Steering towards strategic sectors requires building strategic intelligence capability

Growing geopolitical and -economic competition is rapidly reshaping the world around us. Power dynamics are shifting, and there is an increasing emphasis on strategic relevance and open strategic autonomy. Across Europe and in the Netherlands, there is a growing focus on making deliberate strategic choices.

Making choices, but for what purpose?

With 10 National Key Technologies, 6 growth markets, 4 Wennink domains, an institute for breakthrough innovation and a Dutch defence ARPA, one could argue that we still have not truly made our choices. While generic policy measures provide a solid foundation, additional strategic choices are required. Resources such as land use, energy, talent, raw materials and ultimately capital are scarce, while national interests are substantial.

During the breakout session ‘Steering towards Strategic Sectors’, around seventy participants discussed the analytical frameworks, assessment criteria and decision-making processes needed to enable systematic and transparent steering. The session was introduced by Annelieke van der Giessen, Managing Director and Secretary of the Advisory Council for Science, Technology and Innovation (AWTI), and enriched by insights from Kim Ruijs, Senior Policy Adviser at the Province of North Holland, and Jasper van Kempen of TNO Vector. The session concluded with remarks from Tom van der Horst of TNO.

It takes courage

Annelieke immediately set the tone: ‘Steering towards strategic choices takes courage.’ After all, making strategic choices begins with the difficult question of ‘what’ we are choosing - essentially, the long-term vision for the Dutch economy and society. Yet we often skip that step. It also requires not only deciding what to prioritise and on what basis, but also addressing the question of who should make those choices: government or the market?

Equally important is how those decisions are made. Which trade-offs should be considered? Should we prioritise current capabilities or future potential? How should we position ourselves in relation to our European partners and other like-minded countries? And, crucially, how do we implement the choices we make? After all, decisions have little value if they are not translated into action.

Choosing a stronger and future-proof economy

Kim then illustrated what steering towards strategic choices looks like in practice. The province of North-Holland is one of the economic engines of the Netherlands, but it is also facing a changing reality. Geopolitical developments and increasing scarcity of land, energy, water and labour are forcing the province to make sharper choices. The key question is: which economic activities are strategically important? TNO Vector explored this issue on behalf of the province.

The analysis centred on two key questions: why is a particular activity of societal importance, and what role does the province of North Holland play within wider international economic systems and value chains? Together, these two dimensions, societal importance and systemic position, form an analytical framework that provides a clearer understanding of the strategic significance of economic activities within the province.

This supports decision-making on strategic sectors in a more transparent, consistent and evidence-based approach. Importantly, such an analysis does not produce a list of winners and losers; rather, it provides a structured way of identifying where a region could most effectively focus its efforts.

Building on robust data and insights

How can strategic relevance be measured? Jasper explored this question in greater depth through the work of the TNO programme on Control Points. Existing indicators do not adequately capture the Netherlands’ position, and TNO Vector is therefore developing alternative approaches to provide better insights.

For example, the number of start-ups is a commonly used metric, but it reveals little about how unique or difficult to replicate those activities are. TNO Vector’s newly developed ‘Startup Complexity Index’ addresses this gap and shows that the Netherlands has limited diversification and is primarily active in relatively low-complexity sectors. Patent counts are another widely used indicator, including within the European Innovation Scoreboard. Citation networks, however, reveal knowledge flows between countries, showing who builds upon whose knowledge base. As such, they can help identify dependencies, including those related to the ten National Key Technologies.

Taking strategic intelligence capability seriously

The discussion that followed highlighted a key challenge for the Netherlands: a lack of capability: the provision of highly granular strategic intelligence is not structurally organised. As a result, the country is insufficiently equipped to tackle major challenges through smart, long-term strategies. Yet this is precisely the moment when ambitious thinking is required. Serious investment in strategic intelligence capability is essential.

Such capability would also make it possible to look beyond individual companies and focus instead on the broader innovation ecosystems in which they operate. This could help create the conditions in which new strengths and opportunities can emerge. In other words, the emphasis should be on pro-competitive policy rather than on creating national champions.

As Tom van der Horst noted in his closing remarks: ‘Innovation policy can play an important role.’ He gave a brief ‘sneak preview’ of a Vector publication currently in preparation that takes stock of the situation and looks ahead. That is, in recent years, significant changes have been introduced into the Dutch innovation landscape. Some of these changes remain aspirations that still require further policy development and budgetary decisions. It is therefore valuable to take stock and ask a fundamental question: are these reforms actually delivering what is needed to steer towards strategic sectors effectively?

Time for action

Making strategic choices requires courage. However, by investing in strategic intelligence capability and organising it effectively, those choices can be made with confidence and on a sound evidence base, helping to build a resilient and future-proof Netherlands.