Thrust on Innovation
India and the Netherlands are partnering to use innovation to foster economic growth. The partnerships can also address societal issues feels Renee Bergkamp, Director General for Enterprise and Innovation in the Ministry of Economic Affairs of the Government of Netherlands. Indian policy makers can also take a page out of the Dutch government’s efforts to fuel innovation about SMEs, knowledge institutions and larger companies alike.
 Innovation and entrepreneurship seem strongly linked in the Dutch context. What is the background and philosophy behind this?
Within the Ministry of Economic Affairs, the Directorate-General for Enterprise and Innovation works to ensure a favourable climate for businesses to establish themselves and operate in, which provides room for successful and innovative entrepreneurship.
In the past, the commercialisation of technology was sometimes less prevalent or even forgotten. However, we do not want to end up with new technological inventions without bringing any new products to the market.
So though in the economic policy, entrepreneurship policy and innovation policy are two distinct lines, over the course of time they have become more and more interrelated. Research-based evidence shows that there is an important link between innovation and entrepreneurship, which, if stimulated via valorisation, can lead to an increase in our level of productivity and higher economic growth. For example, new technology-based firms (techno-starters), fast-growing enterprises and spin-offs from knowledge institutions are not only entrepreneurs, they are also innovative. This is true for both new companies and existing ones.
In your opinion, what is the economic opportunity that India offers to the Netherlands at this time?
India is a priority country for the Dutch Government. The Dutch Trade Board (which is a high-level co-operation between the Government and the corporate sector in the field of international business) has chosen India as one of its top three focus countries.
Our bilateral relations have been long and intense, especially the commercial relations between Indian and Dutch entrepreneurs. Although relatively modest at this moment, the bilateral trade increased substantially in the last decade to (an estimated) Euro 4.1 billion in 2009 (2008: EUR 3.9 billion).
Indian foreign direct investments in The Netherlands are also on the increase. The Netherlands is one of the largest recipients of Indian FDI. Indian companies value our country as an excellent investment location and also for their European expansion plans. More than 100 Indian companies, small and large, are established in our country, including Tata Consultancy Services, Infosys, Wipro, Suzlon Wind Energy and Minda Huf.
I do believe that innovation, trade and business relations increasingly go hand in hand. We see that companies that initially come here for trade purposes have now become very promising R&D partners as well!
Enormous opportunities lie ahead of us in areas like life sciences, water and delta technology and renewable energy. Obviously a small country like the Netherlands does not operate alone in this globalising world. We realize the most important innovations with partners all over the world.
In recent years, developments in India have been so impressive that the country now has the world at its feet. Not only big companies like Shell and Philips, but also an increasing number of SMEs, universities like the Delft University of Technology and Wageningen University have acknowledged the importance of India and are keen to have intensive collaborations in this country.
The Indian Government has introduced policies to encourage entrepreneurship. Yet, entrepreneurs face multiple challenges in India. How is entrepreneurship nurtured and sustained in the Netherlands?
Dutch policy for entrepreneurship focuses on making it easier for companies to realise their business opportunities. This is mainly done via a framework based on the main drivers of entrepreneurship, such as entrepreneurial skills, access to finance and human talent, innovation, regulation, market conditions, etc. These drivers are referred to as framework conditions. The Dutch government tries to provide the right framework conditions for entrepreneurs by reducing market and government failures on various drivers.
Another important aspect of entrepreneurship policy in the Netherlands is to try and foster an entrepreneurial culture. This is a major challenge, since until recently Dutch culture had been more or less risk averse and the Dutch were less keen to start a business. This is changing now, but we need to keep facilitating and catalyzing this change.
Last but not least, we face the challenge of stimulating excellence. We need more companies that are excellent and really innovative. Last year, we initiated our Growth Accelerator. This program assists 100 companies in their growth path to a turnover of 20 million a year.
SMEs contribute over 17 percent of India’s GDP at this time and this expected to go up to 22 percent in 2012? How important are SMEs in the Dutch economic structure?
In the Netherlands SMEs (defined as firms with less than 250 employees) have 57 percent share of the GDP.
Despite special provisions for SMEs, small businesses struggle in India, especially with access to finance, market access and legal protection from non-paying customers. What is the support environment for entrepreneurs in the Netherlands?
The Dutch government has implemented a special instrument to facilitate the provision of bank loans to SMEs: bank loans up to €3 million per enterprise are guaranteed for by the State (approx. 50 percent guarantee). Due to the financial crisis, temporary measures have been taken with respect to the abovementioned guarantee scheme, mainly focusing on increased guarantees on small bank loans up to €250,000.
How do you stimulate innovation in the SME sector?
On the one hand, we stimulate entrepreneurs to innovate their own operational process. On the other hand, we stimulate companies to cooperate with knowledge institutions and other companies to make better use of the available knowledge and research. We support companies inter alia with a subsidy and credit scheme, fiscal facilities and several information services. With the so-called innovation vouchers, SMEs can approach a knowledge institution with a research question and we engage in innovation performance contracts with SMEs when they cluster together with other SMEs in the same sector.
Financial bottlenecks are solved through our credit scheme, which can be used for research and development projects that attract insufficient funds in the risk capital market. In addition, my ministry provides first line information to SMEs through the organisation Syntens, which is linked to and funded by economic affairs, with the aim to establish better links between SMEs and available knowledge.
Innovation has always been cutting edge in the Netherlands and need-based in India. How best can the two collaborate?
My recent visits to India have convinced me that India and the Netherlands share comparable societal and environmental challenges to which together we can find and integrate solutions not only for economic benefits, but for societal benefits as well.
This is the basis for our innovation cooperation with the Department of Science and Technology (DST) in India, with whom we have signed a Programme of Cooperation to bring together Dutch and Indian knowledge to solve national (and world wide) social challenges together in both public-public and public-private modes. Mr T Ramasami, Secretary DST and I have signed a Programme of Cooperation (POC) in February 2010, the first bilateral agreement for India that aims at public-private cooperation. This follows after the signing of Memorandum of Understanding on S&T in 2008 in the Netherlands on a ministerial level.
In the framework of the Programme of Cooperation, calls for proposals are open for Indian and Dutch knowledge institutions and companies (both SMEs and large companies in the areas of life sciences (Euro 2 million) and new medical devices for health care (Euro 3 million). We aim to have calls next year in new areas like water. Two successful back to back workshops were organised in January 2010 on life sciences and medical devices, with Indian and Dutch researchers to begin to identifying research proposals.
What are the advantages of setting up shop in the Netherlands for Indian entrepreneurs?
The Netherlands offers excellent linkages to all of Europe through an excellent system of roads, rail and air, cutting-edge logistics expertise, as well as through a superior telecommunications and Internet infrastructure. For entrepreneurs looking at distributing goods and services across Europe, there can be no better location. The Netherlands has an internationally oriented tax regime that helps businesses avoid double taxation through a wide network of tax and investment treaties.
Moreover, a special Knowledge Migrant visa scheme permits a work plus residence visa for workers of foreign companies with operations in the Netherlands. This has made it considerably easier for foreign businesses to set up office in the Netherlands without worrying about complex visa procedures for their employees.
In fact, Indian nationals working in the Netherlands enjoy a superior quality of life, favourable tax structures and a multicultural and international work environment.
To top it all, nearly everyone in the Netherlands speaks English, so language is no barrier to foreign entrepreneurs. Indian companies are welcome come and set up their businesses in the Netherlands with the assistance of the Netherlands Foreign Investment Agency.
What were your impressions of your visit to India, both on a professional level and a personal one? Are you looking at specific initiatives in India at this time?
My visit in February 2010 focussed on strengthening our bilateral technologic and scientific cooperation even further. This visit followed after a high level expert mission to India under my supervision in April 2009 and an Indian ministerial visit to the Netherlands in 2008.
My visit aimed at learning from each other. Solutions in the Netherlands or in India are often not one-on-one applicable in the other country. That is another reason for bilateral cooperation. I believe it is important to stay in close touch with Indian authorities such as DST and Indian companies and knowledge institutes frequently, either here or in India. That is for instance why our Minister for Foreign Trade visits India every year.
During my visit last February I attended the Aquatech, a major conference on water technology. A large number of Dutch companies (mainly SMEs) attended the Aquatech India with big ambitions of cooperating with Indian partners. I was happy to link the ambitions of the Dutch and Indian organisations through the Programme of Cooperation (with DST). During our meeting with the Indian authorities we agreed that an expert workshop on water will be organised in the Netherlands, most likely in the second half of 2010. The next Aquatech will be organised in the Netherlands in 2011.
Source: Connect |
