Amsterdam aims to become a top European startup hub

Amsterdam is selling itself to the startup community as a nice place to live with a high standard of living, and one that opens doors to the continent

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Amsterdam is promoting the quality of life in the city and its potential as a gateway to Europe to attract talented IT entrepreneurs to its IT startup community, and has set its sights on becoming Europe’s third biggest hub, behind London and Berlin.

Until recently, there were no formal government policies and programmes for startups in Amsterdam. But a government and private sector initiative called StartupAmsterdam is changing this.

During the citys Capital Week, representatives of Amsterdam’s city government, the entrepreneurial community and investors connected at 20 events over the course of a week.

Kajsa Ollongren, Amsterdam’s deputy mayor and the government official behind the scheme, told Computer Weekly there was an urgent need for the city government to act. “One of the first things I noticed when I started in June 2014 is that we had lots of things going on in the startup scene but no policies or programmes. It wasn’t really on the agenda, she said.

Gateway to Europe

Ollongren said Amsterdam doesn’t just want to create the perfect environment for Dutch startups, but wants to attract them from all over the world. “Amsterdam is a gateway to Europe and is attractive for companies all over the world,” she said, adding that startups from the US and Israel had shown interest.

“If you need talent, we have it here, and if we don’t have it we will make it easy for the talent you need to come and live and work here”

Kajsa Ollongren, Amsterdam deputy mayor

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Ollongren said the city itself is a great attraction, as are its talent and openness to foreign workers: “The advantages that we have are the city itself, because it’s a nice place to live and is more compact than London and Berlin; we have lots of talent here already and it is easy for talent to come here; and we have an entrepreneurial spirit and like to try new things.”

Amsterdam offers a startup visa to help companies bring in new staff, and has a rule which means foreign staff pay less income tax. “If you need talent, we have it here, and if we don’t have it we will make it easy for the talent you need to come and live and work here,” added Ollongren.

She also said the city government plans to approach central government on suggestions for changing the tax law to make it easier for small companies to set up in the Netherlands as currently “the fiscal system is not fit for starting these kinds of businesses”. She was referring to companies being charged tax upfront, which would proved difficult for startups as they take some years to make money.

Investing in growth and talent

Bas Beekman, public lead at StartupAmsterdam, said although Amsterdam has a vibrant startup scene, it lacks companies that are growing fast.

“In Amsterdam, we have a lot of startups and a lot of talent, but we don‘t have many that are scaling up fast, like Booking.com and Tom Tom, which are our most successful examples. We want more of these in Amsterdam,” said Beekman.

And it is not just about Amsterdam, but the Netherlands as a whole, with Eindhoven and Rotterdam close by.

“We see each other as one startup ecosystem,” said Ruben Nieuwenhuis, entrepreneur and private lead at StartupAmsterdam. “This makes us a bit different to London, where Tech City is separated from hubs in other parts of the UK. It is the same in Germany, where Berlin has a strong tech cluster but it is separate from others.”

With extra government support, Amsterdam could reach its ambition to be one of Europe’s top-three startup hubs. Someone who has been there and done it in Amsterdam is Pieter Van der Does, CEO of payments company Adyen.

“Amsterdam is developing into a good tech hub and the quality of life is higher than in London and San Francisco,” he said.

Maurice Groenhart, product manager at augmented reality company Blippar, said Amsterdam is becoming a more attractive location for talent. “IT talent is very good in the Netherlands, but in the past many people moved abroad.” But government initiatives are changing this, he said, and the quality of life is high, with a much lower cost of living than London and Berlin.

Collaboration between corporates and startups

Dutch corporates are also getting involved as they recognise the importance of a startup scene.

Lodewijk Bonebakker, head of the customer experience centre at Dutch bank ING, where he manages its innovation hub and reports directly to the chief innovation officer, said a local startup scene is crucial to big Dutch businesses.

“Many corporates find it very difficult to combine operational excellence with innovation,” said Bonebakker. Operational excellence is primarily linked to the stability of the business now, while innovation is required for relevance in the future. Having a local startup scene allows corporates to explore and collaborate on new solutions, technologies and directions.”

Having a local startup scene allows corporates to explore and collaborate on new solutions, technologies and directions
Lodewijk Bonebakker, ING

He added that Dutch corporates have realised they have a challenge to increase the pace of implementing new technologies and have begun to actively seek collaboration with startups.

ING itself buys IT from startups in certain areas. “There are very specific digital technologies, like the management of private cloud systems or virtualised server farms, that are very much the domain of startups and we certainly evaluate them,” said Bonebakker.

He said startups are important to the Netherlands’ economy as a whole: “The financial crisis has left deep scars in the entrepreneurial landscape, and large companies and corporates are only slowly starting to look forward. The thriving IT startup scene is a reminder of how exciting and full of possibilities the world economy still is.”

Bonebakker added that startup programmes initiated by the government are a good start and the next step is to develop much closer relationships between universities, corporates and startups to stimulate the transfer of knowledge and technologies.

It must go beyond IT, he pointed out. “Besides the IT startup scene, it is of general importance for the Netherlands to host a broad range of startups, across all disciplines. It is the cross-pollination and active collaboration between different fields that traditionally has given the largest breakthroughs. Looking at IT alone would be too narrow a view,” Bonebakker concluded.

Read more about startup hubs in Europe

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