Dutch tech start-ups increasingly worse off than foreign competitors

Dutch start-ups are increasingly falling behind their competitors in surrounding European countries, the United States and Asia. To remain competitive, efforts must be made to develop deep tech, says Techleap in a press release that follows the annual State of Dutch Tech report. Diversity is also a spearhead and more capital must be made available.

The report will be presented today to Prime Minister Mark Rutte during The State of Dutch Tech 2023 event in The Hague. Based on the report, Techleap argues that action is needed to preserve our business climate. Only with a strong business climate can we realize our innovative ambitions in areas such as climate, care, security and energy. These are social transitions in which start-ups and scale-ups increasingly play a role.

Foreign countries

Dutch start-ups receive structurally lower investments than competitors from other European countries. The Netherlands lags behind high-growth tech start-up ecosystems in Sweden, the United Kingdom and France, for example. The average funding in the Netherlands in 2022 was only €0.26 million per start-up. This leaves Dutch entrepreneurs well behind Sweden (€0.90 million per start-up), France and the United Kingdom (both €0.67 million). Germany (€0.55 million) also remains well ahead of the Netherlands. Moreover, in 2022, half as much money was available for Dutch start-ups compared to record year 2021.

Tech jobs

The Netherlands is in the top three countries that find their tech jobs hard to fill in Europe. The percentage of hard-to-fill jobs in tech has grown to 59 percent. On average, most tech jobs already take more that 60 days to be filled. Despite rounds of layoffs at some large tech companies, this percentage and the length of time unfilled jobs remain on the rise.

Diversity

Diversity remains a thorny issue within the industry. Women represent only 10 percent of the Dutch tech entrepreneurial landscape, and investments in female tech entrepreneurs also lag behind. Only 0.7 percent of venture capital investments reach companies with a female founding team. Techleap.co.uk argues that a focus on diversity and inclusion is necessary. Data collection by tech companies and a diversity policy among investors should contribute to this.

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Knowledge-intensive technology

The Netherlands stands out internationally for its high quality of scientific research. This can lead to knowledge-intensive technology with potentially large social and economic impact, also known as deep technology. However, the Netherlands has relatively few ‘spin-offs’: new companies that arise directly from that knowledge of universities and knowledge institutions. The Dutch spin-off companies that do exist survive for a long time, but grow slowly. As many as 80 percent are still active after 10 years, but half still have fewer than 10 employees.

The potential is there, but these companies, because of their long lead time and lack of support and capital, struggle to grow into the globally leading and impactful companies they could be. The level of investment in the Netherlands is substantially lower than in the United Kingdom, Switzerland, Germany and France. The lead time of spin-offs is long due to the complexity of research and development and contract negotiations with knowledge institutions on intellectual property rights. Transparent standard contracts for spin-offs would save a lot of time. The agreement to start using these by universities is being announced today at The State of Dutch Tech 2023 event.

Techleap.nl: Lack of long-term vision tech sector hinders achieving climate, healthcare, and circular economy goals

The focus on the long-term development of the tech ecosystem and digitization as an engine behind major social transitions is lacking in the Netherlands.

Tech sector also growing outside Randstad and Brainport

The report cites regional specializations and mutual cooperation among local hubs as positive developments. This further stimulates regional development while benefiting from the national network. Also striking is the growth of the Dutch tech sector outside the Randstad and Brainport. Local tech hubs in particular are responsible for this growth. Although the North Holland region (3400), South Holland (2000) and North Brabant (1100) remain prominent hubs within the Dutch ecosystem, the Utrecht region, for example, is showing strong growth in numbers of start-ups. The region has more than 900 and 8 percent more jobs compared to last year. Groningen (+12% since 2018) and Limburg (+6%) also saw significant increases in the number of jobs.