The State of Dutch Tech

The State of Dutch Tech

Aren’t we missing an element?

By Guido Laman (Foodvalley NL) and Anieke Wierenga (ScaleUp Practitioners)

The transition towards a Productive Economy based on sustainable resources and the latest technology, cannot be shaped by innovative startups (and their investors) alone. 

Technology needs market traction to become an innovation. 

Last week, Techleap published its annual report on the state of Dutch Startups and Scaleups. This report gives a good overview of the Technology Landscape in The Netherlands. It focuses on the ‘venture’ side: number of startups, size and origin of investments, leading to jobs created and valorization by IPOs or different exit paths. In the foreword, Constantijn van Oranje, Techleap Special Envoy, concludes that the Dutch Tech startup ecosystem is slowing down due to a decline in investment activity. He expresses his worries about the position of The Netherlands as a leading Tech Nation.  

The solution, according to the report? Greater focus on training, attracting entrepreneurial skills, and better coordination between public finance organizations to create stronger and better-funded tech start-ups. While these recommendations are certainly worth following, in my opinion, this analysis overlooks a crucial element of a leading Tech Nation. 

As described by Marco Hekkert (et al) (2007), innovation systems consist of three motors of change: (1) knowledge creation (2) entrepreneurial activities, and (3) market creation. For many of the early-stage ventures that are based on spinouts from knowledge institutions, market traction, and market creation are the most overlooked and critical elements.  

To be a leading Tech Nation, we do not only need a thriving venture capital scene. Imperatively, we need to build a productive economy based on renewable energy, circular material strategies, and a sustainable food system. The transition from the current fossil-based society based on intensive food production and non-sustainable material use will be enabled by innovative technologies that will partially come from these DeepTech and GreenTech startups.

For these innovative startups to be successful, we do not only need financial resources, but (more urgently), they need to be able to sell their products or technologies in markets that demand high-tech sustainable solutions. We cannot overlook the challenges of market transformation while developing a national Tech Strategy. 

Deeptech and Greentech solutions (like quantum computing, plasma technology, cell-based meat, or advanced recycling technology) are no simple drop-ins for today’s society. They often require significant changes in material flows, financial agreements, consumer behavior, and official regulations to develop market traction and get the next round of capital injections.

The transition towards a Productive Economy based on sustainable resources and the latest technology cannot be shaped by innovative startups (and their investors) alone. A leading Tech Nation requires full commitment from the existing market parties like incumbent (multinational) companies, governments, and consumer organizations.  

There is a significant role to play for organizations like Foodvalley that bring together existing and new market parties and drive experimentation and alignment within specific sectors toward the desired transition 

For instance, digital dietary advice via a smartphone or tablet, tailored to personal circumstances, is a huge opportunity for technology like AI to transform the way the food system works. Many companies are experimenting with the necessary technology. But to bring personalised nutrition to the masses, companies need to create solutions that are desirable to the mass consumer, profitable to companies, and feasible to deliver. A barrier that these companies will never be able to solve on their own.  

That is why at Foodvalley we have created a dedicated community of more than forty stakeholders, made up of venture caterers, GPs, insurance companies and food retailers, knowledge institutes, and others, in which we work together to bring supply and demand into synergy. And with success, the first pilot, in which 10 companies joined forces, proved that we could create a solution that was desirable to the mass consumer. All this works to shape market demand that ensures technology creates economic and social value.  

In conclusion, if we want to take a global leading role in the unfolding DeepTech and GreenTech developments, market transition organizations should become part of the national agenda.  

Reference: Hekkert et al.(2007) Functions of Innovation systems: a new approach for analysing technological change. Technological Forecasting and Social Change, 74(4), 413-432.