“Innovation in the SME sector merits special attention”

6 min reading time

TNO is in regular contact with the government to discuss innovation policy. TNO's CEO Paul de Krom and member of parliament and spokesperson for innovation & SMEs for the Christian Democrats Mustafa Amhaouch got together for an open exchange to discuss current policy and how it could be improved. They both agree that innovation in the SME sector merits special attention.

Small and medium-sized enterprises (SMEs) are the driving force behind the Dutch economy and yet only a small percentage of these SMEs demonstrate an innovative capacity. Most SMEs simply keep pace with current technological developments. According to both Paul de Krom and Mustafa Amhaouch, this is an area where there is still much to be gained and that using the expertise available at knowledge institutes such as TNO is the way forward. “We need the business community to tackle society’s challenges, such as the energy problem. Not just the multinationals, but especially those SMEs that account for 95% of all economic activity. In this context, it becomes clear why innovating the SME sector is so important. And this should also be reflected in the policy”, believes Mr Amhaouch.

Working with the SME sector on innovations

The first steps are being taken. “For example, Secretary of State Mona Keijzer from the Ministry of Economic Affairs and Climate Policy recently announced in a letter to the House of Representatives that the Cabinet plans to allocate funds to boost the innovative potential of the SME sector”, explains Mr Amhaouch. The new coalition agreement also states that SMEs deserve a stronger presence in innovation policy and that the Innovation Credit for SMEs in Regional and Top Sectors (MIT) and innovation grant schemes for SMEs need to be expanded. Mr de Krom adds: "We are very pleased that the importance of investing in innovation in the SME sector is slowly being given a more prominent place on the political agenda. TNO provides services for both the government and the business community, and we work with the SME sector to boost innovation in a number of ways: SMEs are both customers and partners in public-private partnerships (PPP), TNO spends tens of millions of euros a year on the SME sector and we also try to market innovations faster through the Technology Transfer programme.

Mr Amhaouch: “We need the business community to tackle society’s challenges, such as the energy challenge”

Transfer of knowledge to the SME sector

Mr Amhaouch, who has a background in technology, has called for an expansion of schemes to boost innovation in the SME sector in the House of Representatives. He is particularly passionate about the role organizations can play in furthering applied research (TO2 institutes). The House of Representatives passed a motion written by Mr Amhaouch in which he appeals to the government to pay special attention in the expansion of the MIT to maximizing widespread knowledge diffusion to SMEs by institutes of applied scientific knowledge. “Innovation and top sector policy is now mostly aimed at the development of new knowledge by leaders in the field and there are few tools available to transfer knowledge to SMEs, which often have no available resources to invest in research and development. However, in order to create a thriving knowledge economy and to help tackle social issues, the faster knowledge can be developed, transferred and broadly supported, the better”, explains Mr Amhaouch.

Additional resources for TO2 institutes

“We have also advocated for the expansion of the MIT scheme”, adds Mr de Krom. “In this day and age, we face a large number of technological challenges. Block chain, for example. It is important to involve the business community in the developments, if they are not already involved. It would be a shame if, as a country, we missed the boat.” Mr Amhaouch acknowledges this and firmly believes there’s still progress to be made. You have to get the masses on board if you want to move forward. I think it is therefore important that additional resources for TO2 institutions are made available as they are indispensable in harnessing innovative knowledge for the purpose of solving issues”, says Mr Amhaouch.

Mr de Krom: “If we want to remain at the vanguard of innovation, we need to invest more. In the SME sector too”

More investments in the SME sector

“The Netherlands is a frontrunner in innovation”, says Mr de Krom. “The types of public-private partnerships we have in the Netherlands are unique. It’s hardly surprising that many other countries have shown an interest in our methods. The Netherlands is a shining example of technological advancement, integration, cooperation and improvisation - resulting in the production of amazing products. SMEs are a vital link in the chain, for example as suppliers. Even in the country’s top sectors. Unfortunately, funding for PPPs is still lagging behind. It is a good sign that the new coalition agreement has ushered in a change to this trend and that the government plans to invest more in research. From this point of view, the glass can be considered half full. But if the Netherlands wants to remain at the vanguard of innovation, we need to invest more and that includes additional investments in the SME sector.”

Connecting top sectors to the social agenda

“Do you think there’s room for improvement in the top sectors? There are currently nine, should we perhaps be working to downsize this number?” Mr Amhaouch wants to know. Investing in top sectors has already proven very beneficial. It would be a shame to throw that away. Top sector policy was finalized in 2010. Even though there was an incubation period, the implementation has been successful. I see no reason to make any changes to the number of sectors. Perhaps the number of Top Consortia for Knowledge and Innovation (TKIs) can be reduced within the Energy top sector. Involving the top sectors in the social agenda would be a good move”, answers Mr de Krom.

Mr Amhaouch: “It is very important that new expertise is developed, transferred and broadly supported, and the sooner the better”

Exporting innovations

“In your opinion, what would the future ideally look like in 15-20 years time?”, Mr de Krom asks. I hope that the Netherlands will have become a bigger global player. We are doing well and we are among the frontrunners in innovation. We are a small country and building strong relationships with other countries is important for us. It would be great if we could boost exports of innovations and involve our top sectors. I am also hopeful that our knowledge can contribute to solving the, in my opinion, single most challenging issue we face today: feeding the world”, answers Mr Amhaouch.

Technology Transfer

“We would like to be a driving force for Dutch innovation”, says Mr De Krom. “TNO’s Technology Transfer programme, which is aimed at promoting the development and marketing of new technology, was launched in 2017. The goal is to get ten start-ups off the ground every year. So far five have been founded and there are 20 ongoing projects.”

Mr de Krom: “We share our knowledge of printing 3D metal components with SMEs. This gives them a head start so they can leave foreign competitors biting the dust”

Ahead of foreign competitors

TNO has also signed the first SME Knowledge Deal with Metaalunie, in which they agree to share expertise on specific topics. “One example is the conventional process of milling metal components, which is very costly and time-consuming for SME’s. TNO is contributing by sharing expertise in the area of 3D printing of metal components with groups of companies. This gives them a head start so they can leave foreign competitors biting the dust”, says Mr de Krom.

Public debate

“Bouncing ideas around with TNO and discussing the effectiveness of policy is very useful. What I expect is to see is a critical attitude to policy aspects, knowledge to be up to date and to see TNO, as a knowledge institute, leading the public debate based on the available expertise”, emphasizes Mr Amhaouch. Mr De Krom completely agrees that TNO must continue to gain more expertise. “We are always updating our knowledge. We have noticed that our voice in the public debate is appreciated and wanted. We are happy to take on the role of thought leader. This includes providing explanations using our expertise and outlining possible scenarios.

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