Will there really be €4.9 billion for innovation?

From a tangle of half-commitments and past achievements, a substantial amount of money has emerged: the government and the private sector have pledged to spend €4.9 billion on knowledge and innovation. Where did this come from? Did we nod off and miss it on Budget Day?

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But last week, there it was in a spectacular press release from the Ministry of Economic Affairs: a doubling of innovation funding to €4.9 billion.

Except it’s not quite as spectacular as it seems. The communications department has gone out of its way to paint a rosy picture. True, changes are on the way but don’t imagine that a bunch of signatures have produced an additional €2.5 billion like a rabbit out of a hat.

Who’s signed what, and why?

All this commotion concerns the Knowledge and Innovation Covenant 2020-2023. This agreement bears the signatures of no less than ten government ministers and two state secretaries, to say nothing of the representatives of universities, universities of applied sciences, the Royal Dutch Academy of Arts and Sciences, and the Dutch Research Council. And it doesn’t stop there: leading lights from a range of top sectors - areas in which businesses and knowledge institutions have joined forces - have also signed on the dotted line, and a handful of other institutions besides.

Is the money really there?

It depends on how you look at it. This new covenant is an exercise in hedging your bets. The main thrust of the document is ‘commitment’, an area where no one can really go wrong. It is “important to note” that the figures mentioned are not set in stone.

In short, it’s a spending forecast, not an injection of hard cash. Industry’s contribution is an estimate, as is the sum pledged by the provincial authorities. Not only that, but expected revenues from European grant programmes have already been included before they have even been secured, an amount of up to €400 million.

And the money from the ministries?

That money is not new either, but consists of amounts which ‘derive from the departmental budgets.’ In other words, they were already covered by the Budget Day announcements.

So what exactly is new?

What’s new is the fact that an increasing number of authorities and levels of government are collaborating and, as it were, lumping together their innovation budgets. Since they will all be working on knowledge and innovation anyway - if all goes well, this new approach will bring the various initiatives more into line.

How is that going to work?

Stated simply, the government’s idea is this: researchers have knowledge, companies know how to trade, put them together and you get tradable knowledge. This is a gross simplification, given that companies also carry out their own research, but still: for many years, the government has wanted Dutch scientific expertise to generate more in the way of economic return.

To avoid the risk of added funding becoming fractured and fragmented, the government’s primary aim is to encourage promising cooperation. The approach and the jargon have changed over the years. At times this promise was enshrined in ‘key areas’ or ‘top sectors’, at others in a National Science Agenda. And often such initiatives run in parallel.

What’s the new buzzword?

The term of the moment is ‘mission-driven’ knowledge and innovation policy on four themes: 1) energy transition and sustainability, 2) agriculture, 3) water and food, and 4) health, care and safety. There are also a number of ‘key technologies’, such as artificial intelligence and quantum computers.

The idea behind a ‘mission’ is that you first determine the nature of the challenge and then decide how you are going to tackle it and who you need to do it. Suppose you want to promote sustainability: in that case you’ll need new technology, but also public support and, for example, fiscal measures. The required knowledge runs right through all ‘top sectors’. The idea is that a mission will force experts to cooperate more effectively.

Who pays the most?

Around €2.1 billion will come from the private sector and €2.8 billion from government. Which is twice the amount agreed the last time such a covenant (only then it was called a ‘contract’) saw the light of day. Twice as much, but not because there is suddenly much more money available. There are only more signatures on the document, which means that more money counts. Last time around, the Ministry of Economic Affairs and the Ministry of Education, Culture and Science were the only two government signatories.

And now more items are also included, such as private co-financing for all kinds of climate regulations, to the tune of €453 million. This creative accounting does indeed seem to double the available budget. But most of that doubling is a purely administrative affair.

So is it all just nonsense?

No, the money is there and it will be spent, even though it has not yet been fixed down to the last euro. These ever-shifting policies and brand-new covenants ensure that the participants cannot rest on their laurels and have to keep explaining to each other what kind of action they are taking.

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