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The European tech ecosystem was significantly weakened during the last crisis of 2000 and 2008, but it is much stronger and more developed today. There are already significant structural signs of improvement: Europe is closing its funding gap with the United States early; Europe is increasing its investment in artificial intelligence companies and focusing more on climate and other purpose-driven businesses (State of European Tech, 2023).
The European Union (EU) is anticipated to contribute 180 million Euros to pioneering digital technologies as part of the ongoing Horizon Europe Programme, which promotes research and development collaboration throughout the EU. Artificial Intelligence, robotics, and advanced materials are vital technologies driving Europe’s transition towards a digital, sustainable, and inclusive future (European Commission, 2023). Moreover, total European investment is expected to exceed $50 billion in the first half of 2023 (State of European Tech, 2023).
There is a strong correlation between global and European technology demand and Dutch technology expertise. In addition to fundamental technological knowledge, the Netherlands offers a multilingual workforce, a digital infrastructure, and a favourable business climate. A stable economy and low taxes support an innovative and open culture. The Netherlands often refers to itself as the “Silicon Valley” of embedded systems and forms one of the most wired European countries (Invest In Holland, 2015:2023).
The currently trending segments of the fintech industry are embedded finance, alternative finance, SaaS solutions platforms, AI technologies and regTech (Five Degrees, 2022). There is also the capability of developing cutting-edge digital applications (Invest In Holland, 2015:2023).
When examining the Dutch tech sector internally, it attracts more international talents than many other industries. The Netherlands, however, is behind its European counterparts regarding gender diversity. Technology companies must enhance their data collection efforts to eliminate this disparity, and investors should implement effective diversity and inclusion policies. Expanding the talent pool is especially pressing since the percentage of challenging-to-fill tech job vacancies in the Netherlands is rising, reaching 59% in 2023, up from 57% in 2020 and 58% in 2021 (Tech Leap, 2023).
However, the Dutch government moved toward technology. For example, the Netherlands hosts the Amsterdam Internet Exchange (AMS-IX), one of the world’s leading digital data distributors (Invest In Holand, 2015:2023; Startup Headway, 2023). The Netherlands is set to become a significant player in the ICT export sector, with exports reaching $23.4 billion by 2026. It is a 2.4% year-on-year growth on average since 1987, when the industry first began to take off (ReportLinker, 2022). In addition, with an increased emphasis on ‘valorisation’, universities and research institutes have ramped up their efforts to support science-based ventures, substantially increasing their numbers over the past eight years. Technical universities are the most common source of spin-offs, accounting for 30% of all spin-offs, followed by UMC’s 28%), general universities (25%), and research organisations (7%) (TechLeap, 2023).
Despite recent market turmoil, European Deep Tech companies continue growing enormously and have shown resiliency. “Deep Tech” refers to companies that apply an innovative scientific or engineering breakthrough to produce new products for the first time. In 2022, European Deep Tech startups raised $17.7B, 22% below the 2021 total but still 60% above 2020. In Q3 and Q4 2022, Deep Tech was the second best-performing segment, behind only Energy. Deep Tech is inherently dynamic. New segments emerge that push the boundaries of what is possible as segments mature to the scaling and mainstream phases. In 2022, the four core emerging segments of Novel AI, Future of Computing, Novel Energy and Space Tech raised $4.4 billion, their highest amount ever and twice as much as they did in 2020 (Dealroom, Lake Star & Walden Catalyst, 2023).