The interplay between innovation and trade promotion
– The Netherlands at home and in the field
In the Netherlands, it is the so called top sector strategy that governs export promotion. Through the top sector approach, the Netherlands has achieved a coordination of its policies much stronger than what is the case in Sweden. This coordination appears to be an advantage, where the efforts in different areas support each other.
The selection of focus areas makes it possible to offer a more qualified assistance to Dutch companies than if promotion work was carried out in a broader fashion.
The top sector strategy is also the basis for the Dutch research and innovation policy, emphasizing the importance of research working side by side with industry to benefit from the business community and make their results available for companies. In order to ensure the link between business and research representatives, both industry and academia are involved in shaping the agenda.
Trade policies are based on the value creation in global value chains. Export promotion is not just about the export of finished products. Promoting organizations also work very actively to connect Dutch suppliers with for example French and German companies, which in turn are large exporters.
By changing its policy framework with the development of the top sector strategy, the Netherlands got clearer areas/sectors to target its efforts to. In addition, the strategy also led to better coordinated policies, something that also permeates the work of the promotion. For example, the Netherlands agenda for aid, trade, and investment aims to increase the internationalization of Dutch companies and investments are therefore primarily directed towards the top sectors. The strategy also contributes to an increased coordination of the actors in the sectors, where representatives of government, academia and industry will jointly be responsible for setting priorities, action plans and contribute to the financing of actions. Through the top sector strategy the specialization is much clearer in trade promotion through a tougher prioritization and selection. As the top sector strategy points out prioritized areas, the Netherlands can implement a focused trade and innovation promotion agenda.
At the organizational level, the top sector strategy reformed not only the national research and innovation system, but also works to promote the business through greater focus and investments in line with the identified sectors. Ministry of Economy is responsible for the strategy, while the Foreign Ministry is responsible for promotion; however, the ministries have a shared budget for trade and development cooperation. Within each top sector the government appoints a so-called “top team” consisting of industry, academia and the public sector which takes responsibility for implementing the strategy in selected sectors.
The Netherlands directs its innovation and trade promotion towards 26 countries; the selection is based on the opportunities for growth, the ambitions of the Dutch top sectors, as well as the extent to which the Netherlands can act to reduce trade barriers.
The Dutch agency Rijksdienst voor Ondernemend Nederland (RVO) runs the Netherlands Offices of Science and Technology, NOST, in countries that are considered to be of particular interest. NOST are managing innovation, research and education promotion and is well integrated with the economic promotion, even though the business-to-market and business development promotion mainly are done by other organizations in collaboration with NOST.
The integration between areas has led to better synchronized promotion and that different actors can benefit from each other’s work which was the case when a Dutch research institute wanted to make its bio bank available for researchers and companies worldwide. One example is when NOST found stakeholders in the Japanese research institute Riken and the company Fujifilm, contacts who led to cooperation and business. Also the investment department was invited and took the opportunity to a wide group of Japanese researchers and companies showcasing world-leading research in the Netherlands, which in turn led to Japanese investments in the country.
The top sector strategy also affects the operations carried out. One aim of the strategy is to get companies to take advantage of research and development and make better use of the opportunities available in emerging countries. NOST are particularly important for the implementation of the actions addressed directly to enterprises, especially SME’s. The goal is to identify opportunities and establish cooperation in R&D and innovation which both the Netherlands as well as the partner country will benefit from. Focus is on the top sectors key technologies. For example, India and the Netherlands carried out a joint call in the IT sector, in line with the top sector “creative industries”. The call was conducted by the Netherlands Organization for Scientific Research (NWO) in collaboration with the Indian Ministry of Electronics and Information Technology (Deity). It addressed consortiums of academic institutions from both countries as well as companies from India and/or the Netherlands. The Dutch budget was two million euro.
NOST offices can act on local signals, as they did in South Korea, where the market showed interest in the development of so-called serious gaming in cooperation with the Netherlands. This has led to several agreements on exchange in education and research between the two countries and an opportunity for the Netherlands to become a world leader in the field.
Initiatives may also come directly from the top teams and reflect the sectors’ needs. A large energy company with commitments in India had a need to develop the skill base of the sector. The company invested 20 million euro, and succeeded the Dutch State to contribute just as much, to educate graduate students from India in the Netherlands within the sector. The procedure shows the flexibility in the Dutch research system in which the state can step in and support a specific business if the project in question is considered to be of national importance for a top sector.
A risk with the top sector strategy is a lock-in on selected industries, missing developing sectors. Another risk is that once priorities, policy formulation and implementation are relocated to a cooperation body consisting of government, academia and industry the transparency in the decision making and responsibility is less clear.
The Netherlands abroad
Long-term relationships and language skills are of importance to create networks and collaborations Japan. Between four and five hundred Japanese companies have their European headquarters in the Netherlands which is an asset in promoting and networking in Japan. There is a strong mandate for NOST in Tokyo to plan their activities, but also a responsibility to pursue issues relevant to top sectors. The instructions from the home organization are to focus on applied research rather than on basic research. There are low incentives for cooperation between innovation – trading – investments, since each unit is followed-up separately.
South Korea is one of six countries selected as particularly interesting to the Netherlands’ trade relations. Five sections are co-located: the agricultural section, investment division, economic and commercial section, division for student exchange, and the research and technology office (NOST). NOST in Seoul is working with three focus areas: high-tech systems and materials (e.g. semiconductors), offshore wind energy and serious gaming. Focus areas are determined in close co-operation with stakeholders at home, but most of the projects are initiated by the office in South Korea.
Promotion of innovation and science in China is done by NOST, which is well integrated in the economic promotion through its placement at the embassy and consulates. The focus is on key technologies within the top sectors. Eight of the top sectors are emphasized in China, and the goal is collaboration in R&D and innovation from which both the Netherlands and China can benefit. These have been adapted to coincide with Chinese interests which are essential for successful trade relations with China, as well as political support from China. It is worth noting that all MoU in the field of innovation dates back to 2011 and 2012, when the export strategy was declared by the then newly appointed government.
Six top sectors in India are prioritized; agriculture and food, high-tech materials and systems, energy, creative industries, life sciences, and water. The Netherlands act united in order to promote innovation and research, as well as trade. A memorandum of understanding, with the ambition to solve societal challenges in India, and delegations acts as important starting points for dialogues. Delegation trips are carried out jointly by policymakers, companies, universities and research institutions in order to be coordinated in its message to India with a focus on top sector needs and opportunities. The delegations also aim to attract investment and talented students and researchers to the Netherlands.
Promotion in Brazil has a focus on research and education, where one of the main ambitions is to present the Netherlands as an innovative and sustainable country. The top sector strategy changed how the promotion work is organized in Brazil through the establishment of NOST-offices in São Paulo (2012) and at the embassy in Brasília (2013). The two offices’ innovation attachés support research and innovation cooperation in marine engineering, aeronautical engineering and food processing. Netherlands has an active research and innovation agreement, MoU, with Brazil. Ministries and research funding agencies from both countries meet once a year to plan activities. In addition, the Netherlands has an office to promote cooperation between Brazilian and Dutch universities.
The Netherlands’ trade and innovation promotion in the United States focuses on attracting businesses to the Netherlands, especially small and medium-sized start-up technology companies. This is in line with the Netherlands’ ambition to be the European hub for entrepreneurial ventures and Amsterdam’s strategy to attract head offices. Examples of major companies established in the Netherlands are a travel booking site, a streaming site and a data center. Dutch innovative SME’s aiming for the US market have access to “soft landing” services by Startup Delta which is a virtual accelerator. During the first three months Startup Delta will help finding office space, employees, contacts with potential customers and partners, and business services.