The Netherlands must invest in tech

The two years of the Covid pandemic showed the world that technology is essential to keep the world going round. And while tech start-ups and scale-ups enjoyed rapid growth and healthy investments during the two years of the pandemic, last year’s investment wasn’t that optimistic, especially for companies in the Netherlands.

Let’s begin with the good news: according to the Global Start-up Ecosystem Report 2020, the Netherlands has risen from nineteenth to twelfth place in the ranking of global startup hubs. Measured by the total value of the ecosystem, the Netherlands is now in third place in Europe after Great Britain and Germany. This upward movement on the list is mainly due to 17 ‘unicorns’ including Mollie, Bunq and Adyen, produced by Dutch ecosystem. There are now 10,000 active tech start-ups in the Netherlands, responsible for about 100,000 jobs.

However, the invasion of Ukraine resulting in an energy crisis and uncertainty in the financial markets due the interest rate hikes wasn’t especially encouraging to investors and Dutch start-ups saw sharp decline in investments. According to Statistics Netherlands, investments in Dutch tech companies fell by more than half to €2.7 billion on a yearly basis.

Though the entire year saw many ups and downs, if we look at the whole year, the investment decline in Europe was limited to 17% as opposed to 37% in the United States. This may sound like good news; however, the Netherlands saw the largest investment decline in Europe in the third quarter with 54%.

While it might be argued that once the metaphorical geopolitical waters calm down, investments might return to the Dutch tech start-ups, that may be too late for many companies. Wait and hope for the best doesn’t seem like a wise plan either.

Instead, HRH Prince Constantijn, Special Envoy for, is suggesting the government to pay more attention to the innovative tech companies and suggesting that the government could stimulate the flow of money for these types of companies with targeted tax benefits for investments in start-ups. “There is already more and more interest from successful entrepreneurs to invest part of their assets in new companies. If we make that more tax efficient, more money will go there,” says the Prince. He also suggested that the incredibly large pension fund of the Netherlands can be invested in invested in start-ups via a venture investment fund. “If only half a percent of that would go to start-ups, we would instantly have the ecosystem with the most funding in Europe.” A little support to companies that emerge from universities could also result in their swift scale-up.

This much is clear: Dutch tech start-ups have huge potential. If the recent developments in the tech world, including those in AI, are any indication, our reliance on tech is only going to keep increasing – the industry, especially the start-ups and scale-ups, seems like a good horse to bet on.

Written by Priyanka Sharma