“Dutch entrepreneurial climate suffers from inconsistent policy”

It started this week with messaging giant Bird, followed later by Protix, market leader in insect ingredients. More and more tech companies are turning their backs on the Netherlands. Entrepreneurs and experts have been warning about this for years. We must be careful that the Dutch entrepreneurial climate does not collapse due to “overregulation and a lack of focus in government policy,” says Cees Van Beers, professor of innovation management at the TU Delft.

Let's not start off on a negative note. The Netherlands is among the international leaders regarding the entrepreneurial climate. For a long time, we scored highly on subjects such as physical infrastructure and cultural and social norms. However, the appreciation for the entrepreneurial climate has been declining for years now. Tech companies that want to expand have trouble attracting sufficient financing.

So the inevitable happens: they leave. Messaging giant Bird announced its departure at the beginning of this week. Not much later, news broke that Protix is also packing its bags and heading to the US to invest in a new factory there.

A clear trend

Bird and Protix are by no means the only companies leaving our country, according to Van Beers. “This exodus has been going on for years. A few years ago, Unilever decided to move its headquarters to London. Shell has done the same.”

Volatile government policy

The professor points to several important issues that we in the Netherlands must address if we do not want to go under. First: the changing government policy. The sudden halt to incentive funds, such as the National Growth Fund, is hitting the Dutch tech sector hard. The Netherlands also risks losing tech companies due to overly strict tax rules.

“The abolition of dividend tax was once a point of discussion, but for multinationals that is not decisive,” Van Beers explains. Strict European regulations are. ”The CO2 border tax, for example, is intended to reduce pollution. But it imposes a heavy reporting burden on all companies, regardless of their actual emissions. This mainly affects smaller companies that have difficulty with the administrative burden. In addition, the EU's AI Act is much stricter than comparable rules in the US, mainly due to privacy considerations. I believe that the protection of personal data is important. In that respect, I don't think we should strive to become a kind of US 2.0. But overregulation can harm innovation and competitiveness.”

Europe is, however, taking steps in the right direction with the new Competitive Compass, created to restart an upward innovation cycle to close the existing innovation gap.

Reluctant mentality

Then there is the reluctant mentality of investors in the Netherlands and other European countries. If we zoom in on Protix, which produces proteins from insects in Bergen op Zoom, the company has invested heavily in technology development in recent years. The company has raised millions with support from the European Investment Bank and Invest-NL, among others. But a new factory requires approximately €200 million—an amount that is difficult to raise in Europe. In the US, however, this financing is possible.

Van Beers: “In our country, a large part of the capital comes from banks, less from investors. In the US, some billionaires like to invest in start-ups. As a start-up, you are also punished less harshly for your mistakes. That mentality is very different here in Europe.”

Labor migration

It is certainly not due to a lack of talent in our country. According to Van Beers, we have a well-educated labor force with a good knowledge of English, which is “very attractive to large tech companies.”

Nevertheless, more hands are needed in the technical sector. The new cabinet has adopted a negative attitude towards labor migration, according to the professor. “Talent from India, for example, is desperately needed by high-tech companies here. And with that, the Dutch economy desperately needs them too.”

Waiting for a miracle

Waiting for a miracle is pointless. It is time for action, Van Beers believes. “For a giant like ASML, which also previously threatened to leave, a kind of rescue operation Beethoven is being set up to try and get something done within the country's borders. Companies like Bird and Protix, however, are not so lucky.”

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