More businesses expect investment in innovation and R&D to increase

© ANP / Jean-Pierre Jans
More businesses anticipate an increase in investment in innovation and R&D in 2025 than a decrease. Investment decisions by firms are mainly being driven by the desire to improve the quality of their products or services. Statistics Netherlands (CBS) reports this on the basis of the 2024 Annual Report on the State of SMEs. The figures are based on the Netherlands Business Survey of October 2024, conducted by CBS in corporation with the Dutch Chamber of Commerce (KvK), the Economic Institute for Construction and Housing (EIB), the Dutch Organisation for Small and Medium-Sized Enterprises (MKB-Nederland) and the Dutch Employers’ Organisation (VNO-NCW).
Large enterprises (250 or more employees) are more likely to invest in innovation and research and development (R&D) than small and medium-sized enterprises (SMEs) (5 to 249 employees). Businesses in the manufacturing, information and communications and construction sectors are more likely to invest in innovation and R&D than those in service sectors such as accommodation and food services or culture, sports and recreation. Innovation and R&D improve the labour productivity or product quality of a business, enabling them to contribute to the international competitiveness of the Netherlands. Businesses that manufacture unique products have a competitive edge over those that are not (yet) able to do so, and have greater opportunities for growth.

Business owners of SMEs are less positive than those of large enterprises

Entrepreneurs in both SMEs and large enterprises expect to invest more in innovation and R&D in 2025. Those expectations are more positive among entrepreneurs of large enterprises (nearly 12 percent) than among those of SMEs (6 percent). Business owners in the construction and culture, sports and recreation sectors are the most positive about future investment in innovation and R&D, whereas those of SMEs in the accommodation and food services sector expect investment to be lower. In the majority of sectors, entrepreneurs of large enterprises are more positive than those of SMEs. This also applies to the transportation and storage sector.


Nearly 1 in 3 businesses innovate to improve the quality of their products or services

Increasing business productivity is not the main reason for most firms to invest in innovation and R&D. Slightly over 29 percent of SMEs gave improving the quality of products or services as the main reason. Over 37 percent of SMEs in the information and communications sector reported this.

For over 26 percent of large enterprises, responding to changing customer needs or market demand was the most frequently mentioned reason to innovate, while nearly 19 percent of SMEs gave increasing business productivity as the main reason. This was a fraction lower among large enterprises, at around 17 percent. Just over 11 percent of SMEs reported complying with laws and regulations as the main reason for investing in innovation and R&D. Among large companies, this was mentioned less frequently, at over 7 percent. This relatively often involves enterprises in the manufacturing and construction sectors.