The Netherlands is well-known as a hotbed of food industry research and innovation – but its focus tends to be cost reduction and process efficiency, rather than new product development and marketing, according to findings from a new government-backed study. This may lead to problems for small and medium sized enterprises (SMEs) in particular, which rely on bringing innovative products to market in order to compete effectively on a pan-European stage.
Although Dutch food industry research and development is still relatively healthy, most product innovation comes from multinationals and start-ups, the project found, while SMEs account for 98% of the Dutch food industry. Therefore, it may come under pressure in the long term if it fails to find a way to encourage innovation among smaller firms.
“You could take measures that are more suitable for the SMEs,” Elsje Oosterkamp, one of the study’s researchers, told FoodNavigator.
She says that one of the main problems in spurring industry innovation is that government initiatives provide funding for innovation projects retrospectively, while SMEs tend to need funding up front.
“If you ask SMEs what is their bottleneck, it is financing. Because of the crisis, it is not getting better for them,” she said.
This is not to say that SMEs are not innovating, but their innovation may be more incremental. Process efficiency innovation can be positive too, and Oosterkamp highlights the role supermarkets play in encouraging this type of innovation.
“The supermarkets are very much interested in low prices, so price is very important,” she said.
The LEI Wageningen UR study compared food innovation in the Netherlands with that in Denmark, Germany, Italy, France, Poland, Spain and the United Kingdom, following a request from the Dutch Ministry of Economic Affairs. It found that the Netherlands came third in terms of overall innovation, behind Denmark and Germany.
The government aims to increase the competitiveness and sustainability of the Dutch food industry through better understanding of innovation in the sector.