future view

CPB model restricts innovation

19 November 2018 • 7 min reading time

TNO maintains regular contact with the government to discuss innovation policy and the role of applied research organizations (TO2 institutions). We analyse the effectiveness of the policy and examine the cooperation between the TO2 institutions and universities. TNO's CEO Paul de Krom and Eppo Bruins, who is a member of parliament and spokesperson for science and innovation for the Christian Union, got together for an open exchange of ideas. They conclude that mission-driven innovation policy is the way forward.

Eppo Bruins is committed to promoting technical excellence, applied research and innovation in the House of Representatives. “I am concerned that the balance between generic innovation and innovation programmes has become skewed. In 2010, the government decided to focus on the former and reduced the TO2 institutions’ budgets by 25%. The question is: how can we re-establish the balance? It’s good that this coalition has opted to invest in key technologies such as nano, quantum and biotechnology. Funds have been earmarked for applied research, for example in public-private partnerships (PPPs). However, it remains too little to be able to make real choices and ensure that the Netherlands maintains and strengthens its position in this field. There is an increasing number of top sectors, for example. As a member of parliament, I see politics from the inside and I’ve concluded that no one has the courage to stand up and make important choices. This is a shortcoming that really concerns me,” he explains. 

Daring to invest in a specific goal 

“Of course we’re happy that applied research is starting to get more funding again,” says De Krom. “You point out that, in reality, it is difficult to get the money to where it is needed. I propose bringing the various financial resources together (NWO calls, PPP allowances, etc.). The €200 million for applied research is divided between PPPs, SMEs, the National Research Agenda (NWO) and public funding for knowledge institutions such as TNO. The system is sound in principle, but more cooperation is needed to generate mass and impact, whereby it is indeed important to choose which themes, technologies and societal issues you want to focus on. I also agree that politicians need to make clear decisions about where the money will be spent.”

Bruins: “NWO needs to find the courage to say: this is what the government wants to invest in, this is the kind of country we want to be, so that’s where we are going to spend money”

As of 2019, the priorities policy will become ‘mission driven’. The new policy will focus on societal challenges and key technologies rather than specific sectors. “I see that as a positive change. The coalition agreement has pinpointed a number of themes which now need to be more clearly defined. NWO does indeed need to find the courage to say: this is what the government wants to invest in, this is the kind of country we want to be, so that’s where we are going to spend money. The effects of these choices will be felt right down to the level of the factory floor,” Bruins adds.

MAKING CLEAR CHOICES TOGETHER

Bruins notes that the decrease in funding during the past ten years has brought various research organizations closer together. “TO2 institutions, universities and companies realized they needed to cooperate more, so they put their heads together and started listening to each other. This has been a positive development, and now it is time to profit from the partnerships that have been formed. I hope that the increase in funding will not lead to more competition, but instead to more cooperation that culminates in clear choices,” he says.

VALUE OF PPP

“Research is complex and you cannot do it alone; that is where the government comes in. It helps that there are members of parliament who understand how this works. To generate impact, you need both fundamental knowledge and companies who can put this knowledge into practice, so that the knowledge is applied where it is relevant. This is why cooperation in PPPs is so valuable. Many PPPs have now adopted the mission-driven strategy,” explains De Krom. “The Netherlands is world champion in PPPs. We need to retain this position and put it to good use,” emphasizes Bruins.

Bruins: “The Netherlands is world champion in PPPs. We need to retain this position and put it to good use”

DOOR WIDE OPEN

“TNO and the rest of the Dutch research community need to show the rest of the world what we are doing,” says De Krom. “At TNO our door is always wide open. We are very proud of what we are doing in Brightlands, Holst Centre and QuTech, for example. But the societal impact is also important. TNO is ideally positioned to explain this impact. We have close ties to both the universities and the industry. We have plenty of in-depth knowledge in house and we have the connections to bring the research community together. This gives us a unique role in innovation development.”

FLEXIBLE THROUGH BROAD FOCUS AND PPP

“Your broad focus is both your strength and your weakness. On the one hand, you could say that a broad portfolio indicates that you are not making choices, but on the other hand it is important for the Netherlands to have a broad knowledge institution so that the knowledge can be deployed in other sectors. I am a fan of the Holst Centre and the way it cooperates with the industry and the academic world based on joint step-by-step plans and programmes. PPPs like the Holst Centre are where new specializations are formed. The focus is currently on nano, quantum and ICT, but in five years everything could be completely different. We will need to be flexible and adaptable to be able to respond to new issues. PPPs are the ideal platform from which to achieve this and it will be the future for TNO; no other institutions can support such programmes the way TNO can,” thinks Bruins. “I am also a big fan of the other TO2 institutions, but this is what makes TNO special.”

De Krom: “Our multidisciplinary approach is indeed our unique selling point: most innovations happen at the interfaces between the various scientific disciplines”

De Krom agrees that having such a broad focus sometimes makes it hard to show people what you excel at. “If you only have one specialization you are more recognizable. On the other hand, the advantage of being multidisciplinary is that we can bring all the different sectors together. Our multidisciplinary approach is indeed our unique selling point. Most innovations happen at the interfaces between the various scientific disciplines.”

KEY ROLE FOR TNO

With a PhD in experiment physics, Bruins is one of the few pure scientists in parliament. “I promote science because it forms the foundation on which we stand. I believe TNO has a key role to play at the regional, national and international levels, particularly in the coming years, because you are ideally positioned to respond quickly to new opportunities and threats. This is why it is a good thing that you are involved at all three levels. At the same time, it is also important that you are active all over the Netherlands, because this proximity is important for some parts of the ecosystem,” emphasizes Bruins.

CALCULATING IMPACT

“How can we retain knowledge, science and companies? What does the Netherlands have to do smarter?” De Krom asks Bruins. “I am pessimistic in this regard. We are still feeding off investments that were made 20 or 30 years ago, when there was more money for innovation. I am concerned about the lack of funding at present. We should strive for at least 2.5 to 3% of BNP. We currently only invest 1.6%, while a country like Germany spends 3.5% on innovation. I am convinced that the government has a major role to play in innovation. If the government invests, the industry will follow. Investing in knowledge is investing in innovation and industry; in science and technology that can be used by the industry. Moreover, more knowledge will attract more investment in our country. You and I both know that strong investments bring strong returns, and that you always get back more than you put in in the long term. However, these returns are not included in the calculations of the CPB (Netherlands Bureau for Economic Policy Analysis), and politicians are only interested in the CPB’s models, which gives me cause for concern,” says Bruins.

Bruins: “It is logical to spend money on urgent issues first, but failing to invest in knowledge will lead to major problems in the long term, even though you may not notice it at first”

“We are concerned about this too,” says De Krom. “But how can you calculate your impact? It is important for us to be able to demonstrate our successes, but it takes time for positive effects to show. In a world where it's cost before benefits, politicians are often more interested in the short term.” “It is logical to spend money on urgent issues first, but failing to invest in knowledge will lead to major problems in the long term, even though you may not notice it at first. This is why it is important to continue to restate our message. The major investments of 20 or 30 years ago worked. So let’s repeat the performance. There is still time to join the innovation race,” thinks Bruins.

SUSTAINABLE DEVELOPMENT GOALS

“TNO’s mission is to improve the Netherlands’ competitive position and help resolve societal issues. All our research programmes are required to comply with the sustainable development goals of the UN (United Nations), so that is the framework on which we base our choices,” explains De Krom. “That is a good thing, and it fits with my assertion that we need to look further than only the percentage of BNP to invest; we need to consider our welfare as well. How happy are we in the Netherlands? In this respect, you at TNO are many years ahead of the government. ‘How are we doing?’ That is the question the prime minister needs to answer when he defends the national budget,” concludes Bruins.

More information?

For more information, please contact Rogier van Keulen.

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