The Dutch economy isn’t knowledge-based
In a recent contribution to NRC (link in Dutch), Menno Tamminga filleted the advice of the state committee on demographic development. The committee recommends replacing some Dutch economic sectors employing a lot of low-paid foreign workers with “knowledge-based economic sectors.” However, as Tamminga points out, the Netherlands has no knowledge-based economy.
Exceptions such as ASML aside, there’s little evidence to support the contrary. Our educational levels are dropping dramatically. In the comparative PISA score, we’re second to last. At 2.3 percent of GDP, Dutch investments in R&D are well below the OECD average of 2.7 percent – they’ve been for decades. Front-runners like the US, Taiwan, Korea, Germany and Japan yearly spend between 3.2 and 3.7 percent of their GDP. The Dutch capital market is dominated by pension funds, which are too risk-averse to fund deep tech.
To bring the Dutch R&D investments on par with the front-runners requires an additional annual expenditure in R&D of 10 billion euros. The government would have to put up half, amounting to a similar amount needed to scrap the health insurance deductible. In the last elections, the Dutch voters have clearly expressed their preference.
The Dutch attitude is risk-averse, short-term and easygoing, paraphrasing ASML CEO Peter Wennink in a speech at Eindhoven University of Technology. People expect the government to take care of them from their cradle to their grave. For every financial setback, there’s an allowance; for any hardship, there’s a waiver; for strategic vision, you better go see an eye specialist. For six decades, our economy was able to sustain this attitude because we were floating on an enormous gas bubble. That game is over. Ironically, global warming will give our complacent society an ice-cold shower.
From a demographical point of view, any further population growth will be at the cost of our environment and our way of living. Economic growth by virtue of more low-tech industry, more agriculture and more financial loopholes will reach its limits in the next decade. Either we scale down our luxurious lifestyle or we face the challenge and find a way to nestle ourselves in the world-wide knowledge-based economy.
That will require a change of attitude. And that’s something we can do. It’s amazing to see how the transition in retirement age has proceeded: from an average of around 60 years, we now have a quarter of a million 67+-year-old workers. Once the conviction is there, the money is easily found – the annual defense budget went up by 5 billion euros in 2023.
The major long-term change toward a knowledge-based economy has to come from the educational system. Driven by austerity, the quality has eroded. Political choices, such as solving societal problems through education and proclaiming “higher education for everybody,” have lowered the standards and made us the laughing stock of Europe, let alone Asia. “Discipline” has become a dirty word, but if we want to compete with Asia’s top economies, our high-school levels need to meet those of their top schools. That’s far from reality today.
Supporting high-school teachers by organizing visits to factories and laboratories will help attract youngsters to technical education. It’s hypocritical of companies to complain about a lack of high-skilled staff and at the same time take little initiative to stimulate interest in the technical sciences or give sufficient opportunities for internships.
Financial stimuli like the reduction of tuition attract poorly motivated students. Offering senior students coaching jobs for freshmen is a better way to let them make money. If this compensation progresses with experience, studying hard is stimulated.
Universities must primarily focus on providing the best education. Teaching and researching in a monodisciplinary environment and an obligation to disseminate the results is simply not efficient. The scientists who once made our country one of the most innovative were educated in universities without much research. The research was performed in well-equipped institutes like the Neher Laboratory, Shell, DSM and Philips Research.
The achievements of these industrial laboratories created a sense of pride and respect for technology in society, thereby increasing the willingness of the younger generation to bite the bullet of math and physics. We need good and yielding industrial research structures for a knowledge-based future.
I call on ASML’s joint leadership Peter Wennink and Martin van den Brink, who are stepping down this year, to leave us a worthy legacy: a multi-disciplinary ASML Research Lab resembling the place where their company’s cradle once stood.
