The number of unicorns measures how well an economy is able to transform new ideas into globally significant enterprises. Examples of Dutch unicorns include: Adyen, Booking.com, Bunq, Mollie and Picnic. However, absolute numbers are a crude measure, particularly when comparing economies of very different sizes. By adjusting the figures for population size, the raw count is converted into an intensity measure: this shows how successfully a country manages to turn inventions per capita into scaled-up businesses, and makes comparisons with countries such as Sweden, the United Kingdom or Ireland more meaningful. The data show that, over a ten-year period, the Netherlands produced approximately one unicorn per 1.85 million inhabitants. That is a better ratio than in Germany (-27%) and France (-20%. However, more comparable countries such as Estonia (+217%) and Ireland (+314%) produce considerably more, whilst investing a smaller share. In other words: comparable countries spend less and produce more.
Gap between invention and innovation
The gap between invention and innovation is not the result of a lack of capable founders, technical talent, or entrepreneurial ambition. The problem is institutional and can therefore be resolved. McCarthy identifies three: the capital problem – Dutch pension funds invest as little as 0.012% of their funding into supporting Dutch start ups compared to 1.9% in the United States meaning Dutch start-ups struggle to find capital – the exit problem – a weak and fragmented IPO markets make it harder for Dutch firms to go public, meaning successful firms are more likely to scale and exit elsewhere – and the entrepreneurial flywheel problem – weak employee participation in successful scale-ups means less capital and experience are recycled into the next generation of Dutch start-ups. In his article, he also explains how to move from innovation to commercialisation.
Build an innovation system
According to him, the aim is not simply to create more unicorns. McCarthy: “The ultimate goal is to build an innovation system in which Dutch inventions more often develop into Dutch innovations, in which companies can grow into global players, and in which the economic value of knowledge creation is actually retained in the Netherlands. That means not simply investing more in invention, but fixing the institutions around commercialisation: ensuring firms can access growth capital, giving them credible routes to exit through public markets, and allowing the people who benefit from successful scale-ups to reinvest their capital and experience in the next generation.”