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Econ 050: Groningen - the Dutch Silicon Valley?

Date:04 June 2019
Econ 050 is a podcast on the economics and business topics that matter to the Netherlands and the wider world, made by the Faculty of Economics and Business and the Northern Times.
Econ 050 is a podcast on the economics and business topics that matter to the Netherlands and the wider world, made by the Faculty of Economics and Business and the Northern Times.

What will the northern Netherlands look like in the future? Will it become the next Silicon Valley – and is that something we actually want to become? The tech industry is one of the region’s growing strong suits, but what does that really mean for job opportunities today and in the years to come?

Nick Stevens, the Chief Digital Officer in Groningen, explains the role of local government, businesses and educational institutions in developing and executing a new vision for the north in this episode of Econ 050. You can hear the full episode here.

On the vision for the future of the region – or lack thereof:

Nick Stevens: Where is our voice of reason for where does this city, province and the whole northern three provinces want to be in 20 or 30 years from now? I don't hear that conversation happening. And then there is the obvious question of should that be a person, or should it be the government? And I think the answer is both, but not the government necessarily is the institution that we look at. So that could be the city council or the county council, the province, or even the national government. The government is the people. These are representatives we elect. So you and I are equally capable of having our say, theoretically, under representative democracy to say what we are looking for in the future. And it's a particularly Dutch thing, but it's not uniquely Dutch it happens anywhere. We have a representative democracy and we are waiting for the government to take the lead but we can see in the Netherlands that's not necessarily the case.

On whether Groningen could become the next Silicon Valley, and if that is something it should even aspire to:

Stevens: So the first thing I have to say is, what do you mean by Silicon Valley? Do you mean 60 years ago, a few small companies started to build silicon chips and from there, an entire industry was born? Yes, I think we can be that type of Silicon Valley, where we grow new industries. If you mean Silicon Valley as the investment and tech ecosystem - and I say that politely at the moment - that exists today, my first response on that is, why on earth would we want to build ourselves into such a toxic place as Silicon Valley? That's not healthy. Why would we want to be that? Why would we want to be something we're not? Why would we pick a sort of random example of something on the planet and say let's be that instead of saying, “what are we really good at and what could we be that could be world class, but from our own strengths, the strengths of today and strengths that we need to build for tomorrow”?

On the economic strengths of the north:

Stevens: In this region is we have what we've described as the five basics of life. So we're an energy region. We produce a lot of energy for the Netherlands here -

Traci White: Gas at this point, among others.

Stevens: Among others. We're also a food and agriculture region. That's one of the comments we get from internationals who come here or somebody from Amsterdam, “Wow what a lot of green” - you know we're feeding people from this region. This is where I'm going to get it wrong of course. We have a green biochemistry area, so think more up by the harbours in Eemshaven and Delfzijl, we're producing greener than ever chemical stuff that the planet and the people need. We're also a health region, I think that speaks for itself, and lastly we've got an awful lot of tech and digital stuff happening. And if you look at those things, they are things that humans need to live.

On 5G research in the north:

Stevens: At the 5Groningen field lab, they are focusing on what applications of 5G once 5G has arrived. So they're not building the fundamental technology. There's plenty of organizations such as Ericsson and Huawei are that are doing that stuff…

What 5G can bring us is a level of communication and not necessarily human to human, but also machine to machine, so we can make factories much more efficient because the machines in factories can talk to each other, but also send data back to a dashboard to be better controlled, so that means better operating quality, that means better product output, less wastage, et cetera, less downtime for a factory because they can tell when a machine is starting to run out of control so that they can replace parts before they go bang, which makes things much more efficient and effective. And that has an impact on the wider world: less wasted product, particularly if that is plastic product, that's something we should care about. If we want - and that's still a big question – self-driving cars, then I want them to be able to communicate with the infrastructure. That means the road, that means the stoplights which we will still need in the interim until we are 100 percent autonomous vehicles, then we need no stoplights. But there still needs to be a centralized system that these - or perhaps decentralized system - that these cars and trucks and buses and whatever it is can talk to make sure that they're not going to crash into each other. 5G is the only way - 4G will not be able to deliver that. 5G can. For lots of technical reasons that I'm not going to bore our listeners about. And that's a really good example of a hub here in the north that is already working on those applications ahead of 5G being approved for mass use.

On the involvement of telecom companies in exploring the applications of 5G:

Stevens: So let's get one thing really clear. The question that is being posed [about Huawei] is around ethics of capitalistic companies. So are “the Chinese” - and I say that with a little bit of emphasis - spying on the world. And at this point there is no evidence - zero evidence - that in the world of 5G technology that that is being done. And if it's being done by Huawei, why are we not assuming it's also being done by large American companies such as, to name one, Cisco? Why are we assuming it's not being done by Dutch companies? So we're sitting in an area here of capitalism and propaganda, and that's a very dangerous territory. As a very logical person, I like to work on facts, not assumptions and gossip. So let's make sure that that's cleaned up.

And of course technology has two aspects. There is the hardware, and there is the software. There are ways where companies like this can prove what their technology is or is not doing. Open source software is one of those ways. And so again this concept of you know behemoth size capitalistic companies, I see that as not going to be a thing in our future. I'm sure short term it will be, but long term I think we will start to break those companies down. They are going to shift more towards open source where that code can be inspected, and we will know if a device is phoning home, and we will know what that device is communicating back home. And therefore, we will be able to make those decisions based on data instead of this kind of propaganda-type assumptions. And so I think the question should be raised, but I think the research should be done and then it's up to these companies to say, “How do we prove to the world that that's what we're not doing?”