Dutch Enterprise Policy: Topsector approach OECD CIIE-meeting, March 2015 Henry van der Wiel Ministry of Economic Affairs 26 March 2015

2 Modern industrial policy: Dutch enterprise policy Permanent effort to maintain an internationally competitive business environment In 2011 launch of a new enterprise (or industrial) policy with 2 pillars Generic instruments: excellent framework conditions for all enterprises Focus: a) strengthening innovation framework, b) red-tape reduction, c) improving access to finance and d) ensuring better match between education system and labour market Eg. tax incentives for innovation & entrepreneurship, reducing administrative burden, financing (innovative) entrepreneurship Sector specific: Top sector approach Comprehensive sector agenda’s through Public Private Partnerships: knowledge, industry and government Ministry of Economic Affairs

Top sector approach: What has changed? New form of industrial policy Industry representatives are at centre of coordination instead of government => bottom-up New forms of governance Network approach/eco system=> triple helix Role of government: bringing stakeholders together (solving coordination problems and asymmetric information) More focus of public resources on top sectors Most specific (sector) subsidies disappeared Ministry of Economic Affairs 3

Share top sectors in Dutch economy, Ministry of Economic Affairs 4

Modern industrial policy: top sector approach 9 top sectors: Knowledge-intensive (R&D), export oriented, potential to make important contribution solving societal challenges worldwide Demand-driven: comprehensive sector agenda’s through public private partnerships (knowledge – industry – government): Each top sector has action plan with clear ambitions: Innovation (agenda’s for user inspired (collective) research) Human capital (Human Capital agenda, Focus on supply of sufficient S&T-graduates (‘Techniekpact’)) Regional involvement (campuses, cooperation central government & regions) Internationalisation (trade missions, economic diplomacy) Regulation (remove specific regulatory barriers, introduce incentives (Euro I-VI, light bulbs)) Ministry of Economic Affairs 5

Top sector approach: PPPs To use their resources effectively, businesses, knowledge institutions and government (triple helix) work closely together and coordinate their efforts. Top Consortia for Knowledge and Innovation (TKI) User inspired research channel towards societal and business needs 2014: 19 TKIs Allowance to stimulate participation of firms in TKI 40% (25%) for each private euro up to ; 2014: ‘in kind’ possible MIT stimulate SME’s to participate in Top sectors/TKI Ministry of Economic Affairs 6

7 Three main goals of enterprise policy 1.The Netherlands in the top five knowledge economies in the world (by 2020); 2.Raising the Dutch R&D effort to 2.5% of GDP (by 2020); 3.To establish Top Consortia for Knowledge and Innovation (TKI) with more than 500 million euros in public and private funding, and at least 40% by the private sector (by 2015) Ministry of Economic Affairs

8 M&I measurment: annual Enterprise Policy Monitor Ministry of Economic Affairs

9 Main facts & figures Dutch enterprise policy Ministry of Economic Affairs R&D effort private1,08%1,14% Total1,90%1,97%1,98%

10 Main facts & figures top sectors It is too early to assess the impact of top sector approach Period : on average perform better than rest of economy Higher productivity level: € (top sectors) vs € (all sectors) More firms innovate: 50% (top sectors) vs 39% (all sectors) Perform twice as good on growth in value added, also higher productivity growth Ministry of Economic Affairs

Top sector approach: Growing positive appreciation Quote SG OECD Gurria: “Top sector approach is very encouraging and I wished more countries had this policy” WEF: “Excellent innovation capacity, sophisticated businesses, focus on public private partnerships, integral approach” Forthcoming review of all (financial) instruments of our Enterprise Policy by Dialogic (May 2015) Ministry of Economic Affairs 11

Challenges top sector approach OECD Reviews of Innovation Policy: Netherlands 2014 => enhance benefits top sectors approach Representation smaller companies; Extending coverage to other sectors (tourism, retail); Identify possible new areas of strength (see below) Linking to societal challenges Triple helix focuses on the societal challenges of today and tomorrow Linking to smart industry/emerging technologies Smart industry agenda: Not a new form of industrial policy, but an integral part of our Top Sector & ICT Human Capital policy => Awareness, speeding up with 10 Field Labs (test facilities), investing in skills Direct relationship Next Production Revolution Ministry of Economic Affairs 12