PwC warns of Dutch high-tech “monoculture”

The Dutch tech industry risks missing out on billions of euros in sales in the longer term due to an overly one-sided focus on the semiconductor industry, writes accounting firm PwC in a new report. Due to the increasing ‘specialization’ of suppliers, there’s less outreach to other sectors that need advanced technology, such as automotive, medtech, telecom and aerospace.

Until 2019, suppliers made two and a half times more sales outside the semicon sector than within it. That has since declined to 1.6 times, and PwC foresees a further decrease to less than half by 2028, partly because of the industry’s expected strong growth. “These companies are missing out on business due to growth limitations in the Netherlands. In conversations with us, they explained: if we have to choose due to space or capacity constraints, we prioritize semiconductors,” says Joost Eyck, manager of the technology, media and telecom team at PwC.

The Netherlands is losing market share in other key high-tech sectors to other countries because of this development. Depending on a handful of large companies also produces vulnerability. “It’s problematic for individual companies to become increasingly dependent on a few customers in one sector. It leaves them more vulnerable during economic downturns. This individual vulnerability, in turn, affects the stability of the robust ecosystem we currently enjoy. The diversity, painstakingly built up over the years, is rapidly transforming into a monoculture. An appealing one, no doubt, but more fragile and economically less robust,” argues Van Eyck’s colleague Steven Pattheeuws.