Small Country Innovation Systems

Small Country Innovation Systems

Globalization, Change and Policy in Asia and Europe

Edited by Charles Edquist and Leif Hommen

This major book presents case studies of ten small country national systems of innovation (NSIs) in Europe and Asia, namely, Denmark, Finland, Hong Kong, Ireland, the Netherlands, Norway, Singapore, South Korea, Sweden and Taiwan. These cases have been carefully selected as examples of success within the context of globalization and as ‘new economies’ where competition is increasingly based on innovation.

Chapter 9: Challenged Leadership or Renewed Vitality? The Netherlands

Bart Verspagen

Subjects: innovation and technology, innovation policy

Extract

Bart Verspagen 1 INTRODUCTION The Netherlands national system of innovation (NSI) has deep roots in the history of the country. After having been, once upon a time, the world economic leader, the Netherlands has been forced to follow other countries in terms of technological developments, but it has done so with its own specific way of adapting to global developments. The result, by the end of the 1960s, was an NSI that operated at a high level of performance, hosting a number of global companies that played dominant roles in their industries at the world level. However, much has changed in the world economy since this period. Global competition has intensified, and the Netherlands system has felt this pressure from abroad. In 2002, foreign direct investment outflows from the Netherlands equalled 8 per cent of gross domestic product (GDP), and inflows 6 per cent. These figures are higher than those for any of the other European countries in this study (Sweden is second, with 4 per cent outflow, 5 per cent inflow). In addition, European integration has affected the Netherlands system. As will be shown in this chapter, the Netherlands NSI has been severely challenged by this globalization process, and a few years into the twenty-first century, one has to conclude that the system is losing momentum. Innovation performance indicators show a persistent downward trend, especially so in relative (to other countries) terms. The source of this relative decline also seems evident...

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