Evaluation Future Fund 2015-2021

In mid-May, the Ministers of Economic Affairs and Climate Policy (EZK) and Education, Culture, and Science (OCW) presented the evaluation of the research part of the Future Fund – accompanied by an initial response in the form of a Chamber letter - to the House of Representatives (see Rijksoverheid.nl). At the request of the Ministry of EZK, Dialogic conducted this evaluation. The Future Fund (Business part and Research part together) was established in 2014 at the initiative of the House of Representatives ('Pechtold motion et al.'). The basic idea is to set aside a portion of gas revenues for investments in the earning capacity for future generations through a revolving fund. The Future Fund consists of a range of instruments and has been a separate budget article in the EZK budget since 2017 (article 3). The size of the Research part of the Future Fund ultimately amounts to €127.5 million. EZK and OCW share the policy responsibility for the Research part of the Future Fund. The Research part of the Future Fund financed four schemes: 1) Future Fund Credit for Research Facilities (TOF) aimed at financing new or improving existing high-quality research facilities of public and private research institutions; 2) Smart Industry Fieldlabs Scheme (SI-fieldlabs/SIF) aimed at financing ('smart industry') fieldlabs through a combination of a loan and a subsidy; 3) The Proof of Concept (PoC) scheme focuses on innovative startups that build specifically on the knowledge developed at a TO2 institution; and 4) Thematic Technology Transfer (TTT) scheme (incl. Onode pilot) aimed at encouraging valorisation activities of a collaboration or consortium of knowledge institutions and a venture capitalist acting as a fund manager in a specific technology or application domain. Based on the evaluation, the following conclusions were drawn:

1. At the level of the Research part as a whole, the conclusion is that the funds for financing research facilities and valorisation were more than welcome during the establishment of the Future Fund. However, the funds involved (ultimately €127.5 million) had (unintentionally) a predominantly incidental or impulse character. They have not resulted in more structural policy instruments (which is the case with the Business part of the Future Fund). The revolving nature requirement does not align well with designing appropriate instruments focused on financing research facilities and valorisation.
2. The added value of these four instruments under the same umbrella is limited. The Research part of the Future Fund is not managed as a coherent set of instruments and is not experienced as such. In practice, the Research part of the Future Fund provides impulse funding for matters that should actually be budgeted more structurally, namely valorisation and financing of research facilities. Valorisation is a legal task for higher education and knowledge institutions that requires the allocation of structural resources. In practice, insufficient resources are mobilised from regular funding of higher education and knowledge institutions for valorisation, and valorisation is mainly shaped through temporary impulse funding. The same applied to financing research facilities. Until recently, no structural funding was made available for this, until substantial budgets were promised for a period of 10 years this summer.
3. Due to the mandatory nature of a revolving fund, a proper consideration could not be made regarding whether basic funding, a subsidy, a loan, or a different form of the instruments is most appropriate (for facilitating research facilities and supporting valorisation). Looking at the efficiency of the design of the individual instruments, we assess the policy efficiency of TOF and SIF as low. For PoC and TTT, which also involve high-risk activities, we consider the policy efficiency to be higher. Although we did not conduct a comprehensive cost-benefit analysis, we estimate that the ratio between social benefits and social costs is more favourable for PoC and TTT than for TOF and SIF. However, many of the benefits are yet to materialise in the near future.

Various recommendations were made in the report. For instance, it was advised to integrate valorisation as part of investment projects of the National Growth Fund, but caution was mentioned about anchoring valorisation policy exclusively to a (so far) temporary instrument like the National Growth Fund. In their initial response (see the Chamber letter), both Ministers acknowledge that the Research part did not function as originally intended. Therefore, they intend to reconsider the implementation of the Future Fund to date. They also aim to review the existing policy goals and make sharper choices where the policy goals still align. The Ministers also recognise that improvement is possible regarding coherence in valorisation instruments. They provide several examples of actions that have already contributed to this (NGF proposal Delta Plan for valorisation, valorisation vision, higher education and science governance agreement, etc.). Additionally, they intend to build upon existing positively evaluated instruments. The Ministers will also consider integrating the research part into the business part, and will assess whether experimental space in the Research part (with possible revolving nature requirement) is desirable. The Ministers aim to inform the Chamber about their vision on the overall use of the Future Fund and its future design in the autumn.