The next economy: evolution, not revolution...
Frank van Oort and Jeroen van Haaren contribute to Economic Outlook Rotterdam
Area-based innovation policy is very popular nowadays. Interestingly, most of the input in the debate on area-based innovation policy is rooted in vision building and wishful thinking (or even place branding). Measurement and monitoring are scarce. What are, in fact, the tangible benefits of area-based investment? A frequent argument for not quantifying effects is that current developments are going too fast making evidence based policy too little, too late. That may be so, but it is also convenient, as absolves policy advisors from any burden of proof. In fact, a lot of information from the past and present can be used to inform our agenda for the future. Which parts of the city have the strongest foundations for development? And, in fact, the presented argument should strengthen the case for monitoring: if proponents claim we can’t inform policy in advance, should we not at the very least evaluate its effectiveness in retrospect?
On Wednesday March 15th, Frank van Oort and Jeroen van Haaren presented the essay ‘Next Economy, Next City?’ as part of the Economic Outlook Rotterdam (‘Economische Verkenningen Rotterdam’). The full magazine (in Dutch) is available for download here. In their essay, they map the existing building blocks for the next economy and they identify the key ingredients for a Next City. They argue that innovative areas are not developed in isolation, but are a continuation of existing economic activity, large concentrations of consumption and production amenities and an attractive housing market. Rotterdam has everything it takes to join the next economy. However, most of the key ingredients are located in the existing city, close to current economic activity. Rotterdam has a strong economy on the North side of the river Maas, centered between the Rotterdam Central District, Rotterdam Martime District and Erasmus Medical Centre area. This area has the strongest concentration of knowledge intensive business services and the highest density of production and consumption amenities. Rotterdam is developing from a production city towards a consumption city, which is overall a positive development. However, not all the areas in the city are profiting equally. The city has made its name with production and logistical activity, as part of the port-industrial complex, but also has a substantial number of companies active in among others agrifood, insurance, wholesale and retails, as well as a number of corporate headquarters of multinational enterprises. Structural change and diversification are of importance to maintain the competitive position of Rotterdam. The probability of effective change is much higher when current strengths are utilized, as opposed to reinventing the Rotterdam economy from scratch. In other words: evolution, not revolution.