Netherlands eyes DARPA-like agency for tech breakthroughs

The outgoing Dutch Minister for Economic Affairs, Vincent Karremans, has submitted to the Parliament an analysis about the possible establishment of a DARPA-like agency, the National Agency for Disruptive Innovation (NADI). The agency would spur breakthroughs in areas like digitization, security, health, and climate. The proposal is modeled after successful Advanced Research Projects Agencies (ARPA) organizations in the U.S., Germany, and the UK.

ARPAs are government agencies designed to foster high-risk, high-reward research and development. The U.S. Defense Advanced Research Projects Agency (DARPA), founded in 1958, is perhaps the best-known example, credited with advancing technologies such as the internet, GPS, autonomous vehicles, and mRNA vaccines. DARPA's success has inspired the creation of similar organizations worldwide, including ARPA-E (U.S. Department of Energy), SPRIN-D (Germany), and ARIA (UK).

The decision on creating such an agency in the Netherlands has also been remitted to the upcoming government led by Rob Jetten. The project to create NADI was also included in the coalition agreement presented on January 30.

Why NADI?

The Dutch government aims to increase R&D investment to 3% of GDP, and NADI is proposed as a key measure to achieve this goal. The Netherlands, despite its strong scientific base, struggles to translate knowledge into large-scale innovations. This results in promising technologies getting stuck in the 'valley of death' between research and practical application. NADI is designed to bridge this gap by focusing on 'high-risk, high-reward' projects that address complex societal problems and deliver technological breakthroughs.

The proposed NADI would operate as an independent organization, independent of daily politics and existing bureaucratic structures. To attract international talent and foster collaboration, NADI would use English as its working language and determine its own salary policies to compete with international research institutions and tech companies. NADI's structure would include a CEO, a CTO, Innovation Directors, and Fellows. Innovation Directors, described as 'unreasonable protagonists,' would have the autonomy to design and manage programs, make quick decisions, and allocate resources. Fellows, early-career scientists and engineers, would be flexibly deployed across various programs.

Core values and approach

The proposal emphasizes five core values essential for NADI's effectiveness: exceptional talent with a mandate, autonomy and independence, high-risk tolerance, speed and agility, and sufficient scale. NADI would employ a portfolio approach, accepting that some programs will fail but expecting that successes will more than compensate. The proposed budget for NADI is approximately €1-2 billion over five years, supplemented by a 3% reservation from the defense budget for breakthroughs in defense technology. This funding level is comparable to that of other international ARPA organizations, given the size of the Dutch economy.

NADI would finance 'high-risk, high-reward' innovation projects, coordinate R&D teams, manage a portfolio of projects (accepting failures as learning opportunities), and connect successful innovations with public or private customers. It would use a flexible funding instrument based on the U.S. DARPA's 'Other Transaction Authority' (OTA) model to avoid bureaucratic delays. NADI would also establish 'regulatory sandboxes' to integrate regulatory issues into innovation programs from the outset, partnering with Dutch and European regulatory bodies. Additionally, NADI would run 'top-down challenges' using the European pre-commercial procurement (PCP) framework.

How it could work

One proposed program is 'Quantum-Safe Critical Infrastructure,' which aims to protect the Netherlands' digital backbone against the threat of quantum computers compromising current encryption. This program would have three phases, starting with validating cryptographic primitives and culminating in pilot implementations and coordination with European standardization bodies. The Innovation Director would select teams with the greatest chance of a real breakthrough.

Proponents argue that if approved, NADI would replace the existing Innovation Impact Challenge program and act as a catalyst for innovation-oriented procurement in the Netherlands. To safeguard NADI's core values, the proposal suggests enacting an 'NADI Act' to protect the organization from bureaucratic delays. As other countries invest in ARPA-like organizations, proponents argue that the timing is critical for the Netherlands to attract talent, capital, and knowledge.