Law on the reduction of wage tax and national insurance in favour of

The reduced costs for employing R&D staff are intended to lead to a greater use of R&D employees and increased innovation. This should have other effects such as retaining knowledge in the enterprise to provide a basis to build on in the future or to carry out R&D that would not have been done without the measure. This would in turn increase the overall competitiveness of the enterprises and the economy by supporting the introduction of a flow of new products, IT services and processes. Such a context makes it easier to retain R&D employees, especially in smaller enterprises, which usually find it more difficult than larger enterprises to employ highly functionally specialised staff.

The WBSO has been in operation since 1994. As such it has had an impact on innovation over a long period. Some 80-90% of the enterprises that do R&D in the Netherlands have used it. Its targeted uses and impacts have evolved according to the different phases of the economic cycle. For example, during the post-2008 downswing, the measure helped enterprises to retain R&D staff and capabilities that might otherwise have been made redundant.

In 2019, 20,045 enterprises made use of the WBSO (of which 2,710 were start-ups), similar to 2018, where 20,280 enterprises (including 2 850 start-ups) made use of the measure. These two years showed a decrease in usage compared to 2017, when the number of enterprises making use of the WBSO was 21,265 (including 3,175 start-ups).

In the table below, the ‘awarded WBSOs’ refer to the value of WBSOs awarded, which can be higher than the total amount of budget spent (‘realised WBSOs’), because not all WBSO projects are carried out (’realised’), or maybe the whole 100% is not used. When more are realised than there is budget for in a year, the balance is deducted from the following year’s budget. It can also be observed that, during the years of the economic crisis, there were some substantial increases of R&D expenditure.

An evaluation covering the measure's implementation over the period 2011-2017 is currently being undertaken. The last available evaluation (EIM, 2012), covering the period 2006-2010, shows that the measure does produce an increased expenditure on employment in R&D. Positive effects on employment consist of either existing staff working longer hours on R&D, or additional staff being recruited for R&D, or higher remuneration of R&D workers, or upgrading the functional/skill levels of R&D workers – or a mix of these.

Impacts on innovation, enterprise performance and side effects were considered positive. A 1% increase in WBSO led to a 0.19-0.26% increase in the share of new products in turnover. In addition, there were unmeasured operational improvements as a result of process innovations. It was also found that use of the WBSO led to an increase in the nominal added value per worker: each 1% increase on WBSO led to a 0.13 -0.17% increase. 

Further qualitative effects were identified: an increased appetite for higher risk projects, more R&D done internally rather than outsourced, better planning of R&D work, and an improved ability to apply knowledge from R&D and work with external parties.