A vision of a distant future is suddenly becoming reality through the focus on local economy
At the Board, we organise Future Labs, a medium for conversations between strategists and creative thinkers from the Amsterdam Metropolitan Area. About a year ago when we asked participants their thoughts on the likelihood that there would be growing attention for the local rather than the global economy, none of them thought there was much chance of this happening in the foreseeable future. But now, in the midst of the coronavirus crisis, there are plenty of signs that we will continue to focus on the local economy – in other words, that the Local for Local scenario is rapidly becoming a reality.
What we observe:
- The European countries – partly because the EU has very limited powers in the field of health – are all choosing their own package of coronavirus measures
- The borders between many countries are closed to a greater or lesser extent, international passenger transport by rail and air is almost at a standstill and there is also much less traffic between regions in the Netherlands.
- Countries are showing an ‘own people first’ mentality, for example regarding medical equipment.
- We are forced to move in smaller circles and our radius of action is decreasing.
- A range of commercial and non-commercial initiatives are emerging from the bottom up to reduce our dependence on global flows of goods.
- Neighbourliness and a sense of community are taking practical shape in both individual contacts and through organised voluntary action.
At the Amsterdam Economic Board, we have developed four scenarios for the Amsterdam Metropolitan Area, describing extreme situations in which the region could find itself in 2040. The idea is that if you work backwards from the four extreme situations from 2040 to see what you should be doing now, you will be optimally prepared for the future. One of these scenarios is entitled Local for Local.
What do we mean by Local for Local?
Our four visions for 2040 are visualised on a graph with two axes: a divided Europe versus a united Europe, and a bottom-up versus a top-down economy. The Local for Local scenario is the combination of a divided Europe with a bottom-up economy.
Features of this scenario include:
- Focus on local production
- Enterprising and participating residents
- Closed market
- National strength and regional networks
Does it look like we are almost in the Local for Local scenario?
As in any complex system, not everything points in the same direction. Scenarios are impressions of the future that help us to interpret the world around us, but they are not predictions. We do seem to be getting closer to the Local for Local scenario, but there are also signs that point in a different direction:
- The increasing pressure in the EU to deploy far-reaching instruments such as Eurobonds to help the countries in Southern Europe that are most affected by the crisis points to more Europe rather than less.
- For our food supply, we rely on an international supply by big companies through supermarket chains, which indicates globalisation.
- Scientists are currently working hard internationally on solutions, vaccines and treatment methods, also a sign of a global economy and cross-border cooperation.
- People are increasingly organising themselves in networks that transcend the local.
- It is precisely the big global companies, especially in tech, that are again gaining the trust of business and consumers. Take the most popular apps for video conferencing, for example.
In previous crises we have also seen that globalisation is only slowed down temporarily. However, it is interesting to see what will happen now that most of the borders are closed and globalisation – at least physically – has been slowed down.
What kind of local initiatives are we seeing in our region?
Concrete examples we see in this region:
- Restaurants are switching en masse to delivery services, and shops to private shopping.
- Local farmers are increasingly selling their products online.
- Customers are buying vouchers from local businesses to ensure that they can survive the crisis and remain in the neighbourhood/district.
- Laptops are being shared to help children who lack the facilities for home schooling. (links in Dutch)
Is this a positive development?
Like all the AMA scenarios, the Local for Local scenario has its pluses. The economy is organised more locally and is therefore more self-sufficient; creative entrepreneurs develop products and services with a human touch that are in demand; and in regional networks, collective values such as inclusiveness and sustainability are central.
There is a reappraisal of creativity and artisanship, which is necessary to keep using the scarce materials that are available at the highest possible value. Here technology offers support – 3D printing, for example, can enable the region to continue to produce a wide range of parts and products.
The cooperation between large and small organisations takes place on a more equal basis, because everyone’s efforts are needed – this is a good match for the DNA of the Amsterdam Metropolitan Area (‘the Amsterdam Approach’).
Are there any drawbacks to this scenario?
With scenarios, you look in every direction, and Local for Local naturally also has a number of obvious drawbacks.
Firstly, the global economy is in crisis, which means there is less room for investment and people are losing their jobs. Is our region able to absorb this economic blow? How can we maintain public amenities and social welfare?
Secondly, the Netherlands is not large enough to fulfil all the necessary aspects of the economy either at regional or national scale. The Dutch dependence on exports makes our position less secure, and probably makes it necessary to take a completely different view of the Dutch economy, with a lower level of prosperity than in recent years.
Thirdly, the geopolitical situation is also less stable in times of crisis. The EU is currently under pressure in various ways and beyond the EU the power politics are erratic.
OK, but what can we do with this information?
It is hard to predict if the movement we are now seeing is temporary, or if we will be obliged to fend for ourselves more in our region for an extended period. Historically, globalisation has only been held back temporarily by previous crises and disasters. Experts think that society will only get back to normal in a year and a half. As far as we are concerned, the main thing is that we should continue to strive for a smart, green and healthy future for the Amsterdam Metropolitan Area. The trick will be to embrace the good elements of the Local for Local scenario in the coming period and to ensure that we can preserve them for the period after the coronavirus crisis. And on the other hand, to be prepared for the drawbacks and make the region resilient to them.
How can we do this in practice?
In order to preserve the positive elements of Local for Local, we can distinguish a number of lines of activities, which are arranged here by theme and linked to the topics the Board is working on.
Sustainable mobility and logistics: growth of sustainable options for transport
How do we maintain and support valuable and promising local initiatives that emerge and grow during the crisis? Such initiatives might include using sustainable mobility solutions to ensure that goods are delivered to homes as cleanly and efficiently as possible. This will enable many more organisations to use sustainable logistics processes in the future. The Board is working on this in its activities related to procurement and the Green Deal for Zero Emission Urban Logistics . Follow the links to take part.
Circular economy: stimulating and structuring awareness with data and procurement
The focus on producing locally and disposing of less waste is creating more awareness about the circular economy. How can we maintain this awareness and associated activities after the crisis and promote the closure of material chains to prevent waste? The availability of the right data provides a huge boost to the circular economy. Madaster, one of the winners of the City of Amsterdam’s competition on data sharing (in Dutch), aims to provide every building with a materials passport, which allows its materials to be traced and reused. If we can document groups of materials in this way, also in other sectors besides the construction sector, we will make a structural contribution to the circular economy. The Board is also working on this in other activities related to procurement and the circular economy. Another possibility might be support for maintenance and repair companies and second-hand stores.
Now is the time to invest in a sustainable economy
The Dutch government has decided to put measures to cut CO₂ emissions on hold due to the coronavirus crisis. Yet a poll by IO Research commissioned by Milieudefensie (Friends of the Earth Netherlands) among 2,000 members of the Dutch public shows that 77% of people in the Netherlands believe that the government should be continuing efforts to combat climate change. Prior to the crisis, this figure was 65%. In addition, one in six Dutch people also said that the coronavirus crisis made them think about how to improve society and the economy after the crisis. From an economic perspective it also makes sense to invest countercyclically in a future economy that is organised much more locally on the basis of the principles of sustainability and circularity. That means investing in sustainable business and education now, making sure that we do not find ourselves short of professionals in three years’ time. The Board is working on various initiatives regarding education in the Talent for the Future challenge, for example on education aimed at the circular economy and the skills required for jobs in the renewable energy sector (in House of Skills, coordinated by governments in our region).
This also includes looking at better revenue models that take all costs into consideration rather than only financial ones. This means including the effects of an activity on the planet and society. We discussed this previously in our article on doughnut economics, and we will be returning to the topic soon.
Support innovative sustainable companies
Innovative sustainable companies that should be boosting our economy after the crisis now seem to be in danger of falling between two stools when it comes to national support measures. Startups and scale-ups in particular are not always eligible for crisis support, yet we will need them after the crisis to develop a sustainable, green economy. It would be great if we could also accelerate regional financial instruments such as the Invest-MRA investment fund for the AMA (currently being established), so we do not lose these companies in the crisis. The Board is involved in setting up this fund and will also take this message into consideration.
Taking a closer look at international connectivity
Before the crisis, on the basis of the four scenarios, with a group of strategists and creative thinkers we have already considered the international connectivity our region will need in the future. Let us zoom in again on the elements of the Local for Local scenario, such as taking a critical look at what you are exporting and importing, and keeping track of it better using data, as well as making regional connections more sustainable.
Maintain liveability on a local scale
The last thing the Local for Local scenario teaches us is that it is vital to act now to ensure that quality of life and activity on a local scale does not greatly deteriorate as a result of the coronavirus crisis, and in particular to maintain the quality of life in smaller urban centres and neighbourhoods. In a variety of ways, we need to try to keep local businesses in the high street as an important basis for a Local for Local society.
Would you like to contribute ideas on the future of the region after the coronavirus crisis? Join the discussion on LinkedIn.