Looking under the hood: Examining the technology position of the Netherlands

While Europe as a whole faces major challenges with regard to its competitiveness, the Netherlands also has its own specific bottlenecks. The structural shortage of technical talent, lagging and increasingly concentrated corporate R&D investment, and the limited value generated in knowledge intensive sectors are placing growing pressure on the country’s innovation capacity. The Dutch technology position is on a downward trajectory, as evidenced, among other things, by the declining share of patents across all ten key technologies identified in the National Technology Strategy. It is precisely these technologies—linked to critical domains such as security, climate and energy, health and biotech, and digital technologies—that should form the areas in which the Netherlands excels internationally.

Although the Netherlands has a strong startup ecosystem and even hosts a relatively large number of young companies in fields such as AI and quantum technology, growth into scale ups is stalling. A lack of large financing rounds and shortages of technically skilled personnel are hampering the scaling up of radical innovation and new technology driven business activity. These constraining factors contribute to the so called innovation paradox: the Netherlands excels in fundamental and applied research, yet struggles to translate knowledge into innovations, new sustainable economic activity, and economic growth. The successive stages of the innovation chain—from scientific publications to patents and subsequently to entrepreneurship—show a clearly declining Dutch share.

Sectoral structure also plays an important role. Low technology products and sectors with relatively low growth in value added are overrepresented in the Netherlands, while only a limited number of high tech sectors perform strongly. Moreover, Dutch companies structurally invest less in R&D than their international competitors within the same sectors, further eroding the country’s technological edge. At the same time, there are clear opportunities to substantially scale up the production and export of high value technology products, ranging from medical imaging equipment and vaccines to photonic chips.

Strengthening the Netherlands’ competitive position in a sustainable way therefore requires more than simply repairing a faltering innovation engine. Innovation capacity itself must be scaled up through targeted intensification in key technologies, increasing R&D intensity in promising sectors, and creating conditions that allow radical innovations and new business activity to grow and scale. This calls for a stronger entrepreneurship infrastructure and culture, more experimental development, improved financing options for technological scale ups, and closing the shortage of technical talent.

Only when all these components of the innovation chain function effectively and are well aligned can the Dutch innovation engine become a successful driver of prosperity.