Stimulating innovation

26 February 2024

How to boost demand for innovations and keep the Netherlands an international leader in key technologies

Stimulating demand for innovations that benefit sustainable transition and ensuring an international leadership position in key technologies for the Netherlands will require a coordinated effort by private and public parties that reduces the (financial) risk of implementing innovations whilst new markets emerge.  

In a comment published in the national newspaper FD on 5 February, entrepreneur Roderick Rodenburg argues that companies should get a discount on their profit tax when they buy from companies that pioneer new innovations. This comment was in response to an interview with outgoing Dutch minister Micky Adriaansens, who argued that the Netherlands structurally under-invests in research and development (FD, 20 January). Roderick Rodenburg, in turn, argues that the Dutch government would be more successful at driving the uptake of innovations by stimulating demand rather than supply.

What we have experienced, however, is that both supply and demand must be stimulated – simultaneously. The government should indeed do more than invest in research and development if the Netherlands is to remain an international leader in key technologies, encourage more private investment and increase the success rate of startups.

The essence lies in applying these technologies to be able to test and improve them whilst in practice in the market. And since that application is increasingly happening within the context of transition issues, the market may not yet exist.  

Early February marked #BeanMeal week, a national campaign to promote the consumption of Dutch-grown pulses. The average Dutch consumer may not have realised there is an essential link between homegrown beans and the Netherlands’ position as a leader in key technologies.

Let me explain: The government wants to become more protein self-sufficient and less dependent upon imports from outside Europe. The Netherlands is a global leader in crop breeding – a high-tech sector that uses ample key technologies, such as artificial intelligence and biotechnology.

The Netherlands also has suitable arable land to grow, for example, fava beans, a high-protein crop that, besides being tasty and healthy, has nitrogen-fixing properties and can thus contribute to solving our nitrogen problem.   

But for the average farmer, growing fava beans is less profitable than other crops, such as grains and onions, regarding yields and revenues. As a result, a viable market has yet to emerge, and not enough investment is going into applying breeding techniques to improve the yield of these fava beans or to make them more suitable for our climate. The story of the chicken and the egg. In short, to boost key technologies, you must help create the market simultaneously.   

The profit tax rebate, as mentioned by Roderick, is one part of the puzzle, but more is needed to stimulate the market. We need a coordinated effort from private and public parties throughout the chain. This should include committed off-takers, government incentives to create new markets, and willingness among financial institutions to stimulate farmers differently. Just to name a few. It takes all of us to make that difference. Also, you and I – by more often putting beans and pulses on the dinner table.

Only then will we create an impact with all the fantastic knowledge and key technologies we are developing in the Netherlands, and only then can we continue to take an international lead.

This blog post was initially posted in Dutch here: https://www.linkedin.com/pulse/hoe-nu-echt-de-vraag-naar-innovaties-te-stimuleren-en-brasz-2lwie/