The innovation engine is faltering; time to increase capacity

In fact, the recently published R&D Top-50 shows that these expenditures in the Netherlands are increasingly concentrated among a small number of companies, with ASML as a clear outlier and control point in the Dutch innovation landscape – along with all the potential risks this entails.

How technologically competitive is the Netherlands?

For the recently published Wennink report, TNO Vector explored the technological position of the Netherlands. This article provides insight into various analyses showing that the Netherlands’ strong technological starting position is under pressure. To strengthen its competitiveness, it is not enough to fix a faltering innovation engine: innovation capacity must be increased.

Looking under the hood

In this examination, we assess three pillars of the Netherlands’ competitive position:

1. knowledge position
2. technology position
3. entrepreneurship position

Each step in this innovation chain relates to a different aspect of the Netherlands’ competitiveness. In the study, these positions were analysed using quantitative data. We focus on the ten key technologies central to the National Technology Strategy. This sheds light on where the Netherlands stands at each stage and which aspects require greater attention.

The Dutch innovation engine is stalling

Knowledge position

Based on scientific publications, the Netherlands is currently still performing reasonably well. However, its position is gradually declining: across the ten key technology domains of the National Technology Strategy, knowledge specialisation lags behind countries such as China, the US and Germany. The use of scientific knowledge in these areas predicts how that knowledge will be applied in the long term. A downward trend could therefore undermine the Netherlands’ relatively strong knowledge base over time.

Technology position

The Netherlands performs less well in terms of patents. Its share of patents declined between 2015 and 2025, while China and the US showed strong growth over the same period. This downward trend, in particular, poses a challenge for the country’s long-term technological position.

Entrepreneurship position

There are also challenges in terms of entrepreneurship. Only 21.5% of Dutch start-ups scale up, which is lower than the European average (23.1%) and far behind Germany (40.6%) and the US (54.1%). The Netherlands is therefore not sufficiently successful in translating knowledge into scalable solutions and appears to be facing an innovation gap or paradox.

This has two causes:

• The Netherlands excels in scientific output, but this does not (yet) translate into sufficient patents or applications.
• Start-ups do not scale into large, high-impact companies often enough.

Quantum technology in the Netherlands falls further behind as one moves along the innovation chain. This confirms the existence of an innovation paradox or gap.

A structural shift is needed to remain competitive

The Netherlands cannot rest on its laurels. A structural shift is needed to remain competitive in a rapidly changing world. To strengthen its competitive position sustainably, it is not enough to fix a faltering innovation engine.

Innovation capacity must instead be increased through:

• Targeted intensification in key technologies
• More R&D in high-potential sectors
• A better environment for radical innovation and the scaling of new businesses

By selecting a number of knowledge-intensive sectors, the Netherlands can build unique and valuable control-point positions. Only when all parts of the innovation chain function and connect effectively can the Dutch innovation engine successfully drive prosperity.

* See: https://www.rijksoverheid.nl/documenten/rapporten/2025/07/11/de-nederlandse-rd-kloof-groeit.