08-03-2005; 05004.ppt 1 ENTERPRISE AND INNOVATION Entrepreneurial and industrial policies in the Netherlands Luuk Klomp Dutch Ministry of Economic Affairs

08-03-2005; 05004.ppt 1

ENTERPRISE AND INNOVATION

Entrepreneurial and industrial Entrepreneurial and industrial policies in the Netherlandspolicies in the Netherlands

Luuk KlompLuuk KlompDutch Ministry of Economic AffairsDutch Ministry of Economic Affairs

08-03-2005; 05004.ppt 2


ContentsContents

• Industry policy in the NetherlandsIndustry policy in the Netherlands• Renewed instruments for entrepreneursRenewed instruments for entrepreneurs• Budgetary system in the NetherlandsBudgetary system in the Netherlands• ConclusionsConclusions

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Industry policy (1): revivalIndustry policy (1): revival

• Industry policy in the Industry policy in the ’70s and ’80s’70s and ’80s: : – Protecting industries & picking winners Protecting industries & picking winners

• Industry policy in the Industry policy in the ’90:’90:– Governments almost completely stepped backGovernments almost completely stepped back

• Industry policy Industry policy today:today:– Key areas, industry contacts within Ministry, Key areas, industry contacts within Ministry,

more more thematic approach, regional networking, etcthematic approach, regional networking, etc..

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Industry policy (2): strategyIndustry policy (2): strategy

• Improving the business climate and Improving the business climate and framework conditions framework conditions

• Boost innovationBoost innovation• Integrated and tailor made approachIntegrated and tailor made approach


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Industry policy (3): barriers to Industry policy (3): barriers to development & policy measuresdevelopment & policy measures

1.1. Increasing regulatory pressureIncreasing regulatory pressure– Lessen the administrative burden with 25% by 2007Lessen the administrative burden with 25% by 2007– Business impact assessmentsBusiness impact assessments

2.2. Labour costs and inflexibility labour marketLabour costs and inflexibility labour market– Making the labour market more flexible (e.g. make it Making the labour market more flexible (e.g. make it

possible to work longer) possible to work longer)

3.3. Fiscal climateFiscal climate– SStep-by-step reduction of the corporation tax rate tep-by-step reduction of the corporation tax rate

from 34,5 % in 2004 to 30% in 2007from 34,5 % in 2004 to 30% in 2007


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Industry policy (4): barriers to Industry policy (4): barriers to development & policy measuresdevelopment & policy measures

4.4. InnovationInnovation– Innovation vouchersInnovation vouchers– Fiscal measure for process innovationFiscal measure for process innovation

5.5. Specific bottlenecks for sectors and target Specific bottlenecks for sectors and target groupsgroups

– Continuous dialogue with industry through Continuous dialogue with industry through established contactpointsestablished contactpoints


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ContentsContents

• Industry policy in the NetherlandsIndustry policy in the Netherlands• Renewed instruments for entrepreneursRenewed instruments for entrepreneurs• Budgetary system in the NetherlandsBudgetary system in the Netherlands• ConclusionsConclusions

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Renewed instruments (1): visionRenewed instruments (1): vision

• One size fits all → more flexibility and custom-One size fits all → more flexibility and custom-made made

• Less, more effective and simpler instrumentsLess, more effective and simpler instruments• Less and smarter counters Less and smarter counters • Substantial reduction administrative burdensSubstantial reduction administrative burdens• Focus and massFocus and mass

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Programme Programme PackagePackage

General conditionsGeneral conditions

Renewed instruments (2): policy mixRenewed instruments (2): policy mix

Basic PackageBasic Package

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((high-tech)high-tech)starterstarter

capital intensivecapital intensiveentrepreneurentrepreneur

fast fast growergrower

starter starter on foreign on foreign

marketmarket

EntrepreneursEntrepreneursplazaplaza

Information and Information and advice advice

GuidanceGuidance

Brokerage Brokerage

Workshops,Workshops,etc.etc.

innovatinginnovatingentrepreneurentrepreneur

Information & adviceInformation & adviceCapitalCapital

Renewed instruments (3): basic packageRenewed instruments (3): basic package

Bank or Bank or participationparticipation

companycompany

CreditCredit

Guarantee Guarantee

ParticipationParticipation

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Renewed instruments (4): programme Renewed instruments (4): programme package package fostering excellence fostering excellence

• Focus on high-potential areasFocus on high-potential areas• Strong emphasis on public-private cooperationStrong emphasis on public-private cooperation• Custom-made and demand driven programs Custom-made and demand driven programs • Open to challengersOpen to challengers• Mix of grants, credits and guaranteesMix of grants, credits and guarantees• Governance: large role for agency in developing Governance: large role for agency in developing

and implementing programmes in cooperation and implementing programmes in cooperation with public and private partieswith public and private parties

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ContentsContents

• Industry policy in the NetherlandsIndustry policy in the Netherlands• Renewed instruments for Renewed instruments for

entrepreneursentrepreneurs• Budgetary system in the NetherlandsBudgetary system in the Netherlands• ConclusionsConclusions

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Budgetary system in the Netherlands (1)

• VBTB: From Policy Budget to Policy Justification

• VBTB concerns a budgetary process which aims to bring effective and efficient (measurable) policy into place

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Budgetary system in the Netherlands (2):Budgetary system in the Netherlands (2):VBTB indicators on entrepreneurshipVBTB indicators on entrepreneurship

IndicatorIndicator Value NL Value NL (2003)(2003)

Target figureTarget figure

Number of Number of entrepreneurs as a % entrepreneurs as a % of tot. pop.of tot. pop.

10,9%10,9% At least 10%, 0.5 point At least 10%, 0.5 point above EU15 (11,3%)above EU15 (11,3%)

Start-ups as a % of Start-ups as a % of working pop.working pop.

0,55%0,55% 10% higher than growth 10% higher than growth of working pop. (1,12%)of working pop. (1,12%)

Reduction of Reduction of administrative burdenadministrative burden

€ € 66 mil.66 mil. € € 56 mil.56 mil.

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Contents

• Industry policy in the NetherlandsIndustry policy in the Netherlands• Renewed instruments for Renewed instruments for

entrepreneursentrepreneurs• Budgetary system in the NetherlandsBudgetary system in the Netherlands• ConclusionsConclusions

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Conclusions (1)• Renewed instruments in areas of Renewed instruments in areas of

entrepreneurship and industry policy put entrepreneurship and industry policy put firms at the forefrontfirms at the forefront

• There is an awareness of the risk of There is an awareness of the risk of government failure, i.e. avoid picking winners government failure, i.e. avoid picking winners or unconditionally support declining or unconditionally support declining industriesindustries

• Much attention is paid to easy access to Much attention is paid to easy access to information and financial instruments and to information and financial instruments and to instruments aimed at fostering excellenceinstruments aimed at fostering excellence

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Conclusions (2)• Permanent need for indicators Permanent need for indicators ‘prove’ the efficiency ‘prove’ the efficiency

and effectiveness of instrumentsand effectiveness of instruments• Challenge is to find indicators that are:Challenge is to find indicators that are:

– Linked to specific instrumentsLinked to specific instruments– Give an indication of the outcome / impact of policiesGive an indication of the outcome / impact of policies– Are available for a set of EU or OECD countriesAre available for a set of EU or OECD countries– Availability over time, preferably within a time-lag of one Availability over time, preferably within a time-lag of one

year year • Official statistics have to be combined with indicators Official statistics have to be combined with indicators

from other sources. We are interested in best practices from other sources. We are interested in best practices from other countries.from other countries.

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08-03-2005; 05004.ppt 1 ENTERPRISE AND INNOVATION Entrepreneurial and industrial policies in the Netherlands Luuk Klomp Dutch Ministry of Economic Affairs