Amsterdam has a strong reputation as a centre of culture and tourism, but it’s fast becoming one to watch in the list of the world’s top tech hubs. Kirsty Styles reports.
For many, the Netherlands’ cultural capital immediately conjures images of misspent youths and stagparties. But, with the likes of Netflix, Uber and Tesla choosing the city as their European base, it’s becoming increasingly hard to ignore it as a serious global tech hub.
In fact, Amsterdam was built on commerce, which peaked during the Dutch Golden Age when the first stock exchange opened and the port was one of the busiest in the world.
With a relatively small population of 17 million, the Netherlands seems to have always looked to build its prospects internationally and welcomed the skilled foreigners arriving on its shores. This has created an open and tolerant society where more than nine in 10 people speak English — and a large proportion speak another language too.
With internet penetration at 94%, it’s no wonder the country sees itself as a great testbed for new digital technology services, as well as a great launchpad for companies hoping to reach 500 million more people across Europe.
Amsterdam’s city centre population stands at almost 800,000, less than one tenth of the size of London, meaning short and relaxing commutes, particularly if you opt for the Dutch vehicle of choice: the bike.
While Londoners work some of the developed world’s longest hours and have among the longest journeys to work, the Dutch regularly top the tables for having the best work-life balance in the OECD. That may be one of the reasons why the country is consistently featured on ‘happiest countries’ indexes.
An attractive location
The Dutch government has worked hard to negotiate favourable trade deals with most nations across the globe, giving companies that operate there a near-unbeatable business environment to grow in.
Although the tech ecosystem has been growing for a decade or more, the City of Amsterdam and the national government have now joined forces to tell the city and the country’s startup story, within the global digital economy tale.
StartupAmsterdam has been specifically commissioned to lead the city’s tech hub branding efforts, getting to work on a 15-point plan at the start of 2015 that highlights talent, capital and visibility among its challenges.
StartupDelta, meanwhile, is headed by former EU commissioner in charge of the digital agenda Neelie Kroes, who is working to engineer better relationships between Amsterdam entrepreneurs and their peers in places like Rotterdam and Eindhoven.
“It’s the startups that are creating the jobs, 41% in the Netherlands at the moment,” Neelie Kroes, special envoy for the Startup Delta told Tech City News.
Ruben Nieuwenhuis, director of StartupAmsterdam, said parts of Amsterdam’s startup ecosystem resemble the hub’s various equivalents across the globe.
“When you’re here in Amsterdam at the tech clusters, you see a bit of London, a bit of Silicon Valley and New York,” he added.
Adyen: from startup to unicorn
“I think what Neelie is doing with StartupDelta is great because she’s bringing in the politicians and that has been lacking so far,” says unassuming leader of the Netherlands’ tech community Pieter van der Does, CEO and cofounder of Adyen. “That is a very important initiative and should have been there earlier.”
Adyen is a name you may not have heard before, but it’s helping the likes of Facebook, Spotify and Airbnb process payments in more than 187 currencies. That, along with raising more than $250m since it was founded a decade ago, is why it’s considered one of the Netherlands’ growing herd of unicorns.
“We have 12 offices so we recruit in 12 offices,” van der Does explains. “Our core development is based in Amsterdam. That works very well for us because we have a loyal group of employees here.”
“Booking.com was started here,” van der Does adds. “Not many people realise that. And it’s still based here in Amsterdam. We also have TomTom. And now you have Elasticsearch. We have more than you might think … because we’re very, very modest about it.”
Getting tech talent
“We never considered moving out of Amsterdam because we have access to great talent and being in a metropolitan, global city works for us,” explains Brendan Bank, CIO of Booking.com. “We’re close to our customers, we’re close to our hotel partners and from a regulatory and tax perspective, the Netherlands is advantageous because we have tax treaties with nearly every country in the world.
“It’s relatively easy to get tech talent here and we always said, as long as we can get access to really strong, talented people, we’ll stay in Amsterdam and so far we’ve been quite successful at that.”
Although the Netherlands has a highly-skilled native population, a global tech skills shortage means the country is as hungry as any hub for international talent.
It’s the draw of a city like Amsterdam that is again and again cited as a reason people stay and outsiders come, just like Maarten Plesman, VP EMEA for Silicon Valley’s Revinate, which has its European HQ in the city.
“Why Silicon Valley is successful is you have a good environment for investment, for risk-taking and there’s an infrastructure to do it. Here what you have are some similarities but you also have a place that people want to live in,” Plesman said.
“It is a magnet for people to come in and the rest of the infrastructure is building up right now. The investment climate is nowhere near Silicon Valley today, but I think we see a lot of signs that it’s improving, that there’s more risk taking, more possibilities for startups or for anybody else.”
Dirk Groten, VP engineering at Blippar, which acquired Layar in order to expand its technology portfolio and get a foothold in mainland Europe agrees.
“Amsterdam is very attractive for foreigners to come to. You have the possibility here of going via the Knowledge Migrant route that allows you to bring talent from outside of the EU if it’s a scarce resource. IT talent is very scarce in the entire of the European Union so we can very easily get visas for people from all over the world to come here.”
And the numbers say it all.
David van Traa, director of the Expatcentre, which is dedicated to helping incomers have a smooth transition said: “At the moment, about 10,000 people come through the Expatcentre each year. This is mostly non-EU, highly-skilled migrants coming from the US, India, China, Russia, Brazil. About a third of that 10,000 comes from countries within the EU – the UK and Germany are the largest.
“Lots of the people that come here for two or three years often end up staying longer because it’s got a good quality of life. I have six or seven meetings per day just by biking through the town. The bicycle rides themselves are joyous adventures. I think a large part has to do with what we call the ‘cultural infrastructure’, the amazing number of museums, theatres, the dance scene.”
Dutch markets need to grow
Along with representing a great place to live, the government’s Startup Visa, for example, offers each new worker 30% of their salary tax-free, which serves to cut the cost of hiring from abroad.
Because of the EU’s free movement laws, many qualified people are now moving from poorer EU nations like Greece and Spain to set up in this highly welcoming country.
But the big question remains: can the Netherlands regain its Golden Age status, home to the leading international trading city. Better yet, does it really want to?
“You can scale pretty fast, however, the Dutch market is not large enough to use as a growth hub, so you should see Amsterdam as a testbed and the a launchpad into Europe,” said Ruben Nieuwenhuis, director of StartupAmsterdam.
Many in the city also talk more of cooperation and collaboration than competition. Europe is the world’s largest consumer market, but conquering each country alone is only a tiny portion of the job at hand: building brands that could crack the US.
“The Netherlands is famous for their tulips but if you look at the parametres for growing a tulip then the Netherlands is the worst place in the world to grow tulips,” said entrepreneur and founder of The Next Web Boris Veldhuijzen van Zanten.
“It’s too windy, it’s too wet, the soil is too sandy, it’s too cold, there’s not enough sun. Worst place in the world. But because of these limitations, we became really good at it.
“And sometimes I look at startups and I feel like maybe that says something about startups here. It’s not easy to start a company here, but the ones that do are really good at what they do.”