The Dutch software sector

Samenvatting

In its 2008 report on the Dutch software product sector, the trade association ICT Office stated that it is difficult to ascertain the added value of the software sector in the Netherlands due to the lack of validated data. CBS figures provide further insight into the scope of the Dutch ICT sector, with fewer details of its structure. The data required to assess the specifically significant contribution of software development, sales and services to the Dutch economy is not available. CBS has neither the capacity nor the means to conduct more in-depth research on this topic.
For this reason ICT~Office contracted consultancy firm Dialogic to initiate a study of the scope and economic significance of the software sector for the Netherlands, also looking at how the various software activities are organized. This would also give additional depth to the basic data collated by CBS.
In Finland annual surveys have been carried out for some time to determine the impact of the development and sales of software and its services on the Finnish economy. These surveys also formed the basis for the questionnaires used in the Dutch study.

The software sector - Facts and Figures

• The software sector is a fully-fledged and significant economic sector in the Netherlands, with a turnover of 25 billion euros and gross added value of 17.3 billion euros. The sector contributes to 2.8% of the Netherlands economy (GNP). This added value is at least as high as most key areas defined by the Innovation Platform as strategic sectors in which the Netherlands excels at international level both in knowledge and in commercial activities.
• The value of software sales is in fact even higher because a great deal of software is developed and sold by companies that formally do not come under the definition of software sector as applied by CBS (Netherlands Statistics). If these activities are included in the calculation, the extent of added value could rise to 24.3 billion euros. That would account for a 3.9% contribution to the national economy (GNP).


Characteristics of software products
• It is often thought that the Netherlands develops mainly tailor-made software. The annual turnover in this sector is 5.5 billion euros. However, sales of product software in this country also amount to 3.9 billion euro. The larger the company, the higher its share of product software.
• Based on the number of companies in the software sector producing software, it is estimated that in 2010 there are between 30,000 and 35,000 software products on the Dutch market.


Innovation
• The software sector is R&D-intensive as illustrated by the percentage of labour capacity devoted to research and development (software producers = 9%) and by the percentage of applications for innovation subsidies under the WBSO R&D Promotion Act (13.5% of the total). Companies that use a relatively large amount of open source software carry out more research and development than others.
• The innovativeness of the software sector is demonstrated by the fact that 23% of the turnover of companies in this sector is generated by new or improved products. The general average in the Netherlands is 10%.
• There is still much potential for growth in the software sector through innovation subsidies: in fact smaller SMEs and open source businesses make relatively little use of the fiscal support provided by the WBSO scheme.
• Companies that derive a relatively large proportion of their revenue from new products use much of their capacity for R&D; they make profit mainly by selling software developed in-house; they supply software products and make relatively frequent use of SaaS constructions.
  
  

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