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, as are the resources and ideas to give innovative companies the opportunity to play a defining role. This will be explained today during the IGNITE 2022 Summit of Techleap.nl where its annual State of Dutch Tech report will be presented.
Constantijn van Oranje, Special Envoy of Techleap.nl emphasizes: “The ambitions in the coalition agreement on ‘future earning capacity’ and social transitions will not be achieved without effective digitization and innovative startups. They are the engine of the new economy. Every sector gets its Tesla, Beyond Meat, Amazon, Adyen or Moderna. The Dutch earning capacity will depend on our capacity to facilitate the growth of these types of companies. For the time being, we lack early-stage capital, IT talent, ambitious entrepreneurs and an effective valorization practice to make this happen. That is where the major joint challenges lie for the government, universities, investors and entrepreneurs.”
Startups and scaleups keep the Netherlands innovative and competitive. They are indispensable for earning capacity and their social importance will only increase in the coming years. They provide a tech sector that is three times more productive, grows four times faster and has job growth three times greater than other sectors. In addition, they come up with new solutions for the major social transitions in the field of climate, healthcare and the circular economy.
The Netherlands is known as an innovative country and has many technology companies that come up with new solutions for these major transitions. And although everyone knows several large Dutch technology companies, such as Adyen, Mollie and Philips, unlike other countries, the long-term development of the Dutch tech ecosystem is not given priority, both socially and within government policy, and thus threatens to fall behind in several crucial areas. This is emphasized in the ‘State of Dutch Tech report’ launched today by Sifted (part of the Financial Times) on behalf of Techleap.nl.
Lack of ambition
The State of Dutch Tech shows that 2021 was a year of growth for the Dutch tech sector. A total of 5.6 billion euros in venture capital has been invested, more than three times the amount of 2020. There are approximately 11,000 startups and the tech sector now has a total value of more than 300 billion euros. But in the meantime, many startups seem to get stuck, partly due to the availability of talent and access to capital in the earliest phase, but also because entrepreneurs often seem to lack ambition and place more emphasis on starting a company and achieving autonomy, than to let it grow successfully.
The report shows that only 21 percentof Dutch startups progress to scaleup status, which is crucial for job and economic growth in the long term. Other countries are doing much better. The United States even has a 60 percent conversion rate. To increase the conversion rate and to ensure that Dutch tech companies can continuing to grow, the right preconditions and investments, especially in the early phase, are essential.
In the Netherlands there is a lot of attention for the major transitions that we will face in the coming years. An example of revolutionary technologies that can provide solutions for this, but are not yet fully exploited, is deeptech. As a country, we are well positioned to lead in this area with companies such as ASML, but Dutch investors seem to avoid the companies that can drive this in the promising early phase, while they can have a vital impact on growth and innovation in our country.
In the recently presented coalition agreement, transitions in the field of climate, healthcare and the circular economy are highlighted, and substantial resources are received. But where the government is making tens of billions available to solve the problems surrounding the transitions, the role of the innovative business community in solving these problems is lacking, as are the resources and ideas to allow companies from the new innovative economy to drive this. Countries such as Germany and France clearly give priority to this in their government policies (such as a tax deduction for investors), which makes the developments in the tech sector in those countries much faster.
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