A group of 50 leading people from the Dutch economy, governance and society is calling on the Dutch government to set up a national investment and innovation bank. This should support the major transitions the Netherlands is facing in areas such as digitalisation, energy generation and distribution, for expanding our defence and reforming agriculture and food production. The group also advocates for a healthy technology climate in which innovative companies can grow and prosper, while data is secure.
The call has been signed by a wide range of stakeholders. These include Mayor of Eindhoven Jeroen Dijsselbloem, CEO of Deeptech EquityNL Mariëtte Doornekamp, Bunq top executive Ali Nikham, Prince Constantijn, TNO top executive Tjark Tjin-A-Tsoi and VNO-NCW chairman Ingrid Thijssen.
'Clout and financial resources are lacking'
They point to current geopolitical developments and argue that Europe must act quickly to maintain its leading role in the turbulent world. This also applies to the Netherlands specifically. However, according to them, the Dutch government lacks sufficient clout and financial resources to invest decisively, professionally and effectively when needed. The central government and established public finance frameworks are also said to be insufficiently equipped to meet these challenges.
One of the things missing in the Netherlands, according to the call, is a decisive national innovation bank. As a result, there is no powerful government vehicle available to finance the energy transition, defence industry and agricultural transition, also in view of increasing digitalisation. As a result, new initiatives by young and already existing Dutch companies lack funding to grow, without falling into foreign hands.
'The Netherlands is missing the boat'
The signatories of the call warn that by doing so, the Netherlands will miss the boat on attracting European funds available through the European Investment Bank (EIB). Pension funds and other private investors also lack a point of contact with the Dutch government that facilitates large-scale co-financing in a businesslike manner.
This does not mean, by the way, that there are no financing institutions available in the Netherlands; ministries and governments have a range of their own financing institutions. Those involved speak of fragmentation, which they say is not only costly but also causes a lack of expertise and clout. They also point out that, in addition, institutions generally lack direct access to the international money and capital markets.
Decisive national innovation bank
The call therefore advocates pooling within one financial group: a decisive national investment and innovation bank. The signatories argue that such a bank could be realised in the short term under the supervision of the Minister of Finance. "This is a professional bank with a public mission and a politically determined mandate, but in execution at a distance from politics, by law under the supervision of DNB," the parties say.
They point to Germany's KfW and France's Bpifrance. These are national development banks that play an important role in the economic development and innovation of Germany and France respectively. Among other things, they stimulate economic growth, innovation and sustainability, and provide financial support that helps bridge financing gaps between traditional banks and companies.
More than €100 billion in funding
With equity capital of around 10 billion euros, a national innovation bank would enable total financing of more than 100 billion euros. This would take the form of loans and risk-bearing equity investments, rather than the subsidies on which the Netherlands often relies. “Loans must be repaid,
which in turn can be used to help other companies. Subsidies do not find their way back into the Treasury’s coffers,” the appeal states.
One option for creating a national innovation bank, according to the signatories, is to integrate institutions that are already engaged in providing funding. Specifically, the parties cite Invest-NL, Invest-International, National Heat Fund, FMO, National Green Fund and SVn as examples.
'Both financial and qualitative added value'
"The added value of bundling within the group is both financial and qualitative. Financially, it is advantageous that equity capital is optimally deployed, using risk diversification within the group. Costs are saved by organising support and governance together as much as possible. Equally important is the qualitative added value. The group combines financial and high-quality sectoral knowledge, creating the top-quality public financial institution that the Netherlands currently lacks. The added value of bundling within the group is both financial and qualitative. Financially, it is advantageous that equity capital is optimally used, making use of risk diversification within the group. Costs are saved by organising support and governance together as much as possible. Equally important is the qualitative added value. The group bundles financial and high-quality sectoral knowledge, creating the top-quality public financial institution that the Netherlands currently lacks," it said.
The full call can be found here.
Image: Michal Jarmoluk via Pixabay
