"The scale-up climate in the Netherlands requires constant attention. Scale-ups are the engine of growth and innovation of economies; they are not only responsible for most of the job creation, but also help develop sustainable solutions for socio-economic challenges."
Fine-tuning the engine of long-term sustainable growth: start-ups and scale-ups
Entrepreneurship is in the lifeblood of healthy economies. Indeed, one could easily argue that start-ups and scale-ups are very much embedded in the DNA of the most thriving economies. What then of the Netherlands? Does it provide an environment in which entrepreneurial thinking and the growth of new businesses are considered integral to the economic corpus? Does the Netherlands have entrepreneurship in its DNA?
The answer, unsurprisingly, is both yes and no. On the one hand, the Scaleup Dashboard 2020, developed and published by the Erasmus Centre for Entrepreneurship (ECE), shows that the resilience of the Dutch economy has declined, even before the COVID-19 pandemic, and that the number of fast-growing companies – scale-ups – has stagnated. At the same time, while start-ups can grow rapidly, around two-thirds lose their growth momentum. On the other hand – the positive one – scale-ups in the Netherlands are responsible for the creation of some 232,560 full-time jobs in the period 2016-2019. There are reasons to be cheerful! However, as ECE managing director, Martin Luxemburg, says in the Scaleup Dashboard: “The scale-up climate in the Netherlands requires constant attention. Scale-ups are the engine of the economy; they are responsible for most of the job creation, which is needed now more than ever. Not only nationally, but also regionally and locally.”
is Professor of Corporate Entrepreneurship at Rotterdam School of Management, Erasmus University.
He is intrigued by the notion that most organizations tend to focus on existing businesses and clients, and are not able to break away from existing routines and processes in order to explore into new territories.
is Professor of Strategic Growth and Implementation at Rotterdam School of Management, Erasmus University.
His expertise is at the crossroads of strategic management and entrepreneurship, and includes strategic renewal, strategy execution, scale-ups, and ambidexterity.
They are the guest editors for this issue of RSM Discovery.
While initiatives have been introduced to help fast-growing businesses as they scale up, support must also be given to those start-ups that haven’t quite yet realised their full potential, something that affects 50 per cent of Dutch SMEs, by giving them access to much-needed networks of mentors and potential investors. As Constantijn van Oranje, special envoy at Techleap.nl, comments in our interview with him in this edition of RSM Discovery: “How do we compare to countries like France, Israel, China or the US? We’re not even close. And the companies in the Netherlands that are trying to do great stuff? We aren’t helping them grow.”
There are of course exceptions to every rule as our article on YoungCapital shows. A fast-growing recruitment company, YoungCapital is revolutionising the industry. Its success, in part, is down to the creation of a winning culture, and being an organisation that is not afraid to take risks and which learns from its experiences. “Everything we do is experience-based,” says Elbrich Batstra, YoungCapital’s HR director. “We are very holistic and we practise what we preach, embracing differences and maximising the benefits to be derived from them.”
Wehkamp, founded in 1952 as a mail order company, has always embraced innovation and entrepreneurship. It’s an
approach, particularly in relation to IT, that has seen the company become one of the largest online retailers in the Netherlands, with 500,000 customers visiting its website every day. As Anneke Keller, Wehkamp’s chief technology officer, explains in an article that looks at not only Wehkamp’s IT strategy but also reflects on the changed landscape of e-commerce, the speed of technology is very much a driving force: “With e-commerce, the nice thing is that everything goes very fast – you do something and within five minutes you know what your customers are going to do with what you’ve built,” she says.
Research shows that when companies scale up, they can often lose momentum. However, this has not been the case for JustEat Takeway, the online food delivery marketplace, which has scaled up fast in recent years and now operates in 23 countries. For Brent Wissink, the company’s CFO, the secret to growth success is in retaining an entrepreneurial mindset by continuously looking for and evaluating new opportunities. At the same time, Wissink tells us in our interview with him, that: “In a fast-growing environment – and certainly in a company with a growth strategy based on acquisitions – it is crucial to align people and processes constantly.” Amsterdam-based online grocery retailer, Picnic, is challenging the notion that an online grocery business can never be more profitable than traditional bricks and mortar supermarkets. Established in 2015, the company continues to grow, something co-founder and serial entrepreneur Michiel Muller puts down to a combination of being first and foremost an online delivery service, and one that has built up an extremely loyal customer base – something that also flies in the face of convention. “When people have ordered five or six times through our app, they never leave again,” says Muller.
And just as entrepreneurship is vital for growing healthy economies, so finance is the lifeblood of growing companies. ING’s Sustainable Investments division received capital of €100 million when it was formed in 2019. Its investment focus is sharply on sustainable scale-ups. “To date, we have put over a quarter of the capital to work, in companies ranging from solar energy to the recycling of tyres and plastics and the making of batteries,” says the division’s head, Mark Weustink, in a discussion with Dirk Schoenmaker, professor of banking and finance at RSM, and that, “scaling-up financing is crucial to create sustainability solutions.” We are confident you will find the articles in this 40th edition of RSM Discovery to be both informative and enlightening, and welcome any comments or questions you might have regarding them or the work of the Erasmus Centre for Entrepreneurship.
Justin Jansen, Professor of Corporate Entrepreneurship, Rotterdam School of Management, Erasmus University, and Academic Director, Erasmus Centre for Entrepreneurship. Tom Mom, Professor of Strategic Growth and Implementation, Rotterdam School of Management, Erasmus University, and Senior Fellow, Erasmus Centre for Entrepreneurship. Guest editors, RSM Discovery 40