On the 8th of March, the Economic Outlook Rotterdam 2022 (EVR in Dutch) was presented in the studio at Erasmus University Rotterdam. The corresponding magazine (in Dutch) was presented containing four contributions by Erasmus UPT researchers, Jeroen van Haaren, Susan Vermeulen, and Maryam Omar. Furthermore, other researchers, such Frank van Oort from Erasmus School of Economics, were also present.
Central theme
The EVR 2022 gives valuable insights into the Rotterdam economy. This year, the central theme was ‘opportunities for the circular economy’. The researchers brought the structural challenges for the Rotterdam economy to light. The overall tone of the outlook is positive. However, currently a war is raging on the European continent, which requires modesty and caution.
Where does Rotterdam stand now?
Prior to Covid-19, the economy of Rotterdam developed towards a service economy. This was seen as a positive development. However, Rotterdam was not yet on the same level as cities, like Amsterdam and Utrecht, in terms of business and consumer services. The relatively limited scope of the service sectors actually protected the economy of Rotterdam from the worst impacts. Since services are especially vulnerable to the pandemic, the cities with large service sectors were hit the hardest.
Companies in the Rotterdam region are particularly good in valorizing and commercializing knowledge that is being developed elsewhere. Rotterdam is a leader in one green technology field, namely offshore wind energy. In other green technologies, such as hydrogen, Rotterdam is building up considerable expertise. In terms of innovation in the urban region, Rotterdam is relatively strong in digital technologies (in a broad sense), especially looking at funding, startups, employees, and patent development. However, specifically for this technology, the establishment of large firms lags. There is also a risk that the Rotterdam region is heavily dependent on knowledge that is developed elsewhere, especially in terms of Blockchain and AI.
Shortages on the labor market and scarcity of space
Shortages on the Rotterdam labor market are large, in absolute terms in various sectors, but there is also a qualitative mismatch. Especially in technology, there are shortages and surpluses at the same time. The wrong skills at the wrong level of education are abundant. The majority of Rotterdammers work in business economics professions, where the agility is greater, and it is relatively easier to keep up with skills. In addition to the shortages on the labor market, there is a shortage of space to work. Different sectors have a different spatial demand.
Consequences of the war in Ukraine
The war has a major effect on the people in Ukraine and its repercussions are felt throughout the entire continent. Specifically for Rotterdam, it also has significance from the point of view of the raw materials and energy transitions. The very high energy prices, but also the geopolitical dependence, make sustainable and local alternatives now relatively more attractive and more profitable. Thus, the urgency of the energy and raw materials transition and the resulting demand increases (for related products, services and therefore, for labor). The vulnerability posed by the dependence on totalitarian states also calls for change and an increased sense of urgency. The question is to what extent the shortages on the labor market and the scarce space for activity allow the acceleration of these transitions.