01/06/2021

Companies are making efforts to maintain R&D investments despite COVID-19.

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Commissioned by TNO, Dialogic has estimated the development of R&D expenditure and outsourcing by businesses in the Netherlands for 2021 and 2022. To provide the required insight, Dialogic collaborated with PanelWizard Direct to conduct a survey among a panel of 462 working Dutch individuals aged 18 and over, employed in commercial enterprises with R&D activities. Additionally, Dialogic conducted interviews with representatives from 11 R&D top performers in the Netherlands, including ASML, Philips, KPN, Janssen, DSM, VDL, Rijk Zwaan, Vanderlande Industries, DEMCON, Damen, and ING.

Our survey and interviews reveal that businesses are making efforts to maintain their R&D investments despite the COVID-19 crisis. Most seem to be succeeding, but there are various categories of businesses that must adjust their own R&D efforts and outsourcing out of necessity.

Based on a survey among respondents working in businesses with R&D activities, 50% indicate that in the businesses where they work, R&D (both internal and outsourced) increased in 2020 compared to 2019. 31% of respondents report that R&D efforts remained the same, while only 10% mention that R&D in 2020 decreased to some extent compared to 2019. This distribution remains largely unchanged for the expected development of R&D activities in 2021 (compared to 2020) and 2022 (compared to 2021), although uncertainty in this regard is increasing. Small businesses and some service sectors appear to be more vulnerable.

The interviews with the 11 top R&D performers also indicate that the current impact of the COVID-19 crisis on R&D investments seems limited so far. Preserving their own R&D capacity is considered a top priority. Concerning the R&D climate, the 11 interviewed R&D top performers suggest that there is still room for improvement in terms of stability and continuity of government policies, availability of R&D talent, and a 'larger strategic plan' or a government that makes clear choices regarding priorities for R&D investments and innovation.

R&D and innovation are crucial for future earning power and the realisation of societal transitions, but the overall R&D intensity of the Dutch economy is insufficient. Additional desk research indicates that, over the period 2005-2019, gross domestic R&D expenditures in the Netherlands increased as a share of GDP. However, they still lag behind eight benchmark countries (Belgium, Denmark, Germany, Finland, Austria, US, South Korea, and Sweden) and are on par with the EU-28 average. Company R&D expenditures remain low compared to the benchmark countries.

For more details and figures, including information on R&D outsourcing by Dutch companies with R&D activities, please refer to the management summary of the report or the complete report.

Interested in learning more about this research? Please contact Pim den Hertog.

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