Dutch Industrial Innovation Faces Threats Amid Decline
The Hague, Thursday, 24 April 2025.
TNO warns that without increased R&D investment, the Netherlands may lose its industrial lead to countries investing heavily in innovation and industrial policy.
Critical Investment Gap Threatens Dutch Economy
The Netherlands currently invests just 2.23% of its GDP in research and development, falling significantly short of the European Union’s 3% target [1]. This investment gap poses a serious threat to the nation’s industrial leadership, particularly as competing nations accelerate their innovation investments. The Dutch industrial sector, which accounts for 12% of GDP and 20% of total exports, faces mounting pressure to maintain its competitive edge [1].
Innovation Chain Under Strain
A comprehensive analysis released by TNO on April 23, 2025, reveals a concerning pattern of deindustrialization threatening the Netherlands’ economic prosperity [2]. While knowledge development remains robust, the critical transfer of research into market applications has stagnated [1]. Start-ups face mounting challenges from high operational costs and complex regulatory frameworks, while established companies increasingly consider relocating their R&D operations abroad [3].
Strategic Solutions Required
TNO recommends an integrated approach to address these challenges, emphasizing collaboration between industry, knowledge institutions, and government [1]. Key focus areas include strengthening the innovation chain, investing in emerging technologies such as green hydrogen and quantum technology, and enhancing technical education to address skilled labor shortages [1]. The high-tech industry, led by companies like ASML and NXP, must generate at least 50% of revenue from new value chains by 2040 to maintain competitiveness [1].
Global Competition Intensifies
The urgency for action is heightened by increasing global competition, particularly from countries with robust industrial policies [3]. The situation is further complicated by structural challenges, including grid congestion and significantly higher energy costs compared to other nations [3]. Without decisive action to improve the investment climate and support R&D initiatives, the Netherlands risks losing its position as a leading innovation hub [1][3].