The high-tech manufacturing industry needs to start explaining why their sector is crucial as well as what they need from the government.
“If we can’t grow in the Netherlands, we’ll grow elsewhere”, Peter Wennink recently said. The ASML CEO gave off a clear warning, prompted by the political pressure on labor immigration. ASML and other high-tech companies simply need talents from abroad to enable the growth in production and R&D required by their customers.
Wennink is by no means alone. The CEO of Huisman Equipment, Schiedam, threatened to export his business, as more and more houses were built around it and people started to complain about the industrial noise. Nearfield Instruments, a scale-up from Rotterdam, can’t find space for production, housing for expats and sufficient funding for their scaling. The firm may be forced to consider expanding elsewhere. The US and Asia are tempting such companies with big investments and tax reductions.
Such things needn’t be very worrisome if we didn’t need the high-tech manufacturing industry in the Netherlands. But we most certainly do. The Dutch economy, built on natural gas, petrochemical products and large-scale agriculture, needs a completely new recipe for prosperity. High-tech manufacturing, together with biochemistry and IT-driven services, could form three main new ingredients. The opportunities in these industries are huge, but companies need to be enabled much better.
Our (would-be) leaders, however, have no clue about this. They’ve understandably focused their attention on farmers and other civilians who have been left in the cold or even pestered by previous governments. Only a few members in the Dutch House of Representatives have affiliations with technology or industry, let alone high-tech manufacturing.
Complaining about conditions for industrial entrepreneurship or the lack of understanding won’t help. Making threats is also likely to have limited effect, as it offers leaders no perspective for action. Frankly, leaders don’t know how to solve these issues, or even whether they could or should do so. Rather than complain, we need to explain.
First, we need to explain why high-tech manufacturing is so important. Important for jobs and welfare in many companies, including hands-on jobs in catering, security and cleaning. High-tech manufacturing is also important for enabling the big transitions, which must lead to affordable food, houses, energy and care. Show our leaders that companies can help solve the nitrogen crisis (such as Lely Industries and Reedijk) or enable biological farming (Odd.bot). And finally, hammer home the message that manufacturing is important for strategic autonomy.
Secondly, we need to explain what companies need. This includes, among other things, sufficient talent (Dutch and foreign), space (physical and environmental), reliable supply of clean energy, significant and focused R&D budgets and networks with reliable partners and suppliers.
Finally, we need to explain how the government can make life easier for companies, including out-of-the-box solutions. For instance, vocational and academic schools are currently paid per diploma. This naturally leads to the selection of cheaper studies and possibly even to the lowering of standards. Would schools be paid per paid job, this would rapidly change. Such a system works successfully in Germany. Copy and paste that!
Another example: Leiden Bioscience Park, Chemelot and the High Tech Campus are clear examples of hotspots where industry and science meet and enable quick and healthy growth. Enable more of such hotspots. Select a limited number of themes (eg quantum, robotics, hydrogen), prevent regional competition and give substantial long-term support. And don’t build houses near the hotspots!
Finally: focus on scale-ups rather than startups. Startups can only create impact when they can substantially scale. Scale-ups have specific issues and no clear support is currently available.
For such an explanation to be effective, it must result in a proposal for industrial policy that’s credible and acceptable, broadly supported, ambitious and achievable. Therefore, it must be accepted industry-wide, preferably including biochemistry and IT-driven services. It must be a national policy that relates well to European policies. And built by people who understand the issues to be solved and have clear ideas on how to solve them. Don’t wait for the government. Take action! Stop complaining and start explaining.