Irma – research analysis in the netherlands

IRMA – Research Analysis in the Netherlands

Part A: Analysis of the manufacturing engineering

1. General Analysis of the Manufacturing Sector in the Netherlands
The Netherlands is a relatively small country but has the highest density of population of Europe. The economy is very diversified and dynamic showing one of the highest GDP per capita in the continent. The Netherlands is among the world’s leading countries in terms of economic performance. Some of the greatest assets of the Netherlands are the seaports like the port of Rotterdam but also other major entry points like Amsterdam airport. Added to these are the country’s comprehensive work of river connections that are overlaid with a dense infrastructure of ultramodern and well maintained roads, railways and inland waterways. The country is also strategically located in Europe with a proximity to the biggest markets like Germany, France and the UK. Besides the highly developed western region, the south east of the Netherlands is from a European perspective an important technologically advanced region with internationally operating enterprises as well as small but high value subcontractors. The eastern part of the country is an important region in terms of food technology and the energy sector occupies an important share in the north. The Netherlands receive close to 2 billion euros through the European structural funds for the period 2007-2012. A large part of the R&D originating from the private sector is carried out by a limited number of big multinationals. Seven important firms undertake roughly 50 percent of the total private R&D in the Netherlands. The Dutch service sector accounts for more than 50% of the GDP, whereas the manufacturing sector is dominated by the production of chemicals and pharmaceuticals, metals and electronics, food processing and tobacco. The Netherlands’ strong manufacturing position contributes to make it one of the most attractive countries in Europe among foreign companies, especially North American ones of which thousands have established themselves in the Netherlands, many of them being even major ones. A significant number of them have chosen the Netherlands as the site for their main representation in Europe. A large number of European and Asian companies have also established themselves in the Netherlands for assembling and manufacturing operations. Electronics manufacturing in the Netherlands is dominated by the multinational corporation Philips. The company makes lighting, consumer electronics, appliances, semiconductors and communications systems. Philips is a top ten manufacturer of semiconductors in the world. It employs nearly half of the people in the electronics field in the Netherlands and has about a quarter of a million employees worldwide. The Dutch chemical industry produces a variety of goods including synthetic rubber, plastic consumer goods and polyester yarns for industrial purposes. Major Dutch chemical companies include Shell, Akzo Nobel which belong to the top ten of the largest chemical companies worldwide and also DSM which produce 70% of the polymers and rubber that the European automobile industry purchases for the car production. Ship building and repair remain significant components of the Dutch economy in spite of important cut downs caused by tough competition coming from countries with cheaper labour. The Netherlands keeps a top ten global position in this field too. The construction has had a major impact on the Dutch economy. The collapse of the housing bubble in 1970s led to a widespread economic recession. Nonetheless, the construction field is aided by government spending on infrastructure projects. Although companies have different preferences based upon their specific requirements, the best option for modern manufacturing is right in the economic center of Europe, with easy and fast access to customers. In many industries changes are occurring faster and faster and time to market is increasingly important. In this respect, the Netherlands has developed into one of the main manufacturing hubs in Europe. There is some confusion among Dutch industries and the government representatives about the understanding of the manufacturing sector challenges and its future. This is highly reflected by the diverse discussions and debates among political and industry representatives at all levels. Within the production creation process seen in a broad sense and among the different phases of it like analysis, strategy making, conceptualization, product development, product finishing, production, marketing, sales and product improvement, it is often the actual production which is being discussed as a critical part. The idea that the whole sector lacks innovation power and that the manufacturing capacity is successively and at a significant pace being relocated abroad is still often discussed and debated by the industry professionals and the government representatives. Not only is this opinion not shared by everyone, but also it is not clearly supported by facts. Considering the complex picture of the diverse industries and the different levels that manufacturing engineering involves (from design and planning to the product assembling and finishing) we have to recognize the difficulty of validating statements. A significant number of companies are performing well and are able to struggle within the international competition. Companies that cannot face international competition and are not able to compensate their weakness with a higher product quality do probably not belong to the Netherlands or even the EU. The Dutch economy is for sure not a closed one. It is an integral part of the European Union and it operates in worldwide markets. If the manufacturing sector is facing serious challenges, its image could also have a negative impact to the overall Dutch economy especially if we do not distinguish the macro economy from the business economics. The cause of this image is not only a wrong estimation of the performance of the Dutch industry but also a wrong attitude toward the importance of this sector for the national economy. From an historical point of view it is often believed that a small country like the Netherlands cannot face big competitors abroad, and should also not be willing to do so in a global economy. Also, as an international coordinator with a trade mind it is often believed that the Netherlands should focus on what is supposed to be its strengths. The “post industrial thoughts” could have negative effects and probably they have already had. Innovation requires investments and learning, and most of all belief. It is difficult to believe that excellence can be obtained if there is a common understanding that it can preferably be done somewhere else. Why would someone choose to pursue a high technical education if manufacturing plays an inferior role in the service economy? In an attempt to respond to the needs for more industrial innovation in order to resist international competition, the Dutch government created the “Innovatieplatform” (innovation platform) in 2003, presided since then by the prime minister himself Mr. Jan Peter Balkenende. One reason why the weakened image of the manufacturing sector could damage the whole economy lies simply in the fact that many service businesses are based on manufacturing. In the “postindustrial thinking” there is often not enough attention devoted to the interest of the regional and local businesses and the impact they have on the national economy. Such underestimation leads to weird situations consisting of hiring cheap foreign labor or carrying out the production activities abroad whereas it could actually have been cheaper to have them carried out in the Netherlands and this way providing not only the opportunity for high productivity but also better quality control and a more efficient installation for the logistical process. Many enterprises underestimate the complexity of the process of outsourcing and relocation of production abroad and the impact they could have on their own performances but also the local and national economy. 2. The IRMA Model – SWOT Analysis in the Netherlands
The Netherlands features a strong and diverse manufacturing sector, led by the agro-industrial, chemical, electronics and metal industries. This is demonstrated by the fact that five of the world’s leading multinationals – Philips, Unilever, Royal Dutch Shell Group, DSM and Akzo Nobel – were founded in the Netherlands. The high productivity in the Netherlands is a result of the high overall standard of education and training, an efficient work organization, a relatively high level of automation and efficiency in production processes, the good working attitude of the Dutch employees and their flexibility, and a small number of working days lost to strikes annually. The manufacturing activities that have been the most relocated, outsourced or simply lost to countries abroad due to the fierce international competition are found mainly within the shipbuilding and the textile industry. The industry is outsourcing more and more high value activities like design, marketing, and R&D to the service sector. With 825 000 direct employment the industry itself remains an important employer in the Netherlands. Sector SWOT analysis
Strengths
Weaknesses
• Insufficient subsidies for financing
Opportunities
means for manufacturing • Production activities are being engineering. • Education and labour market • Low wage countries will develop importance of manufacturing for the overall economy. 3. Trends and main indicators in the Manufacturing Engineering in The
Netherlands
The advanced economy of the Netherlands is gradually becoming more knowledge intensive, meaning that economic growth and prosperity is increasingly based on a highly skilled labour force and innovative products, services and processes. The Dutch manufacturing has built a worldwide reputation. Nevertheless an increasing number of Dutch companies have relocated or are threatening to relocate their production activities to countries abroad with lower labour costs and more simple regulatory systems. At the same time this trend is compensated by the Netherlands position in the field of development and production of complex and advanced products. This trend could even be further compensated and even reversed by an optimal use of the available knowledge in the country. The rapid internationalization of markets is pushing companies to focus on their core activities. The organization of the core activities is handled in business units or product divisions. Through company take over, fusions and creation of alliances, the core activities are rapidly getting internationalized and developed into product divisions. In some cases the same divisions become important enterprises. Due to the complexity of handling long term research activities, they are often outsourced. For the outsourcing of research many ways exist, like the TNO (Netherlands Organization for Applied Scientific Research), the GTI (big research institutes) and the TTI (Technological Top Institutes). High tech companies that want to remain as such must continue to invest in long term research programs. For this reason academic and industrial interests obviously go hand in hand. The TTI allow an adapted cooperation between business life and universities. Nevertheless for many companies the trend is acquisition instead of research. The new term Acquisition and Development instead of Research and Development reveals this complexity. One of the main competitive advantages of the Netherlands is its ability to reduce the operational costs in manufacturing. This trend is favoring the trading and service based business activities and is also causing the fragmentation of the manufacturing and a further split in the value chain. The fragmentation is realized by market means in the case of outsourcing and by hierarchy in the case of relocation of activities. The growing fragmentation of the production has not only led to the relocation of activities abroad. The outsourcing has also taken place within the domestic market. The construction sector which is also regarded as a manufacturing activity has increasingly been subject to outsourcing. In this particular case more and more often the main contractor has got the managing role, and the actual realization of the work has been outsourced to subcontractors. Technological renewal, process and product innovation provides an advantage in terms of production costs. Innovative solutions throughout the value chain are also encouraged in order to reduce the operational cost of the product. According to a research carried out by Deloitte and published in the report “Made in Holland” sixth edition on January 24th 2008, there would be a very new trend. Dutch production and Research & Development activities would have increased in comparison to the worldwide activities of a selected number of representative companies. Also in the coming 2-5 years the manufacturers want their domestic production and R&D activities to grow, in comparison to their activities abroad. According to the same research the same trend does not allow us to conclude that fewer Dutch companies want to relocate their activities abroad. Just like in the previous years about one third of the companies indicate being in a process of relocating some of their activities to emerging markets. The most important reasons for relocating company activities are the reduction of the operational costs, the conquest of new markets and a better access to cheaper suppliers. Nevertheless there is a minority of companies that actually realize these goals. About a third of the companies acknowledge that they relocate activities to emerging markets. The machining industry has mainly been subject to relocation. China, and East Europe are favorite destinations. It is striking that R&D do not automatically follow. In order to increase its competitiveness, the Dutch manufacturing sector has essentially oriented itself to the optimization of the production processes, on product and process innovation, on quality and on flexibility. More and more companies are strategically cooperating with their competitors, which is regarded as a must in an international and highly competitive business world. This trend is also demonstrated not only by small and mid sized companies but also by the biggest ones like Philips Medical systems, ASML and Océ. The big companies often involve the smaller ones, on one hand for the sake of an optimal efficiency and transparency in the value chain, and on the other hand for the interest of the regions and local business environment. The main goal is to raise the competitive advantage of Dutch international manufacturing. Besides the important challenges of manufacturing engineering consisting of reducing production time, and most of all time to market, one important trend is also to bring the production closer to the market place, reducing further the time to market but also saving money by reducing both storage and transport costs. This phenomenon is also clearly demonstrated by the attractiveness of countries of the east and far-east in terms of relocation production activities. The relocation of manufacturing activities to these countries is motivated not only by possible cost savings, but certainly also by the improved access to the new market places. To summarize the relocation of production abroad can be driven by cost reduction, capacity adjustments, reducing time to market, focus on core activities, improving capabilities and/or quality. In some cases R&D even automatically follows production relocation abroad. Dutch machine and ship building sectors are not only presenting a strengthening in the market position but also a real comeback after years of significant difficulties. The reason for this is not only the improved economic performance of last years but also the ability for these industry sectors to offer clearly better quality than the low wage countries. Ship builders have simply become more prudent with outsourcing to cheaper countries in Eastern Europe and South Korea, where the quality simply appears more difficult to guarantee. Standard series is mostly performed in those countries. The demand is precisely more oriented to tailor made solutions, for which the Netherlands is more adapted, namely with complex ship building in various segments. The customers are ready to pay more for a quicker delivery. In 2005 this sector amounted 2.8 billion euros. Nevertheless customers can also pay more easily in favorable economic times, which has also been the case in recent years. In the case of an economic crisis the situation would most probably be different. In the machining industry too, tailor made solutions for ultra modern and sophisticated products are required by customers and delivered according to very detailed specifications. In the pharmaceutical sector the bigger companies are often prolonging their patents as much as possible, which is preventing the appearance of smaller and cheaper suppliers, or reducing the growth of existing ones. Various studies show also that Dutch manufacturers are barely worried about the evolution in low wage countries and the effect it could have on their profit. On the contrary of enterprises in other European countries, they are not preoccupied with growing influences of China and Eastern Europe in their competitive positions. The companies are more concerned about increasing prices of raw materials. The Dutch manufacturing engineering is not disappearing, it is being transformed. Nevertheless, since July 2007 and during 2008 the daily output in all branches of the Dutch manufacturing industry has a downward trend. 4. Connection between Manufacturing Engineering and Higher Education
It is important for a high wage country like the Netherlands to support the economic activities which creates the most added values. Value creation through renewal is the most important source of growth for an innovative economy. In the business world it appears clearly that innovation has become very knowledge intensive. It is not only a high diversity of technological knowledge and highly elaborated production techniques which are necessary to manufacture products, but also the knowledge necessary to recognize needs in society, and to translate these into successful market concepts and combinations of products and services. The Netherlands shows an excellent record in knowledge creation with a highly productive science base. However we find comparative weaknesses in R&D intensity, in particular business R&D. The Netherlands spent about 8.8 billions euros on R&D in 2005, bringing its R&D intensity below the EU25 average (OECD). Overall the Netherlands ranks around the average for the benchmark countries according to the International Competitiveness Index. The national government has established an innovation platform, presided by the prime minister in order to support the formulation of a coherent strategy on research and innovation. A wide range of policy actions and instruments have been initiated, or currently being planned by government agencies to promote the role of science, technology and innovation in the Netherlands. These initiatives include fiscal and human resources measures among others. The university sector with its 14 universities is the second largest one in terms of R&D with some 2.5 billion euros in 2005, representing 28% of total Dutch R&D expenditure above the average EU25. The universities in the Netherlands receive a relatively large share of their R&D funding from government sources. The research institutes sector accounted for 14% of total Dutch R&D spending or about 1.1 billion euros. The largest institutes are TNO (Netherlands Organization for Applied Scientific Research), NWO (Netherlands organizations for Scientific Research), KNAW (Royal Netherlands Academy of Arts and Sciences) and the GTI’s (Large Technological Institutes). TNO spends the most with about one third of research institutes regrouped. The public sector research institutes in the Netherlands receive a relatively large share of their R&D funding from the private sector. Researchers, either academics or staff at research institutes and R&D intensive technology companies are often at the core of knowledge creation processes: they are the ones that push back the knowledge frontiers and explore the potential of new information and novel techniques. The Netherlands has a relatively low share of researchers in comparison to other western European countries. This gap is explained by the fact that the research intensive manufacturing sectors are relatively small, and the science based technology companies employing researchers for their R&D unit relatively few. The Netherlands is also below the European average in terms of female research staff both within the university sector and within the private sector. Among the main problems related to R&D human resources in the Netherlands, we notice a current shortage of attractive job opportunities, unattractive working conditions and a declining interest of Dutch young people to pursue a scientific career. The fraction of female researchers is growing gradually, but they are still significantly underrepresented within the Dutch university research staff, especially within the higher ranks. Given the relatively small number of researchers in the Netherlands the research productivity rates are quite high compared to most of western countries. The Netherlands is among the top 3 nations in terms of productivity per researcher (amount of publications per researcher). In terms of the productivity of Dutch public sector researchers (academic mainly), the Netherlands is on an equal footing with the US, the UK and Switzerland. The best research performances are mainly carried out in Chemistry and chemical engineering. The volume of research articles published worldwide in international scientific journals is a key indicator since these publications are the main means of disseminating research results and validating their quality. The Netherlands produces some 25000 research publications per year. Universities and public sector research institutes clearly have an important role to play in maintaining excellent research capabilities and increasing the competitiveness of the Dutch knowledge based economy. Some three quarters of the publication output is produced by scientists and scholars employed at the 14 universities in the Netherlands and their medical centres. An additional 12% originates from the public sector research institutes. The private sector amounts for about 5% of the total publication output, in large part produced by the research intensive technology companies in the Netherlands with large R&D units: Philips, Unilever, DSM, Shell and Akzo Nobel. In the Netherlands there are two main types of regular higher education, namely research universities and universities of applied sciences. There are 14 government approved universities in the Netherlands, of which 13 focus on research as well as education (offering bachelors, masters and PhD degrees). The universities vary in size, with student enrolments ranging from 6000 to 30000. The universities are: Utrecht University, University of Amsterdam, VU University Amsterdam, Erasmus University of Rotterdam, Leiden University, University of Groningen, Radbout University Nijmegen, Wageningen University and Research Centre, Maastricht University, Delft University of Technology, Eindhoven University of Technology, University of Twente and Tilburg University. The universities employed some 18000 research staff in 2005. The Netherlands is also home of many non university research institutes. Most of them are publicly founded, such as the institutes funded by the Netherland Organization for Scientific Research (NOW), which also acts as the national research council across all fields of science. The NOW research institutes are: Institute for Astronomical Research in the Netherlands, the National Research Institute for Mathematics and Computer Science; FOM Institute for Atomic and Molecular Physics; FOM Institute for Plasma Physics “Rijnhuizen”; National Institute for Nuclear Physics and High Energy Physics; Institute for Dutch History; Royal Netherlands Institute for Sea Research, Netherlands institute for the study of Crime and Law Enforcement; and SRON Netherlands Institute for Space Research. These institutes employed a total of approximately 2100 staff in 2006. Other public research institutes in the Netherlands are: TNO, National Institute for Public Health and Environment, Netherlands Cancer Institute, KNMI (weather and climate research institute). In addition there are five Large Technological Institutes and eight Leading Technology Institutes focusing on R&D activities with links to the private sector and partially funded by industry. Although each of these universities and institutes differ in size and scope, they all perform quite well in terms of producing large numbers of publications that generates above average citation impacts on the global scientific community. There is a positive association between patenting and R&D investment, especially within the high tech industrial sectors. High tech R&D industries, such as pharmaceuticals or medical, precision and optical instruments are among those that are patented the most. As a measure of R&D outputs patenting by industry provides interesting information on industries technological strength innovation potential. The Netherlands is among the leading nations in international patents. Patenting is particularly important in technology based industrial sectors like electronics, biotechnology and pharmaceuticals. The relatively large output of patents from applicants in the Netherlands originates from Philips, with its corporate headquarters and large R&D laboratories in the Netherlands. The three major actors that are actively involved in transferring research based knowledge to the private sector are: the Netherlands Organization for Applied Scientific Research (TNO): the Large Technological Institutes (GTI) and the leading Technology Institutes (TTI, Technology Top Institutes). TNO is partially founded by the Dutch government . The objective of TNO is to create and translate scientific knowledge into applied knowledge that is useful for the private sector and government agencies. One of the core areas of TNO are science and industry. TNO has established together with universities some 30 knowledge centres to develop knowledge in fields of relevance to innovating companies. The main mission of the five GTI’s (ECN, Geo Delft, MARIN, NLR and Delft Hydraulics) is to transform basic knowledge into applications for both industry and government (The GTI’s are partially founded by the government). They perform research and offer training to scientists and engineers. The TTI’s are co-founded by government and industry. Some of the TTI’s are: Netherlands Institute for Metals Research and Technologic Top Institute Water Technology) Dutch public and private organizations collaborate often in joint R&D projects, programs and networks. By doing so, universities and public research organizations, contribute to innovation processes. The public sector supplies human resources (recently graduated engineers or PhD graduates), offers technical facilities, and provides knowledge and know-how through contract research or consultancy arrangements. Government measures have been taken in order to increase the volume, intensity and effectiveness of R&D linkages between public research organizations and innovating firms. In addition, policies are developed and implemented to increase the current and prospective supply of scientists and engineers with the goal to make the Netherlands a more attractive location for R&D investments. A Eurostat survey from the years 2002-2004 shows that the Netherlands is less competitive than other European countries in terms of its level of public-private R&D cooperation. Only a relatively small share of innovative companies in the Netherlands is R&D intensive or science based. Dutch companies are more likely to team up with research institutes as compared to universities, which is understandable, considering that the research institutes tend to focus on applied and strategic research of more immediate value to companies. In 2004 in an attempt of reducing competition between universities, the 3 technical universities in the Netherlands (TU/Eindhoven; TU Delft; UTwente) managed to create a common sector plan for science and technology aiming at establishing a federation before 2010. The 3TU.Federation (“3TU.Federatie”) was in fact established in 2007, leading to a significant intensification of the cooperation between the three universities from 2008. The main objective of the 3TU.Federation is to provide the Dutch knowledge economy a competitive advantage on the international scene. Within their five common Centres of Excellence and Centres of Competence, technical and scientific research is carried out on essential topics of the knowledge economy, which will result not only in increased research innovation but also the possibility for new bachelor and master study programs. The broader study program in the technical field should also increase the attractiveness of the universities among future new students. From each one of the three technical universities in close cooperation with regional interests there is a new impact given to knowledge transfer and valorization, cooperation with enterprises, supporting entrepreneurial spirit and starters. In the entrepreneurial field, thanks to an increasing number of projects the universities learn from each others. The significant results that have already been experienced so far are due to the trust and the support of the government, the business world in the process but also essentially thanks to the input of many scientists from the three institutions. Through the exchange of knowledge and experience between the universities the quality of the education is improving and the barriers preventing students from moving between the technical universities are being removed. The flexibility within the bachelor study program has been increased by the three universities. Besides a major the students can now make a choice within an increasing number of options, deepening or broadening but also preparation minors for the specialized master programs. The three universities have in principle recognized each ones bachelor programs. Practically speaking some aspects like points and durability still need to be harmonized. Each university has furthermore made new attempts of establishing honour programs for very talented students. Bachelors already receive a broad and transparent offer of options of common master programs to the three universities. The three universities have also intensified initiatives to raise the attractiveness for a technical education among high school students. The technical universities have agreed that initiatives for new master programs should be discussed among the three, in order to avoid unnecessary repetition of similar study programs. Five of six proposed common master programs will be realized: - Embedded systems; - Systems & Control; - Sustainable Energy Technology; - Construction Management & Engineering; - Science Education and Communication, - Computer Science Education (temporary) There have also been attempts of having a common “Nano Science & technology” Master program, but his has failed due to a more complex approach involving also general universities, and the lack of interest among students to follow such an independent master program. Besides an equivalent basic program, the technical universities offer also specific orientations at the end of the studies. This way a student can start a program at one of the three universities and continue at any one of the other two. In the Sector plan for Science and Technology the Technical universities have set as goal a common process coordination, focus and prioritization in the technical and scientific research elements in order to obtain a stronger and more goal oriented national research portfolio. Based on the idea to respond to the need within the five main research fields in the knowledge economy the common Centres of Competence were established. The common Centres of Competence are: - High Tech Systems; - Sustainable Energy Technologies - Information and Communication Technology - Fluid and Solid mechanics, - Applications of Nano Technology In total these centres represent approximately one third of the total research portfolio of the three universities combined. Within each centre of Competence there is a Centre of Excellence under construction. The Centres of Excellence are: - 3TU.Centre for intelligent Mechatronic Systems (within High Tech - 3TU.Centre for Sustainable Energy Technologies; - 3TU.Centre Dependable ICT Systems (within NIRICT); - 3TU.Centre for Multiscale Phenomena (within “Fluid and Solid - 3TU.Centre for Bio-Nano Applications (within “Applications of Nano The government has contributed with important subsidies, spread over a period of five years (2007-2011) for the creation of the different centres. As an additional completion of the centre program, a sixth one has been created and financed by the three universities over the same period. The centre is called 3TU.Centre for Ethics and Technology, and will focus among others on the questions of ethics and technology within the fields covered by the five centres of excellence. The three technical universities have decided that every three years the 3TU.Federatie will be monitored and a citation impact study should be carried out. The idea is to compare the results with other important foreign technological universities. According to the preliminary results of the first edition of the quality monitor (3TU.Kwaliteitsmonitor) in 2008, the three technical universities score far better than the worldwide average, and remain also in the top 5 of European technology universities. The three technical universities have successively started a first approach for cooperation with TNO and the big technological institutes. Common position has been reached on global detailed cooperation plans on six relevant fields and submitted to the competent ministries in order to obtain financial support. Those fields of research are namely: - Energy - ICT - Technical Health Science/Biomedical Systems - High Tech Systems/Mechatronic Systems - Civil Technique/Water management - Mobility One example of a plan would be the establishment by the three universities together with ECN of an Advanced Dutch Energy Materials Innovation lab” (ADEM). The mission of universities is double, research and education. The accents are set on the creation of new options and scientific concepts. Knowledge transfer means for the universities an active input for start ups. But most of all it means the education of new academians that are not only creative but also entrepreneurial, not only deepening knowledge but also able to use expertise in multi disciplinary combinations for societal added value. A successful manufacturing is based on the innovative capability on both product and process technology. Product technology appears to be more and more easy to copy, but this seems more difficult with the process technology. The reason for this is the strong interaction between the hard (production) and the soft process technology (the control of this production). In the Netherlands the interaction between the different types of process technology is already strong due to the close ties between universities and high tech companies like Philips in the electronics business, ASML in the semiconductors industry and Océ in document and information management. This interaction can further be strengthened by a directed input of available knowledge into the network of the manufacturing industry. Innovation in business is very knowledge intensive. The transfer of knowledge has become very complex and the requirements set on the knowledge level of industrial researchers very high. This has also led companies to increasingly leave the scientific research to universities and acquire smaller companies which develop new knowledge. 5. Best practices in The Netherlands
Like many advanced economies, the economy of the Netherlands is becoming increasingly knowledge based. A rising share of the products and services for regional and local markets are based on improvements and innovations derived from the application of new knowledge or advanced skills. The Netherlands has one of the most competitive economies worldwide. Both the educational system and the R&D system contribute to the knowledge intensity of Dutch society and the economy. The knowledge workers account for 10-25% of the workforce in the Western European nations. The knowledge intensity of the Dutch work force is slightly higher than the average of Western European countries with 18% of the working population between 25 and 65 years of age belonging to the group of professionals who work in R&D related jobs and have at least a tertiary education degree. However, the share of researchers is clearly less important than in the other Western European countries. Dutch researchers are very productive considering the number of published publications in relation to the number of researchers and the total population. Within NEVAT (sub-contractors organization) Dutch manufacturers have defined The segment Electronic Manufacturing services wants to position itself as the Dutch international electronic manufacturers and service providers. The metal cutting segment regroups heavy metal process industries that have the capacity of handling big and complex work pieces with high precision and supply companies in various industry sectors like the chemicals, including energy and petro-chemicals, heavy machine construction and ship building. Their goal is among others to strengthen their competitive advantage nation wise and abroad, but also solve company individual problems through common solutions. The automotive segment regroups very diverse component producers that aim the national and international automotive, bus and truck industries’ Original Equipment Manufacturers. More and more automotive OEM companies are joining their efforts. This trend has also expanded to the subcontractors as well, leading them to refine their position in the value chain. They are now subject to higher expectations not only in terms of price, quality, logistics and delivery accuracy, but other fields as well, such as product development. The segment plate manufacturing is a very innovative one. In recent years it has invested a lot in advanced process machines and equipment, leading to further optimizing not only the production but also the logistics process. The Dutch plate manufacturers are used to adapt quickly and adequately to the market demands and requirements. This guaranties a very short time to market which is vital for many big OrEM which face tough international competition. The precision machining & tooling segment has increasingly invested in recent years in production, automation and computerization (CAD / CAM). This way it is possible to operate faster, more efficiently and with a larger grade of flexibility according to the specific needs of the national and international customers which represent a vast majority of industry segments. Furthermore, they possess such an advanced expertise that they can provide extra value to the innovation capacity of their customers. The system developers segment regroups the Original Equipment Manufacturers. They require more and more often engineer competences from their subcontractors. As an answer to this need there is an increasing number of engineer bureaus which have specialized in the development of high-tech systems and products. The mission of system developers is to create new business by bringing together OEMs, system developers and system suppliers. This will be achieved among others by making the notion “system developer” recognizable in the manufacturing sector and by strengthening the network of the system developers in the value chain. Since more and more manufacturers in recent years focus on their core activities the need for subcontractors has increased. The system suppliers segment differs from other subcontractors, since it releases specific responsibilities from the Original Equipment Manufacturer by providing following services: - industrial design, engineering model - project management - manufacturing feasibility and industrialization - serial production - logistics and supply chain management - assembly and testing - value engineering - lifecycle management The frequently spread idea that the Netherlands would not have any industry culture, that it would be a country of trade and services more than industrial production is essentially unfair and wrong, since there is luckily an important level of manufacturing taking place in this country, which is also an essential condition of the survival of the trade and service business. One of the most important sectors that we can distinguish in the Dutch manufacturing is the automotive. Within the Netherlands automotive sector, there are approximately 30 000 employees of whom 11 000 work directly for the car, bus and trucks manufacturers, another 18 000 for the subcontractors and finally 1 000 for the research institutes and engineer bureaus. The subcontractors alone represent 5-10 billions of annual turnover. Just like the other industry sectors, the automotive sector has gone through significant changes due to the globalization of the economy, meaning for all companies a concentration on their core activities, and in fact the whole value chain. Especially the subcontractors must pursue their development from being just regional suppliers into global players of knowledge intensive systems, together with other subcontractors or as subcontractors of innovative products. The successful companies are orienting themselves toward new markets where innovation is the critical factor. The knowledge and expertise of the cooperation structure in this sector has to be transparent and clear. These changes are vital, because the companies in this sector would otherwise face a slow death. This way they will represent an important contribution to the producing companies like DAF and NedCar on the long term. Further on an increase of employees at all levels will be necessary to assure that this industry will remain. Generally speaking the raise of expertise of products and processes of one company will also have spin off effects on other ones. De Unie Automotive Machinery and components is another successful example of Dutch industry. In past years, the trend of the 90s which consisted of a decrease of the added value has been reversed. The pump industry (non liquid) and the food processing industry are the ones taking the strongest positions. Besides the automotive sector, Dutch industry includes a significant number of top players in electronics, chemicals food/health and water sectors. Dutch manufacturing is not dying but is more on the contrary very alive. This is explained by the fact that more and more companies are renewing themselves, bringing new products and processes on new markets and exploiting the opportunities. The aging population is for example providing new significant opportunities for the health industry. In recent years, the Dutch government has invested hundreds of millions of euros in knowledge, innovation and education. Parts of these investments directly support the
industrial structure. Good examples are the Holst Center in Eindhoven (high tech
manufacturing), the WFCS in Wageningen (food sector), the Center for Translational
Molecular Medicine (health sector) and the TTI Water technology. Nevertheless there is
still a long way to go in terms of accomplishments and government support before the
business climate would reach a satisfactory level, not only in the fields of innovation and
business legal aspects, but also in terms supply of qualified personnel (the shortage of
qualified personnel remains a major challenge). In the latter case companies will also
have to invest more in new trainees and offer more educational solutions to existing
employees as well.
References and information sources
Ministerie van Economische zaken, Industriebrief 2008
NOWT (Netherlands Observatory of Science and Technology)
International Competitiveness Index
CBS (Centraal bureau voor de statistiek)
OECD 3TU.Federatie (3TU.Federation) SIC (Stichting voor Industriebeleid en Communicatie) NEVAT Deloite De Unie Automotive ECN energy research centre for the Netherlands

Source: http://www.neli.tk/results/AMESC/hl.pdf