Regional Innovation Monitor Plus 2016

Transcription

1 25 November 2016 Regional Innovation Monitor Plus 2016 Regional Innovation Report North Brabant (Advanced materials) To the European Commission Internal Market, Industry, Entrepreneurship and SMEs Directorate-General Directorate F Innovation and Advanced Manufacturing

2 Regional Innovation Monitor Plus 2016 Regional Innovation Report North Brabant (Advanced materials) technopolis group in cooperation with technopolis group

3 Table of Contents Executive Summary 2 1 Advanced Manufacturing: Advanced Materials Overview of performance and trends Business sector perspective Scientific research potential Role of intermediary institutions Developing skills for the future Major investment projects International cooperation Policy support and delivery mechanisms Good practice case Leveraging the existing potential 27 2 Regional Innovation Performance Trends, Governance and Instruments Recent trends in innovation performance and identified challenges Institutional framework and set-up Regional innovation policy mix Appraisal of regional innovation policies Policy good practice Possible future orientations and opportunities 40 Bibliography 43 Stakeholders consulted 47 i

4 Table of Figures Figure 1: Number and percentage of people employed in manufacturing in Figure 2: Number and percentage of people employed in manufacturing in Figure 3: Flexible OLED lighting panel Figure 4: Map of the Top Technological Region/Eindhoven-Leuven-Achen Figure 5: Map of cross-border and international relationships in the form of strategic cooperative ventures, networks and projects Figure 6: Percentage of R&D funding provided by national governments Figure 7: Picture of flexible electronics developed by Holst Centre Figure 8: Picture of Perovskite-based PV modules Figure 9: R&D spending in the Netherlands between public and private sector Figure 10: Innovation and R&D performance indicators for North Brabant compared with the Dutch average Figure 11: R&D spending, public and private, as a percentage of GDP Figure 12: R&D spending as a percentage of GDP from 2000 to Figure 13: Number of patents per region of the Netherlands in Figure 14: Map of agency representation in the Netherlands Figure 15: Representation of overall economic development plan for Brabant List of Tables Table 1: Educational initiatives for enhancement of skills in HTSM Table 2: Cross-border initiatives Table 3: Projected spending on high-tech systems and materials Table 4 ROMs operating in the Netherlands Table 5 Regional innovation support measures ii

5 PREFACE In the context of the growth and investment package set out in the Investment Plan of the European Commission, the Regional Innovation Monitor Plus (RIM Plus) provides a unique platform for sharing knowledge and know-how on major innovation and industrial policy trends in in some 200 regions across EU20 Member States. Launched in 2010, the Regional Innovation Monitor aimed at supporting sharing of intelligence on innovation policies across EU regions. Building upon the experience gained and results obtained during the period , the RIM Plus provided practical guidance to regions on how to use the collected information, via a network of regional experts. Since 2014, the RIM Plus has introduced a thematic focus on advanced manufacturing. The RIM Plus evolved from a general monitoring of innovation policies towards establishing a more thematic focus in selected areas in order to contribute to improving the competitiveness of European regions. Particularly, the RIM Plus aims through its activities and in close cooperation with the regional stakeholders and other relevant initiatives to: Contribute to the development of new and open spaces of collaboration and exchange on advanced manufacturing, each with a clearly defined thematic focus. Play an enabling role in providing evidence-based information on specific themes and bring in outside perspective from other regions. Map out regional practices in support of advanced manufacturing and relevant pilot/demo projects and work towards involving the relevant stakeholders. Provide an easy access and comparative overview of regional innovation policies and relevant actions in the field of advanced manufacturing. Share the lessons learned with the European Commission services to feed into the preparation of future programmes. The main aim of 30 regional reports is to provide a description and analysis of developments in the area advanced manufacturing with a clearly defined thematic focus and regional innovation policy, taking into account the specific context of the region as well as general trends. All regional innovation reports are produced in a standardised way using a common methodological and conceptual framework, in order to allow for horizontal analysis, with a view to preparing the Final EU Regional Innovation Monitor Plus report. European Commission official responsible for the project is Alberto Licciardello (Alberto.LICCIARDELLO@ec.europa.eu). The present report was prepared by the Technopolis Group in Amsterdam. The contents and views expressed in this report do not necessarily reflect the opinions or policies of the Regions, Member States or the European Commission. Copyright of the document belongs to the European Commission. Neither the European Commission, nor any person acting on its behalf, may be held responsible for the use to which information contained in this document may be put, or for any errors which, despite careful preparation and checking, may appear. Further information: Regional Innovation Report

6 Executive Summary Despite lying outside the population-rich Randstad area between Amsterdam, Rotterdam, and Utrecht, North Brabant is the manufacturing hub for the Netherlands. Manufacturing in the region provides high added-value, relying heavily on innovation. Advanced and new materials remain an important source of value-added, and the importance of innovation for overall output can be seen in R&D spending. North Brabant fairs well when compared to the rest of the country, spending the most on R&D as a percentage of overall GDP 2.61% compared to any other region in the Netherlands and well above the EU-28 average of 2.03% achieved in According to the latest available statistics from the OECD, this spending on R&D reveals itself in the number of patents being granted in the region, with more than 50 percent of all patents in the Netherlands being submitted by and approved to companies in North Brabant. While advanced materials is not, per se, a specific strategic priority in the region, the Dutch top sectors policy which focusses resources on nine priority sectors does include several sectors that would include advanced materials. Two of these sectors overlap provide support to advanced materials, specifically with resources directed to the chemical sector as well as high-tech systems and material. While stakeholders for each of these sectors have generated roadmaps for their field, they share particular views on where the market for advanced materials will go, namely:!! Sustainable development. Advanced materials that are lighter and more durable reduce the environmental impact. New functionalities in materials. Hybrids and composites as well as nano-structured metals provide extra strength and formability to metals. While the region continues to be a top performer in Europe in producing innovation and for high value-added manufacturing, it still faces a number of challenges:! Challenge 1: Industrial strength relies on a limited number of large, potentially vulnerable players Given the overall size of the economy of North Brabant, the region performs very well in terms of growing companies into major international players. However, some of the major players that are working in the region remain vulnerable to external shocks and potential buy-out.! Challenge 2: Attracting and retaining key talent North Brabant, like many other European industry-oriented regions, faces a continuing challenge due to the high demand for a skilled and well-educated workforce. Given the cultural pull of the Randstad, which is considered the more attractive region of the country to live and work, the lack of qualified personnel in the region is a continual issue, particularly for SMEs that are less able to tap into foreign talent.! Challenge 3: Restrictive labour market Various regulations that structure the labour market hinder not only an optimal allocation of skills across the region, but also cross-border cooperation. While the focus of many labour market reforms are around the hiring and firing of workers, housing and health policies are also significant barriers. Diploma recognition of professional qualifications continues to be a barrier. Regional innovation policy fits within a national framework, where the region is largely responsible for implementing national programmes regionally and filling gaps with what funding is available. Much of the policy focus is on spatial planning at various levels, such as support for innovation parks and the overall attractiveness of Regional Innovation Report

7 the region to talent; education for both technical and entrepreneurial skills; and distributing funding for various innovation initiatives. The most significant policy lever available to the province is the four main capital funds available to local businesses, with revenues from!2 billion in invested working capital providing a stable source of resource to support local business and innovation. This revenue source supports the Innovation Funds Brabant, providing!125 million per year of seed funding, a large part of which is diverted to SMEs. To continue to build on the innovative strength of the region, a number of opportunities can be exploited:! Continued support for the leading clusters in the region While there is always an inherent tension between an equal distribution of resource (or even a redistribution) and focussing on the strengths of a region, Dutch policy has in recent years focussed on its strengths. In the region of North Brabant, Eindhoven and its surrounding regions remains the beacon by which to grow and attract new companies and workers. The Hightech Campus is mentioned as a success story in this report, but other areas of strength fed by Eindhoven remain, such as Helmond s Automotive Campus (located 16km from the High Tech Campus). Plans for a new Brainport Innovation Campus near to the Eindhoven Airport continue to move forward. The Brainport brand and support activities around should continue to be a priority.! Confirming Eindhoven as an international hub Despite concerns over the international character of the region, Eindhoven remains diverse, attracting talent globally. While statistics collected by the national agency are hampered by a metric that insists that citizens with a foreign parent can be characterised as foreign (allochtoon), the statistics along this metric show 30 percent of the population of Eindhoven as having some kind of foreign ties. This compares with cities like Rotterdam and Amsterdam, which have approximately 50 percent of its citizenry as allochtoon. The city of Eindhoven and the region as a whole should continue to emphasise the region as a place that is open for business and open to talent.! Additional co-ordination between European and Dutch levels National and regional governments have detailed support plans in place for particular areas of strength. Co-ordination between the national and regional level, while imperfect, is still quite good. What is missing from this picture is a better idea of what should be co-ordinated from Brussels and what should come from the national and regional governments. One interviewee expressed concerns over the lack of coordination between the SME instrument within the Horizon 2020 programme and support instruments within the Netherlands, for example.! Providing SMEs with a platform with which they can better negotiate with large companies SMEs have a difficult time contributing to collaborative research projects given the resource commitment required, something which the province is attempting to address. They also provide information to SMEs on how best to create the IPR and business agreements to successfully gain from collaborative projects. However, SMEs still come into any collaborative agreement with the disadvantage of size. The Holst Centre, as an intermediary between larger and smaller businesses, is a good step towards addressing this power differential. Regional Innovation Report

8 1. Advanced Manufacturing: Advanced Materials 2.1.!Overview of performance and trends As a part of its bid to attract investors to the region, the Brabant Development Agency (BOM) developed their campaign to label Brabant the world s smartest region. The region picked this phrase because of a 2011 award from the Intelligent Community Forum, which identified Eindhoven as the industrial centre of the country with a focus on high-value, technology-based products, able to use its innovative edge to counter poor demographics and a high cost base. In terms of its economic importance to the country, regional GDP amounted to!100.2 billion, approximately 15 percent of the total economic output for the country, making it the third largest region economically. Economic growth in the region, as with the rest of the country, has been relatively unstable since the global financial crisis of , with recessionary pressures in 2009 and Figures for 2014 and preliminary figures for subsequent years have, however, shown that the Dutch economy has recovered to an annualised growth of 2 percent per year and appears on a relatively stable path for the moment. However, it remains clear that the region and the country are vulnerable to further European and global shocks, with the OECD expressing concerns over turbulence in the euro area as well as geopolitical instabilities caused by immigration pressures. 1 Figure 1: Number and percentage of people employed in manufacturing in 2013 Billions! 155! 145! 135! 125! 115! 105! 95! 85! (#$ '#$ "#$ %#$ &#$!%#$!"#$ North Holland North Brabant South Holland Average change in GDP in the Netherlands Source: Statistics Netherlands with own calculations, 2016 Eurostat figures of economic activity in various sectors and the NACE codes on which they are based provide an imprecise picture of sectoral activities (particularly when speaking about cross-cutting and new technologie). These figures do, however, still show the relative importance of high-tech activities to the regional economy. While European statistics shows manufacturing as only 7 percent of the overall economy, it is important to keep in mind that scientific and technical activities will be feeding into the manufacturing being conducted in the region. 1 OECD Economic Surveys: NETHERLANDS, Regional Innovation Report

9 Administrative and support service activities 6% Manufacturing 7% Professional, scientific and technical activities 28% Construction 15% Wholesale and retail trade; repair of motor vehicles and motorcycles 27% Real estate activities 2% Information and communication 7% Accommodation and food service activities 5% Transportation and storage 3% Source: Eurostat, In terms of more specific activities taking place in the province, there are six key areas of interest for the region: High-tech systems and materials (including automotive and solar). In public sector documents and discussions, this sector generally encompasses at least three separate areas within the region semi-conductors, automotives, and solar. However, it also encompasses other areas that are important to the region, such as nano- and micro-systems, embedded systems, advanced materials, and other technological development work. The province and many of its stakeholders sees HTSM as focussing on three applications: health, sustainability, and mobility. The sector encompasses more than 14,000 businesses and employs at least 112,000 people, producing!6.4 billion of goods and services. Life sciences & medical technologies. A few subclusters exist in these fields, with a small innovation park Pivot Park in the city of Oss, started by the initiative of pharmaceutical company MSD and medical technologies being developed largely by Philips medical divisions with various spin-offs in the area (companies such as Akeso Medical Imaging, spun off from Philips, and LifeSense, spun off from the Holst Centre). Food. While the heart of food and food technology lies in the city of Wageningen in the province of Gelderland, Brabant also sees a role for itself in servicing this sector. In 2012, 23,070 businesses were active employing 173,380 people (16% of the total for the sector in the country). The approximate value of goods and services produced was!2.9 billion, focussed largely around production rather than research & development. Logistics. In 2012, 4,015 businesses operate in the logistics sector in North Brabant, which represents 15 percent of the total sector in the Netherlands. These 2 Three categories which contributed essentially 0 percent after rounding have been removed from the graph, namely mining & quarry; electricity, gas, steam & air conditioning supply; and electricity, gas, steam & air conditioning supply. Regional Innovation Report

10 businesses produce goods valued at!8.856 million and produce a turnover valued at!4.226m million (which is 15 percent of the value of the sector in the Netherlands). The sector is quite diverse in the area owning to the many kinds of clients with different logistical needs, ranging from just-in-time, break-bulk, split, and other types of delivery. Maintenance. In 2012, 7,251 businesses employing 40,500 people provided maintenance services in North Brabant, representing approximately 27 percent of the total turnover in the sector. Employment and the knowledge base appear to be relatively stable, with growth opportunities in aerospace (specifically the Joint Strike Fighter and various composite materials) and more general advanced manufacturing (servitization, condition-based maintenance, and robotics). Biobased economy. While the biobased economy can incorporate elements of more traditional sectors, such as the high tech systems and agrofood, the province still measures activities in this area separately. Players such as Cargill and Darling Ingredients are important to the region; however, growth in the biobased economy remains slower than the provinces initial expectations. High-tech activities (including those related to advanced materials) in North Brabant are generally anchored around the Brainport and High Tech Campus in Eindhoven, which is home to world-class manufacturers, most notably ASML (the largest supplier of photolithography systems for the semiconductor industry), NXP (a global semiconductor manufacturer), and Philips. Despite being outside the population-rich Randstad area between Amsterdam, Rotterdam, and Utrecht, North Brabant remains the manufacturing hub for the Netherlands, employing the highest number of people as well as the highest percentage of the overall population in the manufacturing sector. Figure 2: Number and percentage of people employed in manufacturing in , , , ,000 80,000 60,000 40,000 20, )#$ +&#$ %)#$ %&#$ *)#$ *&#$ )#$ &#$ Number of employees % of total employees Source: Eurostat, 2016 North Brabant has traditionally been strong in making polymers, with the technical university of Eindhoven being particularly strong in research as well as major polymer producers and users in the province, such as GE-Plastics, Philips, and Océ. While the history of these major players stretches back several decades, the relationship between knowledge institutes and companies in the field was given a push through the government s leading technological institutes strategy in the 1990s. During this period, the government invited public and private actors to submit applications as Regional Innovation Report

11 consortia for funding to form institutes that would further research & development in a number of fields. Based on those applications, the Dutch Polymer Institute (DPI) was formed in 1997 as a public-private partnership between three ministries, knowledge partners (universities and state-owned TNO), and the main polymerproducing and processing industries. While not strictly demarcated by the borders of Brabant, most of the leading players (and the project office itself) are located in North Brabant. While work in advanced materials takes place in other regions of the country particularly based around Geleen in Limburg, Delft University in South Holland and the University of Twente in Overijssel, advanced materials continue to be a strength for the North Brabant. Regional governments have taken an interest both from a competitiveness position and also with the opportunities they afford to solve societal challenges. One area of particular focus is on biobased materials and how they might support the circular economy. These goals have, in part, helped to take the University of Eindhoven (TU/e) into the field of super molecular structures so that they can understand the life cycle of bio-tech materials to reduce the overall footprint of new materials. 2.2.! Business sector perspective In the field of advanced materials, particularly on the innovative edge, it remains important for suppliers to be within easy reach, which is one reason why Brabant serves as an effective hub and attractor of talent and investment. Businesses in the region have embedded chains of suppliers of services and semi-finished products in manufacturing. Research and development, design, production, and sales all occur within kilometres of Eindhoven, the strongest city in the region, with 70% of the first-tier suppliers of several major OEMs (Original Equipment Manufacturers) located within this radius. Second and third-line ancillary suppliers also remain embedded in the region and its surroundings. 3 As mentioned in the previous chapter, North Brabant is responsible for a majority of R&D and patents in the country, and the aspirations of companies working in the region run the gamut between pioneers, smart followers, and subsidiaries. As an example of a pioneer, ASML continues to be a world leader in photolithography machines used to produce microprocessors, and they dominate the market with between 80-90% market share in Despite competition from established players such as Nikon and Canon, ASML continues to dominate the market with new innovations and has enjoyed record profits over the past years. Another major company in Brabant is the VDL Group. 5 Originally a family business, the company started as a metal industry and construction workshop, with clients such as Philips and DAF Trucks. Nowadays, the VDL Group is a conglomerate of 87 operating companies. It is the only bus manufacturer and large automaker in the Netherlands and produces a large range of finished products. One important offshoot of the VDL Group which involves itself in advanced materials is VDL Fibretech Industries, which works on composite materials in co-operation with Dutch universities in Delft and Eindhoven. It focuses primarily on fiber reinforced plastics with technologies including RTM, a process where two resins polymerise in a mould. 3 Brainport 2020: Top Economy, Smart Society 4 Wolfgang Nickl, Financial Model, November VDL, Regional Innovation Report

12 No discussion of the business sector in the region of North Brabant would be complete without a mention of the influence that Philips has made on companies in the region. Philips, which started its operations in incandescent light bulbs in 1891 in Eindhoven, developing into a multinational corporation with interests as diverse as medical devices, consumer electronics, and lighting. In its latest restructuring, it has recently divested itself of the lighting division, creating a new company, while the remaining parts of the company will focus on health and medical technologies. Many of the leading players in Brabant are spin-offs of Philips, such as ASML and NXP 6, and according to several interviewees for this report, former staff of Philips tend to hold leadership positions in companies around the region. Philips also founded some of the key institutions that unite companies and knowledge institutions in the region, such as the High Tech Campus, mentioned in the introduction to this report. It continues to play an active role in helping other companies to innovate through its Innovation Services unit (which includes a Materials Analysis lab). The network effects and the environment built on the foundation of Philips has been important in how Brabant has been able to thrive in a business environment where innovation chains are more widely distributed. Firms large and small rely more heavily on innovations from tier 1 (and sometimes lower) suppliers, with entire modules of new products being entrusted to suppliers. Importantly, rather than follow a supplied blueprint, companies will provide suppliers a list of technical and quality specifications, giving the supplier flexibility in exactly how that final module is built. And supplier relationships are extremely important in product development for the major innovators of the region. ASML, for example, has 73 suppliers that are responsible for 79 percent of all product-related spending. 7 The tightly knit business community in Brabant one that seems to have embraced the idea of open innovation seems to have been well-placed to take advantage of wider trends in innovation and supply chain management. 8 There are dozens of first tier suppliers located in North Brabant that have at least some work in advanced materials, including companies such as Frencken, Neways Electronics, and the Norma Group, to name a few. Expand to the second and third tiers, and hundreds of companies work within the immediate region. Many of these suppliers could be categorised as smart followers, required to also introduce innovations into their products and services (which can then be sold on to others in the market). Looking to other regions of the world that can be said to have a similar configuration, a 2010 report from Roland Berger outlines a number of competing geographies for the southeast of the Netherlands, namely Bangalore, Singapore, Taiwan, Øresund, Boston/Cambridge, Baden-Wurttemberg, and Detroit. According to this report, the Netherlands fairs quite well in terms of the competitiveness of its companies and its general positioning; however, it also warns (as did many interviewees for this report) of possible complacency of the region and concerns over the attractiveness of the business climate in relatively general terms. 6 Polymer Vision was another spin-off of Philips, founded in Perhaps best known for attempting to develop commercially viable foldable e-ink screens, they were bought by Chinese OEM Wistron in 2009 before eventually being closed in ASML, Corporate Responsibility Report Many interviewees spoke about the coffee culture of Brabant, asserting that local companies would share thoughts on market trends as a part of the everyday business culture. One interviewee also believed that it was one reason why Brabant was better able to grow its manufacturing sector. While governance in the region is certainly less structured than in others, such as France, it can be easy to overestimate the importance of cultural norms in the province. Regional Innovation Report

13 And certainly, while brain drain is not as much of an issue for North Brabant as it is for a competing province such as Overijssel in the east of the country, the Brainport 2020 report identifies concerns around the general attractiveness of the city to retain talent that has been trained at regional universities and to attract talent from other parts of the country and abroad. While North Brabant is a relative powerhouse when it comes to manufacturing, and Eindhoven is the fifth largest city in the country, the perception of the area is that it is less cosmopolitan and international than cities inside the Randstad, such as Amsterdam, Rotterdam, and The Hague. This is also a concern for attracting Dutch talent, as knowledge workers tend to be more internationally oriented and can prefer the rich environment that an internationally oriented city offers. 2.3.! Scientific research potential The Netherlands hosts four technical universities that form a federation to take forward technical research in the country, namely universities in Eindhoven, Delft, Wageningen, and Enschede (Twente). 9 The University of Eindhoven (TU/e) is very well integrated into the business community in Brabant, providing both contract research and an opportunity to seek out government funding through public-private partnerships. The research conducted within various groups at TU/e is both fundamental and applied. While many activities operate under the 4TU umbrella, certain facilities are physically hosted at different locations across these three universities. TU/e hosts two major facilities in support of the material sciences and advanced manufacturing: NanoLab. This facility is a part of a broader national infrastructure with four locations (including the two other technical universities and in the city of Groningen), providing tools for researchers engaged in nanotechnology. The Eindhoven facility specialises in the following areas: -! Deposition of organic, magnetic, and semiconductor nanostructured material, -! Processing of III-V-based integrated nanophotonic devices, -! Advanced nanoscale processing. 10 Multi-scale lab. This lab is run by the Mechanics of Materials group, currently led by Dr. Marc Geers. It attempts to bridge the gap between traditional materials science and mechanical characterization labs by integrating mechanical testing with microscopic observation. In the field of advanced materials, universities in the region have traditionally been strong in the field of polymers, an area in which the university continues to hold strength. One particular area of specialisation for TU/e is service modifications and coatings. However, knowledge in this field has recently diversified. At TU/e, the focus has moved to super molecular structures, trying to understand the lifecycle of biotechnical materials. This knowledge area is being advanced due to a greater interest in the bioeconomy, with the university looking to feed into the general interest in reducing the footprint of new materials by either extending their life or reducing the costs of repurposing or disposing of materials in products that have reached end-oflife. TU/e holds a relatively unique position in the country in advanced materials, though this largely comes out of conscious policy choices of the government and university 9 In May 2016, 10 NanoLabs, Philips, at the High Tech Campus in Eindhoven, also runs a facility in partnership with the national NanoLab called Philips Innovation Services. Regional Innovation Report

14 administrators. One of the reasons to set up the 4/TU apparatus was to acknowledge limited public resources available to further basic and applied research. As such, each university and region specialises in a different sectoral strength, looking for synergies rather than direct competition for talent and resources. While TU/e arguably represents the heart of research for North Brabant, a number of other knowledge institutions support research in the region, including the Fontys University (a part of TU/e), Philips NatLabs, Microcentrum Nederland, and TNO Industries. Fontys University engages in five research areas: architecture of embedded systems, thin films and functional materials, mechatronics and robotics, automotive control and business entrepreneurship. The Fontys laboratories which work on thin-film technologies include areas like inkjet printing, screen printing, slot-die coating, spin coating, vapour deposition and sputtering as well as 3D printing techniques in their Objex lab. 2.4.! Role of intermediary institutions The province of Brabant, one of the largest in the Netherlands, is represented by one regional agency and a hodgepodge of sub-regional and city-based agencies, all of which have at least some overlapping function. The Netherlands Organisation for Scientific Research (abbreviated as the NWO) funds scientific research in the country, primarily distributing funds to research institutions, focussed on universities. The NWO has been an important funder of research in the field of new materials. One example of an important funding mechanism has been the!1.4m fund for new polymer materials, which has recently seen grants provided for six projects in collaboration with the Dutch Polymer Institute, located in Eindhoven: Colouring paint without pigments, Polymers become smart, Supramolecular biomaterials for stem cell expansion, Self-synthesizing gels, SuperActive antimicrobial scaffold repairs tissue, Towards flexible memories made from coordination polymers. 11 TNO was originally founded in 1932 as a semi-public applied research institute, meant to bring academic knowledge to the business community. While it receives approximately 40 percent of its revenue directly from the national government with the remaining funds coming from public and private sector contracts it remains independently run. It operates in five key fields: Industry. This includes support for areas such big data, space technology, sensors, optical systems, 3D printing, biobased materials and the Internet of Things. Healthy living. The mandate around health and lifestyle is relatively broad, including areas such as personalised medicine, but also food technology (such as additive manufacturing techniques in food) _projects Regional Innovation Report

15 Defence, safety, and security. Again, the mandate here is relatively broad, looking at both internal security threats from terrorism as well as external threats, including cyber; Urbanization. This includes research into areas such as mobility, infrastructure and buildings, spatial development, and environmental management; Energy. This area is largely focussed around hybrid energy systems, which look to bring together traditional energy sources with more sustainable ones. As the largest research institute in the Netherlands and with locations in Eindhoven and Helmond (the centre for automotive research in the country) is an important player in conducting applied research. The organisation not only has significant domain knowledge, but also understands how to leverage public and private sector resources both locally and internationally. Holst Centre is an independent R&D centre responsible for developing technology in wireless autonomous sensors and flexible electronics, located in North Brabant. The centre promotes co-operative ( open ) R&D projects between companies and universities with participating organisations providing resources (people and money) while being granted licenses for any patents coming out of the research. The Centre also funds dedicated research trajectories, with results shared between all members, including SMEs who may have shorter R&D horizons. Industrial partners working at the Centre include Philips, Hitachi, BASF, Samsung, Sony, Panasonic, Du Pont, and others. While occupying a very specific niche in the market, the Holst Centre remains an important player, particular for new materials being developed in the field of flexible electronics. Brabantse Ontwikkelingsmaatschappij (BOM). The Brabant Development Agency is the body responsible for executing the provincial strategy and works along four core activities, namely FDI (specifically targeting that 90% of activity be in the top sectors for the region and 25% being knowledge intensive), capital investment (with loans of up to!2.5 million), new business development, and business parks (restructuring approximately 300ha of land in 2015).12 It plays an important role in advanced materials as one of the main funders of the Holst Centre as well as for the matchmaking role that it plays across the province. Brainport Development. A play on the fact that the Netherlands has both a world class airport and seaport, the brainport is the economic development agency representing Eindhoven and the surrounding areas. Its mission is to encourage cooperation between academic institutions, businesses, and government institutions; to provide investor services; and to conduct wider matchmaking activities, both locally and internationally. Arguably, it provides a degree of overlap between activities conducted within the BOM, just with a tighter geographic focus of the city rather than the wider region. One programme which the Brainport along with BOM, TU/e, and Fontys is Bright Move, a valorisation programme. One company to come out of the programme, was Ioniqa Technologies, a high tech spinoff from TU/e and the Dutch Polymer Institute, founded in It specializes in Magnetic Smart Processes, focusing on creating materials from waste for cradle2cradle solution for all PET Polyester plastics. Additive Industries is a private sector player that has received innovation loans and other funds from the national government. It has plans to grow into a major player in industrial additive manufacturing and 3D printing of functional parts of metals 12 Brabantse Ontwikkelings Maatschappij, Activiteitenplan BOM 2015, December Regional Innovation Report

16 providing a platform for development. This includes managing shared facilities such as the AddLab, a 3D printing pilot factory (which receives funding from seven industrial partners). 13 Additive Industries also supports a second laboratory Sigma Labs. Sigma Labs provides 3D printing products and services, including quality assurance software and contract printing services in a variety of industries: aerospace, healthcare, automotive, and consumer products The Green Chemistry Campus, located in Bergen op Zoom in the west of the province, is a business accelerator for biobased innovations. Large companies and SMEs, knowledge institutions, and the government work together to develop biobased technologies with a focus on performance materials, chemicals, and coatings. The Campus markets the fact tht it actively contributes to a sustainable and profitable biobased economy with less dependence on fossil fuels, without competing with food supplies. The province of North Brabant, the city of Bergen op Zoom, and SABIC are all partners. The campus itself is managed by REWIN West Brabant. Mikrocentrum is a conference and training organisation located on the High Tech Campus, providing more than 150 courses and organises nine major exhibitions for networking purposes. Courses and events range technical to non-technical aspects, such as 3D printing and additive manufacturing to six sigma process management. High Tech NL is a trade association representing the high-tech sector in the Netherlands, located on the high-tech campus in Eindhoven. High Tech NL engages in knowledge sharing activities and provides a network for members of the community to is committed to the collective interests of the sector, with a focus on long-term innovation and international collaboration. Members share their knowledge, look for ways to cooperate and use the powerful network to become more successful innovators. REWIN. The regional development agency for the western part of Brabant, supporting companies with location services, providing financing to growing businesses, and giving advice on business planning. Midpoint Brabant. A regional development agency representing the centre of the province, including focussed around the university city of Tilburg. As with the other agencies, Midpoint focusses on matchmaking and financing of business cases and pilot programmes (with funds largely coming from the REAP programme). The Chamber of Commerce s Entrepreneur s Plaza (Kamer van Koophandel Ondernemersplein) operates five locations across the country, including one in Eindhoven. The focus of the Entrepreneur s Plaza is to provide advisory services to SMEs, largely helping with financing issues and putting entrepreneurs into contact with the appropriate regional bodies. The Chamber is an important body for small organisations given that it is generally the starting point for those seeking information. In addition to the development agencies at various levels, several important intermediary organisations supported with national and regional funds exist to help bring about collaboration between the high-tech players in the region. In addition to the various intermediary organisations responsible for helping to build networks and spread financing to innovative companies, the High-Tech Campus science park, located just outside of Eindhoven, remains an important physical hub. Built in 1998 by Philips as a hub for all of the company s R&D activities, Philips began 13 Partners include KMWE; NTS Group; Frencken Europe; Machinefabriek De Valk; FMI; MTA; Philips Innovation Services; Kaak Groups; Brainport Industries (network partner); De Lage Landen (financial partner) and SRE (financing partner). Regional Innovation Report

17 inviting other companies in 2003 to set up operations. Today, the park and surrounding area are responsible for nearly 40 percent of all patent applications in the Netherlands. 14 While each of these institutions plays a role in driving the agendas that will influence advanced materials, no institution is specifically focussed on the subject. Advanced materials, as mentioned in other points of this report, can be found in the number of top sectors that are a part of the economic development strategies of the regions and the country as a whole. 2.5.!Developing skills for the future Given the broad nature of advanced materials, the skillset that people working in the field require varies depends on the type of materials being developed. Generally speaking, however, people require skills in mathematics, chemistry, or physics in addition to a general analytical skill set. Major companies working in the region, while always searching for new talent, seem largely able to fulfil their needs through a combination of tapping into the national university system as well as through the immigration from both inside and outside of the European Union. SMEs, on the other hand, have a much more difficult time accessing the global market for employees. While the Dutch government has gone some way towards reducing the administrative burden of hiring knowledge workers, the fact remains that language and cultural barriers in smaller organisations make hiring foreign workers a difficult step to make. And this issue of hiring foreign talent may become more acute in the future given that the skills question facing the region is not about a relatively unskilled workforce or even a workforce with the wrong skillset, but rather an overall demographic problem. The Brainport 2020 plan quotes the Dutch Bureau of Statistics (CBS) over concerns of a shrinking workforce, though the latest prognosis from the CBS in 2013 shows a relatively stable size for the workforce on the assumption that immigration levels remain. 15 While concerns have been expressed at a regional level about a shortage of skilled workers for SMEs, the strategy to alleviate any shortages comes at a national level. The national strategy follows four pillars: Increasing the capacity of science and technology education, Improving the connection between business and education, Attracting and retaining international talent, Increasing labour flexibility to avoid losing knowledge and expertise over economic cycles. The following table illustrates some of the educational initiatives that cover the skills important to Advanced Manufacturing and that are applicable to North Brabant. Table 1: Educational initiatives for enhancement of skills in HTSM Educational initiative Leading organisation(s) and description Strategic focus 14 High Tech Campus, Eindhoven, Turning Technology into Business. 15 CBS, Regionale prognose Vier grote gemeenten blijven sterke bevolkingstrekkers, Regional Innovation Report

18 Educational initiative 4TU 16 (Eindhoven) Leading organisation(s) and description A partnership the three technical universities in the Netherlands Delft, Eindhoven and Twente as well as the university of Wageningen. A series of two-year, post-graduate programmes have been introduced that combine both technical and business skills to help fasttrack students into relevant positions in industry. Some of these programmes are directly relevant to advanced materials, notably the Post Master programmes in Bioprocess Engineering and Chemical Product Design. Strategic focus To graduate students with a broader skill set more closely related to the needs of industry. Post-graduate students in this programme become trainees, which also provides companies with access to university equipment. Human Agenda Capital High Tech NL, a body representing interests of various business and knowledge institutes, has initiated a programme designed around four pillars, namely (1) increasing the inflow of students into technical fields; (2) increasing the role of businesses in educating students in technical fields; (3) attracting and retaining international talent; and (4) loosening labour market conditions to better contend with production variability without losing talent. To increase the number of technical graduates with a greater focus on industry needs, as well as on attracting international talent. Additive Manufacturing Academy The AM Academy is a not-for-profit organisation funded by Fontys, Mikrocentrum, and Additive Industries. The AM Academy has developed a coherent set of training courses, workshops, and master classes for industrial 3D printing and additive manufacturing. They teach all aspects of 3D printing, including integrated 3D design and engineering through material selection and the actual printing process to finishing, testing and qualification. To develop the Dutch knowledge base in the field of 3D printing. 2.6.! Major investment projects The region continues to see a number of major investment projects at various levels of technological readiness, oftentimes centred around research being done at the High Tech Campus. As mentioned earlier in this report, this is not to discount work in other regions of the province that may be taking place with Bergen op Zoom as a centre for work on Polymers but the High Tech Campus tends to work like a magnet for both talent and companies. One recent and successful innovation to come out of the Holst Centre, an instrument for bringing together business and academics has been the production of flexible organic light-emitting diodes (OLED) using a roll-to-roll process. OLEDs have similar characteristics to the LEDs that have become common in household lighting and other applications, but use plastic, organic layers rather than crystalline ones. This means that OLEDs can be thinner, lighter, and more flexible than existing LEDs, hence providing for different use cases, with OLEDs long expected to become commonplace where LCD/LED technology current dominates, such as televisions and mobile telephones. The importance of developing OLEDs in rolls is that it allows for lighting by the mile, providing a continuous sheet of light without pixels. This type of OLED could provide new design possibilities for lighting in homes and offices, for example, or in mobile displays or solar cells. 17 The Holst Centre has also demonstrated how the technology could be integrated into clothing for safety Regional Innovation Report

19 Figure 3: Flexible OLED lighting panel Source: OSADirect Newsletter The goal of the Flex-o-Fab project a three year,!11.2 million endeavour was to commercialise flexible OLEDs within six years. By the end of the funding period, the project was able to produce 2.5km of roll-to-roll film based on a single inorganic layer with water vapour transmission rates lower than 10-5 g/m2 per day on commercialgrade PET foil. 18 The pan-european project, co-ordinated from the Holst Centre, involved ten partners: Philips (Netherlands / Germany) Orbotech (Israel) CSEM (Switzerland) Du Pont Teijin Films (UK) EPIGEM (UK) Henkel (Belgium) Meyer Burger Technology AG (Germany) Institute of Microengineering, École polytechnique fédérale de Lausanne (Switzerland) Stork Printing Group (Netherlands) Tampere University of Technology (Finland) Building on the expertise in flexible OLEDs, another European collaboration is PI- SCALE: an open access pilot line service offering customised exible organic lightemitting diodes OLEDs. The project brings together Europeam expertise and infrastructure for fexible OLED fabrication, enabling companies to test and scale up their fexible OLED lighting or signage concepts and bring them to a mass production readiness. PI-SCALE, PIX4LIFE, and MIRPHAB, three major Pilot Lines have been launched by the Photonics Public Private Partnership (PPP). The Pilot Lines focus on health applications, flexible organic light-emitting diodes, and sensors for the lighting-by-the-mile-/ Regional Innovation Report

20 detection of chemicals in gas and liquids. The European Commission invested!35 million in these projects to boost Europe s industrial competitiveness. One further pilot project has been a co-operation between the VDL Group and Solliance (a partnership of R&D organisations from the Netherlands, Belgium and Germany located on the High Tech Campus), with funding from the NWO, to build flexible solar cells made from light-sensitive plastic films. The cells are based on organic photovoltaics rather than materials such as silicon, providing lower materials consumption and higher production volumes. 19 The provinces also played a crucial funding role, having originally invested!28 million in Solliance in In addition to the many private sector projects of varying sizes that are running in the region, the ERDF OP South Netherlands has allocated!321.6 million for the period from (with!113.6 million coming from the European Commission). This project covers the province of North Brabant, Limburg, and Zeeland, bringing together public and private sector actors into large projects. The OP South programme 20 is divided in four specific objectives: strengthening and broadening the open innovation system; strengthening the valorisation possibilities of SMEs; sustainable strengthening of the system within which the supply and demand of jobs are aligned within the RIS3 top clusters; and stimulating innovation regarding the smart rollout of low-carbon technologies and instruments, focusing on the build environment. The allocation of budget to projects is divided over these four objectives. 21 In the field of advanced materials, the Fieldlab CAMPIONE received support, a project that looks to make maintenance of machines in the chemical industry more reliable and efficient. Rather than maintaining machines based on a time, CAMPIONE has developed sensors and software to monitor machinery in real-time, which allows for a maintenance schedule to be put in place for when machines actually need servicing. This increases up-time, predictability, and overall productivity. Companies participating in the programme have included Sitech, Tata Steel and Dow, and several universities are also involved. The Photon Delta project that aims to strengthen the photonic ecosystem in the South of the Netherlands, which is executed by the university of Eindhoven, the BOM, SMART Photonics and others. Photonics is based on the interaction of light (photons) and electrons (electronics), which can have numerous applications in computers, lasers, LEDs, solar cells, and optical chips. The project aims to generate new business in this field, strengthening the existing infrastructure and further building the Brainport brand. Further project examples include the development of intelligent packaging with fibreoptic sensors for the chemical process-industry by three SMEs, 2M Engineering, KeyTec and FOCE; the open learning and innovation labs in Eindhoven that aim to develop excellent open access education material; and the EnergyWall in Tilburg that aims to develop infrastructure integrated PV technology and to demonstrate 300Wp solar panels fd OP Zuid, 21 OP Zuid - Results, Regional Innovation Report

21 2.7.!International cooperation While regional innovation policies focus their attention on a particular political geography, the reality is that the borders do little to demarcate how business and academics co-operate and participate in various value chains. The location of the Chemelot Campus, a science park in the city of Geleen specialised in chemicals and materials, is a good example of this. Located in the province of Limburg, organisations working in the park have some connections with the largest city in the region, Maastricht, including the university. However, while the University of Maastricht has a faculty of health, medicine, and life sciences, it still misses faculties for math, physics, and chemistry. 22 But only 75km from Eindhoven, the Technical University of Eindhoven (TU/e) provides plenty of partnership opportunities. One such co-operation that includes organisations based out of Brabant is the Chemelot Institute for Science & Technology (InSciTe) facility, founded by DSM, the universities of Eindhoven and Maastricht, and the province of Limburg. This publicprivate partnership was set up to facilitate research in both sustainable health as well as the sustainable production of new chemicals and materials. One such co-operation is the Brightlands Materials Center, set up on the Chemelot Campus in The Center was set up as a co-operation between 15 organisations, including the province of Limburg; companies like TNO, DSM, and SABIC; and universities TU/e, Wageningen University, and Maastricht University. An investment of nearly!45 million, the centre looks to conduct research into nanocoatings, new materials for 3D printing, and new lightweight materials for the automotive industry. 23 They work in three main programme areas: additive manufacturing, lightweight automotive, and opto electronics (electronic devices and systems that source, detect and control light). As well, as mentioned earlier in this report, Tier 1 and Tier 2 suppliers tend to be located with 100km of the major centre of Eindhoven, an area that stretches over national borders into Belgium and Germany. The city of Aachen, just across the border in Germany, is a particular hub for advanced materials, with organisations such as AMAC, Katcon, AZL Aachen, and Frauenhofer (both production and laser technologies) engaging in activities around advanced materials. They form numerous business and research networks (some of which are discussed in other sections of this report), such as Mikrocentrum, DSP Valley, Leuven.INC, TEFON, ATC, LifeTec Aachen-Jülich, CAR e.v. Flanders DRIVE, FMTC, and LifeTec Network. Given the natural links between major centres in the area, it seems like a natural step to leverage European funds to foster that co-operation. In 2010, the Top Technological Region/Eindhoven-Leuven-Achen (TTR-ELAt) was formed and is one of the largest cross-border collaborations supported by various levels of government in the region. Its role, while not formally institutionalised, has been to support the area into a technology hotspot in the areas of chemicals and advanced materials, high-tech systems and health sciences The university is trying to build capacity in the area by partnering with other institutions in the region, forming the Aachen-Maastricht Institute for Biobased Materials (AMIBM) on the Chemelot Campus in Tweede Fase van Brightlands Materials Center van Start [Second Phase of the Brightlands Materials Centre has Begun] Claire Nauwelaers, Karen Maguire, and Giulia Ajmone Marsan, The Case of the Top Technology Region/ Eindhoven-Leuven-Aachen Triangle (TTR-ELAt) Regions and Innovation: Collaborating Across Borders, OECD, Regional Innovation Report

22 Figure 4: Map of the Top Technological Region/Eindhoven-Leuven-Achen The estimated R&D spent in ELAt is!4 billion, representing 2.5 percent of the GDP in the area. From the 2.9 million people living in the area, more than 520,000 are working in the field of high tech. The Brainport is the leading organisation in the ELAt, and as a part of its coordination activities, it also engages in some lobbying activities. They have four main discussion points with various national and regional stakeholders: Increase and improve use by stakeholders of cross-border public funding for research and innovation projects with cross-border partners, looking at obstacles that stakeholders have faced and legislative changes that could improve cooperation and innovation. Foster the use and transferability of knowledge vouchers from one region to another. Enable cross-border, multilateral public funding by integrating the timing and criteria for access to resources that foster collaboration in innovation. Address intellectual property issues and the taxpayer s dilemma in publicly funded cross-border research projects. While the TTR receives European support and has this plan for lobbying, its visibility with various stakeholders in North Brabant is generally low. The European Union s Interreg programme has been more successful in driving co-operation in the region. While this programme is aimed specifically at advanced materials, the fifth iteration of the Interreg programme in Vlaanderen-Nederland has supported important initiatives in the sector. One project supported under the programme is Accelerate 3. This project is aimed to improve the scientific infrastructure behind shared across the Dutch-Belgian border for research in additive manufacturing, specifically looking at Fused Deposition Modeling (FDM), Digital Light Processing (DLP) and material jetting tend to be limited to projects between governments. Five research centres share knowledge and resources: Regional Innovation Report

23 TUA West Chemelot Research Facilities B.V. Brightlands Chemelot Campus B.V. Centexbel KULeuven-Campus Kortrijk 25 A series of other cross-border and international initiatives between North Brabant and its neighbours can be found, many of them initially supported by European funds, but which have continued their existence after the initial funding period. A sampling of some of the bigger initiatives can be found on the map and table below. Figure 5: Map of cross-border and international relationships in the form of strategic cooperative ventures, networks and projects Source. Smart Specialisation Strategy. The art of combination and cooperation, 2013 Table 2: Cross-border initiatives Initiative AMI Biobased Materials Description The Aachen-Maastricht Institute for Biobased Materials (AMIBM) is a European, cross-border, research institute focusing advanced biobased materials. AMIBM is located on the Brightlands Chemelot Campus in Limburg, though has plenty of connections with North Brabant. It creates synergies through applied and translational research between academia and industry. Web site 25 While none of the main players in this programme are located in Brabant, Chemelot works extensively with TU/e, and as such, Brabant still sees direct benefit for this co-operation. Regional Innovation Report

24 Initiative Biobased Delta (a part of Biobased Europe) Automotive Cluster EMR European Chemical Regions Network DSP Valley Silicon Europe BE Basic Description With one location in Bergen op Zoom, in the west of North Brabant, Biobased Delta brings together entrepreneurs, knowledge institutes and government agencies strengthen the front runner position of the region in the biobased economy. They work with partners in Flanders, northern France and North Rhine-Westphalia. The ACEMR project is focussed on positioning and presenting the Euregio Meuse-Rhine (EMR) as an automotive region as a strong international environment for automotives. Information offered to members includes trends and developments in design and materials. ECRN originated as a part of an INTERREG IIIc project in 2004 with 13 member regions from seven Member States. The project aimed to bring chemical regions across Europe together to better exchange information, explore solutions for common problems, and speak with a single voice. DSP Valley is a European cluster in Smart Electronic Systems, mainly active in Belgium and the Netherlands. It brings together businesses, research organizations, governmental authorities and financial institutions, interacting along in the entire value chain. This ecosystem includes actors from technology providers in micro/nano-electronics hardware and embedded software to smart product developers. Silicon Europe represents leading micro- and nanoelectronics (MNE) clusters in Europe collaborate to represent, support and promote companies on a European and global level. It acts as an intermediary between research, government and industry. The Silicon Europe Alliance, an association welcoming other European MNE clusters, unites currently 12 European MNE clusters with about 2,000 cluster partners. BE-Basic Foundation is an international public-private partnership that develops industrial biobased solutions to build a sustainable society. It initiates and stimulates collaboration between academia and industry, between scientists and entrepreneurs and between the Netherlands and abroad. Web site ! Policy support and delivery mechanisms At the national level, the umbrella policy framework under which economic development takes place is called the top sectors policy (topsectorenbeleid). This policy framework provides the government a mechanism to co-ordinate and steer companies, universities, and research centres through funding that encourage cooperation. The Dutch government has identified nine priority areas, two of which cover advanced materials in some form, namely the chemical sector as well as hightech systems and materials. While stakeholders for each of these sectors have generated roadmaps for their field, they share particular views on how the direction for advanced materials, namely: Sustainable development. Advanced materials that are lighter and more durable reduce the environmental impact of various activities (assuming, of course, that production processes do not offset those benefits on their environmental footprint). For example, more durable glass for smartphones could prevent a huge amount of electronic waste due to people damaging their phones Regional Innovation Report

25 with just one drop. On a larger scale, construction and demolition waste accounts for approximately 25-30% of all waste generated in the European Union, and new biobased materials that are easier to reuse could have a huge impact on in the construction industry. 26 New functionalities in materials. Hybrids and composites as well as nanostructured metals provide extra strength and formability to metals. Design functional metamaterials also provide the opportunity for objects with negative refraction of light as well as adding acoustic, thermal and electronic features. Spending on the national level (including expected expenditures from industry) are provided in the table below. Table 3: Projected spending on high-tech systems and materials Industry 11 12(+7) 14(+7) 16(+9) 20(+9) TNO NLR NWO Universities Departments and regions Grand total Under the latest plan for the top sector of chemicals, the plan for the sector identifies three headline interests for advanced materials (as well as indicating the other top sectors which also have an interest in the areas). These include: Designing materials with the right functionality -! Traditional materials -! Multi-functional materials -! High-tech materials -! Biomedical materials Thin films and coatings -! Traditional coatings, packaging films, and membranes -! Multifunctional and responsive coatings and thin films - Bio-interactive sensors, coatings and films -! Coatings for energy creation/saving Materials for sustainability -! Replacement of petrochemical feedstocks by bio-based feedstocks -! Improved waste management by recycling materials, re-use, and recovery of product components or compounds -! Sustainable materials for energy Roadmap High Tech Materials 27 Topteam Chemie, Roadmaps Topsector Chemie (zoals opgenomen in de Kennis- en Innovatieagenda , Regional Innovation Report

26 One element of Dutch innovation and industrial policy is the belief that the agenda should be driven largely by industry. While public funding will allows need to take into account the public interest, interviewees for this report felt that governments were largely taking on the role of nudging the innovation agenda as one stakeholder of many rather than steering it top-down. From a policy perspective, the largest concern that interviewees held was that government seemed to be stepping back from R&D funding. In 2014, for example, the Dutch Polymer Institute lost its guaranteed funding as one of the Leading Technology Institutes. And it is true that overall funding from government sources have been in decline since the economic crisis of While R&D funding in the Netherlands as a percentage of R&D has been increasingly slightly on an annual basis, governmental spending decreased quite precipitously after 2009 as a percentage of overall R&D spending in the country. It has been private industry (and foreign investors) who have been increasing spending, presumably as part of the drive to remain competitive in a global market place. Figure 6: Percentage of R&D funding provided by national governments European Union (28 countries) Germany Sweden Denmark Netherlands United States Source: Eurostat, 2016 Overall governmental spending on R&D and innovation does, however, need to be kept in perspective. From a historical context, Dutch spending has decreased; however, as a percentage of overall R&D spending, governmental participation in the Netherlands remains at approximately the EU average and performs better than other R&D high performers, such as Germany, Sweden, and Denmark. It could be argued, in fact, that smarter use of R&D funds, which requires matching funds from the private sector to participate in public-private partnerships, have helped to encourage more overall spending on innovative activities. At a regional level, innovation policy is guided by the Economic Programme Brabant 2020 plan. This plan identifies as its main goal to make the region of North Brabant one of the five most innovative regions in Europe as the heart of smart solutions. To Regional Innovation Report

27 accomplish this, it identifies three pillars on which economic development will be based in the region:! Innovation in the top sectors in areas related to societal challenges.! A basis for order, with specific attention paid to promoting entrepreneurship, pro-active labor market policies for the knowledge economy, space for innovative activities, and good transport accessibility.! Supporting the broader ecosystem through a social agenda contributes to a good business climate, which requires making connections between the economy and broader social priorities. Internationalization, according to the plan, is a thread through all of the priorities. Funding for economic developing in the province of Brabant receives approximately 3 percent of the!1.2b in Of the approximately!39.6m budget, around one half is allocated to general infrastructure building and a further one quarter for economic development, specifically aimed at the six clusters (and top sectors of the Netherlands) as identified in the plan. This funding specifically supports the following areas: Various funds in support of innovation, energy efficiency, and broadband internet (such as a lending scheme to Lithuanian-based Mabib to lay fibre-glass for areas without existing coaxial cable for high-speed internet). Building international networks via departments responsible for internationalisation of businesses, public affairs, and branding. Matching funds from European funded programmes, such as INTERREG, the Rural Development Programme, and the European Regional Development Fund. Support for economic clusters and innovation parks, such as the Green Chemistry Campus in Bergen op Zoom. Specific support for high-tech systems and materials, which includes three pillars: -! Manufacturing and equipment -! Design and development -! Software and services Support for various other sectors of the economy, such as aerospace and maintenance, health, automotives, agrofood, and the creative industry. 2.9.! Good practice case One of the value propositions for the Brainport is the concept of open innovation, and the Holst Centre is the one of the important institutions in the region that functions as an intermediary between various organisations to bring about the necessary cooperation. The Holst Centre currently supports collaboration between more than 60 partners, including major international players like Philips, ASML, and Samsung. This open collaboration environment, in which organisations pool R&D resources and share in the intellectual property, serves four main functions: Increased innovation by bringing together ideas from different players, Sharing facilities and competencies, Reducing time to market, Regional Innovation Report

28 Sharing R&D costs and risks. 28 The Holst Centre was founded in 2005 as a partnership between the Dutch public research institute TNO and the Belgian non-profit research institute IMEC. The centre provides facilities, including clean rooms, material and process analyses, test and measurement instrumentation, laboratories, measurement services, as well as design and fabrication support. While the Holst Centre is, at its core, an R&D centre specialised in wireless autonomous sensors and flexible electronics (which requires advanced materials to produce), its critical added value lies in its understanding of how to create bespoke intellectual property agreements between various parties. As an independent intermediary with technical knowledge, the Holst Centre seems better situated to stimulate co-operation between various parties (whether private-private or public-private). The organisation s mission statement incorporates both the research and coordination roles, declaring that the Centre wants: To be a world-leading, open-innovation R&D center that creates generic technologies for ultra-low power wireless sensors and large-area flexible electronics. To enhance the innovative power of our local and international industrial partners by bringing their researchers together with our own and those of our academic partners, to jointly execute shared research programs that address major societal challenges. The Holst Centre has been responsible for a number of new innovations, bring together partners from the region as well as from abroad. A few of the latest innovations include: E-Strate ceramic substrate. This new material developed in conjunction with American ultra-thin ceramics supplier ENrG Inc. is the first ceramic-based, large-area flexible OLED. Manufactured on a 20-40µm thick ceramic substrate, should last for more than 10 years without forming blackspots. The ceramic carrier is also easy to handle and capable of withstanding the high temperatures used in display backplane manufacturing and standard sintering processes. The ceramic substrate used for the small prototype OLED device combines an intrinsic barrier to protect the OLED, but one that is much easier to handle than metal foils or flexible glass. Like a plastic film, the ceramic can be used for semi-transparent devices while offering improved light outcoupling and higher devices efficiencies. Unlike plastic films, though, the ceramic can withstand temperatures up to 1000 C. Figure 7: Picture of flexible electronics developed by Holst Centre Source. Holst Centre 28 Sieberen Schaafsma, Holst Centre: Flexible wireless systems, Regional Innovation Report

29 Up-scaled, Perovskite-based PV modules. Solliance discussed in section 1.6 demonstrated a record 10 percent aperture area power conversion efficiency for its upscaled thin-film perovskite photovoltaic modules. The efficiency was measured on an aperture area of 168 cm 2. Twenty-five cells were connected serially through an optimized P1, P2, P3 interconnection. The PV module was then placed on a 15.2x15.2 cm 2 glass substrate using industrial scale-able slot die coating in combination with laser patterning. The PV module would then be packaged by applying a flexible barrier using a lamination process. Figure 8: Picture of Perovskite-based PV modules Source. Imec Centre The Holst Centre s position in the overall ecosystem has become all the more important in the last few years as they have expanded their activities to consider the unique needs of SMEs. Generally speaking, large organisations with substantial R&D budgets have little problem allocating at least a small percentage of research for frontier research, and the open collaboration environment helps to lower the risk involved in trying to push boundaries and develop new products. For SMEs, however, allocating even one researcher to a project or providing funds that would provide tangible benefits represents a substantial percentage of resources for the organisation. In light of the region s goals to help develop SMEs and difficulties they face in a collaborative environment, in 2014, the Holst Centre reached an agreement with the Brabant Development Agency (BOM) to help SMEs to gain access to some of the intellectual property created at the Centre. In the agreement, the BOM will identify and work with innovative SMEs and start-ups, helping to sign licensing agreements between Holst and the SME. The goal would be to accelerate SMEs entry into the flexible electronics (and wireless sensor) systems markets. Funding for the Holst Centre comes largely from the partners, who pay fees (and potentially also provide research resources) in exchange for access to the intellectual property being developed on the site. Approximately 60 percent of the Centre s funding comes from these fees, with the rest coming from various government sources percent from EU funds and the rest from the city, regional, and national governments. Regional Innovation Report

30 As mentioned earlier in this report, one recent and successful innovation to come out of the Holst Centre has been the production of flexible organic light-emitting diodes (OLED) using a roll-to-roll process. Similar technologies were used for other new products. This includes the launch in late 2015 of a roll-to-roll coating line for flexible solar modules, in which the Holst Centre also provided expertise. While joint research and development projects at least between the larger players in the market seems to be meeting some success, the number of spin-offs that have developed from the institute is relatively limited, with only three companies having been formed in the last decade, namely: Lifesense. Wearables for women with urine loss. RedBlueJay Foundation. Assists organisations with their innovation culture by generating new ideas and advancing knowledge exchange. Bloom Technologies. Wearable for tracking contractions during child labour. While the Holst Centre appears to play an important role for economic development and innovation in the region, the financial sustainability of the Centre remains a continued concern. The Dutch Financieele Dagblad reporting that the organisation needs to continually reinvent itself after every government cycle. In its 10-year history, the trend has been that the organisation sustains itself more and more from the licensing fees that it arranges from its partners and less on government subsidies. This shift has both been due to increasing fees from the private sector and decreasing subsidies on the public side. Debate continues as to how funding will look in 2017, particularly at the national level, as the government considers its top sector strategy. Figure 9: R&D spending in the Netherlands between public and private sector Millions! 60! 50! 40! 30 '*#$,%#$ '&#$ '%#$ ))#$ ")#$ )*#$ "%#$ (&#$,&#$ '&#$ )&#$ "&#$! 20 +&#$ %&#$! 10 *&#$! &#$ Private fees Government support Percentage of subsidy Source: Financieele Dagblad Bert Gyselinckx, Managing Director of the Centre, has argued in the past that the lack of a consistent flow of funds has had an influence on staff, with concerns over job security rising before the start of every new policy cycle, and also makes long-term strategic planning for the organisation more difficult. This problem is compounded by the network of public funders, each of which finances different aspects of the Regional Innovation Report

31 organisation, with some tying funding to equipment and others providing subsidies to only local companies that work in partnership with the Centre. While the inconsistent nature of funding can certainly be problematic, this is in some ways unavoidable and the nature of working in an innovative and ever-changing field. The greater concern for the region, however, is the level of funding being provided (and problem not just for the Centre, but for most innovation support mechanisms) ! Leveraging the existing potential The region of North Brabant, as discussed in earlier sections of this report, continues to have success in advanced materials and more generally in advanced manufacturing. And generally speaking, interviewees were very positive about the continued leading role that the region should enjoy in the field of advanced materials. The region has a good skills base and government policy tends to provide companies with a good combination of support and flexibility. Partnerships between academic and business partners appear to be particularly fruitful, leading to concrete results that can be taken to market. While the region continues to show success, the business environment continues to rely heavily on the expertise and resources of a small number of large players, most notably Philips, from which many of the newer players have spun off. The region needs to continue to support growth of new, globally oriented players. Some of the main challenges moving forward are illustrated below.! Challenge 1: Industrial strength relies on a limited number of large, potentially vulnerable players Given the overall size of the economy of North Brabant, the region performs very well in terms of growing companies into major international players. However, some of the major players that are working in the region remain vulnerable to external shocks and potential buy-out. While ASML continues to perform admirably, the trials of Philips are well known, with the company s footprint in the region decrease with the divestment of consumer products. US-based Qualcomm is currently in talks to acquire NXP. While the threat should not be overestimated, the importance of these larger players in creating the start-ups that will be the next large partners to grow out to the region means that large disruptions can pose a threat (or create opportunities, as local players are pushed into new ventures after restructuring).! Challenge 2: Attracting and retaining key talent North Brabant, like many other European industry-oriented regions, faces a continuing challenge due to the high demand for a skilled and well-educated workforce. Given the cultural pull of the Randstad, which is considered the more attractive region of the country to live and work, the lack of qualified personnel in the region is a continual issue, particularly for SMEs that are less able to tap into foreign talent. As mentioned in the Brainport 2020 plan, concerns over the cosmopolitan character of the city of Eindhoven (and the surrounding region) are a concern. Reports discuss the fact that the Randstad si more attractive in terms of culture, urbanization, international top education, and a vibrant international.! Challenge 3: Restrictive labour market Various regulations that structure the labour market hinder not only an optimal allocation of skills across the region, but also cross-border cooperation. While the focus of many labour market reforms are around the hiring and firing of works, housing and health policies are also significant barriers. Diploma recognition of professional qualifications continues to be a barrier. Regional Innovation Report

32 Given the challenges illustrated above, there are a number of opportunities that the region could exploit:! Continued support for the leading clusters in the region While there is always an inherent tension between an equal distribution of resource (or even a redistribution) and focussing on the strengths of a region, Dutch policy has in recent years focussed on its strengths. In the region of North Brabant, Eindhoven and its surrounding regions remains the beacon by which to grow and attract new companies and workers. The Hightech Campus has already been mentioned as a success story in this report, but other areas of strength fed by Eindhoven remain, such as Helmond s Automotive Campus (located 16km from the High Tech Campus). Plans for a new Brainport Innovation Campus near to the Eindhoven Airport continue to move forward. The brainport brand and support activities around should continue to be a priority.! Confirming Eindhoven as an international hub Despite concerns over the international character of the region, Eindhoven remains diverse, attracting talent globally. While statistics collected by the national agency are hampered by a metric that classifies that citizens with a foreign parent as foreign themselves (allochtoon), the statistics along this metric show that 30 percent of the population of Eindhoven as having some kind of foreign ties. This compares with cities like Rotterdam and Amsterdam, which have approximately 50 percent of its citizenry as allochtoon. The city of Eindhoven and the region as a whole should continue to emphasise the region as a place that is open for business and open to talent. Regional Innovation Report

33 2. Regional Innovation Performance Trends, Governance and Instruments 2.1.!Recent trends in innovation performance and identified challenges As mentioned in chapter 1 of this report, North Brabant is the high-tech production centre of the Netherlands, outperforming higher population centres in the north of the country by a substantial margin. The Regional Innovation Scoreboard from 2014 and 2016 show North Brabant as only one of two provinces in the country that is labelled as an innovation leader, though the region has seen its index score decrease by two percent in the last two years. According to the scoreboard, North Brabant outperforms the European average in EPO patent applications, innovative SMEs collaborating with others, and SMEs producing product or process innovations. Figure 10: Innovation and R&D performance indicators for North Brabant compared with the Dutch average Innovation / R&D indicator North Brabant Netherlands (average of normalised figures for all provinces) EPO Patent Applications SMEs with Product or Process Innovations SMEs with Marketing or Organisational Innovations Employment Medium-High/High Tech Manufacturing and Knowledge-Intensive Services Exports in Medium-High/High Tech Manufacturing Sales of New-to-Market and New-to-Firm Innovations Source: Regional Innovation Scoreboard 2016, EU In terms of R&D spending, North Brabant fairs well when compared to the rest of the country, spending the most on R&D as a percentage of overall GDP 2.61% compared to any other region in the Netherlands and well above the EU-28 average of 2.03% achieved in Regional Innovation Report

34 Figure 11: R&D spending, public and private, as a percentage of GDP +-&&#$ %-)&#$ %-&&#$ *-)&#$ *-&&#$ &-)&#$ &-&&#$ Source: Eurostat, 2016 Over the last decade, while the Netherlands as a whole has been showing a slow increase in R&D spending as percentage of GDP, North Brabant has shown a much greater degree of variability over the years, with a significant dip in R&D spending from 2007 after the financial crisis, with recovery after 2009 when the global economy also managed some recovery. Interestingly, national averages for the Netherlands and neighbouring Germany and Belgium as well as competing regions all show slow increases in R&D spending as a percentage of GDP with North Brabant as the only region mirroring the overall performance of the global economy. This may be explained by the fact that high R&D performers were the ones most likely to cut spending, with the Dutch government cutting support for research and development activities from Regional Innovation Report

35 Figure 12: R&D spending as a percentage of GDP from 2000 to European Union (28 countries) Belgium Germany Netherlands Overijssel Noord-Holland Zuid-Holland Noord-Brabant Source: Eurostat, 2016 Higher education institutions, which are an important part of the innovation ecosystem, show that the number of STEM students attending institutions in North Brabant has remained relatively steady, with approximately 23,000 to 24,000 students attending universities in the area over the last five years. At maximum, 30 percent of these students are from outside of the country, according to Statistics Netherlands. 29 According to the latest available statistics from the OECD, this spending on R&D reveals itself in the number of patents being granted in the region, with more than 50 percent of all patents in the Netherlands being submitted and approved to companies in North Brabant. A large proportion of these activities take place within a single innovation park in Eindhoven, the High Tech Campus, where almost 80 percent of all patents from the region were submitted in Figures collected by Statistics Netherlands on higher education are split according to two categories allochtoon ( emerging from another soil ) and autochtoon ( emerging from this soil ). Citizens who have a foreign-born parent can be categorised under allochtoon, meaning that proper statistics on foreign students versus Dutch passport holders are unavailable. 30 Facts & Figures: High Tech Campus. One would expect that with the establishment of Chemelot Campus, a new innovation park in Limburg, that the number of patents that would be attributed to this region south of North Brabant should have increased substantially in the ensuing years. The Brightlands Materials Centre, one partnership located on the Campus, claims to produce 200 patents per year. Given its close proximity to North Brabant, however, this should only be looked at as a benefit to the greater region. Regional Innovation Report

36 Figure 13: Number of patents per region of the Netherlands in , , , , , , Source: OECD While the innovative capacity remains strong, a number of potential challenges remain in place.! Challenge 1: Inadequate funding for early-stage innovations The open innovation concept is much publicised in North Brabant and matches collaborative research & development projects taking place across various industries. However, open innovation presents a particular problem to SMEs, who generally do not have the resources to invest in early-stage innovation projects in the way that larger organisations can. The Holst Centre, mentioned earlier in this report with funding from the BOM has focussed some effort to attract SMEs into joint research programmes; however, funding (and state-aid rules in the EU) has been an issue.! Challenge 2: Declining public sector funding As has been mentioned in previous studies on North Brabant (and related to the previous point), public sector funding tends to lag behind the private sector. The assumption of many reports is that this should be viewed as negative; however, little concrete evidence has been provided to suggest that the lack of regional funding has been a particular hindrance. As some of these same reports suggest, North Brabant continues to outperform all other regions of the country when it comes to developing intellectual property. In the view of one interviewee, the province of Overijssel with higher levels of government funding relative to private sector funding government money can hinder an entrepreneurial spirit. There has been quite some effort to involve SMEs in collaborative innovation projects; however, it remains unclear whether this is the best path for growth.! Challenge 3: Integrating SMEs into the open innovation environment Many good practice examples of open innovation relate to larger organisations with large R&D budgets and a large regional or global footprint. Larger organisations tend to have the market position and strength to confidently enter into relationships with potential competitors to co-develop products. SMEs, however, (generally) suffer from a lack of both resource and market strength to enter into these relationships. This is not to say that SMEs fail to enter into joint projects; rather, that it happens under more exceptional circumstances. Many policymakers and innovation experts believe there would be further value in integrating SMEs into these joint agreements, and organisations like the Holst Centre have been looking to support SMEs with financial Regional Innovation Report

37 support and knowledge into how to enter into joint agreements while protecting valuable intellectual property. 2.2.! Institutional framework and set-up The 2010s have seen a shift in economic development policy in the Netherlands, which has had important effects on the regions. From 2004, the national government focussed on identifying strong regions and sectors of the economy, and focussing resources in these areas. The so-called Peaks in the Delta (Pieken in de Delta) identified six regions of the country along with their matching sectoral strengths, producing a package of instruments that would facilitate innovation. While there was a sectoral element to the policy documents drawn up at the time, the strategy still focussed quite a bit on general impediments to the Dutch economy, with a focus on spatial planning. There was a large focus on spatial-economic development, looking at how issues such as transportation, housing, business parks, and other elements of the general business environment can be improved to ensure optimal access to talent. Given the focus on finding the strategic advantages of various regions and supporting them to exploit these advantages in the global marketplace, it is perhaps unsurprising that this led to a change in focus for governance of economic development in the country. Rather than a nationally focussed policy looking to balance economic opportunities across the country, responsibilities were devolved to the regions, who would be better situated to understand the local context. The ministry of Economic Affairs, largely responsible for economic development from a national perspective, turned its attention towards the regional development agencies of the Netherlands (Regionale Ontwikkelingsmaatschappij, abbreviated as ROM). Currently, there are eight ROMs operating in the country, with a further one being developed to represent the interests of the provinces of Utrecht and Flevoland. Table 4 ROMs operating in the Netherlands English name Investment and Economic Development Agency for Northern Netherlands Dutch name Noordelijke Ontwikkelingsmaatschappij (NOM) Regions represented Groningen, Friesland and Drenthe Oost NV Oost NV Gelderland Overijssel and Brabant Development Agency Brabantse Ontwikkelings Maatschappij (BOM) North Brabant Limburg Development and Investment Company Limburgs Instituut voor OntwikkelingsFinanciering (LIOF) Limburg Innovation Quarter InnovationQuarter Major centres of South Holland Flevoland Development Agency Ontwikkelingsmaatschappij (OMFL) Flevoland Flevoland Impuls NV Economisch Impuls Zeeland Zeeland Development Agency of Northern North Holland Source. Ondernemersplein Ontwikkelingsbedrijf Noord Noord-Holland The northern part of North Holland Regional Innovation Report

38 Figure 14: Map of agency representation in the Netherlands Source. Technopolis One national evaluation of the performance of the ROMs found concerns over the cross-border nature of the agencies given the increasing focus on provincial policymaking, which could cause co-ordination issues for agencies such as Oost NV and NOM. However, the agency responsible for executing policies around economic development and innovation in North Brabant the BOM only serves the one province, and according to accounts from interviews, the relationship between provincial policy-makers and the BOM remain clear. In 2010, as mentioned in the previous chapter of this report, the Dutch government shifted focus somewhat, developing an overall industrial and innovation policy scheme that would focus on targeting sectoral strengths for the country. The so-called top sectors policy provides governments with a mechanism to co-ordinate and steer companies, universities, and research centres through funding that encourage cooperation. While this new policy represents a step away from the more generalised aspects of former policies that focussed on spatial planning, regional steering still remains an important component of public policy. Arguably, with co-ordination taking place with other stakeholders, regional actors at a public level have even further importance in terms of driving growth within particular sectors. At a European level, the ROMs have been praised for their ability to stimulate crossovers between traditional sectors via their networking activities. It was felt that these cross-overs fit well into the Europe 2020 strategy, in particular with the focus on societal challenges. And while it is true that the thematic area of high-tech materials, for example, has sustainable materials as one of its core areas of interest, it s not necessarily the case that this is because the national government has been pushing this as a goal rather, there is a clear market demand for sustainable materials globally, and as such, many of the key issues addressed in the top sector policy derive from a Regional Innovation Report

39 competitiveness perspective rather than necessarily a concern around key issues driving European policy. However, there is a good degree of overlap. In North Brabant, as has been mentioned in section 1.4, there is a mix of economic development agencies working in the region. While the BOM covers the region as a whole, various subregional and city-level agencies have appeared in various cities of the region, such as Brainport in Eindhoven and REWIN for the west part of the region. 2.3.! Regional innovation policy mix As mentioned in the previous section of this report, regional innovation policy fits within a national framework, implementing national programmes regionally and filling gaps with what funding is available. The region is responsible for co-ordinating stakeholders for the top sectors programme, focussed on the areas of specialisation for Brabant. Much of the policy focus is on spatial planning at various levels, such as support for innovation parks and the overall attractiveness of the region to talent; education for both technical and entrepreneurial skills; and distributing funding for various innovation initiatives. A representation of the various pillars of the economic development plan for the region are provided in the diagram below. Figure 15: Representation of overall economic development plan for Brabant Source. Economic Programme Brabant 2020 Plan, adapted by Technopolis In the last three years, the main change in focus for the country as a whole as well as the region has been moving from the Peaks in the Valley strategy to the Top Sector policies, as described earlier in this report. In theory, the change in policy has meant a focus on sectors rather than regions; however, given the concentration of firms and talent within particular geographical regions of the Netherlands, this should mean a greater focus on North Brabant; however, this would depend upon regional companies taking advantage of programmes that are essentially available to everyone operating in the Netherlands that fall under the top sectors. Some of the more important programmes, driven at the national level but available at the regional level, include: Regional Innovation Report