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The Netherlands has historically been a nation of traders. The period of the Golden Age, driven by the United East India Company (Vereenigde Oost-Indische Compagnie, or VOC, in Dutch), gave the country wealth, influence and power. Now, in 2017, new IT opportunities promise growth for Dutch exports, with Germany a potential destination.
That is the message from minister of economic affairs, Henk Kamp. The Dutch government official praised the business opportunities in Germany during a visit to the country earlier this year.
The stage was the international IT tradeshow Hannover Messe. There were no less than 140 Dutch companies and institutes presenting themselves.
“Germany is our most important economic partner, with an export value of nearly €100bn. Therefore we, in collaboration with the business community and trade associations, are constantly scouting for new opportunities,” said Kamp.
His encouragement for Dutch IT companies to go east is underpinned by a research report by consultancy KPMG. “This research shows that there are many opportunities in Germany for Dutch companies and knowledge institutions if they continue to invest in new, digital technologies,” said Kamp.
The minister for the Dutch economy said this was the way forward, to keep Dutch products and services competitive and to harness the possibilities for extra revenues and jobs in the Netherlands.
Cyber security, of course
The KPMG report, quite literally titled Export opportunities for the Dutch ICT sector to Germany, hailed the growth possibilities in the large German market for tech companies from the Netherlands.
Furthermore, Dutch companies have more than a year’s experience of operating under a breach notification obligation implemented by the nation’s government in 2015. This Dutch rule came into effect on 1 January 2016. The country has since gained experience that can be useful and bankable in other countries that will have to abide by the approaching European legislation General Data Protection Regulation (GDPR).
Vulnerability into strength
There is, however, the recent blemish of the NotPetya cyber attack. The Dutch pride themselves on the nation’s importance as an international hub for trade and traffic, both physical and digital. The harbour of Rotterdam fulfils a central role for the analogue part of this hub function. But it was, ironically, a cyber security incident that laid the harbour low earlier this summer.
One large container terminal at the huge harbour was effectively shut down. Another was thrown back by decades, with staff checking paper clipboards and licence plates of incoming container trucks. The cause of this meltdown lay not with the Rotterdam harbour itself, but with the Danish multinational Maersk, whose IT systems were taken hostage by NotPetya.
Maersk terminals in Rotterdam saw their container traffic blocked by this digital attack. Other terminals, from other companies, were unaffected, but the overall effect was quite severe. Days of logistics were disrupted, the aftermath lingered for weeks, and the domino effect of damage racked up into the billions.
The Dutch harbour and local authorities have since called for a breach notification obligation to prevent, or at least mitigate, future outbreaks. This is playing to the Dutch strength and experience in this area. Other companies, industries and countries can learn from this. And the Dutch can profit from it.
Eastwards for growth
So, it’s no wonder that Dutch IT companies feel encouraged to seek out new opportunities, specifically in Germany. The encouragement is not just in cyber security, but also in IoT and big data. And the large European country is not just being singled out because it’s a neighbour – the KPMG report stated that Germany was poised for strong growth in certain areas.
That growth will surpass the worldwide level, which makes the nation an even more attractive export goal. For example, IoT in Germany is expected to grow by 33%, to reach a market value of €50bn in 2020. The worldwide value of IoT is much larger, with an estimated €1.6tn this year, but the growth is much lower, at 23% worldwide.
While many outsiders interpret the IoT market as just smart gadgets, such as those to automate household goods for example, the larger market is mostly industrial and somewhat hidden from view. Modern cars are, in effect, connected vehicles, with onboard electronics for driving, navigation systems for directions, and other IT components. Several Dutch companies are already manufacturers or suppliers of IoT equipment for cars.
IoT for farming and healthcare
Other sectors for IoT include precision farming, healthcare and domestic devices. The latter can be seemingly frivolous things such as smart lightbulbs (like Philips’ Hue lamps), but also encompasses home appliances such as smart thermostats.
Next to established or even large Dutch companies in this market, the Netherlands boasts a significant number of startups and scaleups in this sector. According to the Dutch government, the country currently has more of these promising newcomers than Germany.
Big data is the third area in which the Dutch aspire to export knowledge, products and services towards their eastern neighbour. Germany is also poised to achieve larger growth in this area than the worldwide rate, says KPMG. The global market for big data technology is on track for 13% growth, but Germany is expected to gain 22%. The respective market values are €54bn and €3.7bn.
Big data for smaller sizes
The projected opportunities for analytical software in big data solutions are in farming, healthcare, the automobile industry and infrastructure. Dutch companies are well positioned in these fields, according to the KPMG report, and the German market has plenty of space for them.
A big chunk of this space lies in the sub-market of small and medium-sized enterprises (SMEs), of which both the Netherlands and Germany have many. This is also applicable to the big market of cyber security.
To successfully reach those SME customers, it is imperative that Dutch IT companies forge close ties with local distributors and other trusted suppliers. Realising the market opportunities is not simply a matter of market invasions. The KPMG report is freely downloadable at the website of the Dutch Ministry of Economic Affairs.
Read more about exportable Dutch IT expertise
- IT often seems a mostly US industry, but other nations contribute a lot too, says Dutch database design scientist Martin Kersten.
- 3D projects abound in the Netherlands, with the technology being applied to canal bridges, bicycles, ship components and buildings.
- Dutch expertise and level-headedness could help broaden the use of blockchain in the finance sector and into a wider range of business and government organisations.
- IT security is about to rival cheese, tulips, windmills and flood defences as an export from the Netherlands.