Science, Technology & Innovation Indicators

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Science, Technology & Innovation Indicators 2012

Internationalization and specialization of the Dutch STI system

Human Capital Pipeline in Science and Engineering

Science,

Technology &

Innovation

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Authors:

Pim den Hertog (Dialogic) Cor-Jan Jager (Dialogic) Robbin te Velde (Dialogic) Jaap Veldkamp (Dialogic) Dag W. Aksnes (NIFU) Gunnar Sivertsen (NIFU) Thed van Leeuwen (CWTS) Erik van Wijk (CWTS)

Publication number: 2010.056-1235 Utrecht, the Netherlands December 2012

For more information about STI2_{please visit} the website (www.sti2.nl)

This report and the Dutch-language version are electronically available at www.sti2.nl. Graphic Design: Teatske sanne

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Science,

Technology &

Innovation

Indicators

2012

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Since 2011, authorized by the Dutch Ministry of Education, Culture and Science, Dialogic in collaboration with the Norwegian research institute NIFU and the Centre for Technology and Science Studies (CWTS) in Leiden, has managed the interactive website or dashboard Science, Technology and Innovation Indicators (WTI2_{, the English variant being STI}2_{). STI}2_provides insight in science, technology and innovation developments in the Netherlands compared to a group of reference countries.1_{These (excluding China) OECD countries have strong know-ledge} and innovation systems and play an influential role in the regional and/or global economy. The STI2_{website at www.sti2.nl features a systematic presentation of the most current statistics} on science, technology and innovation with extensive explanations. The number of indicators in STI2_{is increasing every year and 2012 saw the addition of many new innovation indicators.} The indicators come from reliable sources. The STI2_{website remains up to date and is revised} as soon as underlying data sources change. Visitors to this website can select from a series of figures and have these presented in various formats such as pdf, Excel file, picture or print-out. Every user can also compose and use the print key to obtain this clean (up-to-date) version of the website. The leading concept is that all users always have as much scope as possible to carry out their own selections and analyses.

The aim of the STI2_{analytical report}

In addition to the STI2_{website, we present here the STI}2_{analytical report. This is a two-year} publication, which alongside a Summary (part A), provides in-depth analyses of certain topics. After discussion with the department and the STI2_{advisory committee, two topics were selected} for the 2012 edition, namely ‘Internationalization and specialization of the Dutch STI system’ (part B) and ‘Human capital’ (part C).2

The summary describes and highlights the current state of Science, Technology and Innovation in the Netherlands, using data available on the STI2_{website or dashboard. It is deliberately not} a paper copy of the STI2_{website but a comprehensive publication detailing the major} devel-opments in financing, investment, human capital, collaboration, output and outcome – the six elements that form the basis of the STI2_model.

For each category we will review the Netherlands’ international ranking by examining figures from the STI2_{database that show where the Netherlands plays a significant role or whether an} obvious shift has occurred. Finally we summarize how the Netherlands scores in the indicators compared to the relevant STI2_{reference countries.}

The reference countries are: Australia (AUS), Belgium (BEL), Canada (CAN), China (CHN), Denmark (DNK), Germany (DEU), Finland (FIN), France (FRA), Ireland (IRL), Italy (ITA), Japan (JPN), Korea (KOR), Norway (NOR), Austria (AUT), Spain (ESP), Czech Republic (CZE), United Kingdom (GBR), United States (USA), Sweden (SWE) and Switzerland (CHE). This group was already selected for the previous version of STI2_{(NOWT) and we have retained this group to enable} com-parison between the data in both projects.

The other topics proposed were: mass & focus and service innovation.

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internationalization and specialization represents a ‘horizontal theme,’ that is to say one that is relevant across the entire STI2_{website. The human pipeline is a ‘vertical theme,’ looking more} closely at a particular aspect. Part B of this report discusses to what extent the Dutch STI sys-tem is internationalized and if there appears to be increasing specialization in science, tech-nology, innovation and the economic domains. Our focus will be on how developments in the Netherlands rate compared to those in the reference countries. We will also determine whether the progress over the domains is parallel or in fact more autonomous. The second paper on the human capital pipeline (part C) discusses how the supply of beta students is progressing at vari-ous training levels now and in the near future, and the consequences for labor market demand for beta students. Both publications aim to drive the strategy discussion and finally suggest potential strategic implications. Each of the three parts of this publication can be considered separately.

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1. Introduction

To introduce the 2012 STI2_{analytical report, part A of this report is a summary of the Science,} Technology and Innovation developments (STI) in the Netherlands.3_{From the STI}2_{website we} have selected several key indicators which together show how the Netherlands is positioned compared to reference countries. In addition we will focus on a number of cases in order to draw attention to a specific actor or topic for which no international comparative indicators are available. Although the choice of indicators is obviously subjective, nevertheless we have aimed to present an objective as possible picture of developments within Dutch STI systems.

The logical structure of the STI2_{website and this summary are based on the economic growth} theory as proposed by Grossman et al., 1991 and Aghion et al. 1992. The underlying theory is that in order to produce knowledge, you first have to invest in research and in people (C). In the STI system we distinguish three types of actors: higher education institutes (universities, university medical centers, and colleges), public institutes and firms. Before investments are made, funding (A) has to be available. Knowledge, achieved by research, is seen in publicati-ons (codified knowledge) as well as in people (embodied knowledge). Thus human capital (C) plays a double role, being both input (investment, B) and output (educated work forces, E). The quality of the knowledge produced – the scientific output (E) – leads to a certain international positioning of the actors (higher educational institutes, research institutes, firms). This is the outcome (F) of the investments in the national STI system. From a resource-based perspective, the quality of the elements (nodes) in the STI system (financing, investment, human capital) determines the quality of the output and the ultimate outcome for the system.4_{One element is} still missing, namely the relationship between the elements, which is shown in figure 1. This is covered by the collaboration between actors (D).

Part A

The website www.sti2.nl always features the most up to data available on the situation in the Netherlands.

‘Embodied knowledge’ is part of C: Human Resources. Codified knowledge (articles, publications, patents) is the system’s physical output and forms part of E: Output.

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Figure 1: Structure of the STI2_{website and the descriptive STI}2_report

Each of these six elements will be discussed separately in the following chapters. In chapter 8 we have compiled a table with an overview as well as a summary of each element. Where possi-ble, the table shows the Netherlands’ position in relation to the STI2_{group of reference countries} and the previous year’s indicator score. We close with a number of concluding remarks.

2. Financing

As we will see in chapter 3, the R&D intensity (total share of R&D expenditure in GDP) and its growth in the Netherlands has been lagging behind most reference countries for some time. This is mainly due to the internationally speaking relatively low R&D intensity of all Dutch enterpri-ses combined. Figure 2 indicates the Netherlands’ entire R&D expenditure divided into sour-ces of funding for the period 1990-2009.5_{We do see growth in absolute terms, but relatively} speaking, the increase is limited in international terms. The R&D funding from abroad has been increasing ever since the mid-1990s, when the European research programs gained momen-tum. The proportion of R&D financed by the enterprises has remained more or less consistent, varying between 44 and 49 per cent.

A FinancieringA FinancieringA Financing C Human recourcesC Human recourcesC Human Capital B InvesteringenB InvesteringenB Investments D Collaboration E OutputE OutputE Output F OutcomeF OutcomeF Outcome Elements Relations

Note that indirect measures such as R&D tax credit schemes are not included. In the Netherlands these indirect measu-res account for relatively large amounts of government funding. The budget for the WBSO alone is more than 1 million Euro (see further on in this section).

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Source: OECD = Gross domestic expenditure in R&D by sector of performance and source of funds (Units for

Expenditure: Million National Currency, Sector of Performance: Total intramural). Business Enterprise = Source of Funds: Business Enterprise, Government = Source of Funds: Direct government + Source of Funds: General university funds, Funds from abroad = Source of Funds: Funds from abroad, Other = Source of Funds: Total (funding sector) minus business enterprise/government/univ.fonds/funds from abroad.

However, the source of R&D funding and the actual location where R&D is conducted can dif-fer. A portion of the private R&D funding is spent outside companies. Similarly, a part of the publicly funded R&D is carried out within companies. Dutch enterprises outsource a relatively large amount of research to the public sector compared to other countries.6_{Only China (14 per} cent) and Germany (12 per cent) have a level of private funding in public research comparable to the Netherlands (14 per cent). The majority of private funding goes to research carried out within the institutes.

The amount of Dutch firms receiving funding from abroad from 2001 to 2009 has remained above the average of the reference countries. Apparently the research carried out at Dutch firms is of such a standard that they are able to attract above average sums of money from abroad. Figure 3 puts R&D funding in an international perspective. Compared to the majority of referen-ce countries – the Netherlands together with Austria, the UK and Norway – has the lowest levels of privately financed R&D and therefore relatively the highest proportion of public (or otherwise) financed R&D. In 2009 about 14 per cent of Dutch R&D funding came from other countries and other national sources (mainly private non-profit funds such as charities in the Netherlands). This puts the Netherlands in sixth place in a group of 18 countries.7

See http://www.sti2.nl/financiering/nederlands-innovatiesysteem-2/aandeel-bedrijven for a separate version of this figure. Two significant factors affect the share of foreign R&D funding: firstly the size of the country (the bigger the country, the bigger the domestic market and the smaller the foreign share) and secondly the activities of foreign companies in the domestic market (share of value added under control of foreign affiliates). The amount is highest for smaller countries with a high presence of foreign companies. The second factor undergoes considerable fluctuations because one big take-over can have a huge effect on the figures. Both factors are discussed in more detail in part B (Internationalization).

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Figure 2: Distribution of the funding sources for the Netherlands’ total R&D expenditure (million of euros) in the period 1990-2010 € 0 € 2,000 € 4,000 € 6,000 € 8,000 € 10,000 € 12,000 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% '90 '91 '92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 Million euro

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As Figure 4 shows, from 1990 to 2009, the relative importance of R&D funding from national sources but remarkably from foreign countries (i.e. the EU) increased. Regarding the govern-ment’s share, we should note that the incentive - through indirect fiscal means such as the WBSO – is greater than through direct funding, but is not included in the calculation. This fiscal funding is not strictly in the form of subsidies but applies to reduced tax payments.

Source: OECD = Main Science and Technology Indicators. Business Enterprise = Percentage of GERD financed by Business Enterprise. Government = Percentage of GERD financed by Government. Other = Percentage of GERD financed by other national sources. Funds from abroad = Percentage of GERD financed abroad.

Comment: Base year is 2009, except for Canada, Denmark, Finland, France, Korea, Austria, United Kingdom (2010), Australia en Switserland (2008).

Figure 4: Total R&D expenditure (millions of euros) in the Netherlands (absolute amounts) by funding source, 1990-2009

Source: OECD = Gross domestic expenditure on R&D by sector of performance and source of funds (Units for Expenditure: Million National Currency, Sector of Performance: Business enterprise). Business Enterprese = Source of Funds: Business Enterprise, Government = Source of Funds: Sub-total government, Funds from abroad = Source of Funds: Funds from abroad, Other = Source of Funds: Total (funding sector) minus business enterprise/government/univ. fonds/funds from abroad.

Comment: Million National Currency (Euro for Euro Area).

Figure 3: Total R&D expenditure (millions of euros) in all reference countries, by source of financing, 2009

0 2,000 4,000 6,000 8,000 10,000 12,000 '90 '91 '92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 Million euro

Business Enterprise Government Funds from abroad Other 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

JPN KOR CHN CHE DEU FIN AUS USA DNK SWE BEL IRL FRA CAN NLD GBR AUT NOR Business Enterprise Government Funds from abroad Other

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NB: the figures in this graph are awarded amounts as determined in the tax budget (‘Belastingplan’). The actual reali-zation can deviate from the budget.

We have included this indicator in the report because it is a recurring argument, and one for which comparative interna-tional data are now (finally) available (from Innovation Scoreboard).

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Figure 5: WBSO amounts budgeted (millions of euros), by type of recipient firm, 2003-20118

Regarding the lack of available venture capital (in terms of percentage of GDP) – a frequently mentioned disadvantage of the Dutch innovation system – the Netherlands scores average.9_The Netherlands plays a modest role among the average European countries. Its 0.5% share has been reasonably consistent for years, while most other countries have dropped in the period 2006 to 2009, with the exception of Denmark. Generally speaking, Denmark is managing to catch up quickly, as the scores in many of the indicators in this summary show. On the other hand, priva-te funding for research at Danish higher institupriva-tes is very modest – much lower than the Dutch. Source: Agentschap NL.

In recent years we have seen a clear shift in public funding of research in Dutch companies from specific (sector or industry) to generic (economy-wide) funding. The sharp rise in WBSO funding – in fact a form of indirect funding – plays a significant role. For years the level of this funding has been around EUR 400 to 500 million, but since 2009 it has soared from EUR 850 million to 1.1 billion in 2011. SMEs have benefited from almost all of this increase. Note, however, that the higher budget in 2009 and 2010 was a temporary increase.

0 200 400 600 800 1,000 1,200 2003 2004 2005 2006 2007 2008 2009 2010 2011 Million euro SME Other

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When focusing specifically on the Dutch research institutes, we notice that the volume of busi-ness enterprise funding in the large public research institute TNO has decreased consistently between 2008 and 2011. We see a slight drop in GTIs after 2009.11_{This shows a shift from} research funding in companies and public institutes to universities (where the third tier funding/ contracts with third parties have risen sharply in recent years).12

Figure 7: Total income TNO, by type of funding, 1990-2011

Source: Annual reports OCW.

To enable a true comparison of countries, the percentage has been corrected to reflect the level of the national economy (GDP). We have also utilized skewed and square root transformations to calculate the normalized values.

The Technological Top Institutes (TTIs) are not included in these figures because no data were available. The TTIs have probably also benefited from this shift.

NB: basic funding from abroad (ESF, Framework Programme, ERC) is defined as third tier, not second tier (target) fun-ding, even though it is when you consider the nature of the funding.

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Figure 6: Venture capital as percentage of GDP in Europe, 201010

Source: Innovation Union Scoreboard 2011.

0 100 200 300 400 500 600 '90 '91 '92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 Million euro

Public projects Private projects Basic funding Target funding 0.0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1.0

GBR SWE FIN BEL DNK CHE FRA NLD NOR ESP DEU ITA AUT IRL CZE

Percentage

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Figure 8: Total income large PRO’s, by source of financing, 1990-2011

Source: Annual reports OCW. Comments:

- The individual public and private NLR data is lacking. Therefore, the average distribution of ECN, MARIN and Deltares has been used.

- For the period 1990-2008 the revenue data is included from the Waterloopkundig Laboratorium and GeoDelft. Considering GeoDelft, the revenue from an additional category ‘other’ was originally added, but this (minor) amount is not included at this time.

We can see that as far as funding for Dutch Academic Education (NWO) is concerned, in abso-lute terms, university research funding clearly rose in 2009. Relatively speaking, the ratios have remained more or less equal and the 2009 upturn is probably the result of a budget increase with the measure Vernieuwingsimpuls (from EUR 90 million to 170 million). This could be a case of finance being rerouted. Before the measure was introduced, these budgets went directly to the receivers (universities).

We see a declining trend in the amount of other expenditure since 2009 at the Royal Dutch Academy of Sciences (KNAW), along with an increase in funding activities at its own organiza-tions including research and other activities such as collection building.

0 50 100 150 200 250 300 350 400 '90 '91 '92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 Million euro

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Figure 9: Funding by NWO (left) and KNAW (right), by type of recipient, 2002-2011

Source: Annual reports OCW. Comments:

- NWO > Years before 2009 are rounded to thousands.

- KNAW > For the Fryske Akademy and the Roosevelt Study Center, only the KNAW subsidy is included.

In summary: Over the past decade (2001-2009), the proportion of total R&D funding granted by the government has remained more or less consistent (around 40 per cent). R&D funding from abroad has increased after the mid-1990s, the majority coming from the EU. Although the over-all R&D intensity in Dutch companies is relatively low, compared to international levels, Dutch companies do finance a great deal of public R&D in the Netherlands.13_{The amount of foreign} funding for research conducted in Dutch companies has become more and more significant in the long term. Internationally speaking, the availability of venture capital is average. We notice that the amount of research at TNO (the largest Dutch public research organisation) funded by companies has been falling off since 2001. Thanks to the increasing significance of WBSO finan-ces, public R&D funding in companies is becoming more and more generic rather than specific.

0 100 200 300 400 500 600 700 800 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Milion euro

Research at universities Institutes Other

0 20 40 60 80 100 120 140 160 180 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Million euro Institutes Other

3. Investments

In the past 15 years, huge shifts have occurred throughout the world.14_{The entire R&D} invest-ment has more than doubled in the period from 1996 (USD 522 billion) to 2009 (USD 1300 billion) and the total number of scientists has risen from four to six million (National Science Board, 2012). These changes have predominantly taken place in Asia.15

Apart from these shifts, the comparison between countries shows that in terms of volume, some variables remain surprisingly constant. The amount that Dutch companies invest in R&D is rela-tively low and a large part of these investments comes from abroad. This pattern is typical for the Dutch innovation system. The reason these patterns have remained consistent for so long is that institutional changes occur relatively slowly. Thus the low amount of R&D investment

An obvious explanation is that companies are reducing their own basic research and opting to sub-contract this research to knowledge institutes especially universities. This latest development is not restricted to the Netherlands.

We will examine this issue in more detail under the heading internationalization in part B of this report.

Only China’s R&D expenditure increased in the period 1997-2007 by an annual average of 22%, in 2008-2009 by 28% and in 2010 (despite the crisis) again by 22%.

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Whether we should correct according to sector structure when calculating a country’s R&D intensity has already been dis-cussed – in the Netherlands this was also a topic of debate between Snijders and Verspagen & Hollanders, see Snijders (1998a), Verspagen et al. (1998) and Snijders (1998b). Taking Verspagen and Hollanders’ perspective, we could say that at least a part of the lag in R&D intensity within companies (non-adjusted) is due to them specializing in more general R&D sectors (structure effect). However, an equally intrinsic cause still remains, i.e. lower R&D intensity, as was shown in 1994. Although such an analysis has not been repeated with recent figures, there is no reason to suppose these effects might not exist anymore. It is perhaps more significant to consider Verspagen and Hollanders’ statement that ‘sector structure is an endogenous quantity.’ In other words, the fact that the Netherlands has a higher level of general R&D but is under- represented in intensive R&D sectors, is apparently due to the country being insufficiently competitive technologically speaking in intensive R&D industries. If we follow Snijders’ perspective, we could say that, considering the sector structure in the Netherlands, Dutch companies perform at the same or at a higher level than their peer sectors. The debate on each country’s sector specializations warns not to take a one-dimensional view of business R&D indicators in various countries.

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is down to the Netherlands’ highly deviating industrial sector, which has a low R&D intensity. If this would be corrected, the Netherlands would move up from 13th place out of 19 to 2nd place in the group of reference countries.

Box 1: Sector structure and R&D intensity

The way a national economy is structured – the extent to which certain sectors are over or under-represented – has a huge impact on a country’s R&D intensity. If a country specializes in R&D intensive sectors, it scores high in R&D intensity (this applies for example to Sweden and in particular Finland and South Korea). The opposite applies to a much higher degree in the Netherlands. If we were to look at the R&D intensity of a country’s specific sector compared to a similar sector in another country, the Netherlands’ R&D intensity would increase by the factor 2 and the country’s ranking would rise from 13th place (out of 19) to second place.

Figure 10: R&D intensity of enterprises (as percentage of GDP), adjusted versus non-adjusted for industry structure, all reference countries, 2009

Source: OECD based on the Structural Analysis (STAN) and ANBERD Databases, July 2011; OECD, Main Science and Technology Indicators Database. Adapted by Dialogic.

Comments:

- The structure-adjusted indicator of R&D intensity is a weighted average of the R&D intensities of a country’s industrial sectors, using the OECD industrial structure – sector value added shares in 2007 – as weights instead of a country’s actual shares (which are used in the calculation of the unadjusted measure of BERD intensity).

- BERD data are from 2009 for the Czech Republic, Estonia and Italy; 2007 for Austria, Belgium, Finland, France, Germany, Greece, Mexico, Norway, Sweden, the UK and the USA; 2006 for Denmark, the Netherlands and Poland; 2005 for Australia, Canada, Iceland and Ireland.

- R&D series are presented as a percentage of value added in industry estimated as the value added in all activities excluding ‘Real estate activities’ (ISIC Rev. 3 70), ‘Public administrations and defense’ (ISIC Rev. 3 75), ‘Education’ (ISIC Rev. 3 80), ‘Health and social work’ (ISIC Rev. 3 85) and ‘Private households with employed persons’ (ISIC Rev. 3 95).

0.0 1.0 2.0 3.0 4.0 5.0

SWE NLD FRA DNK JPN USA AUT BEL FIN NOR GBR CAN AUS KOR DEU ESP ITA IRL CZE

Percentage

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In other words, although R&D extensive sectors are over represented in the Dutch economy, these sectors do invest relatively speaking a great deal in R&D.17

Alongside the differences in sector structure, there are also major differences between countries regarding investments in intangible assets. These are investments in factors which are necessary in order to achieve innovation – intangibles such as software and intellectual property, and intel-lectual capital such as human and organizational capital – which are normally not included in R&D statistics. We need to appreciate the scale of these large investments - roughly 5 to 10 per cent of GDP (OECD|EU KLEMS, STI Scoreboard 2011). Thus it does make quite a difference whether or not these intangible assets are included in the international comparisons. The Netherlands has relatively high investments in intangibles, especially intellectual capital (see Figure 11). Figure 11: Investments in intangible assets as percentage of GDP, by type of investment, all reference countries, 2006

Source: OECD. Adapted by Dialogic. Comments:

- OECD, data on intangible assets are based on COINVEST [www.coinvest.org.uk] and national estimates by researchers. - The classification used here is taken from a paper by Corrado, Hulten and Sichel (2006). They differentiate between three categories of intangible investments i.e.: a) computerized information (such as software and databases); b) innova-tive property (such as scientific and non-scientific R&D, copyrights, designs, trademarks) and c) economic competencies (including brand equity, firm specific human capital, networks of people and institutions, the organizational know-how that increases enterprise efficiency, and aspects of advertising and marketing).

The difference in sector structure puts into perspective the various starting positions. This does not, however, alter the fact that the R&D intensity in Dutch enterprises – despite the low star-ting point – fell in the period 2003-2010, while the average intensity in reference countries has risen.18_{We see a clear increase in the reference countries Australia, Denmark, Finland, and}

This development is not just typical of the Netherlands but, according to the most recent EC Competitiveness Report, is wide scale in the EU: ‘overall the EU is showing a structural change towards higher knowledge-intensity in the existing sectors, but with a smaller size of these sectors in the total value-added of the economy. The structural change towards higher knowledge intensity within sectors in the EU has not been sufficient in itself to raise the knowledge intensity of the economy.’ Source: Competitiveness Report, 2011 (p.376).

Recent Eurostat figures paint a more positive picture for the Netherlands. After a drop in 2009 to EUR 4.9 billion, in 2010 Business Enterprise R&D expenditure (BERD) climbed back to the 2008 level with EUR 5.2 billion. The data currently available for 2011 suggest a spectacular increase of 23 per cent to EUR 6.4 billion. However more than three quarters of that sudden growth can be attributed to the use of a different, broader, definition of 'Research & Development'. The shift in definition only affects private sector R&D-expenditure. Adjusting for the broader definition, BERD would have been grown by 5 per cent, of which 4 per cent private sector. Source: Eurostat (2012), BERD by economic activity (NACE Rev. 2) [rd_e_berdindr2]. 17 18 0 2 4 6 8 10 12 14

USA SWE JPN CAN GBR NLD FIN FRA DNK DEU AUT CZE AUS ESP ITA

Percentage of GDP

Software and databases R&D and other intellectual property products Brand equity, firm-specific human capital, organisational capital

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NLD NOR CAN AUS FRA GBR IRL DNK BEL DEU Ave SWE AUT FIN USA CHN CHE KOR JPN 0,0 0,5 1,0 1,5 2,0 2,5 3,0 -6% -4% -2% 0% 2% 4% 6% 8% 10% 12% R&D-intensity (%) Changes in R&D-intensity

Austria and even an extremely sharp rise in Asian countries like China and especially South Korea. The only countries showing a steadier decline than the Netherlands are Canada and Sweden. The graphs below illustrate these trends, first of all the private sector’s share of R&D expenditure (Figure 12), followed by each country’s total R&D expenditure (Figure 13). The y-axis shows the R&D intensity in 2010. This is the relationship between the total R&D expen-diture (private R&D expenexpen-diture in Figure 12 and total R&D expenexpen-diture in Figure 13) and GDP. The x-axis shows the change in R&D intensity for 2010 compared to the previous five years. An increase in intensity may also be due to a relative drop in GDP – or vice-versa.19_{As GDP} deve-lopments can vary considerably from year to year, we have based our calculations on averages over several years (2003-2005) not just one year, which would be too much of a snapshot. Figure 12: R&D intensity of the private sector in 2010 (R&D i.r.t. GDP) and changes in this R&D intensity in 2010 compared to annual average over the years 2003-2005

- OECD>Main Science and Technology Indicators. R&D-intensity = BERD as a percentage of GDP (2010), Growth real R&D expenses = BERD as a percentage of GDP (annual growth 2010 i.r.t. average 2003-2005 [=5 years]).

- Base year is 2010, except for Australia en Switzerland (2008) (annual growth 2008 i.r.t. average 2003-2005 [=3 years]), United States, China, Japan, and the OECD average (2009) (annual growth 2009 i.r.t. average 2003-2005 [=4 years]). - The dotted lines represent the average of the included countries.

- Ave – the white sphere in the middle of the figure – shows the OECD average.

- The blue sphere indicates the current position (2010), the grey cube indicates the reference position (2003-2005). Therefore, the length of the line represents the amount of growth. The Netherlands and the OECD average both have a lightblue and a white sphere.

We see that R&D expenditure in the Netherlands rose from EUR 4.8 billion in 2003 to 5.2 billion in 2010 but R&D inten-sity dropped by 2.7 per cent because the GDP volume grew faster from 2003 to 2010 than the volume of R&D invest-ment by the private sector.

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Also the ratio of R&D investment over the types of actors in the national innovation system – companies, public research organizations and higher education institutes has remained fairly constant over a longer period. Business enterprises remain the biggest investors but we do see a trend shifting towards higher education institutes. In 2010, company investments in absolute terms have increased slightly for the first time since 2007 (at the expense of research institu-tes).20_{At any rate 2010 was a good year, because after years of extremely low or even negative} growth, the total investments have increased by 3.5 per cent.21_{This restores growth to the} 2003-2006 level. A significant trend is the proportion of investments by large companies since 2008.

From EUR 4,900 to 5,218 million. We see the same situation at individual company level. Four of the five largest R&D investors (Philips, ASML, Shell, DSM) increased their investments in 2011 while only NXP’s investments were lower. The long-term investments by the larger R&D investors remain stable or have decreased for example at Philips (restructuring and repositioning) and AkzoNobel (sale of Organon). At the same time, the top 10 companies have increased their R&D expenditure abroad, more so than in the Netherlands (Van der Zee et al., 2012). At least half of R&D expenditure, with the exception of ASML and Océ takes place abroad (ibid).

In footnote 20 we explained that the Eurostat provisional figures for R&D expenditure in 2011 imply the rise in Dutch R&D expenditure in 2010 continues in 2011 i.e. in fact rises considerably.

http://sti2.nl/investeringen/r-d/bedrijven-geaggregeerd http://sti2.nl/investeringen/r-d/hoger-onderwijs-2 http://sti2.nl/investeringen/r-d/publieke-onderzoeksinstel 20 21 22 23 24 2002 2003 2004 2005 2006 2007 2008 2009 2010 Companies 51.9% 52.5% 53.5% 52.9% 53.9% 53.1% 50.1% 47.1% 47.9% a. large (250+) 72.4% 71.9% 73.1% 72.9% 74.2% 77.5% 76.2% 72.3% 68.3% b. medium (50-249) 18.3% 20.2% 18.4% 18.1% 18.1% 15.6% 16.4% 19.3% 21.3% c. small (10-49) 9.3% 7.9% 8.5% 9.0% 7.7% 6.9% 7.4% 8.4% 10.4% Institutes 13.3% 13.3% 13.2% 12.4% 12.4% 12.2% 12.0% 12.7% 11.7% Higher education institutes 34.8% 34.2% 33.2% 34.7% 33.8% 34.7% 37.9% 40.2% 40.4%

Table 1: Ratio of R&D expenditure by (sub)sector in the Netherlands, 2002-2010

From an international perspective, the Netherlands ranks well below average in terms of total R&D investments in GDP. Growth also remains below average, especially due to companies’ relatively low contribution to national R&D expenditure compared to their international coun-terparts.22_{The contributions from academic institutes}23_{and public research organizations}24_are above the international average, but still not large enough to compensate the overall decline. Source: CBS-Statline. Adapted by Dialogic.

Comments: Sum Companies, Institutes and Higher education institutes = 100%, sum Large companies, Medium-sized and Small companies = 100%.

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NLD NOR CAN AUS FRA GBR _IRL DNK BEL DEU Ave SWE AUT FIN USA CHN CHE KOR JPN 0,0 0,5 1,0 1,5 2,0 2,5 3,0 3,5 4,0 4,5 -4% -2% 0% 2% 4% 6% 8% 10% R&D-intensity (%) Changes in R&D-intensity

Figure 13: R&D intensity of the Netherlands in 2010 (R&D i.r.t. GDP) and changes in this R&D-intensity in 2010 compared to 2003-2005

- OECD > Main Science and Technology Indicators. R&D-intensity = GERD as a percentage of GDP (2010),

Real growth R&D-expenses = GERD as a percentage of GDP (annual growth 2010 i.r.t. average 2003-2005 [=5 years]). - Base year is 2010, except for Australia and Switzerland (2008) (annual growth 2008 i.r.t. average 2003-2005 [=3 years]) and United States, China, Japan, OECD average (2009) (annual growth 2009 i.r.t. average 2003-2005 [=4 years]) - The dotted lines represent the average of the included countries.

- Ave – the white sphere in the middle of the figure – shows the OECD average.

- The blue sphere indicates the current position, the grey cube indicates the reference position. Therefore, the length of the line represents the amount of growth. The Netherlands and the OECD-average both have a lightblue and a white sphere.

In summary: All things considered regarding R&D intensity, we can see the pattern emerging that academic institutes have stepped up their already large R&D investments. At the same time the growth in world-wide business R&D expenditures and R&D intensity in the Netherlands for the period 2002-2010 are lagging behind most reference countries.

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4. Human Capital

In order to create and benefit from knowledge, a knowledge society will have to invest in a broad range of people and resources. In the past decades, all developed countries and certainly fast developing countries have invested in human capital. Alongside the working populations’ general level of education,25_{we will now discuss several indicators which provide more specific insight} into human capital in the Dutch science and innovation system.

The average educational attainment of the overall (potential) working population has risen shar-ply over a period of 13 years, certainly if we consider that the increase is mostly on account of the ‘young’ cohorts which have on average a (much) higher education than the ‘old’ cohorts who gradually no longer belong to the (potential) labor force. In 2009, 33 per cent of the Dutch working population has a higher education, compared to 24 per cent in 1998. This puts the Netherlands still above the OECD (30 per cent) and average EU-21 (27 per cent). The average growth in the Netherlands is also relatively large in comparison with a number of other European countries. This is probably linked with the Netherlands’ demographic profile that deviates from the rest of Europe – a relatively young working population has enabled a larger flow to higher education than in other countries. We notice outstanding performances in countries like Korea and Ireland which have very rapidly brought the educational attainment of their work force to a much higher level. What we also see is the relatively slight improvement in educational level in the United States and Germany. Figure 14 indicates the developments since 1999 of the amount of (potential) working population with a higher educational attainment in the Netherlands, OECD, EU-2126_{and a number of selected countries (US, Ireland, UK, Germany and Korea).}

Figure 14: Share of labor force with higher education compared to the total in all reference countries, 1999-, 200927

Source: OECD >> Trends in educational attainment: 25-64 year-olds (1999-2009).

These figures are from OECD (2011). This is a rich source of indicators which provide considerable insight not just in educational levels but also the design and performance of national education systems.

Belgium, Denmark, Germany, Estonia, Finland, France, Greece, Hungary, Ireland, Italy, Luxemburg, Netherlands, Austria, Poland, Portugal, Slovenia, Slovak Republic, Spain, Czech Republic, UK, US and Sweden.

EU21 are all the countries which were EU member states before the ten candidate countries entered on May 1, 2004, as well as the four East European OECD countries (Czech Republic, Hungary, Poland and Slovak Republic).

Source: http://stats.oecd.org/glossary/detail.asp?ID=7020. 25 26 27 - 10 20 30 40 50 60

CAN JPN USA KOR FIN NOR GBR AUS IRL CHE DNK BEL NLD SWE OECD ESP FRA EU21 DEU AUT CZE ITA

Percentage

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By looking closer at a specific segment within the work force that is seen as crucial for the deve-lopment of science and innovation, namely the number of R&D employees, the Netherlands is peddling at the rear of the pack. The number of R&D employees (see Figure 15) rose from nearly 10 per mil in 2009 to 11 per mil in 2010, but this ultimately does not improve its posi-tion in relaposi-tion to the reference countries. The low percentage is of course directly linked to the under-representation of intensive R&D sectors in the Dutch economy and the corresponding relatively low overall R&D expenditure in companies (see box 1).

Taking specific years from 1990 into consideration, we see that the Netherlands has indeed remained stable. Contrary to the assumed static nature of these variables, the number of R&D personnel has however increased in all other countries, and in the case of Finland and Denmark, Korea and Austria, considerably so. That still does not incidentally tell us anything about how effectively and efficiently the Dutch R&D personnel contribute to their science and innovation system’s performance.

Figure 16 magnifies the period 2002-2010 to illustrate where R&D personnel are working in the Netherlands. The number of R&D personnel at higher educational institutes rose slightly in those years, while research institutes’ numbers dropped slightly and companies fluctuated to a greater extent. On average, a little more than half of the R&D personnel work in companies. We first of all see a sharp decline in 2009 compared to 2008 and thereafter a considerable increase in 2010 compared to 2009 in the number of R&D personnel in companies.28

One reason is probably the introduction of what were called Knowledge Workers measures in the spring of 2009. This was a one-off initiative whereby roughly 2000 researchers (of whom 200 were young researchers) were seconded to Higher Education Institutes and TNO.

28

Figure 15: Share of R&D personnel in total labor force, reference countries, 1990, 1995, 2000, 2005, 2009, 2010, sorted by share in 2005

Source: OECD>Main Science & Technology Indicators: Total R&D personnel per thousand labor force.

0 5 10 15 20 25

FIN SWE DNK JPN FRA CAN NOR AUT DEU BEL NLD GBR EU15 KOR IRL CHN

Total R&D personnel per thousand labour force

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Figure 16: Development of R&D personnel in higher educational institutes, research institutes and businesses in the Netherlands, 2002-2010

Source: CBS-Statline.

Comment: The graph consists of data on the research and development (R&D) conducted in companies with 10 or more full time employees, and at Higher Education institutes with their own employees in the Netherlands. Outsourced R&D is not included here.

We see a similar picture in a corresponding indicator, namely the number of researchers in the work force. This indicator, which is based on education and role (not the employee’s actual activi-ties) shows that from an international perspective, the number of researchers in the Netherlands is low. The number increased from 5.3 per mil in 2009 to 5.9 per mil in 2010. This meant a low score for the Netherlands in 2009 and even last place in 2010 compared to those reference countries for which figures are available. Even if we take into account the denominator effect – the working population is growing relatively quickly – this observation is thought provoking. Can Dutch knowledge society survive with a relatively low number of researchers in the work force? Are there alongside officially indicated researchers, possibly other categories of knowledge wor-kers who are relatively more important for Dutch knowledge society?

Figure 17: Share of researchers in the labor force for all reference countries, 1990, 1995, 2000, 2005, 2009, 2010, sorted by share in 2005

Source: OECD > Main Science & Technology Indicators: Total researchers per thousand labor force.

Comments: The graph contains data on activities in research and development (R&D) of companies with 10 or more employees, organizations and higher education institutes, conducted by their own personnel in the Netherlands. Outsourced R&D is not included.

0 20 40 60 80 100 120 2002 2003 2004 2005 2006 2007 2008 2009 2010 x 1000 fte

Business Enterprise Institutes Higher Education

0 2 4 6 8 10 12 14 16 18

FIN SWE JPN DNK USA NOR GBR CAN KOR FRA AUT BEL OECD DEU EU15 IRL NLD CHN

Aantal per 1000 werkzame personen

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The traditional method of measuring knowledge intensity is based on the extent of technological advancement (high tech/medium tech/low tech). Knowledge-intensive employment is for exam-ple measured as the percentage of employment in medium high and high tech manufacturing. This method is biased towards the manufacturing industry, which is a definite disadvantage for the Netherlands. That is why this indicator has been replaced in the latest version of the European Innovation Scoreboard by the more generic indicator ‘percentage of employment in knowledge-intensive activities.’ Knowledge-intensive activities are defined as those industries in which at least a third of the employees have achieved an academic or higher education qua-lification (ISCED 5/6).29_{The average EU percentage is 13.5 per cent and the Netherlands lies} above that at 15.2 per cent. In the lead are Ireland and Switzerland at 19.9 per cent. The lowest growth, however, is seen in the Netherlands (-2.2 per cent compared to the EU’s +0.6 per cent). In addition, relatively few women work in the knowledge-intensive sectors of the Netherlands, Norway and Switzerland.

Figure 18: Share of the labor force in knowledge intensive activities for all reference countries, 2010 and annual growth over 2006-2010

Source: OECD > Main Science & Technology Indicators: Total R&D personnel per thousand labor force.

In recent years the number of personnel at Dutch universities has increased slightly,30_{just as} the research support personnel.31_{In the more detailed figures below, the division of research} support shows that the first tier funding in the period 2003-2010 rose by 6 per cent, the second tier funding rose by 10 per cent and the third tier funding by 28 per cent. Relatively speaking, the contribution from the first tier funding is dropping and the contribution from the third tier is rising. Obviously the developments can differ at individual universities, both in the amount of personnel as well as the funding sources for research support. Also worth mentioning – and no less spectacular – is the increasing number of academic staff among the universities’ total work

This could also be a case of definition. MBO4 is education at ISCED-5 level, but the Netherlands does not traditionally include these figures. In other countries (like Germany), where vocational education has a higher status, this type of education is probably counted.

http://www.sti2.nl/human-resources/hoger-onderwijs http://www.sti2.nl/human-resources/hoger-onderwijs/onderzoeksinzet 29 30 31 -5 0 5 10 15 20 25

CHE IRL SWE GBR DNK DEU NLD FIN BEL AUT NOR FRA ITA EU27 CZE

Employment in knowledge-intensive activities

as % of total employment

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Figure 19: Trends in total number of active R&D employees (fte) in most R&D intensive enterprises in the Netherlands, 2003-2011

Source: Technisch Weekblad, multiple years.

force. As Table 2 shows, this number appears to have increased slightly over the period 2005-2011 and most universities witnessed a ‘minor blip’ between 2010 and 2005-2011.

Table 2: Share of scientific personnel in the total staff of Dutch universities, by university, 2005-2011

Source: VSNU-WOPI.

Comments: Amount of institutes per function category – in fte, permanent + temporary contracts.

It is not so easy to determine the exact number of R&D employees working in companies. Not only does CBS just include companies with more than 10 employees, due to the less formalised and concentrated character of R&D or innovation especially in the service sector, we cannot gain precise insight in the number of people involved in services R&D and innovation. Traditionally the majority of R&D in Dutch companies is conducted by a limited number of enterprises, Philips being the front-runner. Figure 19 shows us that among the top five companies with R&D staff working in the Netherlands, Philips – mainly due to the sale of NXP – has become less domi-nant and in a relatively short time, ASML has become an extremely significant company with a great deal of R&D in the Netherlands.

2005 2006 2007 2008 2009 2010 2011 EUR 59.6% 60.7% 56.4% 56.8% 56.0% 58.6% 58.6% LEI 54.7% 54.9% 55.7% 55.7% 55.0% 54.9% 55.3% RU 50.7% 51.0% 51.0% 51.2% 51.3% 51.4% 52.7% RUG 51.9% 52.2% 52.0% 52.5% 52.7% 53.4% 55.7% TiU 54.8% 56.6% 57.4% 58.3% 57.9% 57.7% 58.8% TUD 56.6% 57.9% 58.3% 58.6% 58.5% 57.8% 57.9% TUE 61.9% 61.1% 61.4% 61.9% 62.5% 63.8% 64.5% UM 52.3% 53.5% 54.5% 55.1% 55.8% 56.8% 57.3% UT 59.2% 58.8% 59.1% 59.2% 59.5% 58.1% 59.6% UU 54.2% 54.6% 55.1% 55.5% 55.6% 56.3% 55.6% UvA 56.2% 56.2% 57.6% 57.5% 57.1% 57.8% 58.2% VU 54.3% 55.3% 55.2% 55.4% 55.5% 56.2% 57.4% WUR 52.9% 54.2% 55.1% 56.4% 57.6% 57.0% 59.1% 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 2003 2004 2005 2006 2007 2008 2009 2010 2011 fte Philips ASML DSM KPN NXP

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The Netherlands has women to thank for its increasing number of researchers. Compared to most reference countries, the number of female researchers in the Netherlands is relatively low (see Figure 18). That applies especially to companies and research institutes where there are many opportunities for growth (see Figure 20 below). Because the number of female researchers in absolute terms is much lower than in most reference countries (especially in businesses), the continually increasing number of women in research will scarcely affect the total number of researchers.

Figure 20: Share of female researchers in total of researchers, by type of affiliation, all reference countries, 2009

Source: OECD > Main Science & Technology Indicators. HO-institutes = Higher education sector: Female researchers as percentage of total researchers, Research Institutes = Government sector, Female researchers as percentage of total researchers and Businesses = Business Enterprise Sector: Women researchers as percentage of total researchers. Comment: Data before 2009 (Finland, Ireland, Japan, the Netherlands en Norway), 2008 (France, Korea en Switzerland) and 2007 (Belgium, Denmark, Germany, Austria en Sweden).

0 5 10 15 20 25 30 35 40 45 50

FIN SWE NOR GBR DNK BEL IRL AUT NLD DEU FRA CHE KOR JPN

Percentage

Business Enterprise Institutes Higher Education

However, at an international level, there is a limited number of female researchers in Institutes and Higher Education. The number of female researchers at Dutch institutes, having risen by nearly 36 per cent in 2008 to nearly 37 per cent in 2009, reached 9th place in the total of 13 reference countries. Looking more closely at the specific trends in the number of female uni-versity assistant professors, associate professors and professors at Dutch universities shown in Figure 21, we see that the numbers increased in the period 2005-2011. However the number of women at associate professor and professor level is still very limited. Thus the number of women employed by universities remains somewhat disproportionate for the main scientific sectors. In Science & Technology, the proportion of women is lagging far behind.32

For a more detailed breakdown, see http://www.sti2.nl/human-resources/hoger-onderwijs/vrouwen.

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5. Collaboration

The dominant trend in science, innovation and technology is the growing national and interna-tional collaboration. A KNAW (2011) report gives a wealth of reasons for this increase. These include the use of ICT which enables remote collaboration, the availability of cheap means of transport, and the scale of equipment and facilities required in scientific research. The report also mentions other reasons: ‘Collaboration enhances the quality of scientific research, improves the efficiency and effectiveness of that research, and is increasingly necessary, as the scale of both budgets and research challenges grow. However, the primary driver of most collaboration is the scientists themselves. In developing their research and finding answers, scientists are seeking to work with the best people, institutes and equipment which complement their rese-arch, wherever they may be. The connections of people, through formal and informal channels, Figure 21: Share of female researchers with fixed tenure, in total of tenured positions, the Netherlands, by category of position, 2005-2009

Source: VSNU-WOPI.

Comment: Based on the amount of fte, permanent + temporary contracts.

In summary, in comparison with the set of reference countries, the Netherlands scores average when it comes to the educational attainment of its working population. Regarding the pro-portion of R&D staff and researchers, the Netherlands is straggling and seems to be scarcely improving, unlike a large number of reference countries. The proportion of the labor force in knowledge-intensive activities is higher than in the other countries, whereas growth has shown a negative trend in the past four years compared to the positive trend in the EU. The situati-on in the universities is relatively stable and is even showing a slight increase in the number of academic personnel. There is more fluctuation with R&D personnel in the business sector, where in absolute numbers we notice the declining dominance of Philips and a few traditio-nally leading players such as AkzoNobel and Tata Steel (Corus), and the rapid rise of ASML, and also for example TomTom. Although the proportion of female researchers in Dutch com-panies, research institutes and universities is increasing, this is still low compared to the set of reference countries. 0% 5% 10% 15% 20% 25% 30% 35% 40% 2005 2006 2007 2008 2009 2010 2011 Professor Associate Professor Assistant Professor

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See http://nos.nl/artikel/411057-ook-samsung-investeert-in-asml.html.

See for example Alexiev (S.), M. Janssen, W. van der Aa and P. den Hertog (2012). United We Stand: Open dienstenin-novatie in de Noordvleugel. Amsterdam: AMSI. http://www.dialogicinsight.nl/projects/2009-036-uws/docs/uws_h1_de_ onderneming.pdf.

OECD refers to formal knowledge relationships as being only the tip of the iceberg due to the existence of numerous forms of informal – less visible – knowledge exchange. OECD distinguishes ten forms of interaction between knowledge institutes and companies, namely: (1) combined laboratories; (2) spin-offs from knowledge institutes; (3) licencing; (4) outsour-ces research contracts; (5) researchers’ mobility between businesses and knowledge institutes; (6) co-publications; (7) conferences, trade fairs, specialist media; (8) informal contacts within professional networks; (9) flow of graduates from knowledge institutes to businesses; and (10) incubators of science parks. Partly based on these forms, Bongers et al. (2003) studied the interaction between ten groups of knowledge flows and differentiated about 50 typical types of flows (see Bongers et al., 2003, p. 40).

33 34

35

diaspora communities, virtual global networks and professional communities of shared interest, are important drivers of international collaboration,’ (Ibid, p. 6).

For similar reasons, collaboration in the technology and innovation domain has become more and more the norm. The cost of developing technology and in the broader sense, innovation, is so high that collaboration is essential. Among the larger players in these sectors, we can speak of an international division of labor whereby global value chains exist with intensive collaboration between users and suppliers. A recent example is the joint contribution by Intel, TSMC and Samsung to the Dutch producer of chip machines ASML’s partner program, worth EUR 1.38 billion.33_{Besides, ASML’s three strategic partners have acquired respectively 15 per cent, 5 per} cent and 3 per cent of ASML shares. Generally speaking, there is a growing trend for more open innovation.34_{We see companies working with third parties in the successive phases of innovation} value chains. They are doing this in order to obtain faster access to externally available know-ledge and/or internally developed knowknow-ledge – which is still being insufficiently utilized – and which they can better market with the help of third parties.

Alongside collaboration within the individual science, technology and innovation sectors, well developed interaction between sectors – above all knowledge institutes (universities, colleges and public research organizations) on the one hand, and business enterprises/social organizati-ons on the other hand – is seen as the most important requisite to achieve an effective innova-tion system and a competitive knowledge economy. The lack of interacinnova-tion in Industry Science Relationships (OECD, 2002) has been cited for several decades as the innovation paradox or European paradox. Good performances in public R&D have not been happening sufficiently hand in hand with good performances in innovation.

It is important to bear in mind that there are numerous forms of collaboration – a better title being knowledge exchange relationships.35_{These can be further differentiated in the use of} formal or informal mechanisms for knowledge transfer, explicit or rather implicit knowledge flows, and the phases in the innovation cycle which best match the appropriate mechanism for knowledge transfer. The indicators for collaboration shown below cover the categories co-pu-blications (both within the public science sector and between public and private parties) and R&D collaboration between innovative firms and the public knowledge infrastructure. These merely provide a first and certainly incomprehensive impression of the collaboration in Dutch

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science and innovation systems.36_{Our earlier discussion in section 2 on private funding of} rese-arch showed that Dutch business enterprises compared to other countries outsource a relatively large amount of their research to the public sector (especially to universities).37

A proxy for international collaboration in science is the number of international co-publications in a country’s entire publication output. Figure 22 shows that the Netherlands maintains a sta-ble position in the middle of the group of 17 reference countries. More than half of the Dutch publication output already consists of international co-publications.38_{For small countries the} concept ‘abroad’ is much bigger and therefore it is not surprising that especially smaller coun-tries have relatively more, and larger councoun-tries fewer international co-publications. From 2007 to 2010, more than 51 per cent of the science publications in the Netherlands were internati-onal co-publications. We can also see from that without exception, there has been an increase in the number of international co-publications in those years. The STI2_{website features a table} with citation-impact scores for the international co-publications over the years 2006-2009 and 2007-2010.39_{We notice that overall these scores are high (above the global average) and} rising. The Netherlands now comes in second place after Switzerland for the period 2007-2010. This demonstrates that many of the publications are top articles and increasingly international co-publications.

Figure 22: Percentage of international co-publications, all reference countries, 2006-2009 and 2007-2010

Source: OECD; Thomson Reuters/CWTS Web of Science.

Although we cannot cover all the forms of knowledge exchange within STI2, there is the potential in 2013 and 2014 to add structural, and certainly more incidental indicators for a few other knowledge exchange mechanisms, and thus obtain a more comprehensive picture of the collaboration in science, technology and innovation. By this we mean indicators referring to researchers’ mobility (one of the most powerful forms of knowledge transfer), contract research, international research collaboration in all three sectors and intellectual property (patent citations, co-patenting).

See http://www.sti2.nl/financiering/nederlands-innovatiesysteem-2/aandeel-bedrijven. http://www.sti2.nl/samenwerking/co-publicaties.

Publications which on the public side concern at least one party, a university or academic hospital.

36

37 38 39

The Netherlands scores average in a co-publication subcategory, namely public-private co-pu-blications which form part of a country’s total publication output. On average between 1 en 1.5 per cent of the Netherlands’ total output consists of public-private co-publications. As Figure 23

0 10 20 30 40 50 60 70

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Percentage

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shows, the Netherlands falls under the OECD average and this position appears to have dropped slightly since 2008. Based on a division per country40_{we see that for this indicator a} number of countries scores significantly better (Japan, Korea, Finland, Denmark, US) or slightly better (Austria, Sweden) than the Netherlands. A major disclaimer is that the public research organizations such as TNO and other large technological institutes in the Netherlands as well as Fraunhofer and the Max Planck institutes in Germany are not included in these figures.41 Because public knowledge institutes are relatively well developed in the Netherlands – and collaborate intensively with business enterprises – this represents a bias in the case of the Netherlands (and even more so for Germany).

http://www.sti2.nl/samenwerking/co-publicaties.

It could be the case that there is a large scientific output (and therefore a denominator effect) or a relatively strong shift in the Netherlands of a part of the basic strategic research from companies to universities and research organizations. Also the pressure on Dutch universities to publish in A-list journals can possibly be detrimental for publishing in more appli-cable scientific journals which are better suited to public-private co-publications. However see Brennenraedts & te Velde (2007) for a discenting voice on the popular notion that striving for scientific excellence is detrimental for utilization. In any case it shows that scientists are still predominantly publishing together with other scientists in universities and colleges.

40 41

Figure 23: Trends in public-private co-publications as a percentage of total publication-output, the Netherlands versus average, maximum and minimum of the OECD, 2005-2011

Source: Elsevier BV (Scopus). Comments:

- Percentage = publication count per country where at least one of the affiliations is a company and at least one affiliation is univ/meds, divided by the total publication count of that country.

- Countries included: Ireland, Canada, Australia, Belgium, China, Norway, Czech Republic, France, Netherlands, Sweden, Germany, Austria, US, Denmark, Finland, Korea en Japan.

– N.B.: public research organizations are not counted as ‘public’, but academic hospitals are. In other words we are simply talking about co-publications between universities (including academic hospitals), colleges and companies. Publications refer to: articles, reviews en conference proceedings.

0% 1% 2% 3% 4% 5% 6% 2005 2006 2007 2008 2009 2010 2011 Netherlands Maximum Minimum Average

Alongside collaboration in science, within the STI system there is also collaboration in innova-tion. The proportion of (technological) innovators in the Netherlands who has experienced some form of collaboration in the period 2008-2010 is 33 per cent (CBS, 2012). Figure 24 provides an overview of the percentage of (technological) innovators that collaborate with public research

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organizations and higher education institutes. It appears in Figure 24 that the Netherlands sco-res less than the reference country average in both types of collaboration. Based on the latest CBS innovation data for 2008-2010, the Netherlands scores 24.9 per cent (was 34.7) and 19.6 per cent (was 24.7) for the technologically innovative companies who collaborate respectively with higher education and research institutes. Compared to the period 2006-2008, the score dropped considerably from 2008 to 2010 (see CBS, 2012). There seems to be a considerable denominator effect. Besides an autonomous growth in the number of innovators, it would appear that since the switch from paper to internet questionnaires, more companies consider themselves (technologically) innovative (CBS, 2012, p. 177). CBS speaks of an improvement in observation and a highly probable previous underestimation of the number of innovative companies in the Netherlands.42_{Regarding the number of technologically innovative companies that collaborate} with higher education institutes, countries like Finland and Germany clearly score higher. For collaboration with research organizations, Finland (once again), Norway and Spain score much higher than the Netherlands.

Figure 24: Percentage of collaborating innovative companies that collaborate with higher education institutes and public research institutes, all European reference countries, 2008-2010

Source: Eurostat, CIS2010. Comments:

- Eurostat>CIS2010>Types of co-operation partner for product and process innovation (Type_inn = enterprises with tech innovation). Higher Education = ‘Universities or other higher education institutes’ divided by ‘all types of cooperation’, Institutes = ‘government or public research institutes’ divided by ‘all types of cooperation’.

We can surmise that the current set of indicators still does not provide an accurate picture of the amount of collaboration in science, technology and innovation. These indicators show that the Netherlands has a stable ranking as average among the reference countries. The relatively poorer collaboration between (technologically) innovative firms and colleges or research organizations seems to point to an underestimation of the number of these types of firms in previous years.

Incidentally, the number of (technologically) innovative companies (with 10 or more employers) is not exceptional inter-nationally speaking. What is more, in most European countries (except Eastern Europe) the percentage of innovative companies was higher than 50 per cent (in Germany even 80 per cent), compared to 45 per cent in the Netherlands. Source: Eurostat|CIS 2008 (figures for 2008).

42 0% 10% 20% 30% 40% 50% 60% 70% 80%

FIN DEU ITA CZE AUT NOR BEL FRA SWE ESP IRL DNK NLD GBR Higher education Institutes

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6. Output

In the previous sections we discussed how science, technology and innovation are funded, what investments are made, and the consequences for human resources and collaboration. Ultimately this has to boil down to codified knowledge (for example publications and patents) and embodied knowledge (people). The quality of the knowledge that is created will give the actors a particular international positioning.

Graduation and promotion

Another form of output is the number of tertiary level graduates and the number of promotions. The number of students graduating from Dutch universities has been rising continually since the late 1990s. Since then, we see that ten thousand more graduated in the academic year 09/10. In the early 1990s there was a similar peak. In ten years’ time, every field of study had expanded by 25 to 100 per cent. In particular, the ‘social sciences & business studies’ fields, with six thousand additional graduates, have contributed to this growth. All fields have grown by nearly one thousand graduates.

The number of promotions shows a similar trend, with a considerable increase in the past two years. Here too all the fields have contributed to the growth. But it is mainly in the technical and health care fields that we see a sharp rise (99/00 compared to 10/11): ‘technical studies, engineering’ of 82 per cent (323 additional promotions) and ‘health care, wellbeing’ 74 per cent (506 additional promotions).

Figure 25: Trends in total of master (+drs) and PhD graduates from Dutch universities, 1990-2011

Source: CBS-Statline.

If we look closer at the number of graduates in Natural Sciences and Engineering, there has been a clear growth in recent years. Of the 1000 Dutch people aged 20-29, 9.2 of them graduated in these fields in 2010, one and a half times more than in 2000. However, the Netherlands is still lagging far behind the set of reference countries. The Netherlands has relatively the fewest graduates in Natural Sciences and Engineering, closely followed by Norway. The reference

0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 0 5,000 10,000 15,000 20,000 25,000 30,000 35,000 90/'91 91/'92 92/'93 93/'94 94/'95 95/'96 96/'97 97/'98 98/'99 99/'00 00/'01 01/'02 02/'03 03/'04 04/'05 05/'06 06/'07 07/'08 08/'09 09/'10 10/11 PhD Graduates

Science, Technology & Innovation Indicators