News - September 29, 2011

Who will foot the bill for the top sectors?

The scientific and business communities must collaborate more closely on innovation, says minister Verhagen. This collaboration is to be channelled through nine ‘top sectors'. Verhagen disclosed details of his plan in the week of Prinsjesdag. But how is Verhagen going to fund his flagship programme?

Coughing up
First off the bat, Verhagen himself is pumping 1.5 billion per year to the top sectors. That might sound like a substantial investment but in fact it is a redistribution of existing resources. The institutes for applied research - such as DLO, TNO and ECN - must cough up 250 million in order to achieve the target sum. The scientific organizations NWO and KNAW will bring 300 million to the table for fundamental research. A further 500 million will come from the reserves of the former ministry of Economic Affairs, to be spent specifically on innovation for small and medium enterprises. Fourthly, Verhagen will take a further 300 million from the Development Aid budget, with the aim of strengthening top sectors which plan to strengthen the economy of developing countries. Throw in another few smaller funds and Verhagen has his 1.5 billion.
Tax breaks for companies
But the government will only spend that 1.5 billion on condition that the private sector contributes at least 1.2 billion. As a result the private sector has had a big say in the contents of the ‘innovation contracts' for research. As an incentive, companies can get tax breaks for research and development to the tune of 500 million euros.
In the coming four months it will become clear who will be doing what in the top sectors. The rule that the ministry only pays if the private sector does too will be key. This rule will also apply to some of the DLO research. This will make money ‘matching' an important activity. For example, Verhagen has announced that the cabinet is offering 5 to 10 million euros for sustainability projects in the livestock sector if the participating companies do the same. The agrifood companies seem to have got the message. Hitherto the sector spent 75 million on innovation. Its contribution to the top sector will be double that: 150 million.

Natural Gas Revenue
For years the Dutch government funded high-level research in certain fields from its natural gas revenues, the FES fund for structural economic reinforcement. This fund is going to be dissolved; in future the gas revenues will be used to reduce the national debt. This is worrying for those Wageningen institutes that were funded by the FES, such as the Top Institute Food and Nutrition (TIFN), Green Genetics and the water institute Wetsus.
These institutes stand a good chance of surviving under the auspices of a top sector. To give them time, Verhagen has made 40 million euro available to TIFN for 2011-2014, as a sort of financial basis. The Green Genetics institute and the genomics institute CBSG will also receive a one-off funding package next year to bridge the gap.