Rising to fifth place in the world competitiveness rankings is no reason to crack open the champagne, writes Ad Scheepbouwer.

‘Show us your proposals for great works’. This is how the government addressed this country’s prestigious scientists in the 1920s. When they complied, the scientists in turn urged the government to be ‘decisive’ in taking the lead in executing their plans.

It was a time of great technological breakthroughs (car, telephone, refrigerator) and the government as well as the scientific world understood that in order to compete they had to join forces.

And after the crash of 1929 those who still lacked that sense of urgency very quickly understood something needed to happen. Three years later research institute TNO came into being in an atmosphere of ‘We are going to innovate our way out of the crisis!’

Pride

Is that what we are doing now, in 2012? Sometimes you would almost think so. Recently this website reported that the Netherlands had moved up two places (from 7 to 5) in the World Economic Forum’s competitiveness index. ‘Bring out the champagne!’ But is it really something to be proud of? Since when does a fifth place entitle you to a medal?

A look at the countries currently ahead of us shows there is no reason why we shouldn’t be number one. Switzerland, a country the Dutch tend to look at rather disdainfully, occupies the top spot.

This much is clear: when it comes to innovation we are lagging behind. Businesses are hesitant to use new technologies and government attempts at stimulating innovation have been largely unsuccessful. Attracting, and holding on to, talent from abroad remains difficult.

Sluggish innovation follower

Moving up two places on the competitiveness ladder is not entirely without merit, but the question which should be asked is who made it happen. Research shows the Netherlands is still reaping the rewards of investments made twenty years ago so any effect, both positive and negative, of what we do now will only become evident a generation from now.

So what’s it going to be? Is the Netherlands destined to remain a sluggish innovation follower? Or will it work its way up to the number one position in a number of key areas? If we want to achieve the latter, present government policy – focusing on a number of top sectors – should be rigorously streamlined.

With no less than nine top sectors and twenty consortia, it seems to show a lack of direction. Are we going to be averagely competent in many areas or champions in a few? I say we go for the championships. But we need a concentrated focus.

Does this sound facile? It does and, from the safety of the sidelines, I take a special pleasure in saying it. I was part of a team that wrote a report outlining the above suggestion for Balkenende’s Innovation Platform.

Report

After careful deliberation we unanimously decided the key areas in which the Netherlands ought to excel should not exceed six. We politely handed over our report to the Innovation Platform which thanked us profusely. Then things went quiet until one day up popped a new minister. What did he say? ‘We will increase our top sectors from six to nine!’

For me personally the experience was a healthy and chastening one. Until that time I had supposed advice was meant to shape policy and expedite its execution. Now I see it’s an exercise in prevarication meant to avoid making commitments.

Looking at the election results I don’t hold out much hope for the formation of a decisive government any time soon. But what’s to stop knowledge institutes and universities coming up with their own proposals for great works? Show us the areas in which we can take the top by storm! Try to get the attention of financiers, here and abroad! The biggest plans attract the deepest pockets.

Ad Scheepbouwer is an investor and former chief executive of telecom group KPN.

This column first appeared in Dutch in the Financieele Dagblad