Funding and performance of R&D in the Netherlands

R&D in the Netherlands is performed by various types of organization and funded from several sources. In 2024, over €26.4 billion was spent on R&D. The business enterprise sector is both the largest funder and the largest performer of R&D. In addition to companies, government is an important source of funding. In addition, Dutch researchers receive money from abroad (e.g. European research programs) and other parties, such as private non-profit organizations. Researchers carry out their research within companies, institutes of higher education and other research institutions, such as the NWO institutes or the RIVM.

The table below shows who funded R&D in the Netherlands in 2024, the amount they spent and what type of organisation performed the R&D. These are the latest available figures.

R&D spending in the Netherlands by sector of performance and source of funding, 2024, in millions of euros

Companies

Companies fund 60% of all research and development work (R&D) in the Netherlands. Commercial funding focuses mainly on R&D within the company itself and within the company’s own sector (this accounts for 82% of funding in 2024). Dutch companies also fund research performed by universities and research institutions. Finally, they also fund R&D in other countries, spending €3.6 billion, according to Statistics Netherlands’ preliminary 2024 figures.

Central government

Central government funds about a third of R&D in the Netherlands. Government funding of academic research takes place in several ways.

1. Direct government funding
This takes the form of:

• Fixed financial contributions to institutions (known as institutional or basic funding). The government also funds research through intermediary organisations such as the Netherlands Organisation for Scientific Research (NWO: instruments), the Royal Netherlands Academy of Arts and Sciences (KNAW) and the Netherlands Enterprise Agency (RVO: grants & funding);
• Funding for research performed by its own knowledge institutes, such as the Ministry of Security and Justice’s Research and Documentation Centre (WODC) and the Ministry of Infrastructure and the Environment’s Mobility Policy Institute (KiM);
• Direct funding for policy-oriented research (project or programme funding).

2. Tax incentives
In addition to direct funding for R&D, there is indirect, fiscal support for R&D and innovation. This fiscal support makes it more attractive for companies to invest in R&D and innovation, for example through tax deductions. This is an important instrument within the government's innovation policy, but it is also used to stimulate R&D. This instrument has gained in importance since the Rutte government made the switch from specific financing (via programmes and subsidies) to generic tax support of innovation.

Tax incentives are governed by the Research and Development (Promotion) Act (Wet Bevordering Speur- en Ontwikkelingswerk, (WBSO), ]), a scheme for companies whereby the Dutch government compensates companies for a proportion of the costs of research and development work. The Netherlands Enterprise Agency administers the scheme on behalf of the government. It consists of three facilities:

• Compensation for a proportion of the wage costs associated with research and development work in the form of a reduction in the salaries tax and social insurance contributions payable;
• An R&D allowance for self-employed people;
• An extra allowance for start-ups

Since 2012 a new tax instrument has been introduced in addition to the WBSO scheme. Known as the Research & Development Allowance (RDA), it is intended for R&D costs other than those associated with employees (which are covered by the WBSO scheme). In other words, for R&D investments and R&D running costs.  As of 2016, the WBSO and RDA have been merged (see the Letter to the House of Representatives of July 7th, 2015). Together, the two schemes provided €1.437 million in incentives in 2023.
 

Funds

Some R&D in the Netherlands is financed by private non-profit funds. The health funds contribute the most to scientific research. The Netherlands has several of these funds, which focus on specific disorders or groups of disorders. Their annual reports show that in 2023 they funded €187 million in research. In 2024 this was €189 million. The two biggest funds are the cancer research charity KWF and the Dutch Heart Foundation. Nineteen of the funds have joined forces in the SGF (Samenwerkende Gezondheidsfondsen).

Non-domestic

Besides funding from Dutch sources, research in the Netherlands also receives funding from foreign companies and from European Union research programmes, particularly the Framework Programmes. Foreign companies have become an increasingly important source of funding for Dutch R&D. Non-domestic funding comes from:

• Foreign companies, which mainly fund research by Dutch companies;
• The European Union’s research programmes, particularly its Framework Programmes. The Eighth Framework programme (Horizon 2020) ran from 2014 to 2020 and had a total budget of over €77 billion. Dutch researchers received €5.4 billion of this over that period, representing 8% of the total. Horizon Europe, the successor to Horizon 2020, runs from 2021 to 2027 and has a total budget of €93.5 billion. We see a similar role for the Netherlands this far: 9% of the total budget went to Dutch researchers. Since the United Kingdom has left the EU and is participating in Horizon Europe as an associated country, the percentage is higher for most European countries, including the Netherlands. 

The data publications on the EU framework programmes show developments in the position of the Netherlands in the framework programmes and the  share of funding of the EU framework programmes in relation to government funding of R&D in the Netherlands.

Developments in R&D funding in the Netherlands

The figure below shows the relative proportions of funding from different sources. Dutch companies fund around half the R&D performed in the Netherlands. The amount paid for by the government has risen from almost €3.0 billion in 2001 to €7.4 billion in 2024. As a share of the total, public funding represented around 35% until 2009, until this share slowly decreased to about 30%. In 2024 the share of government funding in R&D in the Netherlands was 28%. The share of non-domestic funding of R&D has fluctuated between 10% and 13% since 1997. The share of private non-profit funding of R&D has been between 2,0% and 2,5% in the last 10 years.

R&D performance