Professor Frank van Oort of the Erasmus School of Economics is working on two major studies - one in Rotterdam, one in all of the Netherlands - looking at the consequences of corona policy on the economy, and especially how we can reduce the negative effects and reduce contraction. For example, by differentiating policy per province, by re-shoring, or by including sustainability directly in the recovery plans.
What COVID-related studies are you working on?
"We are working on a monitor for the Rotterdam region; about the impact and mitigation of impact in the economy of the region. Which sectors are shrinking, which are growing? The economy of Rotterdam needs to recover, but at the same time, the city wants to renew. Can we seize the crisis to combine this? Can we, for example, immediately put AI or the hydrogen economy higher on the agenda? Is a more technological and more sustainable agenda possible? In Germany, they said: you get more subsidy if you make electric cars, less if you make petrol cars. That arouses resistance, but it also has advantages. Another question for the city of Rotterdam is: where will new houses be built if we are resetting, and if people increasingly work from home and the inner city perhaps gets a different function?
Finally, when everything reopens, we want to see if the subsidies given by the municipality, for example, to set up online shops, have really helped. Will certain companies survive this crisis - or will bankruptcy follow later?''
"The economy of Rotterdam needs to recover, but at the same time, the city wants to renew. Can we seize the crisis to combine this?"
In addition, you're doing a national COVID project?
"That's right. We have received a ZonMw COVID-19 research grant to see if regional and sectoral differentiation of corona measures can lead to less economic damage. This year, the policy was the same everywhere. We are looking at whether we could have gained by differentiating policy per province. For example, if there is a high infection rate in Brabant, we could close sectors there but not in Groningen. We have now calculated that you can make a lot of economic profit this way. You can't move the port of course, but other tasks and sectors are mobile. Such a policy would therefore solve a significant part of the economic contraction. The tricky part is the administrative interpretation. We are therefore conducting research together with administrative sciences: could regions regulate this, and how? It can also create unfair feelings among citizens and businesses.
We are also looking at how the impact of the crisis is related to what is happening elsewhere in the world. The corona crisis showed how dependent we are on production from Asia or the US. If there is a lockdown somewhere else, we suffer. By bringing production or distribution back to Europe, we could be more independent. Our neighbours in Germany, for example, have a strong manufacturing tradition. What can we actually make ourselves, in the Netherlands or in Europe? It's called: reshoring''
Are the results of this research already for the next pandemic?
"You can expect to see other shocks. Before this research, I did research on Brexit. That was a smaller shock. But I think we will get more shocks in the future; whether they are trade shocks, shocks in nature. Or a pandemic. And what happens, for example, if the sea level rises and parts of the Netherlands are threatened with flooding?
Our research also benefits the region immediately. The questions in the region are now: how can a large museum, or a large shop, open earlier? How can we open in steps after a lockdown, and is there also profit to be gained from differentiation?"
With all this knowledge, are you worried or not?
"I think people with a good job will not come out of the crisis badly. This is the group of people that is saving now. But people at the bottom, flexible workers, restaurants, and the cultural sector will be hit hard. And so do people with low education. So it increases the differences, and I find that worrying.
In Rotterdam, you could already see a clear division between north and south. The groups that were already weak have emerged even weaker from the economic crisis. It is becoming more and more urgent to create opportunities for them. We are already seeing more people ending up on welfare. Unemployment is not rising very fast in this city, but at the same time, the employment rate is going down, so there is definitely an increasing economic inactivity of vulnerable groups in Rotterdam."
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