INTERVIEW: "It is about creating the breeding grounds for the future"

Otto Raspe studied Economics at Tilburg University. After his graduation he worked as a researcher / consultant at The Netherlands Organisation for Applied Scientific Research (TNO), where he advised on the topics of (spatial) economic development, the impact of spatial investments (impact analysis, cost-benefit analysis), industry studies and (regional) economic benchmarks. Since mid 2002 he works as senior researcher at The Netherlands Environmental Assessment in The Hague. Here his focus is on the (impact of the rise of the) knowledge economy, innovation and entrepreneurship. Otto successfully defended his dissertation on The Regional Knowledge Economy on December 14th 2009 (Utrecht University). He often gives lectures and publishes on these topics.

What is your perception on the on-going discussion about the relevance of agglomeration policies linked to the attention for metropolitan areas and an economic renewal? How is the Netherlands Environmental Assessment Agency (PBL) involved in the national and international discussion?

We just finished a report with the CPB, The Netherlands Bureau for Economic Policy Analysis, about agglomeration economies and how we understand the mechanisms behind it. We talked about the international research that highlights the importance of agglomeration economies. Firms and people are clustering in cities, since they are 2-10% more productive in cities. This is due to three main mechanisms. It is about input sharing mechanisms, where suppliers can specialise further to make better products and therefore can sell their products better. Labour market pooling and matching mechanisms have a significant influence so the skills of employees are better matched with the demand of firms in cities. The final mechanism is knowledge spill overs. Cities are places where a lot of people meet and share ideas. Cities are the breeding ground of entrepreneurship and innovation. Gradually, agglomeration economies are becoming more important. Especially since our economy is transforming into a knowledge economie, that thrives thanks interactions by human capital. There are no general rules that cities always have the same benefits by equal size. Cities and agglomerations have different growth paths due to the economic structure of a city, the types of activities, the types of jobs they have and the transition in economies. Some cities do not profit much from agglomeration economies because they have a lot of firms at the end of their lifecycles with no gains in productivity or employment growth. On the contrary, some cities are doing very well in renewing their activities. For example, Eindhoven had a very different structure forty years ago. During a severe economic crisis related to the loss of the biggest employer, Phillips, the region reinvented itself as a Brainport. Amsterdam also reinvented itself on creative industries and life sciences and Rotterdam is really struggling to set the same growth figures. They are lacking behind and are below the average in job growth in The Netherlands. Amsterdam and Eindhoven are good examples and are far above the growth rate of average cities in Europe. It is difficult to say there are golden rules with the impact issues and mechanisms. You cannot say that when you stimulate ‘x’ in every city, you always have certain growth, and there is a big difference in employment growth and productivity growth. Productivity is added value divided by employment, and cities that renew, create a lot of jobs, like Amsterdam. The productivity figures are not growing as much as the employment growth does because otherwise they have to gain a lot of added value, more than job growth. Most new activities have lower productivity rates because creative industries are not as productive as an established knowledge intensive chemical firm, for example, which evolved over fifty years. There is a negative slope between forty years of employment growth in Europe and productivity growth and that is forming a significant theme I’m currently working on.

Do you recognise a growing demand from policy makers and politicians about this topic in relation to the question of the distribution of power between cities, urban agglomerations and nation states in Europe and worldwide?

I have been lecturing on the topic of agglomeration economies for more than fifteen years now. Terms such as agglomeration economies or agglomeration power, were inner circle terms used by academics only in international journals, but now the average policy maker uses these terms as often as a scientist. Policy makers are especially aware of the importance in relation to the competitiveness of their cities and regions. Certain books contribute to that success like The Triumph of the City by Edward Glaeser, which summarises why cities work economically so good and why cities are imported for economies. The book ‘If mayors ruled the world’ by Benjamin Barber described how cities will be more important than nation states. However, not every city is a winner and not every city has a mayor with the capacity to rule the world. In the Netherlands, we have a lot of mayors who are struggling on how to formulate economic strategies. Eindhoven has a very capable mayor but in the Dutch context he has to make certain strategies with the 23 neighbouring municipalities in de region, for example concerning amenities. He also has coalitions between cities within a 30 minute radius and with necessary links towards the national and international urban networks, on the larger scale. 

How do we make and organise good cities and agglomerations which are part of a multi-level network?

So, at least 5 scales are important. Mayors have to constantly level on different scales and there are a lot of policy related questions regarding the most relevant scale for a certain economic development topicand what can we do on different strategic scales. The real question is how we organise a spatial economic system which is not unified by one spatial scale but all the scales we discussed earlier, which are very dynamic. How do we make and organise good cities and agglomerations which are part of a multi-level network?

This question links to our role as urbanists and designers and one of the reasons to start Beyond Plan B. How do you see architects and urban planners acting in this topic? Dutch firms, for example, are internationally very known and successful with designing buildings, cities and regional plans but they not very present in the spatial-economic discussion in Europe and in the Netherlands. 

One of my observations is that many architects are looking solely at the object they are making. They are making a new building or public space, which is not related to the five spatial scales already mentioned. In a city structure, there are administrative boundaries, neighbouring city relations, the link to national economic centres and on a broader scale with international connectivity. Spatial disciplines are acting too separate from economic dynamics. In the logics of the spatial disciplines, it does not seem to matter whether you build a building in Leeuwarden or in Amsterdam. Leeuwarden is not an international competitive region in need of a world trade centre. Too often the same success formula is applied to every region designers are working in. It is about embedding the objects into the economy of the city it is performing in.



Interview conducted by Helmut Thoele 

Full version of the interview can be downloaded below (PDF)



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