What is the task of government in innovative markets?

expected in the first quarter of 2017

Background and advice question

Technological advances (such as digitisation and robotics) and societal acceleration (rapid worldwide adoption of innovations) are leading to rapid changes in society. This creates a great variety of new markets in which the demand for goods and services is matched to the supply, and where the relationship between provider and user are being shaped in new ways. Some examples are the sharing economy, apps for tablets, the bio‑based economy, the decentralised generation and exchange of energy, new nature services, etc. What scope does the regulatory framework offer for the development of these innovative markets? What physical preconditions or restrictions affect them?

illustration of artificial intelligence - two heads and at the background the world with all kinds of connections as a symbol for a changing and digital world

These developments may affect spatial locations and processes such as commuting, shopping centres, distribution, and the development of rural areas. What long-term impact will innovative markets have on physical space, logistics, mobility, and nature? Will the function of cities as centres change? What kind of guidance and steering should – or can – the government provide for all this?

Explanation

There have been major changes in the economy in recent years:

  • new markets are developing for customised products and small-series production, made possible by ICT-facilitated one-to-one relationships between companies on the one hand and customers, suppliers, and flexible workers on the other. This offers opportunities for small businesses and decentralised production;
  • new types of collectivity and services are developing involving the sharing of facilities and specialised services, for example at start-up centres. Private individuals are contributing to those services, for example via Airbnb and Uber.
  • nature policy is aimed at a more nature-inclusive economy.

Some of these innovations are within existing markets, while others also involve new concepts such as the circular, sharing, and network economies, etc. Government policy aimed at facilitating and regulating these developments is by no means always adequate, however, as the Secretary-General at the Ministry of Economic Affairs pointed out in his New Year's article for 2015.In addition to economic effects, consequences are also conceivable in the physical domain:

  • economic innovations are closely linked to digitisation, and therefore to the proximity and accessibility of digital infrastructure. Digital infrastructure will thus play a part in determining spatial development;
  • production processes may change, with potential consequences for the nature, size, and spatial pattern of flows of resources and products;
  • residential, work, and production functions are becoming more intertwined, with potential implications for mobility and the use of buildings and public space;
  • decentralised energy generation imposes new demands on the energy infrastructure;
  • in a sharing economy, different mobility solutions are conceivable, for example car sharing or new parking concepts;
  • technological advances will make more adaptable buildings and public spaces possible, with consequent changes in the need for them, their use, and their construction;
  • the search for new revenue models in nature policy can have spatial consequences in the longer term.

Building on its Survey of Technological Innovations in the Living Environment, the Council intends exploring which physical and policy preconditions are decisive for the development of these new markets, and what their potential consequences are. The Council will seek to cooperate on this with the planning offices and the Advisory Council for Science, Technology and Innovation (AWTI). The advisory report will examine the extent to which it is desirable and possible for the authorities to provide guidance in this context. How adaptable are our spatial structures and infrastructures in the light of an innovating economy?

Planning

Publication is expected in the first quarter of 2017.

Members of the advisory committee

A.M.A. (Agnes) van Ardenne
L.J.P.M. (Léon) Frissen
Prof. N.S.J. (Niels) Koeman, chair

Information or response: 

For more information or to respond, please contact Douwe Wielenga, project leader, e-mail: douwe.wielenga@rli.nl