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

2. 08-03-2005; 05004.ppt 2 ENTERPRISE AND INNOVATION Contents Industry policy in the Netherlands Renewed instruments for entrepreneurs Budgetary system in the Netherlands Conclusions

3. 08-03-2005; 05004.ppt 3 ENTERPRISE AND INNOVATION Industry policy (1): revival Industry policy in the ’70s and ’80s :Industry policy in the ’70s and ’80s : – Protecting industries & picking winners Industry policy in the ’90:Industry policy in the ’90: –Governments almost completely stepped back Industry policy today:Industry policy today: –Key areas, industry contacts within Ministry, more thematic approach, regional networking, etc.

4. 08-03-2005; 05004.ppt 4 Industry policy (2): strategy Improving the business climate and framework conditionsImproving the business climate and framework conditions Boost innovationBoost innovation Integrated and tailor made approachIntegrated and tailor made approach ENTERPRISE AND INNOVATION

5. 08-03-2005; 05004.ppt 5 Industry policy (3): barriers to development & policy measures 1.Increasing regulatory pressure –Lessen the administrative burden with 25% by 2007 –Business impact assessments 2.Labour costs and inflexibility labour market –Making the labour market more flexible (e.g. make it possible to work longer) 3.Fiscal climate –Step-by-step reduction of the corporation tax rate from 34,5 % in 2004 to 30% in 2007 ENTERPRISE AND INNOVATION

6. 08-03-2005; 05004.ppt 6 Industry policy (4): barriers to development & policy measures 4.Innovation –Innovation vouchers –Fiscal measure for process innovation 5.Specific bottlenecks for sectors and target groups –Continuous dialogue with industry through established contactpoints ENTERPRISE AND INNOVATION

7. 08-03-2005; 05004.ppt 7 ENTERPRISE AND INNOVATION Contents Industry policy in the Netherlands Renewed instruments for entrepreneurs Budgetary system in the Netherlands Conclusions

8. 08-03-2005; 05004.ppt 8 ENTERPRISE AND INNOVATION Renewed instruments (1): vision One size fits all → more flexibility and custom- madeOne size fits all → more flexibility and custom- made Less, more effective and simpler instrumentsLess, more effective and simpler instruments Less and smarter countersLess and smarter counters Substantial reduction administrative burdensSubstantial reduction administrative burdens Focus and massFocus and mass

9. 08-03-2005; 05004.ppt 9 ENTERPRISE AND INNOVATION Programme Package General conditions Renewed instruments (2): policy mix Basic Package

10. 08-03-2005; 05004.ppt 10 (high-tech) starter capital intensive entrepreneur fastgrower starter on foreign market Entrepreneurs plaza Information and advice Guidance Brokerage Workshops, etc. innovatingentrepreneur Information & advice Capital Renewed instruments (3): basic package Bank or participation company CreditGuaranteeParticipation

11. 08-03-2005; 05004.ppt 11 ENTERPRISE AND INNOVATION Renewed instruments (4): programme package  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 programsCustom-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 and implementing programmes in cooperation with public and private partiesGovernance: large role for agency in developing and implementing programmes in cooperation with public and private parties

12. 08-03-2005; 05004.ppt 12 ENTERPRISE AND INNOVATION Contents Industry policy in the Netherlands Renewed instruments for entrepreneurs Budgetary system in the Netherlands Conclusions

13. 08-03-2005; 05004.ppt 13 ENTERPRISE AND INNOVATION 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

14. 08-03-2005; 05004.ppt 14 ENTERPRISE AND INNOVATION Budgetary system in the Netherlands (2): VBTB indicators on entrepreneurship Indicator Value NL (2003) Target figure Number of entrepreneurs as a % of tot. pop. 10,9% At least 10%, 0.5 point above EU15 (11,3%) Start-ups as a % of working pop. 0,55% 10% higher than growth of working pop. (1,12%) Reduction of administrative burden € 66 mil. € 56 mil.

15. 08-03-2005; 05004.ppt 15 ENTERPRISE AND INNOVATION Contents Industry policy in the Netherlands Renewed instruments for entrepreneurs Budgetary system in the Netherlands Conclusions

16. 08-03-2005; 05004.ppt 16 ENTERPRISE AND INNOVATION Conclusions (1) Renewed instruments in areas of entrepreneurship and industry policy put firms at the forefrontRenewed instruments in areas of entrepreneurship and industry policy put firms at the forefront There is an awareness of the risk of government failure, i.e. avoid picking winners or unconditionally support declining industriesThere is an awareness of the risk of government failure, i.e. avoid picking winners or unconditionally support declining industries Much attention is paid to easy access to information and financial instruments and to instruments aimed at fostering excellenceMuch attention is paid to easy access to information and financial instruments and to instruments aimed at fostering excellence

17. 08-03-2005; 05004.ppt 17 ENTERPRISE AND INNOVATION Conclusions (2) Permanent need for indicators  ‘prove’ the efficiency and effectiveness of instrumentsPermanent need for indicators  ‘prove’ the efficiency and effectiveness of instruments Challenge is to find indicators that are:Challenge is to find indicators that are: –Linked to specific instruments –Give an indication of the outcome / impact of policies –Are available for a set of EU or OECD countries –Availability over time, preferably within a time-lag of one year Official statistics have to be combined with indicators from other sources. We are interested in best practices from other countries.Official statistics have to be combined with indicators from other sources. We are interested in best practices from other countries.