The Netherlands are fast becoming world leaders in all things tech, turning old images of the nation upside down and pioneering extreme innovation. Earlier this year, Dutch multinational Philips decided to sell its lighting division via an initial public offering. But why would the company sell off what has been one of its core businesses since 1891? The answer lies in the growing demand for medical technology and Philips Healthcare
When Philips ‘abandons’ lighting, it will be the end of an era. The company is closely associated with Eindhoven, and it’s hard for the Dutch to imagine that city and its surrounding area without Philips Lighting – both economically and emotionally. However, the company has a new focus there – making the region into a European hotspot for medical innovation.
In 1998, Philips established the High Tech Campus Eindhoven, a highly sought-after incubation hub, which has attracted many foreign medtech companies. Offering space to a mix of high-tech medical startups (such as Mint Solutions and G-Therapeutics), SMEs (Cytocentrics) and original equipment manufacturers/multinationals (Philips Healthcare), institutes and service companies, the campus is at the heart of innovation in Eindhoven and the Brabant province.
The Eindhoven hub is clearly the showpiece of Dutch medical innovation but it’s not the only cluster fuelling the country’s medtech scene. Venture capital funding stats 2012 until present) show that no single region dominates the Netherland’s €18 billion medtech export market; however, Swiss-Dutch G-Therapeutics contributed the most to this amount. The neuro-stimulation therapy startup secured €26 million from four European VCs and a €10 million loan from the Dutch Ministry of Economic Affairs in April 2016. And, naturally, the company is based in Eindhoven.
And while more than 20 per cent of Dutch medtech companies are located in the Eindhoven/Brainport area, the Delft-Rotterdam-Leiden region (southwest), HealthValley region (centre and east), Limburg province (south) and Twente region (east) are not far behind in terms of the number of medtech companies in operation.
Furthermore, the Netherlands is setting an example for the rest of the world, says Nico van Meeteren. He is the Executive Director and Secretary of Topsector LSH (Dutch Life Sciences and Health), one of the nine key sectors defined by the government to encourage public-private partnerships to develop, validate and enhance the value of life science and health innovations.
According to Van Meeteren, the Netherlands has a reputation for open-mindedness, tolerance and transformation (for example, in its support of end of life and relational discourses). That culture of constant progress and change for the better has its effects on life sciences and health, too. ‘The Netherlands has top scientists and entrepreneurs who, supported by governmental policies, contribute to an excellent medtech hub,’ he says.
One of those policies was an important initiative last year by the Dutch Ministry of Health, Welfare and Sport. It announced so called ‘health deals’ – a €500 million injection from public-private partnerships in healthcare innovations over the next two years.
Such initiatives didn’t go unnoticed by foreign companies. Icelandic startup Mint Solutions subsequently moved to Eindhoven, for instance. ‘The Netherlands has turned out to be an excellent place to develop our product further,’ its co-founder and CEO Gauti Reynisson told Forbes.‘… the Dutch healthcare system increasingly works with public and private partnerships,’
Dutch startups also consider the Netherlands a great place for medical innovations to flourish, although in a more nuanced capacity. CEO Jeroen van den Hout from Leiden-based BabyBloom Healthcare, a neonatology equipment manufacturer, thinks even small players, like emerging medtech companies, can fight for a spot among the big medical moguls.
‘That’s because the Netherlands is one of those countries where new equipment doesn’t necessarily have to come from the same manufacturer after depreciation,’ he says. ‘Clients here look at the whole market again. What’s new? What’s better? And what’s affordable? That way, newcomers have a chance of entering the market successfully.’
There is a downside though. ‘In the Netherlands, there’s a surplus of startup initiatives – even in medtech – and all these initiatives want to connect everyone with everyone,’ says Van den Hout. But he’s not complaining. ‘All this attention on startups and innovation eventually leads to a lot of media exposure,’ he says.
To explain his view, Van den Hout reveals that hospitals approached his company, instead of the other way around. ‘BabyBloom started as a graduation project from the Delft University of Technology (TU Delft). When it was just in the idea phase – and we really only had some pictures – the media wrote about us. That certainly got the ball rolling!’
The team at Dovideq Medical, an endoscope testing startup based in Deventer, also thinks there are two ways of looking at the Dutch medtech sector. ‘On the one hand, the climate is hard for most of the medical startups because the health sector, in general, is kind of conservative,’ says Remco Balk, Dovideq’s Product Design Manager. ‘I think four out of five medtech startups fail here. You need a business revolving around something the market really needs. There’s not really a technology push, which is more the case for other kinds of startups and innovations.’
But once ‘in’, there’s a nurturing medtech climate that allows startups to thrive. Balk continues, ‘I’m impressed by our medical regulations. The Netherlands is far ahead in comparison with other countries. Think about how surgery rooms are classified, how protocols are being made. There are organisations that are actively making these decisions on a daily basis. I think they are asking the right critical questions and solving problems immediately. Needless to say that’s beneficial for the development of the medtech climate here.’
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