in the European research programme, ‘Horizon 2020’. Of the increased amount announced in the coalition agreement, the government will invest €100 million a year in research via the NWO. This increased spending will start at €25 million in 2014, rising to €75 million in 2015, 2016 and 2017 and reaching €100 million from 2018. In addition, the government will devote a lump sum of €50 million from the additional annual funds for the Top Consortiums for Knowledge and Innovation to further stimulate public-private partnerships in the area of fundamental research via the NWO. The sum will be spent in installments of €25 million in 2014, €15 million in 2015 and €10 million in 2016. In this way, the government will provide a firm boost for fundamental research, both independent research and the research carried out in the joint programmes with the top sectors.

Dutch research policy will also contribute to the development of the European Research Area (ERA), the planned open European area where researchers, knowledge and technology can circulate freely. In its Communication on the ERA, the European Commission requested member states to undertake a number of actions, many of which are already addressed by Dutch policy. For example, the Netherlands already has competitive research financing, as requested by the Commission, through the funding provided through the NWO (which, as previously mentioned, will be increased further), and has had a system of international visitations for years. Other examples are the fact that all vacancies in the Dutch academic world are published on the international website Academic Transfer and a large number of Dutch universities have requested the "HR Excellence in Research" logo from the European Commission, to identify them as institutions that provide a good and stimulating working environment. The ministries of Education, Culture and Science and Economic Affairs promote gender diversity in the senior ranks of companies, organisations and institutions through the Talent to the Top Foundation, among other things, and a substantial share of the €150 million in additional funds will be used for participation in European collaborative projects. Given the autonomy of the research

17

institutions in the Netherlands, the government will take further steps to develop the ERA in consultation and collaboration with the institutions (and, where relevant, the private sector).” 14

Gender Equality

Regarding gender equality and gender mainstreaming in research, there are several initiatives. The charter ‘Talent to the Top’ was e.g. developed in 2008 with the aim to achieve a higher intake, promotion and retention of female talent in top jobs. In addition, several universities have chairs and fellowships exclusively for top female researchers (e.g. VU University: Fenna Diemer Lindeboom chairs, Groningen University: Rosalind Franklin Fellowships). There is also the Dutch Network for Women professors.

Other subsidies/programmes targeted at strengthening the gender dimension in research programmes are for example: NWO Programme Plural, Emancipation Policy Grants, FOM-bridging subsidies, Aspasia Programme and the FOM / V network initiatives for female physicists -Minerva Prize (FOM). In addition, Athena is a grant scheme intended for female researchers who have received a Veni grant from NWO Chemical Sciences. The premium stimulates appointment as assistant professor in permanent employment. Athena encourages the appointment of female researchers in chemistry at a university, or an equivalent fixed position at a research institute.

Transfer of scientific knowledge

In the last years, many initiatives have been implemented in the Netherlands in order to facilitate the optimal circulation and transfer of scientific knowledge in the Research and Industrial System. Among them, the measures implemented by the National Research Council of the Netherlands (NWO) are the ones that contribute the most to ERA priority 5 ‘optimal circulation, access to and transfer of scientific knowledge including via digital ERA’.

Stand out a series of measures devoted to promote the public-private cooperation in research, in particular, the ones that support the Top Sector policy and the European Research Programmes such as Horizon 2020. Among them the TKI-allowance is an example of measure that promote synergy and coherence of research and innovation activities on economic and social priorities, by fostering public-private cooperation. See also section 2.4.

2.2 Funding trends

2.2.1 Funding flows

Dutch expenditures on Research and Development (GERD) as a share of GDP have been increasing over the past few years. The jump in 2011 can partially be attributed to revisions in the measurement procedure (definitions and inclusion of firms with a size of 1 – 9 employees), as well as to temporary crisis measures implemented in 2010. Whereas the 2.03% in 2011 was still roughly similar to the EU27 average, the 2.16% in 2012 is substantially above the EU28 average of 2.06%. In absolute numbers, this 6.5% increase amounts to a jump from €12.1 billion to €12.9 billion. As the table below reveals, also the GERD as expressed by euro per capita is on the rise.

The R&D expenditures funded by the business sector, amounting to 1.01% of GDP in 2011, is well below the EU28 average. Similarly, when looking at who performed R&D (rather than who funded it), Dutch businesses account for 56.6% of the total R&D expenditures (BERD) versus a European average of 63% (2012). In the past Innovation Union Scoreboards, this has been the main indicator where the Netherlands are underperforming. A low share of BERD is

14 More details are included in the ERA Communication Fiche of July 23rd 2013.

18

complemented with a high share of R&D being performed by higher education institutions (HERD). Despite its recent decreases, the 33% of GDP (in 2012) is still exceeding the European average of 23.8%. Finally, R&D performed by the public sector (GOVERD) is slightly decreasing, thereby scoring below the EU average.

Table 1. Basic indicators for R&D investments

2009 2010 2011 2012 EU28 (2012)

GDP growth rate tec00115

-3.7 1.5 0.9 -1.2 -0,4

GERD (% of GDP) [rd_e_gerdfund]

1.82 1.86 2.03 b

2.16 (p)

2,06 (e)

GERD (euro per capita) [rd_e_gerdtot]

631.3 657.1 728,9

772.6 (p)

525.8 (e)

GBAORD - Total R&D appropriations (€ million) [gba_nabsfin07]

4,767.607 4,781.111 4,901,745 4,815.052

86,309.497

R&D funded by Business Enterprise Sector (% of GDP)

0.82 n/a 1.01 (b)

n/a 1.12 (e)

BERD: R&D funded by Business Enterprise Sector (% of GDP) [rd_e_berdindr2]

0.85% 0,89% 1,07% 1,22% 1.3%

HERD: R&D performed by HEIs (% of GERD)

40% 40% 33% (b)

33% (p)

24%

GOVERD: R&D performed by Government Sector (% of GERD)

13% 12% 11% 11% 12,4%

BERD: R&D performed by Business Enterprise Sector (% of GERD)

47% 48% 56% 57% 63%

Share of competitive vs. institutional public funding for R&D

n/a n/a n/a

Venture Capital as % of GDP (Eurostat table code htec_vci_stage2)

0.030 0.028 0.031 0.027 0,025 (EU-15)

Employment in high- and medium-high-technology manufacturing sectors as share of total employment (Eurostat table code htec_emp_nat2).

2.7% 2.5% 2.5% 2.7% 5.6 (2011)

Employment in knowledge-intensive service sectors as share of total employment (Eurostat table code htec_emp_nat2).

45.5% 45.6% 45.6% 45.3% 38.9 (2011)

Turnover from Innovation as % of total turnover (Eurostat table code tsdec340)

8.4 (2004)

10.9 (2006)

8.6 (2008)

n/a 13.3 (2008, EU 27)

Source: Eurostat, December 2013. Note: e=estimated, p=Eurostat prevision, b=break in time series, d = definition differs

The national investment target for R&D expenditures is 2.5% of GDP in 202015. One reason for setting this target below the 3% which is pursued by the EU as a whole is the sector composition of the Dutch economy. A relatively small high-tech and industry sector is complemented with a large service sector, in which R&D investments are either lower, or less well administered and thus less visible in statistical indicators. Moreover, an employment rate of 80% of the population to be employed is the Dutch target set for 2020, exceeding the EU target of 75%. The national tertiary education attainment target for 2020 is set around 40-45%.

15 http://www.rijksoverheid.nl/documenten-en-publicaties/rapporten/2013/10/02/voortgangsrapportage-bedrijvenbeleid-2013.html

19

2.2.2 Funding mechanisms

2.2.2.1 Competitive vs. institutional public funding

The following table shows the development in government resources for innovation and research for the years 2008-2016. After a significant increase in the past years, total public expenditures are planned to stabilize around 6.5 million euro. With the introduction of the Enterprise Policy, the government reconsidered the way in which support to research and innovation helps to support economic growth. The main shift concerns the increasing importance of generic policy in the form of fiscal incentives for R&D. Whereas nearly 10% of total public expenditure on R&D used to be devoted to applied research (2008), this has dropped to 6% by 2012. Also the innovative expenditures by other departments – both in absolute as well in relative terms - will drop (its share e.g. from 24% to 15%).

Table 2. Resources for innovation and research for the period 2008-2016

2008 2010 2012 2013 2014 2016

Fundamental research 2.975 3.183 3.280 3.282 3.334 3.368

Applied research 512 488 453 407 384 361

Fiscal incentives for R&D 797 1.497 1.777 1.753 1.765 1.698

Expenditure on innovation and research by other departments

1.317 1.778 1.545 1.354 1.094 973

Total 5.601 6.946 7.055 6.796 6.504 6.400

Source: National Reform Programme 2013. Amounts in millions of euros.

Institutional block funding, as a percentage of total funding for national R&D performers, has been decreasing between 2005 and 2008 (77.6% to 72.2%).16 Nevertheless, it still exceeded the OECD mean of 62.4%. The current research and innovation strategy aims to develop the share of competitive funding even further. One notable effort on this account is the decision to make university funding more performance-based. In 2011, the budgets of Dutch universities consisted of 60% core funding, 9% (competitive) funding from the research councils NWO and KNAW, 4% industry funding, 4% EU funding and 3% non-profit sector funding17. In the budgets for 2012-2016, 7% of the core funding for universities will be competitive rather than block-funding. The major part (5% of total higher education budget)will be conditional funding, while the other part (2%) will be allocated selectively for education profiling plans. The share of funding that is provided by NWO and KNAW is largely based on program and projects proposals. In 2012, NWO invested 756 million euro, of which 637 million euro was allocated to universities and other institutes (excluding NWO institutes) based on competition18. Secondly, a substantial share of the budget for applied research is being allocated for research projects executed in one or multiple Top Sectors. As for the national institutes for applied research, the government declared to reduce fixed block-funding with 20% over the period 2011-2016. Instead, the institutes have to find co-funding from private parties, thereby ensuring the practical relevance of the research. Apart from directly collaborating in research projects, the institutes can also participate in studies performed together with the Top consortia for Knowledge and Innovation (see section 2.3).

16 OECD Outlook 2012, p. 351 17 JRC-IPTS (2011) 'European university funding and financial autonomy. A study on the degree of diversification of university budget and the share of competitive funding' 18 http://2012.nwojaarverslag.nl/jaarverslag-2012/S_1069_Organisatieenbedrijfsvoer57/S_1075_Financi235n63/S_1077_Financieeloverzicht201265/a1050_default

20

2.2.2.2 Government direct vs indirect R&D funding

Direct funding in the form of grants or subsidies for businesses has been reduced over the past years. The reduction in resources devoted to applied research, however, is accompanied with an increase in the financial resources that make it more fiscally attractive for companies to invest in research and development (see the resources increase in the RDA scheme or Innovation box). More details on especially the development in fiscal instruments are provided in section 2.3. Table 3 shows the development of venture capital investments in the Netherlands. The total amount of investments is highly fluctuant: especially the decrease from €2.1 billion in 2011 to €1.3 billion in 2012 is remarkable. Almost two thirds of Dutch VC investments in 2011 and 2012 concern buyouts, whereas this percentage was 77% for the EU15 average. Phrased differently, early-stage venture capital investments are relatively large in the Netherlands.

Table 3. Venture capital investments by detailed stage of development (in millions of

euros)

Type of investment 2007 2008 2009 2010 2011 2012

Seed stage 14,134 8,995 4,828 1,025 9,204 2,241

Start-up stage 138,255 150,278 111,189 108,590 112,679 81,571

Later stage venture 154,988 83,078 58,800 56,230 63,642 79,461

Buyouts 2.336,551 958,733 240,868 708,819 1.455,074 886,588

Total venture capital investments 2.842,799 1.763,203 805,422 1.326,492 2.101,128 1.320,375

Source: Eurostat (Retrieved: December 2013.

2.2.3 Thematic versus generic funding

Over the past decade, the focus on generic policy has been rising. Despite the prominent role of specific policies in the last few Dutch innovation strategies (e.g. innovation programmes, top sectors), budget is increasingly being allocated to generic measures. The OECD Outlook 2012 reports a shift from 68,5% in 2005 to 73,1% in 201016, whereas other European countries adhere (on average) to a nearly equal distribution. Especially the recent and planned development of the fiscal R&D incentives contributes to the diverging trend, which is expected to continue in the next few years.19 By relying increasingly on generic measures, the Dutch government is limited in her possibilities to steer innovation towards solutions for societal or ‘grand’ challenges. The table below shows the share of R&D (as percentage of total GBAORD) that was devoted to socio-economic objectives. Overall, the mutations between 2009 and 2013 are very modest. Relatively, environment has increasingly been receiving attention, while budgets for exploration and exploitation of earth and space decreased. Table 4: The share of R&D (as percentage of total GBAORD) budgeted for social-economic objectives 2009 2010 2011 2012 2013

Exploration and exploitation of the earth 0,6% 1,2% 0,2% 0,2% 0,1%

Environment 0,3% 0,0% 0,8% 0,8% 0,8%

Exploration and exploitation of space 4,0% 2,9% 3,6% 2,2% 2,5%

Transport, telecommunication and other infrastructures 2,8% 3,1% 2,9% 2,4% 2,3%

Energy 2,5% 2,9% 1,5% 2,2% 1,6%

Industrial production and technology 9,3% 9,3% 10,7% 11,5% 11,5%

Health 4,1% 5,1% 5,4% 4,5% 4,3%

19 E.J. Velzing (2013). “Innovation Policy from the Dutch Ministry of Economic Affairs, 1976-2010”. PhD thesis. UvA, Amsterdam.

21

Agriculture 3,4% 3,6% 3,3% 3,1% 3,0%

Education 0,3% 0,3% 0,2% 0,2% 0,3%

Culture, recreation, religion and mass media 0,4% 0,4% 0,4% 0,4% 0,4%

Political and social systems, structures and processes 2,9% 2,6% 2,8% 2,6% 2,6%

General advancement of knowledge: R&D financed from General University Funds (GUF)

50,0% 47,9% 50,9% 51,7% 52,8%

General advancement of knowledge: R&D financed from other sources than GUF

17,6% 19,0% 15,8% 16,6% 16,4%

Defence 1,7% 1,6% 1,5% 1,6% 1,5%

Total civil R&D appropriations 98,3% 98,4% 98,5% 98,4% 98,5%

Total R&D appropriations 100% 100% 100% 100% 100%

Source: Eurostat. Retrieved: December 2013.

2.2.4 Innovation funding

In the Netherlands, funding for R&D and R&I comes predominantly from the Ministry of Education, Culture and Science, and the ministry of Economic Affairs. Whereas the first one mainly focuses on fundamental research, the innovation policies of EA are more oriented towards the commercialization of new knowledge. As for the balance in funding: the total budget for fundamental research is significantly larger than the budget available for applied research and support for innovation activities by businesses. For 2014, this balance is €3334 million for fundamental research, versus €384m and €1785m for applied research and business R&D (respectively).4 In other words, less than 40% of the relevant budgets concerns the valorization part of the innovation chain. This figure would change if we also take into account the innovation expenditures of other departments. Since these would concern valorization rather than fundamental research, the balance would shift to a 50/50 distribution. A detailed estimation of the share of innovation expenditures is presented in the annual overview of total investments in science and technology (TWIN).20 The report states that R&D and innovation are increasingly aligned with each other (both in the spheres of policy and practice), but that is not reflected in the planned budget adaptations. For 2014, innovation covers only 32% of the total R&D&I budgets. The table below provides the direct and indirect budgets for the period 2012-2018. Table 1: Estimated direct and indirect budgets for the period 2012-2018 (in millions of € and as a percentage of GDP)

2012 2013 2014 2015 2016 2017 2018

Expenditure on R&D 4.676,80 4.607,50 4.533,80 4.296,10 4.175,60 4.135,10 4.110,70

- out of which relevant for innovation 752 710,9 759,5 653,5 571,7 541,3 525,2

Expenditures on innovation (not being R&D)

229,5 299,7 247,8 224,4 177,4 145,4 137,6

Fiscal instruments for R&D&I 869,1 1.075,60 1.068,60 1.099,70 995,6 980,6 980,6

Total direct and indirect R&D&I

5.775,40 5.982,80 5.850,30 5.620,20 5.348,70 5.261,10 5.228,90

- out of which direct expenditures on innovation

981,4 1.010,60 1.007,30 877,9 749,2 686,7 662,8

As a percentage of GDP

Expenditures on R&D as a % of GDP (excluding fiscal

0,78 0,76 0,74 0,7 0,67 0,66 0,65

20 Rathenau Instituut (2014) – Total investments in Science and Technology 2012-2018.

22

instruments)

Expenditures on R&D as a % of GDP (including fiscal instruments)

0,96 0,99 0,96 0,91 0,86 0,84 0,82

23

2.3 Research and Innovation system changes

The most recent description of the research and innovation Dutch system can be found in the publication The Science System in The Netherlands: and organisational overview (April 2012)21. In this document the main points of the Dutch science policy are described (in which the Strategic Agenda for Higher Education, Research and Science presented in July 2011 plays an important role), it describes the organisation of the science system (advisory bodies, funders, intermediary organisations and temporary task forces, research institutions etc.) and the various levels of the science system (Parliament, Cabinet and ministries). The document concludes with a number of factsheets with more detailed information on funders and performers of research in the Netherlands, with some key figures and it addresses of a number of relevant Dutch websites.

One of the advisory bodies described in this document is The Advisory Council for Science and Technology Policy (AWT), an independent body set up to advise (both on request as at its own initiative) the Government and Parliament on policies relating to scientific research, technological development, and innovation. The Cabinet has submitted a proposal to the Parliament (lower house) for the establishment of the Advisory Council for Science, Technology and Innovation (AWTI) in September 2013. In practice this means that the field of 'innovation' will formally be reflected in the name of the board. In addition, the subject of energy-innovation will be added to the responsibility of AWTI while the General Energy Council will be stopped. The subject of energy infrastructure goes to the Council for the Environment and Infrastructure (RLI). So far, this change has not yet been implemented.

The majority of other research and innovation system changes are mainly related to the establishment of a new government coalition in November 2012 (Cabinet Rutte II). In the coalition agreement22 substantial measures were announced regarding the labour market and housing market reform. Regarding the industrial policy, the Commodity and Industrial Boards (government-approved associations of employers and employees which focus on the regulatory framework for specific sectors, such as retail and the dairy industry), will be abolished. Their public tasks will be taken over by the Ministry of Economic Affairs from 2014.

Enterprise Policy

As described in the previous country study the R&I strategy of Cabinet Rutte II follows, with some modifications, the one incorporated by the Ministry of Economic Affairs (EA): ‘To the top: Towards a new enterprise policy' (February 2011)23. This strategy identifies nine ‘top sectors’ in The Netherlands, which build on the unique strengths of the Dutch economy (see also section 2.1). With this Top Sector approach Cabinet Rutte (I and II) aims to achieve systemic changes. The government promised to facilitate these changes, i.e. by several interventions to create triple helix networks. Below we will just briefly mention the most important developments regarding the enterprise policy (see section 2.4 for an overview of recent policy developments and new policy measures).

First of all, it was already mentioned how for each top sector a 'top team' of entrepreneurs and researchers has been formed. These have been asked by the cabinet to make concrete proposals for these policy agendas. Top sectors, research institutes and the government signed the new Knowledge and Innovation contract for the next two years on 2 October 2013. In 2014, the top

21 http://www.government.nl/documents-and-publications/leaflets/2012/04/17/the-science-system-in-the-

netherlands.html 22 http://www.kabinetsformatie2012.nl/actueel/documenten/regeerakkoord.html 23 http://www.government.nl/documents-and-publications/parliamentary-documents/2011/02/04/to-the-top-

towards-a-new-enterprise-policy.html

24

sectors will invest over 970 million euro’s in research. With the additional public investment of nearly 1.06 billion euro, the total investment will be about 2 billion euro. For 2015, the investments will be at the same level.

From 1 January 2014 onwards business can go to one place for all government matters related to doing business: ‘A one-stop-shop for businesses’ (in Dutch ‘het Ondernemersplein’). In this one-stop-shop for businesses, services of the Chamber of Commerce, Syntens and parts of the former NL Agency will be combined. In time, services of new parties, such as the taxation authority or municipalities will be included as well. Recently, the related website was launched24.

Higher education, (fundamental) research and science policy

ERA priority 1: more effective national research systems: improving the quality and profiles for higher Education Institutions

The main recent reform of Dutch Higher Education relevant for research is the implementation of the report by the Veerman Committee, which urged for better profiles of HE institutions, which impact on education as well as research. As the institutions are autonomous, performance agreements have been agreed in the autumn of 2012, with a financial sanction mechanisms. As of 2013, additional resources are available for quality and profile, representing about 7% of education funding. Of this 5% for quality (conditional funding) and 2% for profile (selective budget). The funding in the period 2013-2016 will be awarded on the basis of the performance agreements with individual universities and colleges. For education and academic achievement (quality) an amount of €200 million will be available in 2013 rising to €245 million in 2016.

In order to carry out basic and applied research in the top sectors, 19 consortia have been established. In the so-called Top consortia for Knowledge and Innovation (TKIs) many existing research initiatives are being put together (see section 2.4). The government wants to handle at least € 500 million in the TKIs in 2015.

To improve the connection between education and labour market (especially within the Top Sectors) several Centres of Expertise (higher education) and Centres for innovative craftsmanship (vocational education) were established. In these centres students, teachers and businesses work together. At the moment there are 25 Centres of expertise25 and 18 centres for innovative craftsmanship26 (October 2013). To a large extent, these centres are located at one of the campuses in the Netherlands. Currently, there are 34 campus initiatives; 8 of them being in the idea phase, 10 of them recently started, 9 being in a phase of growth and 7 begin mature.

In December 2011 the National Commission of Valorisation (LCV) was established (in retrospection of two years) in order to improve the valorisation of knowledge and research. The LCV is a platform with a representation of the Ministry of Education, Culture & Science, the Ministry of Economic Affairs, KNAW, NWO, TNO, HBO-Raad, VSNU, MKB-Nederland, WUR, VNO-NCW, the large technology institutes, STW and the Dutch Federation of University Medical Centers. The Commission was e.g. responsible for the development of the Valorisation Agenda27 and the development of a set of indicators for valorisation. The activities of the commission ended in 201328.

24 http://www.ondernemersplein.nl/ 25 http://www.centresofexpertise.nl/ 26 http://www.centravoorinnovatiefvakmanschap.nl/ 27 http://www.rijksoverheid.nl/documenten-en-publicaties/rapporten/2010/07/23/valorisatie.html 28 Ministry of Education, Culture and Science (2012). Overdrachtsdossier

25

What we need to mention here as well is how Dutch government is dealing with its substantial infrastructure for applied research. This includes TNO and the large technological institutes MARIN, NLR, ECN and Deltares (including DLO, part of Wageningen UR). In total turnover amounted to 1157 million euro in 2012.29 In total 414 million out of this budget was a subsidy from the state for knowledge development. These institutes had in 2012 8500 employees. These institutes, that are typical for the setup of the Dutch innovation system, were at first under the responsibility of the Minister of OCW, but at the beginning of Rutte I government (2010), transferred to the Ministry of Economic Affairs. Whereas the first steered at a distance, the latter steers more directly and for example has demanded the institutes be involved in the whole top sector approach. A document that gives an insight in the way the Ministry of economic affairs deals with the applied science institutes is the so named Vision on applied research of July 2013.29 In this document it is explained that government wants to increase efficacy and efficiency in how the institutes operate and how they are governed. Government also wants new and more coordinated ways of research programming and the actual research, especially in the context of top sector policies. Five points of departure are formulated in this document, notably:

Better positioning of institutes vis-a-vis private knowledge providers (with government subsidies research should focus on pre-competitive research and should not compete with private firms that already cover these areas well enough.);

Focus on multi-annual public-private collaboration within top sectors;

Less ‘institutional’ or fixed subsidies. more (government) funding that is dependent on quality and impact;

Steering or governance of the institutes based on quality and impact (evaluation in the same fashion once every four years);

Harmonisation in execution and organisation (this includes exploring of bringing all six institutes under the same law).

2.4 Recent Policy developments

After the contours of the Enterprise Policy have been sketched by the Ministries of EA and OCW in 2011, its actual implementation has begun. In the following sub-sections, we describe which instruments have been designed over the past year(s) and which other policy initiatives were performed. Special emphasis is placed on the most recent developments. Most notable in this respect are the agreements made in the Innovation Contracts for 2014/2015, the launch of the SME innovation support for top Sectors (MIT), extension of business financing via various measures (grossing to €125 million in 2013), and first steps to establish a Dutch Investment Agency (NII).

Knowledge transfer

Improving exploitation of scientific knowledge by supporting triple helix collaboration is one of the main pillars of the Enterprise Policy. The top sector approach is concentrated on nine priority areas characterized by scientific excellence and high export opportunities. Although selection of these priority areas resulted from a top-down process, actual design of sector-specific instruments is based on a bottom-up approach. For each top sector, a 'top team' of entrepreneurs and researchers has been formed in 2011. These multi-institutional top teams are requested to optimize the scientific and commercial performance of their sector, in which

29 See http://www.rijksoverheid.nl/documenten-en-publicaties/notas/2013/07/05/visie-op-het-toegepaste-onderzoek.html

26

knowledge transfer plays essential role. Although the innovation voucher scheme is no longer continued, several instruments for knowledge transfer and collaborative efforts are made available to the top sectors.

In an interactive policy process, the government, the business sector and knowledge institutes in the top sectors jointly identified the problems and opportunities for each sector. The top teams presented their first policy agenda’s (2012/2013) in 2011. These so-called Innovation Contracts, which are updated bi-annually, contain integrated sector-specific roadmaps regarding domains like education policy, research policy, foreign policy, and environment policy. The latest Innovation Contract dates from 2nd of October 2013, when it was signed by the top sectors, knowledge institutions and the Dutch cabinet. In the Innovation Contract 2014/2015, these stakeholders promise an annual research investment of almost 2 billion euro (out of which about 970 million by the top sectors, and 1,06 billion public investments). In the Innovation Contracts, it is agreed how the available resources will be used in each top sector to build on existing scientific excellence and to meet the need for innovative solutions to societal problems. In this vein, alignment with the societal challenges formulated in European research programs and Horizon 2020 is emphasized in the latest contracts, amongst others by specifying the relevance of each research topic mentioned in the Innovation Contracts. Furthermore, participation in European programs is supported with a total (cofounding) budget of 36 million euro for the years 2014-2017.

In the course of 2012, the parties collaborating in the top sectors established 19 Top Consortiums for Knowledge and Innovation (TKIs), which have started to implement the research agendas that are part of the Innovation Contracts. Enterprises can participate in incidental or multi-annual research projects by investing resources. For each euro an enterprise contributes to a TKI, the government adds another 25%. This TKI-allowance, which is intended to spur private financing for TKI projects, had a total budget of 83 million euro in 201330. It is estimated that the private contribution for this year will amount to another 319 million euro. For 2014, the budget will be increased to 200 million. Given the ambition to connect to European research programmes, as expressed in the Innovation Contract 2014/2015, part of the available funds will be available to co-finance EU projects. In order to enhance the participation of SMEs in TKIs, they can enjoy a special TKI-allowance of 40% for the first 20,000 euro they contribute. From 2014 onwards, SMEs also have the possibility to contribute this first 20,000 euro in kind rather than pecuniary. Moreover, each TKI has a contact point devoted to SMEs. These contact points help small and medium enterprises with identifying appropriate research programs and innovation activities. By relying on acquired experiences, both within the TKIs as well as in earlier platforms for public-private partnerships31, the TKIs plan to make the criteria for TKI-allowance more demand driven and flexible with respect to how to use the investments.

In addition to the 9 top sectors with their respective top teams, 3 cross-over domains have been formulated. The following domains are recognized as promising areas for research and innovation:

ICT. Public-private partnerships form the basis for removing barriers related to use of ICT by particularly SMEs. Existing efforts focus on topics like precision-agriculture, education (open courses), e-health (telemedicine) and smart mobility. In line with the approach followed by the top sectors, a roadmap was formulated in 2012 (following up on the Digital Implementation Agenda from 2011). A central role is assigned to ten ‘breakthrough projects’ which go beyond the individual top sectors themselves. The

30 For the TKIs related to the topic of energy, like the TKI for ‘Biobased Economy’, additional funding was available from innovation resources specifically related to energy (e.g. the measure ‘SDE+’). 31 The most notable example of such platforms are the Technological Top Institutes (TTI).

27

developments for this cross-over domain are reported in the policy letter ‘Benefitting from the economic opportunities of ICT’ (July 2013);

Nanotechnology. Like the roadmap for ICT, the roadmap for nanotechnology was developed by the top sector HTSM but affects many more sectors. The main focus here lies on multi-purpose technologies such as sensors;

BioBased Economy. The topic of biobased economy was initially embraced by the top sector Chemicals, but the corresponding Innovation Contract ‘Green Growth, from biomass to business’ is presented by five other top sectors as well. Projects to reap the benefits of transforming biomass into valuable resources and materials are coordinated by a TKI devoted to BioBased Economy. Parallel to this development, the Dutch cabinet explained her ambitions regarding green growth in March 2013 (see section 2.5).

Access to finance

ERA priority 1: More effective national research systems. Action MS01: Introduce or enhance competitive funding through calls for proposals and institutional assessments as the main modes of allocating public funds to research and innovation, introducing legislative reforms if necessary

The new measures in the field of research and development can be summarized as follows: TKI-allowance, increasing the proportion of funding for applied research and fundamental research, more money available for financing and partnership among European research programs, fiscal measures for promoting R&D (RDA, Innovation Box, WBSO), the Companies of Public Organisation (PMOs) and the PBO tax are expected to disappear from 2014, support measures for innovation in SMEs (Innovation Credit, Seed Capital scheme and Fund-to-Funds) and the NWO Grants programme. The Companies of Public Organisation (PMOs) and the PBO tax are expected to disappear from 2014.

The Enterprise Policy aims to spur innovation by facilitating private R&D spending. In this respect, various predominantly fiscal measures have been adapted or newly introduced over the past year(s). The central role of innovation-supportive tax schemes is evidenced by their aggregated budget of €1073 million in 2013 (€1066 million in 2014), which accounts for more than 40% of the total Enterprise Policy budget32. The total annual resources for fiscal innovation measures will be reduced by €93 million in 2014 and another €67 million in 2015. In winter 2013, the government started preparing an integral assessment regarding the details of the cuts in the relevant tax facilities in the coming years. The most important fiscal instruments are:

The tax credit for R&D (WBSO). With an annual budget of €698 million in 2013 and an incidental increase to €764 million in 2014, the WBSO is by far the largest innovation policy instrument. It provides a tax exemption with respect to the labour costs of researching employees. Following the evaluation in 2012, there was a budget-neutral reallocation of the funds for the WBSO in 2013, which has enhanced the facility’s efficiency and effectiveness. The rates for the WBSO were lowered, the salary threshold for the first bracket was raised and the ceiling was maintained at 14 million euro. The changes are expected to encourage companies to conduct more R&D. In the end of 2013, a study is performed with the purpose of investigating how the WBSO can be optimized for supporting contract research between knowledge institutions and SMEs.

32 See Begroting 2014, XIII EZ, p. 24. When taking into account fiscal measures for R&D that are not part of the Enterprise Policy, the total budget amounts to €1753 in 2013.

28

The tax relief for innovation (the Innovation box) offers firms a reduced corporate tax rate for profits derived from in-house developed intangible assets. The innovation box, having a budget of an estimated €625 million per year, will be evaluated in 2015.

The Research & Development Allowance (RDA) was introduced in 2012. The aim of RDA is to make non-wage costs of investments in innovation more attractive (from a fiscal perspective). The RDA offers a higher tax relief for R&D investments in capital equipment and exploitation costs. It is complementary to the ‘old’ WBSO scheme offering a tax relief on R8D wage costs. Despite pre-launch intentions to raise the initial budget of €250 million per year with a factor of two, the budget is determined to be €375 million in 2013 and €302 million in 2014.

The TKI-allowance, mentioned earlier in this section.

All the fiscal instruments are eligible to innovative firms from any sector or size. Approximately two-thirds of the budget appropriated to the above-mentioned tax facilities is used by SMEs (over 95% of the users are SME’s). Recognizing that especially small, young firms face problems with acquiring capital, there are several additional (non-fiscal) policies exclusively devoted to facilitate private R&D spending by SMEs:

SME Innovation support Top Sectors (MKB Innovatiestimulering Topsectoren, MIT). One of the most important developments in 2013 was the launch of the MIT-measure. Purpose of the MIT-measure is to involve SMEs in the top sector approach. To this end, a menu of partial subsidy instruments is available, ranging from collaborative business-to-business R&D projects, feasibility studies, knowledge vouchers, hiring highly qualified staff, networking activities and innovation brokers. The top sectors themselves advise the Ministry of EA which instruments are best suited to the needs of SME’s in their sector and thus how to divide the available budgets of 2 million euro per top sector (including the crossovers of BioBased Economy and ICT). Given the success of the measure in 2013, the total budget for 2014 will be increased to €30 million.

The SME+ Innovation Fund (Innovatiefonds MKB+) offers revolving funds for a period of four years (2012-2015) in order to increase the availability of venture capital for entrepreneurs. The SME+ Innovation Fund includes several financial instruments for innovation and funding fast growing innovation companies. It consists of three main pillars:

o Innovation Credit. The Innovation Credit supports development projects with high risks. Companies using the Innovation Credit pay back the loan if their project is successful, otherwise the loan can be converted to a grant. In 2013 the threshold for the Innovation Credit has been lowered to improve access to the scheme for small companies. Moreover, as from 2013 and until (at maximum) the end of 2014, the credit percentage of 35% will be raised till 50%.

o SEED Capital. This scheme focuses on high technology or creative entrepreneurs. It provides public venture capital investment funds. The scheme improves the return-to-risk ratio for investors. In 2010, the Dutch government participated in 29 funds, together making available €40 million worth of risk capital.

o Fund-of-funds. In 2013, this financial instrument with a budget of €150 million was launched in collaboration with the European Investment Fund (contributing one third of the funding). This most recent pillar with ‘later stage venture capital’ funds focuses explicitly on high-growth innovative enterprises. Despite the

29

current difficult economic circumstances, the ambition for 2014 is that the government will participate again in at least 30 funds (both SEED Capital and Fund-of-funds) and maintains the amount of annually available risk capital.

SME loan guarantee scheme (Borgstelling MKB, BMKB). By stimulating banks to provide loans, this scheme allows SMEs to borrow more than would be possible with their own collateral. Until the end of 2014, the BMKB will be broadened by increasing the guaranty from 45% to 67.5%, with a maximum of €200,000 per firm.

Dutch Investment Agency (Nederlandse Investeringsinstelling, NII). In September 2013, the Minister of Economic Affairs presented his plans to improve the availability of funding for enterprises. Based on an analysis captured in the report ‘Corporate funding’, the minister decided to create a Dutch Investment Agency in cooperation with pension funds, insurers and banks. “By combining knowledge and expertise, and promoting standardization and economies of scale, it will act as an intermediary that matches supply of long-term finance with demand. The aim is to widen financing opportunities for profitable investments and encourage developments that market failure would otherwise prevent. The NII will concentrate on social challenges in the Netherlands in such areas as health care, energy, infrastructure, school buildings, housing and sustainability, and regional initiatives. Following consultation, a project planner will be appointed in the near future to set up an institution that can stand on its own feet in a couple of years.” 33

Innovation Performance Contract (IPC). The IPC is a subsidy (€7.75 million in 2013) for multi-annual research projects between SMEs within a similar region, value chain, or (sub)sector. Although the IPC started as a generic measure, it was included in the Top Sector approach by adding the criterion of ‘relevance for top sectors’ in 2012. Almost half of the IPC-participants in 2013 belonged to a top sector (mostly HTSM and the Creative Industries). 2013 was the last active year for IPC: from 2014 onwards only existing projects will be finalized. Reserved budgets will be used for the MIT-measure, mentioned above.

Microfinancing (by Qredits).Qredits offers startup or business credit of up to €100,000-€150,000 coaching and business tools. The budget for micro financing has recently been increased with €30 million.

Growth facility scheme (Regeling Groeifaciliteit). This concerns another instrument for helping SMEs to access venture capital. Under the scheme, financiers who provide venture capital to SMEs receive a guarantee: if the bank or venture capital company incurs a loss on the investment, 50% can be reclaimed from the Ministry of Economic Affairs. The guarantee applies to, for instance, losses incurred on the sale of shares, the writing off of a loan, or bankruptcy. The term of the guarantee is a maximum of 12 years. No recent changes apply to this instrument.

In addition to the instruments aimed at facilitating private R&D by predominantly SMEs, there is one instrument that focuses on large and medium-sized companies in the Netherlands. The Business loan guarantee scheme (Garantie Ondernemingsfinanciering, GO) allows them to borrow substantial amounts of money. Capital providers, since 2013 also including non-banking organizations, receive a 50% guarantee from the government. The term of the guarantee is a maximum of 8 years. The amount involved used to be between €1.5 million and €50 million, but has recently been increased to €150 million.

33 Budget Memorandum 2014, p. 4.

30

Another generic development in the field of financing research and innovation is the coalition’s intention to support alternative forms of funding (e.g. credit unions, crowd funding, SME obligations) via promotion, reduction of legislative barriers and incorporation in existing measures.

Besides funds for supporting business R&D, we should also note here the developments with respect to financing of academic research. The Netherlands Organization for Scientific Research (NWO) set approx. €275 million over two years available for excellent basic research in the leading sectors. NWO Grants programme is intended for excellent research groups in the research domains under the different NWO’s Divisions. The NWO research grants are broad in terms of applicants and topics (TOP grants for outstanding research groups –social-science, health issues, chemicals, physics, etc.-, for top researchers -astronomy, computer science, mathematics). There are four different types of NWO research grants: Big facilities, Cooperation and Exchange, Individual Investments, Open Access, Programmatic. The calls have internationally peer review by default. Foreseen contributions of a structural nature in the 2013 new budget agreement are (1) NWO research for major infrastructure facilities for the implementation of projects on the basis of the results of the national roadmap committee selected. (2) N.W.O. to carry out an integrated program for personal talent alongside the “Innovational scheme”. (3) STW NWO budget will be increased by €10 million per year to improve the enhancement of technological and technical-scientific research.

Other developments are:

In the coalition agreement, the Company of Public Organisations (PMOs) and PBO tax are expected to disappear from 2014. This has particular implications for the top sectors Agri&Food and Horticulture and starting materials, because the contribution of the PMOs was part of the private contribution to the Innovation Contracts, with a reduction of €47 million.

There is an agreement for increasing the proportion of funding for applied research (TNO, DLO and LTI) for the top sectors (is expected €250 million in 2016).

There will be more money available for financing and partnership among European research programs (particular emphasis is devoted to Horizon 2020), thanks to the increase in the budget for the TKI-allowance (€110 million) and for fundamental research (€75 million rising to €150 million).

Innovative procurement

Apart from instruments focused on providing access to finance, policy measures with a demand-side perspective are increasingly present in the Dutch innovation policy. First of all, the recently established program Innovative Procurement Urgent (Inkoop Innovatie Urgent) aims to increase governmental expenditure on innovative solutions. The initiative is initiated by the Ministry of EA, but tries to engage other departments as well. Ultimate goal is to devote a minimum share of the governmental budgets (2,5%) to innovative solutions. Like in the existing Small Business Innovation Research Programme (SBIR), the initiative is project-based. So far, a total of 27 projects have been initiated to address the eight societal challenges around which Inkoop Innovatie Urgent is centred. 23 of them resulted into actual results and received permission to continue. The latest developments are presented in a policy letter attached to the Progress Report Enterprise Policy (see section 2.4). Inkoop Innovatie Urgent is supported by PIANOo, an expertise center for innovative procurement. In order to link supply and demand of innovative solutions in an early stage, it developed a virtual market place (www.innovatiemarkt.nl).

31

Administrative burden

One of the central pillars in the Enterprise Policy is simplification of administrative processes. In the Coalition Agreement, it is agreed that the administrative burden for enterprises, citizens and professionals will have to be reduced with €2.5 billion. A first decrease of 845 million has already been achieved in the period 2011-2012. Further reduction has to be realized through a range of interventions presented in a policy letter (‘Goed Geregeld’) by the ministers of Economic Affairs and the Interior Ministry. These measures include: prevention of unnecessary rules, duplication in data collection, harmonization and standardization of administrative procedures, focused use of ICT and digital services and better communication. A special initiative is the Proof of Good Service (Bewijs van Goede Dienst, BvGD), which is a certificate for helping municipalities to improve their services (143 of them already obtained it, another 17 are on their way). Another action is the program ‘Better and more concrete: good rules and aimed service’, in which local governments commit themselves to reducing administrative burdens.

In addition to reducing the administrative burden in general, the Dutch government also has been undertaking efforts to make individual policy measures more accessible. An example is the intention to simplify the TKI allowance and MIT-measure, which is supposed to attract more SMEs. Finally, from 2014 onwards, SMEs can benefit from the availability of a one-stop-shop for businesses, rather than facing two separate institutions for administrative and advisory issues (for the merger of Syntens and the Chambers of Commerce, see section 2.3).

Human capital / Education

The envisaged lack of qualified (technical) personnel is one of the drivers for the Enterprise Policy. Each of the top teams has been asked to develop a Human Capital Agenda. These agenda’s include an analysis of the exact demands, a joint vision on the required education, and detailed agreements on how education and enterprises for the top sector contribute to the development of attractive curricula that prepare students for the labour market. Some first results of the Human Capital Agendas are the establishment of Centres of Expertise and Centres for innovative craftsmanship (see section 2.3).

Another outcome of the Human Capital Agendas is the National Technology Pact 2020. This pact was signed in May 2013 by a coalition of employers, employees, regions, education, and students. It aims to result in more technologically educated employees with competences that meet the market demand. In the pact, one can find concrete activities, like more attention for science and technology at elementary schools, an investment funds for collaboration between enterprises and schools, and one thousand grants per year for students choosing a technological education. Indicative for the importance of this issue is that €100 million is budgeted for improving the presence of technology teachers at higher education institutions, and another €300 million for both 2014 and 2015 for retraining and additional training of people with an interest for technology. A total of 23 exact action points, and details with respect to national and regional activities, have recently been presented in a policy letter.

Other recent developments with respect to education concern attempts to increase the overall level of education, as described in the National Reform Program 2013. In recent years, the universities of applied sciences and the research universities have received around 80 million euro per year to improve the success rate of students and 2.15 million euro for educational guidance interviews. Following pilot projects in the period 2009-2011, it was decided to extend educational guidance interviews throughout higher education. By extension, it was decided that students are entitled to more support, such as trial enrolment in a course or an educational guidance interview, to help them decide on a particular course of study. Furthermore, from the 2014-2015 academic year, prospective students will have to enroll no later than 1 May in order to give themselves enough time for such an activity.

32

What should be noted as well is that “the government plans to introduce a loan system for new students, also starting in the 2014-20115 academic year. Under the new system, students (and parents) will be required to pay more towards the costs of their upkeep. Loans will be made available on favorable terms, to be repaid according to the student’s ability after graduation. Studies by the CPB and the Netherlands Institute for Social Research (SCP) suggest that the effects of this measure on the number of enrolments of new students will be small. Furthermore, the supplementary grant for students with parents with a lower income will be retained. The revenues from the introduction of the student loan system will be invested in the quality of education” (p. 26). The implementation of this plan has been postponed, both for bachelors and masters.

2.5 National Reform Programme 2013 and R&I

At the end of April 2013, the Dutch government submitted its National Reform Programme (NRP) 2013 to Parliament and the European Commission. It is structured along the five priorities stated in the EU-wide priorities for growth for the European Semester of 2013 adopted by the European Council mid-march 2013. Below we very crudely indicate along what lines the Dutch government works on these five priorities and then we focus on the R&I component described in the NRP.

Pursuing differentiated, growth friendly fiscal consolidation. On this priority the documents states that: “The Netherlands attaches great importance to sound public finances. The government has opted to restore government finances by making savings of 16 billion euro, on top of the measures already agreed by the previous government. The government is designing the spending cuts in a manner that is conducive to growth and friendly to the environment. The austerity measures will not affect investments in education, research and innovation. A number of tax exemptions will also be phased out.” (p. 4)

Restoring normal lending to the economy. To promote a healthy financial sector and restore normal lending to the economy a number of changes to mostly existing financing schemes are made. It is stated that “The Government supports lending to business with guarantees, such as the Business Loan Guarantee scheme (Garantie Ondernemingsfinanciering) and the SME Loan Guarantee scheme (Borgstelling MKB Kredieten). The Business Loan Guarantee scheme will become permanent, with an annual ceiling of 400 million euro, which will help companies to meet their funding requirements. To provide more help for small start-ups, the ceiling for loans from the micro-financing organisation Qredits will be raised from 50,000 to 150,000 euro. There will also be more scope for providing risk-bearing capital to young, innovative companies from the SME+ Innovation Fund” (p. 4).

Promoting growth and competitiveness. Dutch government works on this priority along various routes including measures in the area of research and innovation (see below) and structural reforms in (a.o.) in areas such as the labour market and the housing market.

Tackling unemployment and the social consequences of the crisis. To address this priority Dutch government describes the various measures in place to promote job creation and measures to prevent social exclusion.

Modernising public administration. This priority is reflected in policies aimed at decentralizing a large number of the government’s tasks and a structural reduction of the administrative burden for companies, professionals and citizens by 2.5 billion euro in 2017 (p. 4).

The National reform Programme 2013 in a concise way also summarizes the actions Dutch government is taking to spur research and innovation. It states that “government will promote private spending on research and development (R&D) and fundamental research and annual public funding for research and innovation will increase by more than 0.7 billion euro to around

33

6.5 billion euro in the period 2008-2016. However, up to 2016, spending will be 0.7 billion euro lower than in the peak years of 2010-2012 as a result of the expiry of temporary crisis measures.” (p. 16). In section 2.4 we point at recent developments in both enterprise or broad innovation policies and higher education, (fundamental) research and science policy in more detail. There are some developments and changes, but the bottom line is continuation of existing policies in both sub domains. In section 2.5 we briefly reflect on the 2013 National Reform Programme for the Netherlands as well as the related Stability programme and the reaction by the European Commission (i.e. proposal for a council recommendation). The European Council reacted on both the national reform programme 2013 and 2013 Stability Programme Report (see section 2.1) of the Netherlands and decided on July 9th on a council recommendation in which it was recommended to mostly intensify efforts on structural reforms such as stepping up efforts to gradually reform the housing market, to adjust the second pension pillar, to implement the planned reform of the long-term care system and take further actions to enhance participation in the labor market. The number one recommendation though was to: “reinforce and implement the budgetary strategy, supported by sufficiently specified measures, for the year 2014 and beyond to ensure a timely correction of the excessive deficit by 2014 in a sustainable manner and achieve the structural adjustment effort specified in the Council recommendations under the EDP” (p. 4). Relevant for this country report is that it was also recommended to “protect expenditure in areas directly relevant for growth such as education, innovation and research” (p. 4).

2.6 Recent evaluations, consultations, foresight exercises

According to the National Reform Programme 2013, monitoring and evaluation is common practice in Dutch research and innovation policy, although some changes to character are underway. It is stated that the “Ministry of Economic Affairs has established an extensive monitoring system that will be used to evaluate the effectiveness of specific instruments and enterprise policy as a whole. The recommendations in the report ‘Dare to measure’, produced by the expert group on the measurement of the effects of enterprise policy (Theeuwes Commission) will be followed, as reported in the Minister of Economic Affairs’ reaction to the report on 13 December 2012”34.

Effects of policy instruments

The main task of this commission Theeuwes (a panel of experts consisting of scientists, the Netherlands Bureau for Economic Policy Analysis, the General Court (as observers), the Statistics Netherlands, the former NL Agency and the EA Ministry itself) was to systematically analyse possible ways of evaluating the direct impact (output) of several of the Ministry of Economic Affairs’ policy measures. The question is what proportion of the observed output is attributable to application of the policy instrument. Evaluation of the effectiveness at output level can be seen as the first step in evaluating the effects on outcome level (social and economic impact). The report: ‘Dare to measure’ (November 2012)35, presents a series of recommendations on how the effect of policy can be made more visible, and some proposals for the evaluation of policy designs. The report ‘Dare to measure’ set a new standard for the evaluation of policy instruments. One of the first reports to follow this new standard was the evaluation of the Innovation Credit 2006-2011 (July 2013)36.

34 National Reform Program The Netherlands 2013 35 http://www.cpb.nl/en/article/dare-measure-evaluation-designs-industrial-policy-netherlands 36 http://www.rijksoverheid.nl/documenten-en-publicaties/rapporten/2013/08/23/evaluatie-uitdagerskrediet-en-innovatiekrediet.html

34

Information about the use of the instruments to promote innovation is also published on the website www.volginnovatie.nl. Data on the effects of the policy changes will become available during this government period, when more is known about the use of the instruments and the change in private R&D spending (along with other indicators). Recent evaluations are37:

Evaluation of the WBSO 2006-2010 (published in 2012)

Ex-post evaluation of the Energy Innovation programs (published 2012)

Evaluation of the Programmatic Approach (published 2012)

Evaluation of the Space Policy program 2007-2011 (published in 2012)

Evaluation of the Innovation Credit instrument (published in 2013)

At the website one can also find facts and figures about the use of several policy measures (like the use of the WBSO, the use of RDA, the use of innovation performance contract (IPC), MIT-instrument for SMEs etc).

Since early 2013 Elsevier, commissioned by NL Agency, is responsible for bibliometric research regarding the science-driven themes covered by the Top consortia for Knowledge and Innovation (TKIs). For each theme this will result in indicators regarding number of publications, citation impact and collaboration between universities and business. Eventually, this will provide the TKIs and stakeholders with an instrument for international comparison (which can assist in building and maintaining a good portfolio of research programs and research projects). Completed studies will be uploaded on www.volginnovatie.nl as well.

Effects of enterprise policy

Regarding the top sector approach, the Statistics Netherlands (CBS) in consultation with the Ministry of Economic Affairs, Agriculture and Innovation (EL&I) and the Centre for Policy Related Statistics (part of Statistics Netherlands) presented a first monitoring report of this new enterprise policy based on a consistent statistical overview of the economic position of the top sectors in 201238.

The latest progress report of the Top Sector approach39 was presented by the Ministry of Economic Affairs in October 2013, giving an overview of achievements, budgets, participants etc. Attached to this report one can also find an update of the Top Sector Monitor40.

In this report the Ministry of Economic Affairs states that it continues implementation of Enterprise Policy and presents three actions to improve it:

1. More emphasis on societal challenges: in March 2013 the Cabinet already send a letter to the Parliament (lower house) in which it presents its ambition for Green Growth41. The government wants to strengthen the competitiveness of the Netherlands and wants to decrease the impact on the environment and the dependence on fossil fuels. The effort

37 http://www.agentschapnl.nl/onderwerpen/innovatief-ondernemen/research-development/volg-innovatie/effecten-van-bedrijvenbeleid-0 38 www.cbs.nl/NR/rdonlyres/FA8F2205-3054-41D9-A206-BC9D13F7ECBF/0/ monitorentopsectorenresultatenweb.pdf 39 http://www.rijksoverheid.nl/documenten-en-publicaties/rapporten/2013/10/02/voortgangsrapportage-bedrijvenbeleid-2013.html 40 http://www.rijksoverheid.nl/documenten-en-publicaties/rapporten/2013/10/02/monitor-bedrijvenbeleid-bedrijvenbeleid-in-beeld-2013.html 41 ‘Kamerbrief Groene Groei’ (March 2013) and ‘beleidsnota Maatschappelijk Verantwoord Ondernemen loont’ (June 2013)

35

of the government is targeted at market incentives, regulatory reforms, innovation and the operation of the government as a network partner. Eight promising areas were identified, where ‘green’ and ‘growth’ can reinforce each other. One of them, Biobased Economy, is also a cross-cutting them in the Top Sector approach [see also section 2.4 – knowledge transfer].

2. More support for entrepreneurs: the government is developing a new facility in order to help start-ups and innovative SMEs in the first risky stage from proof of concept to business development (the government intends to allocate 75 million euro’s to this new facility) and some changes will be made in the WBSO and the TKI instrument [see also section 2.4 – access to finance].

3. Simplification of instruments: The government simplifies and harmonises the TKI- charge and the MIT-scheme based upon the experiences of the Top Sectors. The TKI-charge will be extended (i.e. for Health Funds) and it will be possible to apply for this supplement for multiannual programs [see also section 2.4 – administrative burden]

The report also includes the first evaluative observations of the Advisory Council for Science and Technology Policy (AWT), regarding the progress of the Top Sector approach42. One of the tasks of the AWT is to inform the Ministry of Economic Affairs about the developments within the Top Sector approach. Although she will officially take stock by publishing a report in 2014, the Ministry of Economic Affairs already requested her to come with some first observations. The letter in which the AWT presented her views mainly focuses on knowledge and innovation. Topics like legislation, human capital and export will be more prominent in the evaluation that is foreseen for 2014. The main conclusion of AWT is that the Top Sector approach did initiate dynamics that contribute to stronger relations within the Triple Helix: continuity of the chosen directions is now seen as crucial. In order to provide some guidance in creating the envisaged structures, some suggestions for improvement are made:

Improve organization/coordination: the Ministry of Economic Affairs could be more proactive in guiding changes within the innovation system. AWT claims that the government should provide more (concrete) directions. Stakeholders now face uncertainty with respect to budgets, contact points, etc. Moreover, bureaucratic complexity might scare potential participants. Transparency regarding the added value of the top sector approach might increase commitment from the field. The top sectors themselves are largely responsible for their organisation, but might benefit from professional support concerning communication and managing public-private partnerships. Another issue is the identified need for more clarity in how research agendas are constructed. Not all stakeholders understand or agree that ‘demand-driven research’ basically means ‘industry inspired research’. A lot of focus is currently on fundamental research, while crossing the ‘valley of death’ by engaging in applied research is less prominent.

Improve SMEs involvement: it appears that SMEs are not heavily involved in Top Sector approach. The AWT expresses a demand for more vision on which kind of SMEs should be engaged, pointing at the difference between a broad scope versus a focus on the most innovative ones.

Invest more in cross-sectoral (societal) challenges: crossovers between the Top Sectors (and their TKIs) are believed to have a huge potential for innovation. So far, only few

42 http://www.rijksoverheid.nl/documenten-en-publicaties/brieven/2013/10/02/awt-eerste-observaties-uit-de-balans-van-de-topsecoren.html

36

attempts have been made in which stakeholders from multiple top sectors join their forces to address topics with a large economic and/or societal relevance. AWT advises for more guidance in creating crossovers and points at the approach followed by Europe Horizon 2020, in which innovation is explicitly linked to societal challenges of a broad nature.

Align national and regional policy: regions are observed to be increasingly occupied with innovation: they devote financial means to this topic and develop Smart Specializations strategies. The AWT acknowledges the potential leverage regions can give to the national top sector approach, but warn for risks related to misalignment (e.g. duplications, omissions, inefficient variation in instruments, conflicting rules).

Facilitate customisation within the instruments of the top sector approach: the Top Sector approach builds on (sector) specific measures as an addition to the Dutch generic innovation policy. However, stakeholders claim that the current top sector instruments are insufficiently customised to their needs. Additionally, there is a demand for more support with respect to service innovation, for instance in the form of creating partnerships between manufacturing and service providers. A consideration might be to shift part of the budget for generic policy towards the more specific policies.

Among the measures related to innovation and business development, there also is a series of Social and Economic Council (SER) advisory reports, for example:

report on supporting initiatives to strengthen the private sector of developing countries

report on greater differentiation in higher education.

report on development through sustainable enterprise

Other measures that have been taken in the area of business and innovation are the conferences and symposium organized by SER, such as the one organized on 1 February 2012, The new generation of entrepreneurs and workers, where entrepreneurs, new workers and their representatives engaged in a debate within the SER regarding the changes in the labour market and their consequences.

Effects on scientific research

ERA priority 1: More effective national research systems. Action MS02: Ensure that all public bodies responsible for allocating research funds apply the core principles of international peer review.

The Dutch Science System has as a basis for its evaluation the national Standard Evaluation Protocol 2009-2015. This lays down four main assessment criteria: quality, productivity, feasibility/vitality and societal relevance. An international committee with peers is appointed to evaluate each institute, working on the basis of a self-evaluation report from the institute and a site visit. The most recent evaluations of NWO-institutes were conducted in 2011 (for more information here). In addition, the KNAW-institutes and university groups are also evaluated. By the end of March 2014, NWO, the KNAW and the Dutch association of universities presented the Standard Evaluation Protocol 2015-2021.

Some evaluation exercises have been conducted in order to evaluate the implementation of the top sector policy and to develop a system to monitor and evaluate the impact of the business policy in general and its implemented measures [see the section above]

The effect of the policy on the discretionary room for fundamental research is being monitored by the committee of the Royal Netherlands Academy of Arts and Sciences (KNAW), which is exploring the possible effects for scientific research of the policy of profiling by universities and

37

the top sectors policy introduced by the previous government. The committee presented a report with its initial reflections to the State Secretary for Education, Culture and Science in February 2013. The KNAW committee will present a second report at the end of 2014, by which time the initial effects of the policy will be starting to emerge.

The individual initiatives taken by the different bodies regarding R&D funding are revised by international independent experts: for example: the NSFC Chinese – NWO Dutch research cooperation grants. This is an example of the experience which The Netherlands Organisation for Scientific Research (NWO) has in common with other research councils, in this case with third countries. NWO and the National Science Foundation of China (NSFC) are long time partners in international research co-operation.

2.7 Regional and/or National Research and Innovation Strategies on Smart Specialisation (RIS3)

In line with the subsidies allocated under the programming period 2007-2013, the operational programmes for ESF, ERDF and ETC funding for the period 2014-2020 are developed by the regions North, East, South and West. These programmes are expected to be finalized by the end of 2013, after which they will be submitted to the European Commission. In the development stage, the national government (Ministry of EA) urged each program to rely on a SWOT analysis, involve instruments to support private investments, and to formulate a vision on how to monitor and evaluate results. Partly due to the relatively low and declining budgets, the (now preliminary) programmes target only a small number of themes related to the challenges facing Europe, thus assuring their contribution to the Europe 2020 strategy. As for the ERDF funding, central topics are innovation (including innovative SMEs), sustainability (especially a low-carbon economy) and labour participation, as well as actively promoting synergy and cohesion between the programmes through partnership agreements. At the same time, the fund will be used to promote the regional aspect of the top sectors approach and create synergies with other policy measures. The new programs under the European Territorial Cooperation objective will largely be devoted to similar themes, in order to ensure that they simultaneously contribute to Europe2020 and national instruments. Finally, ESF funding is assigned to support re-integration on the labour market and sustainable employment. As a requirement for obtaining the ERDF funding, each of the operational programs is requested to include a Regional and Innovation Strategy on Smart Specialization Strategy (RIS3):

South: The RIS3 for the South(-East) of the Netherlands is largely based on the Brainport2020 strategy, which is in fact one of the inspirations for Europe to adopt this approach. Brainport2020 is an economic vision and strategy document including a high level of governance details with respect to responsibilities, planning and instruments. Priorities have been selected through a ‘triple helix’ process in which various stakeholders were involved. By including the business perspective, Brainport2020 has already proven to be successful in attracting private investments.

West: The RIS3 for Western-Netherlands goes by the name ‘Chances for West’ and is an update of the programme which received ERDF funding in the 2007-2013 programming period. The new strategy, which has been put forward for consultation in October 2013 and is soon to be finalized, aims to increase private investments in R&D, energy efficiency, and economic and social cohesion within and between the larger cities. The programme focuses on crossovers between top sectors, knowledge valorization, and sustainability. Again, the development of the plan relies on intensive triple helix collaboration. Part of the underlying analysis is an international comparison of the innovative strengths of Western-Netherlands.

38

North: For the Northern region, improving social-economic conditions and creating jobs is of top priority in her RIS3. In order to develop a sound strategy, the participating stakeholders commissioned an analysis already in 2012. A SWOT-analysis identified strong sectors (Agribusiness, Life Sciences, Energy and Tourism) and questioned the innovative power of the region. The RIS3 is currently still in development, but the region is already connected to the S3 platform.

East: The Eastern region of the Netherlands is focusing on creating a low-carbon economy43. If the plans will receive final approval from the European Commission, there will be €100m of European funds for spurring the development of such an economy. The national government intends to add another €17m, but only if there is sufficient co-funding from within the region. This co-funding is should include €48m from the two provinces and largest cities involved, as well as €120m from local businesses. Apart from striving for an economy that is less depending on fossil fuels, the development strategy of the Eastern region also invests is the three top sector domains of high tech systems and materials, health, and agrofood, energy and environmental technology.

The Netherlands Environmental Assessment Agency (PBL) clearly has a coordinating think tank function regarding regional innovation strategies and S3 strategies and provides insight on how to link a top sector approach and develop a S3 strategy. In 2012 PBL performed in cooperation with CBS a study on the rationale for regional economic top sector policies (Rapport PBL ‘De ratio van ruimtelijk-economisch topsectorenbeleid’). In this study the top sectors were mapped on the Netherlands showing where they are concentrated. Further a plea was made to better link top sector approach (which is primarily a sectoral and not so much a regional economic approach yet) to regional innovation strategies. In 2013 PBL performed an assignment for the Department of Infrastructure and the Environment on the international competitiveness of the Dutch regions and how to improve these further (Notitie PBL “Werken aan de internationale concurrentiekracht van de Nederlandse regio’s”, 4 maart 2013.). In the latter study on how Dutch regions could work on their international competitiveness it was a.o. concluded that Most Dutch regions miss the pure agglomeration power due to the relative small population and population density (as compared to other European agglomerations); that public knowledge investments are generally well developed in contrast to private knowledge investments that are in comparison to foreign agglomerations relatively low; that accessibility is well developed and that clusters are not a golden rule for success as clustering is most relevant to knowledge intensives manufacturing and service industries. These type of studies as performed by PBL clearly play a role in the development of the regional innovation and (new, but related) S3 strategies.

43 http://www.energienieuws.info/2014/01/honderd-miljoen-eu-voor-aanjagen.html

39

3 PERFORMANCE OF THE NATIONAL RESEARCH AND INNOVATION SYSTEM

3.1 National Research and Innovation policy

According to the Innovation Union Scoreboard (IUS) 2013, the average innovation performance of the Netherlands corresponds with a leading position in the group of innovation followers. In the IUS 2014 this place was lost to Luxemburg, positioning the Netherlands at the sixth place. Especially the excellent research system and its linkages with private businesses are contributing to this above-EU position. Somewhat weaker, on the other hand, is the business expenditure on R&D (see section 2.2). Further increase on this account is required for the Netherlands to join the select group of innovation leaders. Table 5: Main science and innovation figures: the Netherlands

Indicator NL

1. ENABLERS

Human resources

New doctorate graduates (ISCED 6) per 1000 population aged 25-34 1.9% (2011)

Percentage population aged 30-34 having completed tertiary education 42.3% (2012)

Open, excellent and attractive research systems

International scientific co-publications per million population 1,457 (2012)

Scientific publications among the top 10% most cited publications worldwide as % of total scientific publications of the country

15.6% (2009)

Finance and support

R&D expenditure in the public sector as % of GDP 0.93% p (2012)

Public funding for innovation (innovation vouchers, venture/seed capital, access to finance granted by the public sector to innovative companies) (% of firms receiving any public funding; inn_cis7_pub)

34% (2010)

2. FIRM ACTIVITIES

R&D expenditure in the business sector as % of GDP 1.22% p (2012)

Venture capital and seed capital as % of GDP 0.300 (2012)

Linkages & entrepreneurship

Public-private co-publications per million population 128.2 (2011)

Intellectual assets

PCT patents applications per billion GDP (in PPS€) 2.33 (2010)

PCT patents applications in societal challenges per billion GDP (in PPS€) (climate change mitigation; health)

1.17 (2010)

3. OUTPUTS

Economic effects

Medium and high-tech product exports as % total product exports 40.46% (2010)

Knowledge-intensive services exports as % total service exports 28.8% (2011)

License and patent revenues from abroad as % of GDP 1.80% (2012)

Source: Innovation Union Scoreboards 2013 and 2014, and Eurostat (updated in December 2013).

A closer look at the 24 indicators underlying the composite index reveals that performance in the category ‘enablers for innovation’ is well above the average of the EU27. This holds for the strength of human resources and the access to finance and support, but especially for the presence of an open, excellent and attractive research system. Outstanding is the number of international scientific co-publications: 1457 in the Netherlands versus a EU27 average of 343 (IUS2014). Also the percentage of scientific publications that is part of the top 10% most cited publications is above average (15.6% versus 11.0%).

40

In the category ‘firm activities’, the picture is somewhat more mixed. Notably the R&D investments of the business sector are lagging behind. Although this finding is based on figures from 2010, it is stated that the recent increases in BERD would not have been sufficient for a higher place in the overall ranking. Nevertheless, we observe that non-R&D investments have showed the fastest growth of all Member States (arriving just above the EU27 average). An explanation provided earlier is that this is due to the sector composition of the Netherlands, in which the tertiary sector is relatively well-presented. It should be noted, however, that the IUS 2013 and 2014 recorded a rapid decrease of exports by knowledge-intensive services. The main reason for overall performance in the category ‘economic effects’ to be regarded as strong, is found in the license and patent revenues from abroad. Whereas the score on this account is exceptionally strong, other indicators for economic effects are relatively modest.

3.2 Structural challenges of the national R&I system

Looking at the performance and dynamics within the Dutch innovation system, several major challenges can be identified. First, like many other (European) countries, the Netherlands are struggling with the challenge to valorise the excellent knowledge it is producing. The indicators in the Innovation Union Scoreboard point at the contrast between the quality of the research system, resulting in relatively many (top) publications and doctorate graduates, versus a modest performance on the account of economic output. A common explanation is found in the business expenditures on R&D, which lags behind EU averages. In comparison, Dutch firms are less inclined to invest heavily in R&D. The necessity to improve the role of firms in diffusing and applying public knowledge is one of the drivers behind the innovation policy of the Ministry of EA. Another urging challenge is the need to improve availability of funding for innovation. In current times, firms experience difficulties with obtaining access to finance. Venture capital investments might be above the European average, but especially for small firms it remains difficult to fund their innovative activities. As for this specific group, the AWT expressed her concerns regarding the accessibility of existing policy instruments. It also stated that SMEs are still poorly connected to the initiatives that are central in the Enterprise Policy.44 With respect to various actors making up the Dutch innovation system, there is a risk that (small) firms are overwhelmed by the multitude of institutes that are of potential interest. The AWT is concerned that a lack of clarity in the innovation system prevents fruitful interactions to emerge. Moreover, coordinating a large number of institutions brings costly governance structures. A particular issue which is currently at stake, is the question how to proceed with the six institutes for applied research (TNO, DLO, NLR, ECN, Deltares and Marin). With the introduction of the Top Sectors, the position of these institutes has to be reconsidered in order to improve the effectiveness and efficiency of the innovation system as a whole45. From a market failure perspective, especially the possible competition with private parties deserves attention. Apart from spurring economic progress, policy makers also face the objective to address societal challenges. On its own, the government cannot solve problems in domains like health or sustainability. Therefore, she sees it as her responsibility to support other parts of the innovation system in achieving innovative solutions. How this support can best be organized remains a

44 See section 2.6 for report of the AWTI. 45 Wetgevingsoverleg Ondernemerschap van 17 december 2012.

41

puzzle. By adhering to specific rather than generic innovation policy, notably in the form of Top Sectors, the cross-sectoral nature of many societal challenges is hard to address. Finally, the presence of good education is essential for the future success of an innovation system. The IUS 2014 indicator for Dutch population aged 30-34 with a tertiary education shows a strong performance in comparison to the EU average, but the main concern on this account is the level of education. Due to the crisis, the government planned substantial budget cuts for educational institutions, which were only partially adopted in the end. Nevertheless, the common fear is that the search for more efficiency will go at the cost of quality. Additionally, it has been stated that excellent talent is not exploited adequately: educational institutions are urged to find methods for better challenging excellent students. A last challenge in the domain of education is found in the lack of science and engineering students. The attractiveness of beta-studies appears to be insufficient.

3.3 Meeting structural challenges

The Table below summarizes how the identified challenges are being addressed.

Table 6: Structural challenges and status of policy solutions

Challenges Policy measures/actions addressing the challenge

Assessment in terms of appropriateness, efficiency and effectiveness

1. Better utilisation of the public knowledge infrastructure by firms

Knowledge transfer elements within Enterprise Policy

Top Sectors and TKI’s are designed for improving valorisation. Bottom-up approach ensures involvement of businesses.

2. Improve availability of funding (esp. for SMEs)

Modification of existing and introduction of new funding measures. Removing administrative barriers.

Policy development addresses both the lack of funding and poor accessibility. Policy development addresses both the lack of funding and poor accessibility. Transparency and access for SMEs improved by merger of relevant agencies.

3. Reorganization of institutes for applied research (technological and scientific).

Five action points, formulated in ‘Vision on applied research’ (July 2013)

Some actions are still in phase of vision formulation, others are just implemented.

4. How to deal with (cross-sectoral) societal challenges?

Challenges are put on the agendas of Top Sectors, ambition to create linkages between them, and participation in Horizon2020.

No indications for efficiency or effectiveness yet.

5. Quality improvement of the overall higher education system

Strategic agenda on Higher education, research and science (Quality in Diversity, 2011).

Comments by stakeholders are mixed.

Stimulating closer links between enterprises, knowledge institutes and government has been a key motivation for the introduction of the Enterprise Policy. As the name suggests, this strategic program for innovation draws heavily on supporting businesses. Especially the creation of Top Sectors provides a structure for intensifying the role of firms in the innovation system. Their active role in developing innovation agenda’s for TKI’s ensures that policy support is directed to opportunities and challenges observed by firms. A detailed discussion of knowledge transfer activities is provided in section 2.4. Several of the instruments in the Enterprise Policy aim to support innovation by providing access to funding. In terms of budgets, the tax exemption scheme WBSO is the largest instrument. Despite having ample opportunities for making use of the WBSO, SMEs are also targeted with other measures. As indicated in section 2.4, these include (amongst others), the

42

MIT, Innovation fund MKB+ (including Innovation Credit, SEED Capital, Funds-of-funds), SME loan guarantee scheme, and IPCs. Actual use of the various instruments is supported with efforts to lower administrative barriers. A striking example in this respect is the merger of Syntens and the Chambers of Commerce as of January 2014. This should make it easier for SMEs to find their way to support. In order to clarify and improve the role of public institutes of applied research, the Ministry of EA published a vision report in July 2013.46 The report contains five action points: elaboration of the relation with private parties; focus on multi-annual research collaboration within Top Sectors; a shift from block funding to competitive funding; more focus on quality and impact; uniform governance structures. Several of these actions have already been initiated, since parts of the Top Sector policy have been developed in further detail after the report was published. Also the decreasing share of block-funding has already been budgeted. The institutes themselves will present their thoughts on how their activities relate to research efforts by market parties, whereas the Ministry of EA will explore how the institutes can be organized in a uniform way.

In her reaction to the observations by the Advisory Council for Science and Technology Policy (AWT), the Ministry of EA emphasized once again the importance of addressing societal challenges. One way to yield solutions to these problems is by focusing the activities performed within Top Sectors. The innovation agendas which were signed this year (see section 2.3) have incorporated the topic of societal challenges in several ways. Apart from asking Top Sectors to direct attention to societal challenges, the government also plans to initiate linkages between them. A vision report on how to do this is expected to be published in the beginning of 2014. Finally, the Ministry of EA sees opportunities in European research programmes of the Horizon 2020 framework. For participation in these research programmes, focusing explicitly on grand challenges, co-funding is required. In addition to existing financing for collaborative research, a fund of € 36 million (2014-2017) is made available for these purposes. The structural challenge with respect to education has received ample attention in the past few years. In particular the strategic agenda on Higher education, research and science (‘Quality in Diversity’) from 2011 marks an important step towards improvements on this account. The content of this strategy is summarized earlier in this report. Currently, the long term agenda is still its implementation phase. Concrete agreements have been made with the presentation of the innovation agendas. Some stakeholders criticized the Dutch government for not investing substantially in Higher Education. A new strategy document is under development and will most likely be presented in 2014.

46 http://www.rijksoverheid.nl/documenten-en-publicaties/notas/2013/07/05/visie-op-het-toegepaste-onderzoek.html

43

4 NATIONAL PROGRESS IN INNOVATION UNION KEY POLICY ACTIONS

4.1 Strengthening the knowledge base and reducing fragmentation

This paragraph consists of two subsections. First we will present the key features of the national labour market for researchers in terms of size, labour market demand-supply balance, the quality of higher education etc. In addition, we will also have a closer look at research infrastructures.

Promoting excellence in education & skill development

In this subsection we will have a look at ERA priority 3 ‘An open labour market for researchers’. In general we conclude that the Dutch government encourages the mobility of researchers within the Netherlands and outside the Netherlands, in particular, in the ERA. However, few policy measures related to Human Resource Strategy have been implemented recently by the Dutch government (there are no measures announced in the National Reform Programme 2013).

The majority of the measures are being developed by the different institutions that constitute the Dutch National Research System: universities, research institutes and associated institutions. The main reason for that is the high autonomy of the research institutions in the country.

The Code of Conduct of International Student in Dutch Higher Education intends to contribute as a quality tool to the ambitions of the government and the educational institutes regarding internationalization as a means to turn the Netherlands into an attractive destination for knowledge and development. There are two institutions that have already completed the procedure and are granted to use the logo of the Charter and Code of Conduct: Radboud University and Wageningen University and Research Centre (July, 2013).

Cross-border access to and portability of national grants

Several national initiatives can be found that are targeted at international mobility of researchers, such as the mobility grants by the Netherlands Organisation for Scientific Research NWO (e.g. Rubicon, which gives postdoctoral researchers the chance to gain experience at top research institutions in other countries). NWO also gives researchers the opportunity to do their own research independently by means of the NWO-Talent Scheme (‘Vernieuwingsimpuls’). In addition, NUFFIC has launched a new website that provides international students and alumni with reliable and up-to-date information about career opportunities in Holland after their studies.

Coordinated personalized information and services (EURASXESS3 network)

All vacancies in the Dutch academic world are published on the international website of Academic Transfer. The Netherlands provides support to take part in EURAXESS initiatives, which provides personalised information and services to researchers and PhD students who want to participate in activities through the pan-European EURAXESS network in the Netherlands or in another related country. Three EURAXESS3 websites are:

Nuffic Euraxess expertise: immigration procedures, health insurance, social security and taxation.

University of Tilburg Euraxess Expertise: social security and taxation.

44

NL Agency (now RVO) Euraxess Expertise: the Marie Curie programme and research funding in general.

Doctoral Training Programmes Doctoral education is under development in the Netherlands. The Dutch system contains an accreditation system by the Dutch Higher Education and Research Act, which is a formal and independent decision that indicates that an institution and programme meets certain predefined quality standards. However, PhD programmes are the responsibility of the individual university and therefore outside the scope of the accreditation process. According to the position by the Dutch government on the ERA communication, doctoral schools in the Netherlands are well aligned with the European principles for innovative doctoral training. Transferable skills are considered important, as 75% of researchers will not reach the level of excellence needed and should ultimately find a job outside research. A next wave of top research schools will be funded, also linked to the Top Sectors and other implemented linked policies.

Research Infrastructures

In this subsection we will give an overview of the progress on the ERA Communication Priority 2 ‘Optimal Transnational co-operation and competition’. More specific, we will look at action MS15 (Confirm financial commitments for the construction and operation of ESFRI, global, national and regional RIs of pan-European interest, particularly when developing national roadmaps and the next Structural Fund programmes) and action MS16 (remove legal and other barriers to cross-border access to RIs).

In general, contributions of a structural nature are foreseen to:

NWO research for major infrastructure facilities for the implementation of projects on the basis of the results of the national roadmap committee selected. With the use of these resources, researchers have the opportunity to work with world-class research facilities;

NWO is to carry out an integrated program in which personal talent alongside the ‘Innovational Research Incentives Scheme’ also the former funds for specific target groups will merge. Goals are to give (young) promising researchers, to promote excellence in research and to ensure adequate and circulation of researchers so that they can improve their career prospects enough space through competition based on scientific quality;

STW NWO budget will be increased by € 10 million per year to improve the enhancement of technological and technical-scientific research.

In addition, there are also contributions to international organisations like ESA, ESO, CERN, EMBL and EMBC in order to provide Dutch researchers with unique large-scale research facilities and international networks. The National roadmap for large scale research facilities is designed to strengthen the promotion of development and construction of large-scale research facilities.

ESFRI initiatives There are several ESFRI initiatives that have the Netherlands as a hosting country: CLARIN-ERIC (Common Language Resources and Technology Infrastructure), SHARE-ERIC (Survey of Health, Ageing and Retirement in Europe), EATRIS (European Advanced Translational Research Infrastructure in Medicine). In addition, the Netherlands participates or has participates itself in 60 ESFRI projects. In 2013 the Ministry of Infrastructure allocated budget for the SURF Foundation.

45

In the Netherlands there are also some grants allocated to foundations and centers, like: the scientific library of Delft University, SURF Foundation, Naturalis (NCB), the Biomedical Primate Research Centre (BPRC) and the Dutch Centre for Science and Technology Communication (NCWT).

4.2 Getting good ideas to market

In this paragraph we will have a closer look at policy measures regarding improving access to finance, Protecting and enhancing the value of intellectual property and boosting creativity and public procurement.

Improving access to finance

Policy instruments for financing innovation, venture capital and shaping demand for innovative services are discussed in section 2.4. The various instruments and their respective budgets are listed in section 2.2. Most notable instruments and policy initiatives include:

Knowledge transfer / collaboration: TKI allowance and Innovation Contracts.

Fiscal measures: The tax credit for R&D (WBSO), the tax relief for innovation (the Innovation box) and The Research & Development Allowance (RDA).

Funding schemes and institutions, predominantly aimed at providing (venture) capital to SMEs: SME Innovation support Top Sectors (MKB Innovatiestimulering Topsectoren, MIT), SME+ Innovation Fund (Innovatiefonds MKB+), SME loan guarantee scheme (Borgstelling MKB, BMKB), Dutch Investment Agency (Nederlandse Investeringsinstelling, NII), Innovation Performance Contract (IPC), Microfinancing (by Qredits), the Growth facility scheme (Regeling Groeifaciliteit), and the Garantie Ondernemingsfinanciering, GO).

The multitude of policy schemes implies a wide availability of support for innovation and research. However, this might result in a bureaucracy in which firms perceive difficulties with actually using the offered instruments. Therefore, one of the fundaments of the Enterprise Policy concerns reduction of administrative burdens. An example, mentioned in section 2.4, is the intention to simplify the TKI allowance and MIT-measure, so that they will be better accessible for SMEs. Moreover, from 2014 onwards, SMEs can benefit from the availability of a one-stop-shop for businesses, rather than facing two separate institutions for administrative and advisory issues (see section 2.3).

Ongoing efforts to monitor the policy instruments are reported in section 2.5.

Protect and enhance the value of intellectual property and boosting creativity

IPR are seen as important to the Dutch economy and to the overall innovation performance of the Netherlands. One of the key indicators used in the annual Budget of the Ministry of Economic Affairs are IPR related. More specifically the Dutch performance on both patent applications (filed PCT patents) and trademarks applied for at the Office for Harmonisation in the Internal Market (OHIM) are carefully monitored. Over the period 2010-2012 the Dutch position on the first was quite stable (5th among EU-27 in 2012) and on the second slipping somewhat (9th position among EU-27 in 2012). The Agreement on a Union Patent Court by the Council (of February 19th 2013) is not yet ratified by Dutch parliament.

46

Public procurement

Important initiatives are the recently established program Innovative Procurement Urgent (Inkoop Innovatie Urgent), the Small Business Innovation Research Programme (SBIR) and PIANOo. See also section 2.4.

4.3 Working in partnership to address societal challenges

This section describes the progress regarding ERA priority 2: Optimal transnational co-operation and competition. Regarding action MS06 ‘Step up efforts to implement joint research agendas addressing grand challenges, sharing information about activities in agreed priority areas, ensuring that adequate national funding is committed and strategically aligned at European level in these areas and that common ex post evaluation is conducted’, we see the following efforts:

NWO research and actions that relate to national and international agendas for the period 2011-14: healthy living; water and climate; cultural and societal dynamics; sustainable energy; connecting sustainable cities; materials and solutions for scarcity. This selection is based on an inventory of the priorities of the government, TNO, Innovation programmes and European themes.

Top Sectors: 2013 update of Innovation Contracts: the top teams of representatives of the Top Sectors Policy will update in 2013 the innovation contracts and will align these with the EU flagship initiatives in order to achieve the objectives set in the Europe 2020 growth strategy. Among them: “Innovation Union”, “A resource efficient Europe”, a “Digital Agenda for Europe” and “An Industrial Policy for the Globalisation ERA”. Also, the alignment will be sought with the implementation of RIS3 (Regional Innovation and Smart Specialisation Strategies) initiatives at regional level.

Joint Research Project Bio-based Economy: This call is to strengthen research cooperation between State of Sao Paulo, Brazil and the Netherlands by funding joint research projects in the field of biobased economy. Brazil and the Netherlands have a strong history in this research field. While this bilateral programme is relatively small in size, it will contribute to the further enhancement of bilateral innovative research on the topic bio-based economy and sustainable solutions for societal challenges.

The Max Planck Institute for psycholinguistics research; The Max Planck Institute for Psycholinguistics research is an initiative granted by the Dutch government to this cross-border branch of the German Max Planck Foundation. It has as a goal to understand how our minds and brains process language, how language interacts with other aspects of mind, and how we can learn languages of quite different types. It could be considered as example of a cross-border initiative to address a joint research agenda.

Co-funding for participation in Horizon 2020 initiatives: The Dutch government has announced that 150 million euro will be provided to strengthen fundamental research. A substantial portion of this sum could be used to facilitate participation in the European research programme, “Horizon 2020”. Also a TKI-allowance will be available as from 2013, which will be increased by 2014 to 200 million euro. These funds will partially become available for co-financing of EU projects as well.

47

4.4 Maximising social and territorial cohesion

The four regions North, East, South and West are well on track in developing smart specialization strategies and especially Ministry of Economic Affairs and the Netherlands Environmental Assessment Agency (PBL) play a facilitating role. The currently mostly preliminary programmes seem to be more focused now and target only a small number of themes related to the challenges facing Europe. In general there is some discussion on the link between top sector policies and regional innovation strategies. In a recent interview with one of the senior economists of PBL it is remarked that agglomeration power maybe more important than pure clustering of similar industries. It is further warned that responsibility for top sectors has been spread over various ministries and this makes that ministries are mainly focusing on ‘their’ top sectors. Finally it was remarked that whereas the Peaks in the Delta programs were predominantly regional development programs with a strong spatial emphasis (and weak national coordination), top sector policies are nationally coordinated, but are predominantly sectoral and seem to lack thus far a strong regional economic or spatial perspective47.

4.5 International Scientific Cooperation

Examples of NWO grants with other countries

ERA-Net with Africa off Rica is funded by the EU's Seventh Framework program and Focuses on research, innovation and capacity building in three areas: renewable energy, interfacing challenges and new ideas.

NWO has led to a new, programmatic cooperation with India and China by the Joint Scientific Thematic Research Programme.

China-Hé Programme on Innovation Cooperation: The Hé Programme of Innovation Cooperation aims at realizing Sino-Dutch research projects, where academic and industrial researchers in both countries collaborate. At least four parties participate in a project: 1) one Chinese industry partner; 2) one Dutch industry partner; 3) a Chinese academic research institution; 4) a Dutch academic research institution.

47 http://nicis.platform31.nl/Wat_doen_wij/Verspreiding/Docbank/Economie_Innovatie/Innovatie/Economische_topsectoren/Economische_topsectoren/Het_koppelen_van_een_ruimtelijk_economische_visie_aan_de_topsectoren_mag_wel_wat_prominenter

48

5 NATIONAL PROGRESS TOWARDS REALISATION OF ERA

The summary presented here is based on the ‘Analysis of the ERA state-of-play in Member States and Associated Countries: focus on priority areas’ Country Report for the Netherlands (2013).

5.1 More effective national research systems

Effectiveness and efficiency of the Dutch research system is being pursued by introducing new competitive funding schemes. In the first place, 7% of the university budget for 2012-2016 is performance-based funding. Other notable changes include the increasing proportion of competitive funding for applied research, more money for participation in European research programs, the TKI-allowance that can be used for research projects (possibly in collaboration with public research institutes). The competitive NWO-grants for fundamental research are being continued. Another way to steer towards improved performance of the research system is to evaluate carefully the policy measures that are being deployed. Developments related to the Top Sectors, for instance, are being monitored on a continuous basis. After the introduction of the report by the commission Theeuwes (on evaluation methodology), several studies have adopted the new guidelines for evaluation. Moreover, with the national Standard Evaluation Protocol 2009-2015 and since recently 2015-2021, the Dutch Science System has as a basis for its evaluations. This protocol lays down four main assessment criteria: quality, productivity, feasibility/vitality and societal relevance. An international committee is appointed to evaluate each research institute, working on the basis of a self-evaluation report from the institute and a site visit. A new protocol is under construction.

5.2 Optimal transnational co-operation and competition

Joint research agendas and ERA-NET (plus) networks form an important contribution to international research collaboration. The Dutch government has announced that 150 million euro will be provided to strengthen fundamental research. A substantial portion of this sum could be used to facilitate participation in the European research programme, “Horizon 2020”. Also a TKI-allowance will be available as from 2013, which will be increased by 2014 to 200 million euro. These funds will partially become available for co-financing of EU projects as well. Apart from supporting participation in Horizon 2020, the Dutch government also encourages international research co-operation by contributing to international organisations (e.g. ESA, ESO, CERN, EMBL and EMBC). Of major importance in this respect is the creation of (and access to) large-scale research facilities. Finally, some of the competitive NWO- and KNAW-instruments support international research collaboration as well. All funding provided by these research councils is subject to international peer review assessment. NWO and KNAW also have several collaboration agreements for supporting visits, joint workshops and research projects, but without predefined priorities.

5.3 An open labour market for researchers

Despite the fact that measures for active recruitment of researchers are scarce, the Dutch labour market is open to international R&D personnel (including academics). For instance, NWO mobility grants encourages the international mobility of researchers, and all vacancies in the

49

Dutch academic world are published on the international website Academic Transfer. Improvement of doctoral education is still in progress, and also the HR Strategy for Researchers (incorporating the Charter & Code) is increasingly present.

5.4 Gender equality and gender mainstreaming in research

Both the research councils NWO and KNAW run programs devoted to encouraging women to pursue an academic career. Although almost half of Dutch PhD graduates is female, women are less presented in higher academic functions. Gender equality in research is actively supported by a variety of means (e.g. emancipation policy grants, FOM bridging subsidies, Aspasia Programme, LEAP!). Additionally, cultural and institutional change on gender is fostered by initiatives like Girls Day, the Charter Talent to the Top Foundation, and the Dutch Network for Women Professors. Gender and women’s studies are taught at various Dutch universities and there is a Netherlands Association for Women’s Studies.

5.5 Optimal circulation, access to and transfer of scientific knowledge including via digital ERA

The current Dutch government supports the principles of access to and dissemination of scientific information, but does not intend to invest substantially in the furthering of open access and preservation. In November 2013 a letter has been sent by the Cabinet to Parliament, giving its vision on the further development of Open Access.48 Nevertheless, access to (and preservation of) scientific information is being ensured by a variety of initiatives. These include the establishment of the NWO ‘incentive Fund Open Access’, the KNAW’s open access policy and its Data Archiving and Networked Services (DANS) initiative, the NARCIS scheme, and an e-depot. In the Netherlands, the scientific community and libraries are actively engaged in developing policies for open access. All Dutch research universities have one or more repositories, and from 2010 on all articles by Dutch researchers in Springer journals will be made available Open Access (subject to the author's approval). How the circulation of knowledge is supported has been reported throughout this report. The main policy interventions in this respect are the Top Sector policy (including the TKIs), the MKIB Innovation Scheme for Top Sectors (MIT) and the Centres for Innovative Craftsmanship and Centres for Expertise. Finally, the usage of e-infrastructures is supported through the creation of SURF. SURF is a Foundation for ground-breaking innovations in ICT allowing researchers and higher education institutions to make optimal use of the potential of ICT and improve their quality. The Funds are made available in accordance with the government’s response to the advice by ICTRegie on ICT research infrastructure such as computer networks (SURFnet, GigaPort), e-Science and High Performance Computing.

Since 2005, all Dutch universities, the Netherlands Association of Universities of Applied Sciences, the KNAW, NWO, the Royal Library and SURF have signed the Berlin Declaration on open access to knowledge in the sciences and humanities.

48 http://www.rijksoverheid.nl/documenten-en-publicaties/kamerstukken/2013/11/15/kamerbrief-over-open-access-van-publicaties.html

50

Annex 1. Performance the national and regional research and innovation system Feature Assessment Latest developments

1. Importance of the research and innovation policy

(+) Long tradition of strategic multi-annual programs, consisting of various complementary policy measures (-) Innovation policy accounts for a minor share of public expenditures

(+) Enterprise Policy is introduced in 2011, implemented over the past two years. (+) Grand challenges and EU programs play a larger role

2. Design and implementation of research and innovation policies

(+) Firms are being involved in shaping policy measures (-) Multitude of similar measures might be confusing

(+) Proposal for sound evaluation methodologies

3. Innovation policy

(+) The topic of innovation is explicitly addressed by a high variety of policy measures. (-) Specific innovation policy is largely focused on technological R&D

(+) Publication of report on the progress towards innovation goals.

4. Intensity and predictability of the public investment in research and innovation

(+) Large fiscal instrument is fixed element of innovation policy

5. Excellence as a key criterion for research and education policy

(+) Fundamental research is coordinated through competitive calls (+) Applied research often requires private co-funding.

(+) Shift from block-funding to competitive funding, both in research and education

6. Education and training systems

(+) Education level is high, on average. (-) Concerns about maintaining quality of teaching (-) Beta-studies are increasingly popular, but not yet to the level of the needs of the labor market.

(+) Funding was increased in ‘Autumn Agreement 2013’ (+) Human capital agendas focus on improving attractiveness of beta-studies

7. Partnerships between higher education institutes, research centres and businesses, at regional, national and international level

(+) Knowledge transfer is key element of past multi-annual strategic frameworks. Triple helix collaboration in and between top sectors.

(+) Innovation agendas have been signed by firms, universities and government.

8. Framework conditions promote business investment in R&D, entrepreneurship and innovation

(+) SMEs receive extra attention in innovation policy

(+) Introduction of new measures aimed at SMEs, mainly for funding.

9. Public support to research and innovation in businesses is simple, easy to access, and high quality

(+) Ambition to lower administrative burden is prominent part of current innovation policy

(+) Merger of Syntens and Chambers of Commerce

10. The public sector itself is a driver of innovation

(+) Innovative public procurement via SBIR (-) Regions and municipalities should do more

51

Annex 2. National Progress on Innovation Union commitments

The Innovation Union communication of 2010 sets out 34 Commitments for Europe. Several of these are focused on EC actions, while others also draw on activities performed at national level. These commitments are listed below. In the table below we will give an overview of the progress in The Netherlands. Please note that the assessment refers to the current level of achievement / progress towards specific goals. It may therefore be green in the absence of very recent developments if the goals were already achieved before the launch of the Innovation Union / ERA communication. IU Commitment Main changes Brief assessment of progress /

achievement

1 Member State Strategies for Researchers' Training and Employment Conditions

(+) 2 institutions have already completed the procedure and are granted to use the logo of the Charter and Code of Conduct (-) Few policy measures related to HRM strategy have been implemented recently: no measures in relation to HRM strategy have been envisioned by in the National Research Program (+) there are several grants and fellowships designed to encourage international mobility of researchers (NWO mobility grants, NWO-Talent scheme) (+) The Netherlands provides support to take part in EURAXESS initiatives (three websites) (+) Doctoral education is under development

(+) Radboud University and Wageningen University and Research Centre are allowed to use the logo. Many more universities requested the logo (-) The majority of the measures are being developed by individual institutions. The main reason is the high autonomy of the research institutions. The danger is that the effort is fragmented.

5 Priority European Research Infrastructures

(+) Contributions of a structural nature are foreseen in the 2013 budget agreement for NWO (e.g. the STW NWO budget will be increased by 10M) (+) Budget is allocated for the contributions to international organizations (e.g. ESA, ESO, CERN, EMBL and EMBC) (+) National roadmap scale research facilities (+) 3 ESFRI initiatives have The Netherlands as hosting country (+) The Netherlands participates or has participated in 60 ESFRI projects (+) Budget allocated by the Ministry of Infrastructure for the SURF Foundation (+) There are grants for organizations which play an important role regarding knowledge: scientific library of the TUD, SURF Foundation, Naturalis, Biomedical Primate Research Centre and the Dutch Centre for Science and Technology Communication

(+) NWO budget will be increased to improve the enhancement of technological and technical-scientific research (+) By participating in intergovernmental organisations, Dutch researchers get access to unique large-scale research facilities and networks (+) The national roadmap is designed to strengthen the promotion of development and construction of large scale research facilities

52

7 SME Involvement (+) The Netherlands takes a 6th position regarding received funding from FP7 by companies (both large companies as SMEs) (+) Dutch companies participate and have been participating in Eureka Clusters, Eurostars and Joint Technology initiatives (-) within the national Top Sector approach SME involvement could be improved

(-) SME involvement can be improved. The strong position of The Netherlands in FP7 is mainly due to scientists and research institutes. (+) Especially in the Eurostars program (aiming at improving international R&D collaboration among SMEs), The Netherlands is doing well: 46 of the 186 applications were scored as ‘good’ and 30 of these 46 were among the top 100.

11 Venture Capital Funds

(+) amount VC increased

SME Innovation support Top Sectors

SME+ Innovation Fund

SME loan guarantee scheme

Innovation Performance Contract

Growth facility scheme

Garantie Ondernemingsfinanciering

(+) Seed Capital Fund (+) Business Angel Network (BAN Nederland)

(+) Funding schemes and institutions, predominantly aimed at providing (venture) capital to SMEs. Regional funds play an important role in this. (+) The Seed Capital Fund enlarges the amount of capital for techno starters and creative starters (+) BAN is an umbrella organisation of match makers and intermediaries between entrepreneurs and private investors. (-) the multitude of policy schemes might result in bureaucracy

13 Review of the State Aid Framework

(+) More than 50% of aid earmarked for environmental topics; eg.: aid for offshore wind farms (Buitengaats, Zee-energie), combined heat and power production. Also aid for intermodal infrastructure and impaired asset relief measures are present.

14 EU Patent (-) No ratification yet of the Agreement on a Unified Patent Court

(-) The Netherlands did not yet made a ratification of the Agreement on a Unified Patent Court

15 Screening of Regulatory Framework

(+) monitoring and evaluation is common practice (+) In the future recommendations of the Theeuwes Commission (‘Dare to Measure’) will be followed. (+) Information about use of instrument/evaluations is published on the website www.volginnovatie.nl (+) Elsevier will be responsible for bibliometric research regarding science-driven themes covered by TKIs (+) Annual progress report + monitor Top sector approach

(+) One of the first reports to follow this new standard was the evaluation of the Innovation Credit 2006-2011 (July 2013). However, in many cases the ‘new standard’ is not yet applied (or difficult to apply). (+) Regarding the enterprise policy the government will put more emphasis on societal challenges, will provide more support for entrepreneurs and will simply and harmonise different policy instruments (-) the Ministry of EA could be

53

(+) The Dutch Science System has as a basis for its evaluation the national Standard Evaluation Protocol 2009-2015 and now 2015-2021.

more proactive (-) SMEs could be more involved in the Top Sector approach (-) instruments could be more aligned and customized

17 Public Procurement (+) Innovative Procurement Urgent (+) Small Business Research Programme (SBIR) (+) Pianoo Expertise Center

(+) Innovative Procurement Urgent is initiated by the Ministry of EA, but tries to engage other departments as well. Ultimate goal is to devote a minimum share of the governmental budgets (2,5%) to innovative solutions. (+) PIANOo is an expertise center for innovative procurement. In order to link supply and demand of innovative solutions in an early stage, she developed a virtual market place (www.innovatiemarkt.nl).

20 Open Access (+) NWO Incentive Fund Open Access (+) NWO supports OAPEN (+) NARCIS scheme, DANS, scientific library of the TUD (+) e-depot for all national scientific and cultural publications

(+) The Open Access Fund is a pilot in the humanities for starting open access journals. NWO also co-finances the Open Access Publishing in European Networks (OAPEN) (+) there are several archiving systems providing researchers with data and stimulating them to reuse data in a sustained manner

21 Knowledge Transfer (+) Creation of 19 Top consortia for Knowledge and Innovation (TKIs) (+) The TKI-allowance (Top Sectors approach) (+) Innovation Contracts 2014/2015 (+) 3 cross-over domains have been formulated: ICT, nanotechnology and Biobased Economy (-) Innovation voucher scheme stopped (+) MKB Innovation scheme (MIT) (+) MBO Centres for Craftmanship, HBO Centres for Expertise (+) Technology Pact (+) Valorisation and Knowledge Transfer by Higher Education Institutes

(+) TTIs will be the coordinating and programming vehicles for carrying out basic and applied research in the various top sectors. the TKI-surchage promotes synergy and coherence of research and innovation strategies by fostering public-private cooperation (+) In the Innovation Contracts, it is agreed how the available resources will be used in each top sector to build on existing scientific excellence and to meet the need for innovative solutions to societal problems. In this vein, alignment with the societal challenges formulated in European research programs and Horizon 2020 is emphasized in the latest contracts (+) there are several initiatives promoting open innovation an foster knowledge transfer. An important measure that was not

54

continued was the innovation voucher scheme.

22 European Knowledge Market for Patents and Licensing

(+) Participation in Benelux-Bureau for Intellectual Property (BBIP)

(+) BBIP accepted English as third language (-) IP legislation not prominent part of current R&I policy

23 Safeguarding Intellectual Property Rights

No information available yet No information available yet

24 Structural Funds and Smart Specialisation

(+) Operational programmes are developed by the regions North, East, South and West

These programmes are expected to be finalized by the end of 2013. In the development stage, the national government (Ministry of EA) urged each program to rely on a SWOT analysis, involve instruments to support private investments, and to formulate a vision on how to monitor and evaluate results.

25 Post 2013 Structural Fund Programmes

(+) RIS3 strategies proposed or in development by four regions.

26 European Social Innovation pilot

(+) Social innovation is included in the Human Capital Agenda’s of the different Top Sectors (+) Research institutes included it in their research programmes (like TNO, KNAW and NWO). (+) The municipality of Tilburg and Midpoint Brabant start with a Centre for Social Innovation (+) Development of Social Infrastructure Agenda by NWO

(+) Social innovation is on the agenda of the national government, local government and also research institutes (-) Companies can still put more focus on social innovation

27 Public Sector Innovation

(+) Herman Wijffels Innovation Price (+) Ministry of Defence Innovation competition

Out of 743 applications 13 entrepreneurs are nominated for the Herman Wijffels innovation price. The competition by the Ministry of Defence is stimulating SMEs to use their knowledge for applications for the Ministry.

29 European Innovation Partnerships

(+) Broad participations in EIPs (+) Max Planck Institute for psycholinguistic research (+) Co-funding for participation in Horizon 2020 initiatives (+) Participation in Joint Technology Initiatives by firm from top sector HTSM.

30 Integrated Policies to Attract the Best Researchers

(+) New migration policy (+) website www.careerinholland.nl launched

(+) Finally, the new migration policy started (2 years later than planned). This policy makes it easier for students and knowledge

55

(+) website Academic transfer with all vacancies in the Dutch academic world (+) three EURAXESS3 websites: Nuffic, University of Tilburg and Agency NL (+) Mobility grants NWO (+) Announcement of Action Plan International Talent

workers to apply for a visa. On the 12th of July the first pass was handed out (+) with different websites information is provided to knowledge workers/students (+) the government has announced that she want to develop an action plan by the end of 2013 in order to maintain international students

31 Scientific Cooperation with Third Countries

(+) ERA-Net with Africa off Rica (+) Programmatic cooperation with India and China by the Joint Scientific Thematic Research Programme. (+) China-Hé Programme on Innovation Cooperation (+) Joint Research Project Bio-based Economy (with Brazil) (+) Due to Top Sector approach a shift towards America, China and Russia

(+) ERA-Net with Africa off Rica is funded by the EU's Seventh Framework program and Focuses on research, innovation and capacity building in three areas: renewable energy, interfacing challenges and new ideas. (+) China-Hé Programme on Innovation Cooperation: The Hé Programme of Innovation Cooperation aims at realizing Sino-Dutch research projects, where academic and industrial researchers in both countries collaborate. At least four parties participate in a project: 1) one Chinese industry partner; 2) one Dutch industry partner; 3) a Chinese academic research institution; 4) a Dutch academic research institution.

32 Global Research Infrastructures

(+) Budget is allocated for the contributions to international organizations (e.g. ESA, ESO, CERN, EMBL and EMBC)

(+) By participating in intergovernmental organisations, Dutch researchers get access to unique large-scale research facilities and networks

33 National Reform Programmes

(-) less subsidy (more fiscal measures). Meanwhile promoting private spending on R&D (+) government supports business to lending with guarantees; the business Loan Guarantee scheme will become permanent (+) more help for start-ups (Qredits) and young innovative companies (SME+ Innovation Fund) (+) reforms in labor market and housing market (+) efforts in modernizing public administration

The European Council reacted on both the national reform programme 2013 and 2013 Stability Programme Report of the Netherlands and decided on July 9th on a council recommendation in which it was recommended to mostly intensify efforts on structural reforms

56

Annex 3. National progress towards realisation of ERA

ERA Priority ERA Action code

ERA Action Recent changes Assessment of progress in delivering ERA

ERA priority 1: More effective national research systems

MS01 Action 1: Introduce or enhance competitive funding through calls for proposals and institutional assessments

(+) TKI-allowance (+) increase in expenditures Top Sectors (+) increasing the proportion of funding for applied research (+) Government will invest 100 million in fundamental research (+) more money for European Research programs (-) PMO’s and PBO tax are expected to disappear from 2014 (+) support measures for innovation in SMEs (SME Innovation Fund+) (+) NWO grants

(+)Due to an increase in the TKI-allowance (110M) and for fundamental research 75M rising to 150M) there is more money available for financing and partnership among European research programs (there is particular emphasis devoted to Horizon 2020) (-) There is a shift towards more fiscal measures and towards support for Top Sectors. The dangers is that SMEs are not fully connected and will benefit less

MS02 Action 2: Ensure that all public bodies responsible for allocating research funds apply the core principles of international peer review

(+) Standard evaluation protocol 2009-2015 (+) Commission Theeuwes (+) Top sector monitor

(+)The Dutch Science System has as a basis for its evaluation the national Standard Evaluation Protocol 2009-2015 and 2015-2021. This lays down four main assessment criteria: quality, productivity, feasibility/vitality and societal relevance. A separate committee is appointed to evaluate each institute, working on the basis of a self-evaluation report from the institute and a site visit (+) The Commission Theeuwes provides a new standard for evaluation studies. (+) The progress of the Top Sectors is monitored on a continuous basis.

ERA priority 2: Optimal transnational co-operation and competition

MS06 Action 1: Step up efforts to implement joint research agendas addressing grand challenges, sharing information about activities in agreed priority areas, ensuring that adequate national funding is committed

(+) NWO research (+) Update of Innovation Contracts (+) Joint Research Project Biobased Economy (+) Max Planck Institute

(+) Innovation contract will be aligned with the EU flagship initiatives (+)The Dutch government has announced that 150 million euro will be provided to strengthen fundamental research. A substantial portion of this sum could be used to facilitate participation in the

57

and strategically aligned at European level in these areas

(+) Co-funding for participation in Horizon 2020

European research programme, “Horizon 2020”. Also a TKI-allowance will be available as from 2013, which will be increased by 2014 to 200 million euro. These funds will partially become available for co-financing of EU projects as well.

MS07 Action 2: Ensure mutual recognition of evaluations that conform to international peer-review standards as a basis for national funding decisions

No information available yet

No information available yet

MS08 Action 3: Remove legal and other barriers to the cross-border interoperability of national programmes to permit joint financing of actions including cooperation with non-EU countries where relevant

No information available yet

No information available yet

MS15 Action 4: Confirm financial commitments for the construction and operation of ESFRI, global, national and regional RIs of pan-European interest, particularly when developing national roadmaps and the next SF programmes

(+) Structural contributions to NWO (+) Contributions to international organisations (+) National roadmap scale research facilities (+) 3 ESFRI projects who have NL as a hosting country. The Netherlands participated and participates in 60 projects (+) grants for foundations with a specific role with respect to knowledge

(+) example is the Investment Grant NWO large Programme: NWO awarded 15 projects for the acquisition of equipment and the setting up of data collections. Total investment is 6,5M. (+) Due to contributions to ESA, ESO, CERN, EMBL and EMBC researchers have access to unique large-scale research facilities and international networks of researchers (+) The national roadmap is designed to strengthen the promotion of development and construction of large-scale research facilities

MS16 Action 5: Remove legal and other barriers to cross-border access to RIs

(+) Contributions to international organisations (+) Access to large research facilities for non-resident researchers based on excellence.

(+) Due to contributions to ESA, ESO, CERN, EMBL and EMBC researchers have access to unique large-scale research facilities and international networks of researchers. Participation is also important for the functioning of the Dutch national research system. (+)The Dutch government envisages N.W.O. instruments for the access to large research facilities. This access is only based on excellence as explained during

58

the Country Visit European Semester on 30 January 2013 by the minister of OCW.

ERA priority 3: An open labour market for researchers

MS24 Action 1: Remove legal and other barriers to the application of open, transparent and merit based recruitment of researchers

(-)No measures in relation to HRM strategy for Researchers are envisage in the National Research Programme 2013.

MS25 Action 2: Remove legal and other barriers which hamper cross-border access to and portability of national grants

(+) NWO mobility grants (+) NWO-Talent Scheme (vernieuwingsimpuls) (+) NWO grants with other countries

(+)The Netherlands encourages the international mobility of researchers via a range of grants and fellowships designed to promote international cooperation between Dutch researchers and researchers of different nationalities.

MS26 Action 3: Support implementation of the Declaration of Commitment to provide coordinated personalised information and services to researchers through the pan-European EURAXESS3 network

(+) Academic Transfer (+) Support to take part in EURAXESS initiatives

(+)All vacancies in the Dutch academic world are published on the international website Academic Transfer. (+)The three EURAXESS sites that the researchers can have access to personalized information apart from the one provided through the internet are: Nuffic Euraxess expertise, University of Tilburg Euraxess Expertise and Agentschap NL Euraxess Expertise

MS27 Action 4: Support the setting up and running of structured innovative doctoral training programmes applying the Principles for Innovative Doctoral Training.

(+) doctoral education is under development

(+) A next wave of top research schools will be funded, also linked to the Top Sectors and other implemented linked policies.

MS28

Action 5: Create an enabling framework for the implementation of the HR Strategy for Researchers incorporating the Charter & Code

(+) 2 institutions are allowed to use the logo

(+) Radboud University and Wageningen University and Research Centre are allowed to use the logo. Many more universities requested the logo

ERA priority 4: Gender equality and gender mainstreaming in research

MS39 Action 1: Create a legal and policy environment and provide incentives

(+) NWO programme Plural (+) Emancipation policy grants (+) FOM bridging subsidies (+) Aspasia Programme (+) FOM/V network

(+) there are several initiatives to stimulate gender equality

59

MS40 Action 2: Engage in partnerships with funding agencies, research organisations and universities to foster cultural and institutional change on gender

(+) Girls Day (+) Charter Talent to the Top Foundation (+) Dutch Network for women Professors

MS41 Action 3: Ensure that at least 40% of the under-represented sex participate in committees involved in recruitment/career progression and in establishing and evaluating

(+) Athena grant scheme (+) a grant scheme intended for female researchers who have received a Veni grant from NWO Chemical Sciences. The premium stimulates appointment as assistant professor in permanent employment. It encourages the appointment of female researchers or an equivalent fixed position at a research institute.

ERA priority 5: Optimal circulation, access to and transfer of scientific knowledge including via digital ERA

MS45 Action 1: Define and coordinate their policies on access to and preservation of scientific information

(+) NWO ‘incentive Fund Open Access’ (+) NARCIS scheme (+) DANS (+) Scientific Library of the TUD (+) educating researchers on copyrights by courses + National Research Council has agreements with publishers (+) e-depot

(+) In the Netherlands, the scientific community and libraries are very active at national (and international) (-)the new government supports the principles of access to and dissemination of scientific information, however does not intend to invest substantially in the furthering of open access and preservation.

MS46 Action 2: Ensure that public research contributes to Open Innovation and foster knowledge transfer between public and private sectors through national knowledge transfer strategies

(+) Top sector Policy / TKI-allowance (+) MKB Innovation Scheme for top Sectors (MIT) (+) Centres for Innovative Craftsmanship and Centres for Expertise (+) RAAK programme (+) Technology Pact (+) National Science and Technology Platform Programme (+) Valorisation and knowledge transfer by Higher Education Institutions

(+)The Top Sector policy has exacerbated the public-private cooperation, which used to be fragmented and temporary financed, between entrepreneurs, researchers and government. (+) Support to private research is being increased through the introduction of the research and development tax deduction scheme as part of the incentives to promote innovation, private R&D and closer science-business links. (-) the focus on “top sectors” should not come at the cost of fundamental research nor exclude innovative firms that do not belong to one of the “top sectors”.

MS47 Action 3: Harmonise access and usage policies for research

(+) SURF (+)SURF is a Foundation for groundbreaking innovations in ICT allowing researchers and higher

60

and education-related public e-infrastructures and for associated digital research services enabling consortia of different types of public and private partners

education institutions to make optimal use of the potential of ICT and improve their quality. The Funds are made available in accordance with the government’s response to the advice by ICTRegie on ICT research infrastructure such as computer networks (SURFnet, GigaPort), e-Science and High Performance Computing.

MS48 Action 4: Adopt and implement national strategies for electronic identity for researchers giving them transnational access to digital research services

No information available yet

No information available yet

61

REFERENCES Government of the Netherlands (2013). Dutch Economic contraction slows, retrieved 14th of August 2013: http://www.government.nl/issues/entrepreneurship-and-

innovation/news/2013/08/15/dutch-economic-contraction-slows.html

Government of the Netherlands (2012). Informatie over afspraken in de Topconsortia voor Kennis en Innovatie European Commission (2012a): Regional Innovation Scoreboard 2012. European Commission (2012b): Stability Programme of the Netherlands European Commission (2012): Council Recommendation: Assessment of the 2012 National Reform Programme and Stability Programme for the Netherlands, COM(2012) 322 final.

European Commission (2013): Council Recommendation: Assessment of the 2013 National Reform Programme and delivering a Council opinion on the Netherlands’ stability

programme for 2012-2017

European Commission (2013): Innovation Union Scoreboard 2013. European Commission (2014): Innovation Union Scoreboard 2013. European Commission (2013). In-depth review for the Netherlands European Commission (2013). Research and Innovation Performance in Netherlands – country profile Ministry of EL&I (2011): Naar de top: de hoofdlijnen van het nieuwe bedrijfslevenbeleid Ministry of EL&I (2011): Naar de Top: het bedrijvenbeleid in actie(s) Ministry of EA (2012): Bedrijvenbeleid in cijfers 2012, November 2012 Ministry of EA (2012): Aanbieding Eindrapport Expertwerkgroep Effectmeting (Commissie Theeuwes) en folder AgentschapNL "Bedrijvenbeleid in cijfers", November 2012 Ministry of EA (2012): Durf Te Meten: Eindrapport Expertwerkgroep Effectmeting, November 2012 Ministry of EA (2013). Voortgangsrapportage Bedrijvenbeleid 2013 Ministry of OCW (2011): Kwaliteit in verscheidenheid. Strategische Agenda Hoger Onderwijs, Onderzoek en Wetenschap.

62

Ministry of OCW (2012): The State of Education in the Netherlands. Highlights of the 2010/2011 Education Report, Education Inspectorate, Ministry of Education, Culture and Science, April, 2012. Ministry of OCW (2012): The Science System in The Netherlands: and organisational overview, April 2012.

Ministry of OCW (2013). Trends in Beeld 2013 – Zicht op Onderwijs, Cultuur en Wetenschap NWO (2010). Groeien met Kennis – strategienota NWO 2011-2014 NWO (2013). Intellectual Property Rights (IPRs) and the Dutch government Rathenau Instituut (2013). Totale Onderzoeksfinanciering 2011-2017 OECD (2012).Draft Synthesis Report on Innovation Driven-Growth in Regions: The Role of Smart Specialisation, December 2012, OECD-TIP-Innovation and Technology Policy PBL (2012). De Ratio van ruimtelijk-economisch Topsectorenbeleid.

63

LIST OF ABBREVIATIONS

AOW General Old-Age Pensions Act AWT(I) Advisory Council of Science, Technology (and Innovation) Policy BERD Business Expenditures for Research and Development BvGD Proof of Good Service CBS Statistics Netherlands (Centraal Bureau voor de Statistiek) CDA Christian Democratic Appeal CPB Bureau of Economic Policy Analysis CU Christian Union D66 Democrats 66 Party DLO Agricultural Research Institutes (WUR) EB Centre of Policy Statistics ECN Energy Research Centre Netherlands EL&I Ministry of Economic Affairs, Agriculture and Innovation ERA European Research Area ERDF European Regional Development Fund ESF European Social Fund EU European Union EU15 European Union including 15 Member States EU27 European Union including 27 Member States EA Ministry of Economic Affairs FES Economic Structure Enhancement Fund FTE Full Time Equivalent GBAORD Government Budget Appropriations or Outlays on R&D GDP Gross Domestic Product GERD Gross Domestic Expenditure on R&D GL Green Left party GO Business Loan guarantee scheme GOVERD Government Intramural Expenditure on R&D HAVO Senior general Secondary Education HE Higher Education HEI Higher education institutions HERD Higher Education Expenditure on R&D HES Higher education sector HTSM High Tech Systems and Materials ICT Information and Communication Technology IPC Innovation Performance Contracts IU Innovation Union IUS Innovation Union Scoreboard KNAW Royal Netherlands Academy of Arts and Sciences LCV National Commissino of Valorisation LTI Large Technology Institute MARIN Maritime Research Institute Netherlands MBO Vocational Secondary Education MIT SME innovation support for Top Sectors NII Dutch Investment Agency NL The Netherlands NLR Aerospace Knowledge Enterprise NSFC National Science Foundation of China

64

NWO Netherlands Organisation for Scientific Research OCW Ministry of Education, Culture and Science OECD Organisation for Economic Co-operation and Development PBL Netherlands Environmental Assessment Agency PMO Company and Public Organisations PPS Purchasing Power Standards PRO Public Research Organisations PVV Freedom Party R&D Research and Development R&I Research and Innovation RCI Regional Competitiveness Index RDA Research & Development Allowance RVO Netherlands Enterprise Agency (formerly NL Agency) SBIR Small Business Innovation Research Programme SCP Netherlands Institute of Social Research SER Social and Economic Council of the Netherlands SME Small and Medium Sized Enterprise STW Research Council for Technical Sciences TKIs Top consortia for Knowledge and Innovation TNO An independent research organisation in the Netherlands TTI Technologische Topinstituten UMC University Medical Center VSNU Association of Universities VWO Pre-university education VVD People’s Party for Freedom and Democracy WBSO Research and Development (R&D) tax credit WRR The Advisory Council on Governance Policy WUR Wageningen University and Research Centre (collaboration between Wageningen University and DLO)

Europe Direct is a service to help you find answers to your questions about the European Union

Freephone number (*): 00 800 6 7 8 9 10 11

(*) Certain mobile telephone operators do not allow access to 00 800 numbers or these calls may be billed.

A great deal of additional information on the European Union is available on the Internet.

It can be accessed through the Europa server http://europa.eu.

How to obtain EU publications

Our publications are available from EU Bookshop (http://bookshop.europa.eu),

where you can place an order with the sales agent of your choice.

The Publications Office has a worldwide network of sales agents.

You can obtain their contact details by sending a fax to (352) 29 29-42758.

European Commission

EUR 26755 EN – Joint Research Centre – Institute for Prospective Technological Studies

Title: ERAWATCH Country Reports 2013: The Netherlands

Author(s): Pim De Hertog, Leonique Korlaar, Matthijs Janssen based on 2012 Country Report by Raquel Ortega-Argiles

Luxembourg: Publications Office of the European Union

2014 – 64 pp. – 21.0 x 29.7 cm

EUR – Scientific and Technical Research series – ISSN 1831-9424 (online)

ISBN 978-92-79-39490-4 (PDF)

doi:10.2791/95981

doi:10.2791/95981 ISBN 978-92-79-39490-4

JRC Mission As the Commission’s in-house science service, the Joint Research Centre’s mission is to provide EU policies with independent, evidence-based scientific and technical support throughout the whole policy cycle. Working in close cooperation with policy Directorates-General, the JRC addresses key societal challenges while stimulating innovation through developing new methods, tools and standards, and sharing its know-how with the Member States, the scientific community and international partners.

Serving society Stimulating innovation Supporting legislation

LF-N

A-2

67

55

-EN

-N