The Netherlands ranks 5th in the Global Innovation Index of the World Intellectual Property Organization in 2024

Intercompany Solutions assists foreign entrepreneurs in expanding their business to the European Union (EU). More specifically, we are specialized in the establishment of Dutch companies and various continuous services that are aimed at accelerating the growth of your business and ensuring its stability and success. We believe that the Netherlands has a lot to offer for foreign investors and entrepreneurs, mainly due to the overall economic and political stability of the country. The Netherlands is extremely welcoming toward foreign investors and as such, offers many incentives and benefits for startups and subsidiaries that are linked to foreign companies. 

If you have an innovative business idea or would otherwise like to expand your business to the Netherlands, we can offer many helpful services to assist you in attaining this goal. We have helped thousands of other foreign entrepreneurs before you, ranging from small startups to internationally renowned multinational companies. Our establishment process has been perfected over the years and can be finalized in just a few business days, even completely remotely if you so desire. We offer our services for clear and predetermined quotes, which are competitive when compared to other company establishment companies. Feel free to ask for our advice anytime, if you have ambitions that include expanding your business to the EU. We are always happy to assist you in any way we can.

The Netherlands’ consistent high ranking throughout the years

During the past decades, the Netherlands has consistently ranked high in the Global Innovation Index (GII) of the World Intellectual Property Organization (WIPO). This organization ranks countries based on their capacity for continuous innovation throughout all sectors and markets. Being in the top ten for many consecutive years speaks volumes about the country’s capacity for growth, stability, innovation and economic prowess. Which is why we believe that establishing a Dutch company is almost always a safe bet to achieve substantial success and expand your business in ways you could not have achieved otherwise. In this article, we will delve deeper into the GII, what it does, how countries are ranked and what the establishment of your business in the Netherlands might mean for you. 

What is the Global Innovation Index?

The Global Innovation Index (GII) is an annual report published by the World Intellectual Property Organization (WIPO). There are many world-famous indexes that measure some form of performance, but this one specifically measures the amount and extent of innovation globally. It provides a comprehensive ranking and analysis of countries based on their innovation capabilities and performance. There are some key aspects involved with this ranking. For starters, the GII has several purposes:

• To measure innovation performance globally
• To encourage countries to enhance their innovation ecosystems in a variety of ways
• To highlight certain innovation trends and challenges.
• Serve as a benchmarking tool for policymakers, business leaders, and academics.

As for the methodology, all data is gathered from various sources, including international organizations like UNESCO, the World Bank, and proprietary databases. A mix of quantitative and qualitative indicators ensures balanced insights. Some interesting insights are that high-income countries like Switzerland, Sweden and the Netherlands consistently rank at the top and are seen as top innovators. Other countries, such as China and India, have risen significantly over the past years due to strategic investments in technology and research. In terms of trends, the themes vary annually (e.g., "Innovation in the face of uncertainty" for 2023), exploring specific global challenges and how innovation addresses them. 

The GII also has various specific applications, such as policy development. Many governments use GII findings to identify weaknesses in their innovation systems and craft targeted policies. Businesses can also profit from the index, as they gain insights into innovation-friendly markets. This is especially the case when a foreign entrepreneur wants to expand to an innovation-friendly country, such as the Netherlands. And the index also helps academic scholars to analyze trends in global innovation. Concretely, the GII evaluates innovation using seven pillars, grouped into two main categories.

1. The innovation input sub-index:

This measures factors that enable an environment that is welcoming to innovation. It includes:

1. Institutions: the amount of political stability, regulatory quality, and ease of doing business.
2. Human capital and research: the quality of education levels, R&D expenditure, and university rankings.
3. Infrastructure: the functioning of ICT access, ecological sustainability, and logistics.
4. Market sophistication: the degree of credit availability, investment environment, and competition.
5. Business sophistication: innovation linkages, knowledge workers, and firms' absorptive capacities.

2. Innovation output sub-index:

This measures the actual results of innovation efforts. It includes:

6. Knowledge and technology outputs: patents, scientific articles, and high-tech exports.
7. Creative outputs: cultural and creative goods, trademarks, and online creativity.

A Global Innovation Efficiency Ratio is also calculated to show how well countries convert innovation inputs into outputs. In these cases, both the inputs and outputs are measured against each other to gather data about efficiency and effort. The main goal is to see how well all the pillars work together to create innovative solutions from several different viewpoints.

Which criteria are taken into account when ranking countries? 

The GII is quite a comprehensive index, that ranks countries based on a systematic evaluation of the previously mentioned innovation inputs and outputs. It uses as much as 81 indicators across seven main pillars (five input and two output), as we already explained above, ensuring a comprehensive analysis of each country's innovation ecosystem. We will now provide you with a more detailed breakdown of the criteria and the data collected for the rankings.

1. Innovation input sub-index

This part reflects factors that create a conducive environment for innovation. So it’s not about the actual innovative output that any country can generate, but rather the present conditions that enable a country to innovate throughout various sectors. It includes the following five pillars, which we will explain in a bit more detail. Keep in mind that these are rather crude explanations, as every pillar encompasses a very broad field of expertise and action. 

A. Institutions

This pillar focuses mainly on the political, regulatory, and business environment of any given country. It includes the following:

• The political environment of the country in question, such as political stability and general government effectiveness
• The national regulatory environment, such as the rule of law, and regulatory quality
• The general business environment. This includes factors such as the ease of starting a business, the way businesses are able to thrive and the ease of resolving possible insolvency

B. Human capital and research

This particular pillar measures investments that are focused mainly topics such as education and research. It includes the following subjects:

• The quality of education, which includes factors such as pupil-teacher ratios, general school life expectancy and government expenditure on education
• The quality and access to tertiary education, which includes (but is not limited to) university rankings, cost of education and graduate outputs in STEM fields
• Research and development in general, which includes the gross domestic expenditure on R&D (GERD), as well as R&D personnel per capita

C. Infrastructure

This examines the development of all kinds of general and innovation-specific infrastructure, which inevitably allows for faster travel, higher speed of connection and more general possibilities for innovation. The pillar infrastructure covers the following topics:

• Everything related to ICT, such as internet usage, the amount and quality of broadband subscriptions and mobile network coverage in the country
• The general infrastructure, you can think of things such as electricity access, the quality of (rail)roads and waterways and overall logistics performance
• The ecological sustainability of a country, which can entail environmental performance, renewable energy use and the attained degree of a circular economy.

D. Market sophistication

Market sophistication deals with the way citizens are able to acquire financial aid, or invest in something lucrative themselves. It also covers the competitiveness of the financial sector in general. It basically analyzes the financial and market environment. Some examples of tested data include:

• Everything about credit, such as the possibility to access to venture capital and the amount of domestic credit that goes to the private sector
• It also entails the topic investment in all its forms, such as the degree of market capitalization and the number of Initial Public Offerings (IPOs)
• Trade and competition are also indexed, such as the current applied tariff rates, market scale and trade openness of any country.

E. Business Sophistication

Business sophistication is another pillar, but it differs from market sophistication in the sense that it’s not about money, but more about knowledge. So in essence, it looks at factors that improve a company’s capacity to innovate. Some topics are the following:

• The amount of knowledge workers, meaning humans that can offer skilled labor, and the amount of employment in knowledge-intensive industries. This means that there needs to be a certain quota of highly educated professionals available
• Innovation linkages, which points to interdisciplinary cooperation. You can think of collaboration between universities and the industry, joint ventures and even certain patent families
• The level of knowledge absorption, which can include high-tech imports and intellectual property payments.

F. Innovation output sub-index

As opposed to the input sub-index, the output index  measures the tangible results of innovation efforts. It isn’t about the conditions to be able to innovate anymore, but more about the way the conditions that are present are achieving any tangible innovative results. Input is basically about the conditions, whilst output is about the results. The innovation output sub-index has two pillars, which we will explain below. 

G. Knowledge and technology outputs

Knowledge and tech outputs assesses the level of knowledge creation and diffusion. This can sound rather complicated, but it generally covers the capacity in which knowledge is actively used to create innovative concepts. Knowledge is essential for breakthroughs and innovation, so this pillar has quite some influence on the ranking of any country in the GII. Some examples of this pillar include:

• The amount of knowledge creation, such as existing patent applications and current and topical scientific publications
• The general knowledge impact, which can entail productivity growth and the level of high-tech manufacturing
• Knowledge diffusion, which entails the dissemination of knowledge, which is measured, for example, by ICT services exports and Foreign Direct Investment (FDI) outflows, which means that someone can create influence in another economy. This happens when entrepreneurs start a business overseas, such as in the Netherlands. Would you like to offer your country some knowledge diffusion? Intercompany Solutions can assist you with that by establishing a Dutch company for you in just a few business days.

H. Creative outputs

The last (but definitely now least important) pillar analyzes intangible assets and creativity. Since both ‘intangible’ and ‘creativity’ are very tough to be actually measured, the WIPO created some standards that still manage to collect data on this eccentric topic. These include the following ways of data collection:

• Looking at intangible assets, such as the amount of trademark applications for creative works and industrial designs that pay off
• The amount of creative goods and services available in any country. For example exports of creative goods and the quality and variety of entertainment content
• The level of online creativity, such as app development, creative freelancers such as writers, designers and storytellers and also YouTube uploads per capita.

As you can see, the seven pillars are quite extensive and broad. The GII is therefore not a simple index that bases its rating on some random facts and figures, but it dives deeply into the potential of any country and its citizens, inventors, investors, entrepreneurs, scientists, schooling, political and economic climate, the level of collaboration between seemingly different entities and the general potential of the country to innovate in any given sector and market. Innovation is not a very easy thing to conceptualize, after all. Innovation only works when all systems, civilians and laws are working in unison. This makes the GII unique in its kind, as it balances all these factors to come to a conclusive index.

What are the data sources that the WIPO uses to collect data on innovation?

As there are so many statistics and forms of data involved, the GII draws on different types of data. One of the main sources of data collection includes a variety of official global databases, such as the World Bank, UNESCO, IMF, ITU (telecommunications), and WIPO itself (intellectual property). Next to that, the GII draws data from academic and proprietary sources, such as SCImago Journal Rank, Elsevier (for publications) and Clarivate Analytics (patents). Additionally, there is also need for survey-based data, such as the World Economic Forum’s Executive Opinion Survey for aspects like university-industry linkages. Lastly, national statistics are also used due to their importance. Without these, the data would not be complete. These statistics are provided by countries for specific indicators and are highly valuable in calculating the actual possibilities for innovation in any given country. 

The scoring and weighting of all data

We don’t want to sound too specific here, but it’s important to explain how the data is scored and weighted. So first there is normalization. This means, that raw data for each indicator (pillar) is normalized to a score between 0 and 100. This is like scoring in university and school: all countries basically get a certain grade. After this step, the data is weighted. So, each pillar contributes equally to its respective sub-index. So input and output sub-indices are weighted equally to compute the overall GII score. Once this is done, the innovation efficiency ratio is calculated. This is achieved by dividing the Output Sub-Index score by the Input Sub-Index score. This essentially reflects how effectively a country converts inputs into outputs. Lastly, we get the final rankings. Countries are ranked based on their overall GII score. The rankings highlight leaders, rising stars, and countries that demonstrate innovation excellence relative to their income levels.

Specifics about the Netherlands in the 2024 GII ranking

The Netherlands ranked 5th globally in the 2024 Global Innovation Index (GII), maintaining its high position among the world's most innovative economies. This ranking reflects its strong performance in key areas such as knowledge creation, technology outputs, and business sophistication. Specific highlights for the Netherlands include:

• It’s infrastructure: both digital and physical infrastructure are top-notch in the Netherlands
• The present institutions: the Netherlands benefits from a robust legal and regulatory environment that supports innovation
• Human capital and research: investment in education and research institutions contributes to its innovative capabilities, as well as the fact that most Dutch people are bi- or even trilingual
• Market sophistication: the Netherlands boasts a mature financial market, which fosters investments in innovation-driven enterprises
• Creative outputs: the country excels in areas like writing, design, branding, and digital creation.

The Netherlands also benefits from its efficient innovation linkages, connecting universities, industries, and research sectors effectively. Next to its almost unbeatable trade position, mainly due to its strategic location. For more details on the GII ranking methodology and data, you can explore the official WIPO GII rankings.

Why innovation is such an important factor in doing business

During the past decade, the importance of innovation has become more crucial than ever. We have dealt with several challenges and crises in a rather short amount of time, ranging from climate issues to pandemics, immigration, water management and energy crises. The world is waking up to the fact that solutions to long-standing problems are highly sought-after and thus, the Netherlands is actively looking for foreign entrepreneurs to think along about solving many of these issues. If you are a starting entrepreneur with some interesting ideas, the country welcomes your expertise and knowledge now more than ever. 

Doing business is generally about financial freedom and doing what you desire, as opposed to being stuck in a 9-to-5 job you don’t like. But if you have the possibility to mix business with innovation, you are truly a step ahead of the rest. If you can offer something to the Netherlands that brings in revenue and helps solve outdated problems, your business is almost surely able to achieve success here. Business, in its core, has always been about constant innovation, growth and progress. Making money is just the byproduct of being a star entrepreneur. It’s helping others and achieving something sustainable together, that truly lightens up ambition even more. 

What can you gain from establishing a Dutch company?

The Netherlands has an absolute wealth of advantages to offer to motivated and ambitious foreign entrepreneurs. For starters, it’s one of the most highly respected member states of the EU, with its stable economy, political situation and business-friendly atmosphere. This will provide your Dutch subsidiary or business with a high level of professionalism, trustworthiness and stability. In turn, this will inevitably draw more clients to make use of your services, attract possible business partners and will also make investors more drawn to your company. 

Next to that, the country benefits from an exceptional digital and physical infrastructure. Almost every single citizen is connected to high-quality and high-speed internet, making the entire population instantly accessible. Additionally, the Dutch roads and railroads are one of the best in the world. You can reach any city in the Netherlands in less than 2 hours, and you can also reach the borders to Germany and Belgium in the same amount of time. Trade companies can especially benefit from this particular factor. 

Furthermore, the Dutch population is mostly bilingual and often even trilingual. The workforce is highly skilled, generally by obtaining various university degrees and the necessary work experience on top of that. You will have no issues finding qualified staff here. The business atmosphere is very inviting and colorful, with a wide variety of creative, functional and assisting businesses. Entrepreneurs here generally love to help each other out, making friendly partnerships and often even becoming friends. All in all, the Netherlands is a very safe bet if you want to expand overseas.

Our Dutch company establishment process can be finalized in only a few business days

We have established a multitude of companies for foreign investors and entrepreneurs during the past years. This has allowed us to build an extensive network of professionals in the field of Dutch company establishment, which allows us to offer you a very fast company establishment procedure. The process itself is rather straightforward and simple. You will need to provide us with some necessary documents in the first stage, such as:

• The names of all shareholders
• Proof of identity via a valid document
• A preferred and unique company name
• A Dutch company registration address

After we receive all these documents, we make an appointment with a Dutch notary to incorporate your business. 99% of our clients choose the Dutch BV company type (which is the equivalent of a private limited liability company), and since this is considered a legal entity with limited liability, it needs to be incorporated at a notary. If you are one of the 1% of people that choose an unincorporated company to establish, you can skip this step. Anyway, after the notary has incorporated your company, you will have to deposit the minimum share capital, and we can immediately make an appointment at the Dutch Chamber of Commerce to attain your Trade Register number and VAT number. Once these steps are finalized, you can start doing business in the Netherlands!

The services that we can offer you

Intercompany Solutions has assisted hundreds of foreign entrepreneurs from over 50 different nationalities. Our clients range from small one-person startups to multinational corporations, and everything in between. Our processes are aimed at foreign entrepreneurs and, as such, we know the most practical ways to assist with your company registration. We can assist with the full package of company registration in the Netherlands:

• Company establishment in the Netherlands
• Opening of a local bank account
• Application for VAT or EORI number
• Application for a variety of permits
• Application for a visa or start-up permit
• Startup assistance
• Financial services
• Administrative services
• Secretarial services
• Legal assistance
• Tax and financial services
• Media
• General business advice

We are constantly improving our quality standards to continually deliver impeccable services. 

Get in touch with Intercompany Solutions if you would like to expand your business to the Netherlands

Intercompany Solutions believes in the power of entrepreneurship. It’s the companies of this world that fuel the economy, provide the workforce with employment opportunities, and initiate innovative concepts almost continuously. Innovation in every imaginable sector is essential to go in a forward motion, grow together and thrive as a society. WE believe every entrepreneur should be able to profit from the European Single Market, in which goods and services can be exchanged freely. This creates a business environment in which innovation is not only evident, but also highly sought after.

If you would like to expand your business overseas, keep in mind that the Netherlands has a wealth of opportunities and benefits to offer. We can advise you just about anything related to Dutch company establishment, growth and sustainability. We offer a wide variety of services that are specifically and personally tailored to our clients, taking into account all of your preferences and ambitions. If you would like to know more about how to make your international business dream come true and the specifics of establishing a Dutch company, look no further and contact us directly. We will assist you with any query you might have to make your future Dutch business a huge success.