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fact sheet
30 January 2020

R&D expenditure and capacity by field of science

Factsheet on the R&D expenditure (international comparison) and research capacity (national data) by field of science.

The Netherlands spent a total of € 14.7 billion on R&D in 2017. Much of this research is privately financed and carried out at Dutch and foreign commercial enterprises. Publicly funded research – most of it government-funded – is carried out mainly at institutions of higher education (including university medical centres) and public research institutes.

This factsheet explores expenditure in six different fields of science: the natural sciences, engineering and technology, agricultural science, medical and health sciences, the social sciences (including economics and law) and the humanities. The focus will be on spending at public knowledge institutions (both institutions of higher education and public research institutes).

R&D expenditure at public knowledge institutions in the Netherlands

With regard to corporate R&D spending, we know that commercial enterprises spend 80% on R&D in the natural sciences and engineering, 9% on medical and health sciences, and another 9% on agricultural science (2017). For public R&D spending, we look at how institutions of higher education (especially the universities and university medical centres) and public research institutes distribute expenditure across the individual fields of science.

The figure below shows public R&D expenditure by field of science.

Total public R&D spending began to climb in 2007. There has been almost no increase in spending in the natural sciences and engineering cluster. Relatively speaking, the share of spending accounted for by these two fields has fallen from 42.2% (€ 1,904 million) in 2007 to 39.4% in 2017 (€ 2,416 million). 

The sharpest increase in both absolute and relative terms can be seen in medical research, rising from 25.2% (€ 1,136 million) in 2007 to 27.4% in 2017 (€ 1,681 million). Public spending on the humanities rose from 6% (€ 269 million) of total expenditure in 2007 to 7.6% (€ 468 million) in 2017. The share of public spending for the social sciences has remained relatively stable at 17.6% in 2017. 

There are, however, clear differences in how the institutions of higher education and public research institutes distribute their research outlay across the different fields of science. In 2017, the institutions of higher education spent 35.9% of their research funding in the natural sciences and engineering, considerably less than the 49.3% spent by the public research institutes. The latter also spent more on agriculture science (17.6%) than did institutions of higher education (4.5%). The reverse is true for medical and health sciences (30.3% versus 19.5%), the social sciences (20.4% versus 9,8%) and the humanities (9.0% versus 3.9%), with the institutions of higher education investing more in these fields.

International benchmark

The figure below shows the Dutch figures in an international context. Where possible, we compare national figures for the year 2017.

The figure reveals obvious differences between the relevant countries.

If we consider spending on the natural sciences and engineering, then we see that the Netherlands is on the low end of the spectrum, with 39.4% of its total expenditure going to this category. The countries on the left spend considerably more than the Netherlands on the natural sciences and engineering, while the United Kingdom, Denmark, Sweden and Norway spend even less. The Netherlands spends relatively large sums on medical and health science research, but not as much as Denmark, Japan, Norway and Sweden. The share of public expenditure on the social sciences is also high compared to other countries. Spending on humanities and agricultural sciences is slightly above average.

One common argument is that a country’s research agenda reflects (or should reflect) the nature of its economy, since that is what drives the need for knowledge and academically trained employees. Countries such as the Netherlands and the United Kingdom, which have relatively large service sectors, would thus have a greater need for research (and professionals) in economics, law and other social sciences. Countries in which manufacturing dominates, for example Japan, Korea and Germany, would need more research and researchers in the natural sciences and engineering. The figure below shows the relationship between the percentage that manufacturing accounts for in a country’s economy and the extent to which public investment goes to the natural sciences and engineering.
 

Relationship between the importance of manufacturing and public R&D investments
Source: Eurostat (R&D investments) OECD – STAN (total persons engaged in manufacturing)
Note: Figures for South-Korea are of 2015. In this graph we compare the share of public R&D-investments going to the natural science and engineering with the share of the working population engaged in manufacturing.

This figure reveals the relationship between the nature of the economy – measured by the size of the manufacturing industry – and the distribution of expenditure across the fields of science. Countries on the bottom left-hand side – the United Kingdom, the Netherlands and Norway – have a relatively small manufacturing industry and spend relatively little on the natural sciences and engineering. The opposite is true for countries on the top right-hand side.

The Netherlands is third from the left (bottom), with 8.6% of its economy accounted for by manufacturing and 39.7% of public R&D expenditure being in the natural sciences and engineering. Germany’s manufacturing industry accounts for 17.3% of its economy and 58.8% of its public R&D investment goes to the natural sciences and engineering, putting it on the right (top). The Netherlands and Germany - as most countries - are both situated close to the linear regression line and both therefore devote attention and public resources to the natural sciences and engineering in proportion to the nature of their economies. The two countries have very different public spending patterns in the natural sciences and engineering, but in both cases public R&D spending is consistent with their economies. South Korea spends relatively little money on R&D in the natural sciences and engineering given the nature of its economy.

Sources of university funding in the Netherlands by field of science

We can also zoom in on Dutch university research and differentiate between the various sources of funding by field of science. Although we cannot do this on the basis of financial figures, we can measure research capacity in terms of full-time equivalents (FTEs). In the Netherlands, we differentiate between direct funding (first flow of funds), indirect funding (second flow of funds), and contract financing (third flow of funds). Direct funding is provided directly by the national government in the form of lump-sum financing. Indirect funding is competitive funding distributed by the Netherlands Organisation for Scientific Research (NWO). The third source of funding is also competitive and consists of contracts awarded by Dutch and foreign enterprises and public authorities.

The figure also shows that in 2017, research capacity in the diverse fields of science varied depending on the source of funding:

  • If we look at the three sources combined, the natural sciences and engineering cluster is the largest at 37%, as opposed to 30% for medical and health sciences and 20% for the social sciences. Agricultural science and the humanities account for the smallest shares, both at 7%.
  • We see the same pattern in indirect funding and contract financing, with the natural sciences and engineering accounting for an even larger share of the total at 46% and 37% respectively. The third flow of funds has a relatively high percentage of medical and health science personnel, at 34%.
  • The natural sciences and engineering account for almost the same share of direct funding at 32% as the social sciences and medical and health sciences, at 27% and 29% respectively. 

About the figures

The financial data cited above is taken from the Eurostat database. The database makes it possible to generate data on R&D expenditure in euros and national currencies. The statistics purely for the Netherlands are specified in euros. The international comparisons are in PPS (= purchasing power standard). The data was collected in accordance with the OECD’s Frascati Manual; data on the Netherlands was provided by Statistics Netherlands.

Data on the nature of the economy comes from the OECD’s STatistical ANalysis Database. Figures per country indicate the percentage of the total economy accounted for by manufacturing according to the International Standard Industrial Classification of All Economic Activities, Activity C manufacturing. It concerns the total fte of persons engaged in manufacturing. The differentiation relevant for this factsheet – the division into six fields of science – is not available for every country and every year.

For the Netherlands, we have data from 2007, 2009 and 2011-2016. There is no pre-2007 data available from the public knowledge organisations.  

The international comparison does not include the United States, France, Canada, Brazil or China because their data is not differentiated by field of science. In addition to the customary reference countries in Europe, we have decided to include Japan and Korea in our comparison because their knowledge economies are at the top of the global rankings.

The data on research capacity was provided by the Association of Universities in the Netherlands (VSNU), which collects annual data on this subject by funding source, i.e. the University Research Key Figures (KUOZ). This also includes research carried out at university medical centres. Research capacity figures for Leiden University date from 2008 onwards; figures for the University of Amsterdam, on the other hand, are available up to 2008 but not beyond.

Sources

Photo: Silas Stein/dpa Picture-Alliance GmbH/Hollandse Hoogte