Netherlands sets aside €500M for the establishment of NADI

The Dutch government is reserving €500 million for the establishment of a National Agency for Disruptive Innovation (NADI), as detailed in the 2027 budget. The agency will focus on technologies that could address societal challenges, but whose outcomes remain uncertain. This approach leaves room for projects that may ultimately fail.

The establishment of NADI has been in preparation for some time. In February this year, former-Minister of Economic Affairs Vincent Karremans published an analysis about the creation of a Dutch agency, modelled on American and European ARPA organisations. The core of this model is to fund high-risk research and technology with the potential to deliver major societal impact.

The 2027 budget now makes clear that the plan has financial backing. The coalition agreement had already reserved €500 million for NADI. In addition, €42 million from the budget reserved for innovation at regional campuses will be used as partial funding.

Room for technologies that may fail

NADI is intended to distinguish itself from existing innovation programmes, such as the Research and Development Promotion Act (WBSO), by creating room for investments in high-risk technologies. The earlier exploration explicitly identifies a high tolerance for risk as one of five conditions for an ARPA model to function effectively. Under this approach, projects should not be judged individually on whether they succeed or fail. Instead, the focus is on the performance of the portfolio as a whole: some failures are acceptable if several projects ultimately develop into breakthroughs.

This means NADI will not focus solely on technologies that are already close to market. The agency should be able to invest when it is still uncertain whether a technology is technically feasible, commercially viable or scalable.

From €1–2 billion to €500 million

The amount now allocated to NADI is considerably lower than the figures discussed in earlier plans. The earlier exploration referred to a budget of approximately €1 billion to €2 billion over five years as a possible scale for NADI. The 2027 budget now reserves €500 million for the agency.

The current budget makes clear that NADI can get off the ground financially, but does not yet specify how the funds will be distributed across programmes, companies and research projects. The precise governance structure and selection procedures have also not yet been fully established.

Strengthening innovation capacity

The government is positioning NADI as part of a broader strategy to strengthen the Netherlands’ earning capacity and economic resilience. The Budget Memorandum identifies NADI as an instrument to strengthen innovation capacity and improve access to financing for companies.

The Budget Memorandum has not yet detailed the precise structure, operating model, and selection criteria for NADI. What is clear, however, is that the government has now secured funding for the establishment of the agency and that NADI will become part of the Netherlands’ innovation policy.