Bas Jacobs expresses criticism at the start of 20 billion euro investment fund

Het Financieele Dagblad
Erasmus School of Economics

Minister of Finance Wopke Hoekstra and his colleague Eric Wiebes of Economic Affairs and Climate Policy launched the 20 billion National Growth Fund ( Nationaal Groeifonds) on Monday 7 September 2020. With the start of the new 20 billion euro investment fund, the Dutch government wants to increase public investment in Research and Development (R&D), among other things. The research boost aims to “reinforce existing research and innovation ecosystems, and start promising new ones,”

The aim of the National Growth Fund

The fund will accept proposals from all scientific disciplines, including fundamental research. Hoekstra and Wiebes explained that the overarching goal is to boost the long-term earning power of the Dutch economy, while also transitioning to a low-carbon economy. Apart from R&D, the fund will also invest in human capital development and physical infrastructure. The initiative for project proposals lies with companies, entrepreneurs, knowledge institutes and other organisations, while government departments are responsible for their execution. An independent committee, supported by experts, will advise on which proposals should be funded. Among the ten committee members are ASML CEO Peter Wennink, ‘startup Prince’ Constantijn van Oranje, Institute for Advanced Study director Robbert Dijkgraaf and Robert-Jan Smits, president of the executive board at Eindhoven University of Technology.

A dose of critisism

Economists and politicians of opposition parties react critically to the plans. Amongst them is Bas Jacobs, Professor of Public Economics at Erasmus School of Economics. He argues that the committee is not independent and technocratic enough. ‘The composition is very polder-like, with many members from the business community and civil society’, Jacobs states. He is concerned of the risk that the committee will be influenced by the sector they come from. He himself would have expected more scientific heavyweights, for example academics with expertise in innovation, education and the environment.

Bas Jacobs also states that the fund is “too hazy” and focuses too much on increasing GDP. This threatens to exclude investments that increase prosperity, but which do not translate into higher GDP. Think, for example, of projects to reduce CO2 emissions. Jacobs would therefore argue in favour of putting the broad concept of prosperity more at the centre of the assessment.

Het Nationaal Groeifonds is bron van conflict

Professor
More information

Download the article from Het Financieele Dagblad above, 8 September 2020 (in Dutch).