R&D expenditure and capacity by field of science

The Netherlands spent a total of € 18.4 billion on R&D in 2020. 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 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 79% on R&D in the Natural sciences and Engineering, 10% on Medical and health sciences, and another 7% on agricultural science (2020). 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 R&D spending rises, percentages vary slightly
The total R&D spending increases in both higher education and research institutions in the years 2013-2021. The expenditure of the cluster of Natural and Technical Sciences also grows during this period.

If we look at higher education, we see that in a relative sense the share of Natural sciences and Engineering in higher education increases slightly from 33% in 2013 to 36% in 2020. The share of Medical Sciences varies around the 32 % mark. The share of the Humanities remains around 9% and the Agricultural Sciences around 5%. The share of the Social Sciences remains more or less the same in the years 2013-2021 at 20%.

At the research institutes, the share of Natural sciences and Engineering remains about the same until 2019: around 52%. After that, the share drops to 48% in 2021. The share of the Medical sciences is around 7%. The share of Agricultural Sciences is declining slightly: from 26% to 24%. The proportion of the Humanities and the Social Sciences increases in the years 2013-2020 from 2% to 6% and from 12% to 16% respectively.

Clear difference between universities and research institutions
There are clear differences between the universities and the research institutions. At 36%, the share of Natural sciences and Engineering is clearly lower at the universities in 2021 than at the research institutions: 48%. Agricultural sciences are also higher in the research institutions (24%) than in the higher education institutions (5%). The opposite is true for the Medical Sciences (32% versus 7%), the Social Sciences (20% versus 16%) and the Humanities (8% versus 6%): the higher education institutions invest more in these.

International benchmark

The figure below shows the Dutch figures in an international context. Where possible, we compare national figures for the year 2019.

The figure reveals obvious differences between the relevant countries.

Dutch higher education spends relatively more on social, humanities, agricultural and medical sciences
If we look at higher education expenditure on Natural sciences and Engineering, the Netherlands is at the low end of the spectrum with 36% of total expenditure on Natural and Technical Sciences. The countries on the left in the figure spend more on Natural and Technical Sciences, Norway and the United Kingdom score lower than the Netherlands. Expenditure on research in the medical sciences is relatively high in the Netherlands, but more is spent on this area in Denmark and Norway. The share of Agricultural Sciences is also slightly higher in the Netherlands, at 5% compared to 4% on average. The share of research expenditure that goes to the  Social Sciences (including economics and law) in the Netherlands is equal to the average of the reference countries in the figure. The share of the Humanities is slightly lower, at 8% compared to 9% on average. 

Average expenditure of Dutch research institutions on Nature and Technology
If we look at the expenditure of the research institutes for Nature and Technology, we see that the Netherlands is fairly average compared to the reference countries. The Netherlands also spends relatively more than the reference countries in agricultural and social sciences. The figure clearly shows that countries vary greatly in expenditure per field of science.

Reflection of the economy
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.

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 8.4% of its economy accounted for by manufacturing and 39.9% of public R&D expenditure being in the Natural sciences and Engineering. Germany’s manufacturing industry accounts for 17.2% of its economy and 59.5% 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.