Economists are interested in everything that is scarce and that people consider valuable

In your view, prosperity can also be defined as quality of life. Health and happiness should also be part of the equation. In what manner should one approach economics to improve quality of life?

'In essence, quality of life is part of economics. Naturally, this depends on your definition of economics. Many people define it as earning capacity, funding, and wages: prosperity. However, we are actually interested in everything that is scarce and makes people happy. In other words: well-being. This also includes one's living environment and one's health.

The concept of broad welfare is now commonplace among scientists and policymakers in the Netherlands. Statistics Netherlands (CBS) and the Netherlands Environmental Assessment Agency (PBL) monitor indicators of broad welfare. For municipalities as well as regional and provincial authorities, quality of life, safety and social cohesion are important topics.'

In the Rotterdam Lecture, you spoke of a "trade-off", as if well-being and prosperity were two different things. Could one reinforce the other?

'As long as we can attribute value correctly. For example, to spending time with your family. That means you might not be productive for the company, but you are productive for society. That is why we may need to measure more than just labour productivity. If you are unhappy, you will also be less productive in your company. So, we need much more balance. Not only in terms of work and private life, but also when it comes to sustainability, inclusion and economic development.

Europe is the continent with perhaps still the best balance. But that balance is increasingly under pressure. For example, there is Mario Draghi's report on the future of European competitiveness and its Dutch counterpart, the recently published Wennink report. Both state that the EU economy is lagging behind that of the US and China. We are investing too little in ICT, AI and big data. These are economic wake-up calls, but they do not tell the whole story about well-being and perception.'

How do you collaborate with partners to make the Netherlands a better place?

'I collaborate with quite a few people. Within the faculty, I focus on applied economics. However, I also work with researchers from ESSB, the Erasmus School of Social and Behavioural Sciences. For example, I am currently working with them on a project about precarious work. Together with SEOR, a research agency affiliated to Erasmus, we are investigating why people in certain neighbourhoods in Rotterdam live below the poverty line despite having a job. 

I also collaborate extensively with other Erasmus BVs (limited companies) such as EHERO, the Erasmus Happiness Economic Research Organisation. They conduct research at the interface of sociology, economics and psychology. Convergence, a partnership between EUR, Erasmus MC and TU Delft, is also an active partner.

I participate in advisory committees at the CPB Netherlands Bureau for Economic Policy Analysis and Platform31. I collaborate extensively with the Ministries of Economic Affairs and the Interior and do a lot of work for local authorities. For the municipality of Rotterdam, we compile a monitor, the annual Economic Outlook, from the ESE. We also collaborated on the one for The Hague this year. 

And then there is the Rotterdam-The Hague Metropolitan Region and the LDE (Leiden, Delft, Erasmus) partnership, which has a keen interest in urban regional economics and broad prosperity. On 15 December, LDE published a white paper on the future of the economy of South Holland. It contains interviews with scientists from the three universities demonstrating the important role of research in solving problems in the region.'

As a society, how do you invest more in people?

'People are at the heart of virtually all regional research. The Netherlands is prosperous enough to stimulate regions outside the major urban centres, as proposed in the recently published Nota Ruimte (spatial planning policy document), as well as to take future generations into consideration. However, whether this is acted upon is a political decision. 

Moreover, there is a need to recognise that problems always have a personal and a regional dimension. For example, one can provide better education for people in socially disadvantaged areas, but people are mobile. Once they have obtained their qualifications, they move away. Yet the problems in their neighbourhood or village remain. This means that you will need to address the living environment and employment opportunities at the same time. 

It is also important to stick to the set course for a while. Many entrepreneurs I worked with last year in Denktank Rotterdam (Rotterdam Think Tank) say: "It doesn't really matter what kind of government we get, as long as they carry on doing the same thing for ten years". They want stability. Investing in people sounds great, but it's also rather complex.'

You state that sustainable and inclusive choices generate financial benefits and a better life for everyone in the long run, even though they are often more expensive initially. What can be done to promote these choices?

'Italian-American economist Mariana Mazzucato wrote about the first moon landing in her book Mission Economy. Everyone was glued to their television sets at the time, but what did the Apollo programme actually achieve apart from planting a flag on the moon? From a cost-benefit analysis perspective, this mission cost a few billion at the time. But ultimately, we got a lot in return. For example, without the communication system developed by NASA for the moon landings, we would not be where we are today in terms of telecommunications, computers and satellite communication.

This illustrates that we cannot accurately predict everything in advance. That also goes for today's missions such as the energy and circular economy transitions. These are too large for individual companies and even for all companies combined. Mazzucato believes that the government should take the biggest risk by providing infrastructure, funding and legislation. That does not alter the fact that private parties must also invest and ultimately deliver. Risk-taking on both sides is essential.'

What is the wider social impact of your research and advice?

'That better decisions are made about important social investments. Sometimes that impact is more concrete, as in the specific case of the research project with ESSB, showing that more people are escaping poverty.

It is important to identify what contributes to the positive development of broad welfare. You also need to be able to demonstrate which policies are not working, as well as show communities how they can greatly improve their socio-economic situation through self-organisation, without direct policy intervention. It is a kind of chain reaction that you set in motion. It starts with sound knowledge.

Our research and advice also make an impact by voicing dissent from the often positively framed regional and sectoral policy evaluations. After all, it is rarely the case that everyone benefits equally from developments or policies. And we must make that clear, even if we are not asked to do so.'

How can you create impact through education?

'Education is an important source of impact: after all students are the future managers and policy officials. One of the courses I teach is Economics of Sustainability. It includes a case study from the province of South Holland about investing in sustainability by small and medium-sized enterprises. Students really enjoy being able to contribute to solving a business problem, and the province is happy with the advice.

In addition to regular education, I also teach in the Master City Developer (MCD) programme. This is postgraduate education for people who work on urban area development at municipalities, housing associations and companies. These students really bring practical experience to the table. The MCD also has a number of modules dealing with broad welfare. Students often feel a bit apprehensive because of the subjectivity linked to this approach. Often, more dilemmas arise than solutions, which sharpens the students' critical thinking skills.'

You aim to contribute to urban well-being. Some scientists believe that science should remain independent and theoretical. Could you elaborate on your position in this regard? 

'Independence is a primary requirement for researchers, but it can sometimes be difficult to uphold. When I am asked, "Can those stevedores in the port of Rotterdam be replaced by automation?", I tend to think: you should rather ask me, "If those stevedores are replaced, what does that mean?". Furthermore, science should not remain purely theoretical. At some point, you have to gauge whether policies are effective for people or businesses. This is where macroeconomics and microeconomics meet.

Personally, I am particularly interested in questions such as "Why is this theory not working?", "Why are we not getting the predicted outcome?" and "For which groups does it apply or not apply?". This requires a great deal of empirical research. We prefer quantitative data, but qualitative research should not be shunned either.'

What do Rotterdam and the Netherlands look like in fifty years' time, in your opinion?

'I hope that Rotterdam will be a more sustainable and inclusive city by then, in addition to still being an economic hub. In my lectures, I sometimes compare Dutch cities with those in China, such as Shenzhen. This city is a major centre of industrial production, where companies generate a great deal of added value. But quality of life and inclusion do not follow suit. Compared to other places, things aren't all that bad here in Europe. So, hopefully that will still be the case in Rotterdam and the rest of the Netherlands in 2075, and we will know how to appreciate it.'