Opening Academic Year of TU Eindhoven, with: TU/e President Robert-Jan Smits; European Commissioner Thierry Breton; minister Micky Adriaansens. Credit: TU/e, Bart van Overbeeke
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The most crucial decision of outgoing minister Micky Adriaansens during last night’s debate on the “Earning Power of the Netherlands” was to move the deadline for the fourth round of applications from April 1 to June 1.

Outgoing minister Micky Adriaansens said, “There is a formation going on, and there are divergent wishes regarding the NGF. There is a need for more direction, tightening, and updating. On the other hand, some companies are in the application process and spend a lot of money already. I’m searching for a balance. By postponing this round for two months, I hope to create more calm.”

Why I need to know this:

During the debate on the earning power of the Netherlands yesterday, it became clear that the future of the National Growth Fund is uncertain. The topic fuels a fundamental debate about innovation and investment in the Netherlands.

Rachel van Meetelen (PVV) earlier asked to wait to open the fourth round of the NGF until a new cabinet is formed. The parties prominent at the formation table (PVV, BBB, NSC, and VVD) want to abolish or cut the NGF. These parties already took money from the fund last year to pay for a reduction in gasoline excise tax.

Uncertain future

Thus, the future of the Growth Fund is uncertain. Whether the subsidy round of 3.4 billion euros will continue in the same size is still being determined. Several options for a different design of the fund came up. For example, Femke Zeedijk (NSC) suggested integrating the NGF with Invest-NL and RVO to create a “national development company.” “A nice thought,” Adriaanse said.

Tjeerd de Groot (D66) expressed serious concern. “I hear you [outgoing minister Adriaanse, ed.] saying that we should not treat companies carelessly and that reliability and predictability are important. Fifty quick scans are already underway. Delaying the growth fund sends exactly the opposite signal when it comes to a reliable government that believes in innovation and the power of start-ups.”

Adriaansens argued that while the NGF is essential for innovation power, it is not the only way. “The most important thing is that we invest in R&D. And that the NGF continues in an acceptable way to both the Senate and House of Representatives. In its current form, that is not the case.”

Broad support

A survey from Kieskompas – commissioned by Quantum Delta – shows broad support for the National Growth Fund in the Netherlands. Ninety percent do not want to cut back on innovation, and seventy percent of respondents believe politicians are too focused on the short term, while “investments in innovation lead to a healthy economy that can provide solutions to social problems.”

Protecting innovation

Given the political shifts and impending budget cuts, the innovation community is concerned about the survival of the Netherlands as a technologically advanced country. Last month, Quantum Delta NL and PhotonDelta launched a petition to protect the NGF and the future of Dutch innovation. The parties urge the preservation of critical investments amid political shifts that could affect the country’s competitive advantage.

Marcel Levi, chairman of the Knowledge Coalition, called on Dutch radio station BNR this week to commit NGF money to the national budget. The coalition argues that the Netherlands is the only European country that does not meet the agreement to spend three percent of GDP on knowledge and innovation. The National Growth Fund can help retain and attract companies, especially those that invest heavily in R&D. That is why the House of Representatives must fully commit to additional investments, the Knowledge Coalition calls. “Otherwise, you will miss out on the further development of new companies and remain tremendously behind economically.” The debate last night seems opposed to this call.

Alternative financing

Peter van Asperen, Senior Manager of PWC Energy Transition and Regulation, contributed several alternative financing options in a post on LinkedIn. He was part of several NGF projects and believed that the discussion politicians should have started with asking what the Netherlands wants. “What type of companies do we need to become happy together? The idea of the NGF is that we don’t yet know exactly what we need, which is innovation. Then, the question is what it takes to get those projects off the ground. And: how do we get organizations and companies to come up with solutions that will move our country forward or stick their necks out to bring about an energy transition?”

If companies manage to do that independently, Van Asperen argues, the government is unnecessary. If not, The Hague can play a role by making public funding available. “There are many more options than just a big subsidy pot,” he says. He mentions a loan, a guarantee, or a subsidy that a company must pay back if it turns out that they are doing well financially. The government can also use different financing options (“blended finance”).