Dutch society is at an important pivotal point. Green growth and broad prosperity require innovation maturity: the ability of a society not only to embrace technological advances but also to strengthen the resilience of its local communities and human capital. However, national policy, as shaped by the Schoof administration, can no longer be separated from the international challenges and local realities facing the country. This opinion piece highlights how a dual perspective — international and local — can better direct national policy towards a future of sustainable and inclusive growth.
What is green growth and broad prosperity?
Green growth is about economic development that is not at the expense of the environment. This means that economic growth goes hand in hand with environmental sustainability, by embracing renewable energy and circular economies, among other things.
Broad prosperity, on the other hand, looks not only at economic indicators such as GDP, but also at people’s well-being, social cohesion, health and the environment, in a way that involves all strata of society and is future-proof.
The double perspective: international and local dynamics
When assessing national policies, we need to take into account two complementary perspectives: the international goals of the European Commission and the United Nations, and the local needs and challenges of communities in the Netherlands.
International perspective: European and global commitments
The European Commission stresses the need to place innovation and sustainability at the heart of economic strategy. Mario Draghi’s report highlights the great need for investment in technology, education and research to keep Europe competitive in the world. Download the report: link
The European Green Deal also sets strict targets for sustainability, urging countries to invest in renewable energy, the reduction of CO2 emissions and circular production processes.
The UN and the Sustainable Development Goals (SDG) agenda underline that achieving global sustainability goals depends on strong local actions. Local communities and their capacities are crucial to achieving goals such as the SDGs. Innovation maturity thus requires the Netherlands to remain internationally connected while implementing locally oriented solutions.
Local perspective: Ravine years and the struggles of municipalities
As international pressure to become more sustainable grows, Dutch municipalities are facing the so-called ravin years (explainatory articles 1, 2 and 3). These are the years when local governments face sharp financial shortfalls due to national cutbacks and policy measures. Municipalities receive much of their funding through the Municipal Fund, which is heavily dependent on general government spending. When national spending falls, as planned in the coming years, the contribution to the Municipal Fund also decreases, leading to large deficits at the local level.
The cause of these ravenous years lies in the way the government makes structural adjustments to the financing of municipalities. The outline agreement of the Schoof government cuts local benefits and subsidies, especially in areas such as public health, youth care and welfare. This leaves municipalities with the difficult task of continuing to deliver key social services with ever decreasing resources.
Municipalities have repeatedly expressed their concerns about this situation and are actively fighting to change the minds of the government and the House of Representatives. They stress that the impact of the cuts is being felt directly by local communities, where crucial services such as care, education and social support are under pressure. Local governments have called for structural funding in line with their increasing responsibilities, especially in the areas of care and sustainability.
The impact of the ravin years on local communities
The ravine years have serious implications for local communities. Financial shortfalls make it increasingly difficult to maintain essential public services. Municipalities are forced to cut back on care, welfare and social services, directly affecting citizens’ quality of life. At the same time, local governments are expected to play a leading role in implementing national sustainability and innovation programmes. This creates an imbalance where pressure on local communities increases while resources decrease.
The direct impact is felt in almost all strata of society. Social inequality is increasing, vulnerable groups receive less support and the gap between national ambitions and local realities is widening. While plans are being made at the national level to invest in major technological and environmental projects, the communities tasked with implementing these transitions are increasingly constrained financially.
Conclusion: The importance of a balanced approach
The path to green growth and broad prosperity requires a balance between international commitments and local realities. The Netherlands should continue to invest in innovative technologies and sustainable production processes, as proposed by the European Commission. At the same time, the government must recognise that the basis for these innovations lies in strong, well-funded local communities. The current Schoof administration’s policies leading to the ravine years for municipalities undermine the ability of local communities to play their crucial role in the transition to a sustainable and inclusive economy.
Innovation maturity therefore means not only that the Netherlands leads the way in technological innovation, but also that we provide local communities with the resources and support they need to grow sustainably. Only through this dual-focused approach can the Netherlands successfully complete the transitions to green growth and broad prosperity, without leaving behind the communities that need to make these changes possible.
Advice: Making smart use of European plans for local communities
To maximise the potential of European plans, such as the Green Deal and the Recovery and Resilience Facility, it is essential that Dutch municipalities make strategic use of available funding and programmes. This can be an important way to relieve the financial pressure of the ravine years while investing in sustainable and innovative projects. Municipalities can prepare and benefit in the following ways:
1. Capacity building within local governments: It is crucial that municipalities develop the right knowledge and skills to submit successful applications for European funds. This can be done through training and expertise on sustainability, innovation and project management.
2. Use European networks and cooperation: Municipalities can join networks such as the Covenant of Mayors, which offer support in obtaining funding and sharing best practices with other local authorities. These networks help position municipalities within European policy structures and strengthen their ability to attract funds.
3. Encourage public-private partnerships: By collaborating with businesses, educational institutions and civil society organisations, municipalities can develop innovative projects that address both local needs and broader European goals for sustainability and innovation. These collaborations ensure shared responsibility and expertise, and increase the likelihood of successful project realisations.