Innovation Policy

Our main conclusion is that the efficiency and effectiveness of innovation policy in the period 2003-2010 cannot be determined. We could not establish, for example, whether the doubling of expenditure on innovation policy from €1.8 billion in 2003 to €3.7 billion in 2010 had increased the innovative strength of the country. The Minister of Economic Affairs' coordination of the innovation measures displayed shortcomings. Ministries conducted their own innovation policies but their contribution to strengthening innovation was uncertain. The number of grant schemes to promote innovation has increased sharply in recent years. There is no coherence, however, between the schemes and the goals.

Most evaluations do not include the information necessary to assess the efficiency and effectiveness of expenditure on innovation policy. Most evaluations, for example, provide little information on a scheme or instrument's effectiveness: the increase in innovative strength. In the period 2003-2010, no policy reviews were made of the effectiveness of innovation policy. Furthermore, evaluations did not consider all economic externalities and only minimal attention was paid to the coherence between Dutch and European innovation instruments and goals.

In our report, we recommend that the Minister of Economic Affairs, Agriculture and Innovation incorporate systemic responsibility for and coordination of innovation policy into the new enterprise policy (the successor to innovation policy). Ensure that the minister responsible for each top sector prepares a concrete and measurable action plan, setting out each action's contribution to innovation and the effect of externalities. Ensure that the action plans agree with each other and with generic innovation policy. 

We further recommended that the minister ensure that the efficiency and effectiveness of the old and new schemes and instruments in the enterprise policy are feasible and verifiable. They should be assessed against the main policy goal. Conduct periodic policy reviews to determine the effectiveness of innovation policy as a whole. Finally, include relevant externalities, including European innovation policy, in instrument evaluations and policy assessments.

The Minister of Economic Affairs, Agriculture and Innovation wrote in response to our audit that he agreed with the report's main points and conclusions. He would set targets for the actions and instruments in the top sector plans. Performance would be measured by means of indicators. Furthermore, external factors would form an integral part of the enterprise policy. This will be raised in the minister's second enterprise letter. The minister would also execute top sector policy and generic policy in conjunction with each other. This, too, would be raised in the second enterprise letter. The instruments' results would be measured and their effectiveness embedded in evaluations. The minister said an independent agency would review the enterprise policy. External factors that influenced an instrument's effectiveness would be included in the evaluations. The minister also promised that policy reviews would include all factors that had a bearing on the goals. 

In our afterword we noted that the minister had not gone into detail on his role as coordinator. In his response he did not deny that there were shortcomings in the coordination of innovation policy. However, he did not respond to our recommendation that coordination be improved. The ministries concerned should at least analyse performance and effects in a comparable manner. Only then will the coordinating minister have a full insight into the results of innovation policy. We also note that the minister has announced actions to measure the effectiveness of his policy instruments. He wrote, however, that impact assessment was difficult. To gain a better understanding of the effectiveness of expenditure in the future, we would refer to the fund tracking websites successfully used by the US and UK governments (see www.recovery.gov and http://data.gov.uk/openspending respectively). In the Netherlands, such a website could use advanced techniques to display where innovation funds are channelled, who receives them, what they are spent on and the results of expenditure.