Strengthening our security delivers a powerful economic boost

In today’s geopolitical reality, security and resilience have become top priorities. At the same time, they present major opportunities for the Dutch economy, says Willem-Jan Dubois, partner and defense industry expert at PwC, in response to the Wennink report

The Netherlands must shake off its naivety and face reality. That, in a nutshell, is my takeaway from what former ASML CEO Peter Wennink argues in his report The Road to Future Prosperity. His message is clear: the Netherlands risks losing its ability to address the major societal challenges ahead.

Reduce the regulatory burden

One of those challenges is strengthening our security and resilience. In this domain, accelerating licensing procedures and simplifying regulations are especially critical. These are identified in the Wennink report as key preconditions for investment and growth. For the last three decades, the Ministry of Defence has faced declining budgets, while procurement and tendering processes became increasingly complex. The result was a system designed primarily to account for every euro spent, rather than to enable speed and scale. Now that the geopolitical situation has changed fundamentally and large-scale investments are required, this system is being challenged to provide te required speed, scale and flexibility.

Changing government-business relations

Reducing the regulatory burden will also create room to rethink the relationship between government and business. Speed, mutual trust and shared responsibility must become central. This is even more important because the Ministry of Defence is calling on companies to invest heavily, while certainty about long-term demand remains limited. 

This uncertainty can lead to hesitation, particularly among smaller companies with limited investment capacity. Here, the government has a clear role to play, for example through risk-sharing mechanisms, more flexible financing conditions, and a more active role as the launching customer.

In public–private partnerships, The Netherlands could indeed take inspiration from initiatives such as the American DARPA (Defence Advanced Research Projects Agency), where governments, knowledge institutions and companies jointly develop breakthrough innovations without predefined outcomes.

Strengthening OEM positions

‘The Netherlands must develop from a supplier to an Original Equipment Manufacturer (OEM),’ writes Wennink. I fully agree (although it is not that easy). Large international defence companies currently hold dominant positions in the value chain. They define specifications, contract terms and margins, while suppliers remain dependent on their choices. The Netherlands has only a limited number of strategic OEMs today, mainly in areas such as radar and maritime systems and shipbuilding.

Making deliberate choices to strengthen OEM positions is essential: not only for national security, but also for economic value creation, innovation and political relevance within Europe. Without such choices, the Netherlands risks seeing a large share of the billions spent on ‘NATO-standard’ security investments flow abroad. Talent and knowledge development would then lag behind, ultimately weakening the country’s broader innovation capacity.

Cooperation instead of fragmentation

The Netherlands has immense innovative strength, but it is often fragmented, for example within ecosystems such as Brainport. The Ministry of Defence’s current procurement and tendering system can further align with this reality.

Too often, tenders prescribe specific solutions instead of inviting answers to clearly defined challenges. As a result, innovative potential remains untapped and promising collaborations fail to materialise. Greater cooperation between companies should be actively encouraged, with procurement processes designed to support and facilitate this collaboration.

Working in ecosystems

When strengthening security and resilience, we should not focus solely on the defence industry itself, but also on dual-use technologies – a point Wennink rightly emphasises.

Dual-use technologies are for example solutions originally developed for civilian purposes that later prove to have military applications. A good example is a Dutch company that developed radar and detection technology to recognise birds at airports, which subsequently turned out to be highly effective for drone detection.

To operate successfully in this ecosystem, companies must be willing to meet new requirements. As a result, many organisations are critically reassessing their own readiness and ability. Trust and transparency within their value chains are becoming increasingly important prerequisites.

A manual for The Netherlands

Not just the section on defence, but Wennink’s entire report reads almost like a manual for the Netherlands in an increasingly uncertain world. His analysis is realistic, and its timing could hardly be more relevant given today’s political and geopolitical developments.

The core message is unmistakable: if the Netherlands wants to remain relevant, resilient and prosperous, it must make deliberate choices, adapt its institutions and strengthen cooperation between government and business. Let us make those choices ourselves and act on them, before others do it for us.