The research budget in the Netherlands is under pressure. The developments in R&D investments as a percentage of the GDP in the Netherlands have shown a slight downward trend (see figure 1). From 2007 onwards, the Netherlands scores below the average of the 27 European countries. The investments made by the Netherlands contrast sharply with those of reference countries – Sweden and Denmark have already reached the EU-2020 target of 3 per cent, and Germany is well on the way. In this manner, these countries are strengthening their position as leading knowledge economies.
Between 2000 and 2010 these investments remained below two per cent, and even appeared to be in decline. Despite being counted among the European innovators for years, the Netherlands invests less in R&D than the European average. Private investments in R&D remain far behind those of other countries. A significant drop has been forecast in the Netherlands for the years ahead, meaning that the R&D investment targets of 3 per cent (EU) and 2.5 per cent (Dutch government) for 2020 will not be achieved. The Rathenau Institute expects the total resources available for research to drop from €5.1 billion in 2010 to 54.4 million in 2016 (see figure 2).
This will affect the productivity of Dutch research and the options for maintaining the level of the research infrastructure. There has also been a shift away from direct funding towards encouraging sources of private indirect funding for R&D using tax incentives.
Private research financing
University income from direct government funding has dropped, while income from indirect government funding and contract research funding has increased. The flipside of the cuts to direct government funding is that the relationship between education and research is placed under increasing stress, limiting the available resources for free research, which forms the basis for development among the top sectors of the future. Most PhD students are now being financed from indirect government funding and contract research funding. Changes to these funding sources have a direct impact on numbers of PhD students. Furthermore, income from these sources places increasingly greater demands on direct government funding.
Compared to the European reference countries, private investment in R&D in the Netherlands is a major weakness, as shown in the figure below. Relative to all 27 EU countries, the Netherlands scores 0.3 per cent lower than the average.
Direct government funding provides the basis for all university research activities and also forms a key (or the only) source for financing the basic infrastructure of every university: laboratories, libraries, buildings, research support staff and support departments.
Although direct government funding has dropped in recent years, university income from indirect government funding and contract research funding has increased. Universities are becoming more and more dependent on these sources of income for their staff deployment (and therefore also for their scientific output).
The amount of direct government funding available for research is shrinking. The figure below shows that the total volume of academic staff funded using direct government sources has dropped by 6.5 per cent. This is compensated for by a rise in the percentage of academic staff financed using indirect government funding and contract research funding (2.6 per cent and 3.9 percent respectively). In the period ahead, the research budget will shrink due to the phasing out of the Economic Structure Enhancing Fund (FES). The Dutch government is attempting to encourage private investment in research with its Top Sectors policy. Over the next few years, the research domains outside the top sectors will have significantly fewer funds available.
Increased funding from indirect government sources and contract research places greater demands on direct government funding. The increased sources of funding are targeted subsidies, which reduce the amount of leeway and policy freedom offered to the universities in question, and only comprise partial subsidies.
Universities that already work using a full-cost-system are clearly able to demonstrate that projects funded by indirect government funding and contract research funding place great demands on direct government funding. The VSNU has calculated that approximately €1,750 million of direct government funding (in the form of PhD supervision, research infrastructure, accommodation) will be spent on co-financing projects funded by indirect government funding and contract research funding. Most PhD students are being financed from indirect government funding and contract research funding.
The Netherlands scores relatively highly in European Framework programmes. Whereas our contribution to the EU budget is around 5%, under the European Framework programmes for research and innovation Dutch knowledge institutions receive around 6.5% of the budget. It is essential that the criteria for accessing European funds be appropriate and administratively feasible. The criteria for European funding should also be taken into consideration when designing the Top Consortia for Knowledge and Innovation (TKIs).