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The Netherlands is a country with few natural resources. It therefore has to create wealth primarily by developing and applying knowledge. More than 60,000 researchers work in Dutch companies, universities, and research institutes. Each year, nearly EUR 7 billion are spent on research - half of it by companies and a quarter each by universities and research institutes.

Dutch researchers produce 7% of the EU’s scientific publications and hold 6% of its patents. Around 5,000 Dutch companies conduct their own research to develop new products and make production more efficient. The country’s five largest multinationals - Philips, Shell, Akzo Nobel, DSM, and Unilever - are at the forefront of industrial research and development. The Ministry of Economic Affairs actively encourages technological innovation with subsidies open to all companies in the Netherlands, regardless of the owners’ nationality.

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The main elements of the science budget 2004
The main elements of the innovation letter

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Science and Technology in the Netherlands
In the context of European developments and the European Research and Innovation Area, the Netherlands has ambitions of its own: to raise the Dutch knowledge economy to a leading position in Europe and to change the current mediocre position in innovation into a top position. The start of a new Cabinet in May 2003 gave an important impetus to science and technology policy in the Netherlands. The new Cabinet decided to establish an Innovation Platform, headed by the Prime Minister, with members from government, business enterprises and knowledge institutes. The task of the Innovation Platform is to propose strategic plans to reinforce the Dutch knowledge economy and to boost innovation by stimulating business enterprises and organizations in the public knowledge infrastructure to work closely together. Besides the installation of the Innovation Platform, the Cabinet decided to allocate € 800 million of extra funding to education, research and innovation. € 185 Million of this extra funding was allocated to priorities in the field of research and innovation and € 100 million was set aside to intensify the fiscal R&D incentive for private R&D. In the autumn of 2003 two policy documents were published to set out the main lines of science, technology and innovation policy. In October 2003 the Ministry of Economic Affairs published the Innovation Letter, entitled ‘Action for Innovation: tackling the Lisbon ambition’. In November 2003 the Science Budget 2004, entitled "Focus on excellence and greater value", was published by the Ministry of Education, Culture and Science

The main elements of the Science Budget 2004
Stimulating focus and mass in research in order to concentrate research funds on national priorities, which are genomics, ICT and nanotechnology. Some areas that are of special importance to the Netherlands from a societal point of view, such as traffic management, water control and the vitality of major cities, can also be supported;

Rewarding excellent research groups, which should be based on simple, non-bureaucratic procedures, such as track records of individual researchers;

Promoting the utilization of research results by strengthening the societal role of universities and stimulating a university patent policy;

Attention for human resources in science and technology, with a particular focus on the impending shortage of knowledge workers, especially in science and engineering;

Raising public awareness on science and technology, in which science centers, museums as well as schools, universities and industries play a vital role and aimed at pooling the current regional initiatives.

The main elements of the Innovation Letter
Strengthening the climate for innovation, which includes intensifying the fiscal incentive for R&D, the introduction of a new (project-based) scheme for R&D collaboration and policy directed at tackling the impending shortage of knowledge workers;

Encouraging more companies to be innovative by improving the climate for high-tech start-ups,by better exploiting the potential of SMEs through policy actions aimed at the dissemination of knowledge to SMEs, and by attracting knowledge-intensive business activity to the Netherlands;

Taking advantage of opportunities for innovation by opting for focus and mass in strategic areas, which is aimed at strengthening the knowledge base and stimulating public-private cooperation in key technology areas such as ICT and life sciences