The location of R&D in the Netherlands: trends, determinants and policy

Many factors determine the location of business R&D projects, the most important being history, the supply of R&D labour, and the quality of the public knowledge infrastructure (including the science-industry knowledge transfer). The set of R&D locations in the Netherlands changes little over time. But two things do change regularly: the size of the R&D activities at a particular site and the name and nationality of the owner of an R&D site. The Netherlands takes an average or higher position in a ranking of OECD countries according to attractiveness to the location of business R&D. Since domestic R&D is an important engine for domestic economic growth and since the market fails to provide optimal incentives for R&D, there is scope for government policy that improves upon the R&D location climate. Yet, this policy rationale does not necessarily imply that R&D policy initiatives are always effective and efficient: elasticities and social (opportunity) costs should be taken into account.