Jeroen Dijsselbloem (Mayor of Eindhoven): 'Pursuing Collaboration Opens Up Huge Opportunities'

Dijsselbloem, who once helped shape Europe’s financial and economic future as Chairman of the Eurogroup, has just cast his vote in the European Parliament elections as we sit down for this interview. The election is important to him, and he notes with satisfaction that the turnout at Eindhoven City Hall was good.

Dijsselbloem (PvdA) has been mayor of his hometown since September 2022 and thus far enjoys the job: ‘What is happening in Eindhoven is fascinating. The companies in the city are doing well and are investing substantially. All role players want to move forward and are operating at full speed which is contagious. Everyone is considering how to approach this: The healthcare sector is concerned with their capacity to support the growing population, PSV Eindhoven (the well-known sports and football club) considers expanding the stadium, and the concert hall, the ‘Muziekgebouw Frits Phillips’, whether to double its capacity. This is a very stimulating environment. It is wonderful to work in such a dynamic environment but it is also extremely challenging to manage. How on earth do we keep up with ASML's incredible pace?’

The region’s answer to this was to establish the Brainport Eindhoven initiative in the Eindhoven Metropolitan Region (Eindhoven and surrounding municipalities) at the end of the last century. Dijsselbloem explains: ‘In the 1990s, the industry in and around Eindhoven was under severe pressure. DAF went bankrupt, and Philips was downsizing. At that time, the entire city was largely dependent on those two companies. Former Mayor Rein Welschen, the Chairman of the Chamber of Commerce and the Chairman of the Technical University then sat down together with the exclusive aim of preventing the problems at Philips and DAF from leading to the end of Eindhoven as an industrial city. Their efforts ultimately led to the Brainport collaboration.’

Is there a secret to how this turned out to be successful?
‘There was a sense of shared fate: that we were dependent on each other to survive, to build an ecosystem. The big theme at the time was: how do we retain talent? With 35,000 people who lost their jobs, the risk was that many would find work elsewhere, and we would lose an immense amount of talent. Various initiatives helped retain many of these people.’

What do you see as the key to successful public-private partnerships?
‘First and foremost, shared interests. If you cannot formulate shared interests, it becomes a difficult story. In this regard, Eindhoven has an advantage over other cities or regions. We always had a strong focus on technology and manufacturing. All the major, successful companies in and around Eindhoven work with a combination of technology and metal. This provides a clear focus.
A second condition for successful public-private partnerships is skin in the game. If parties are not willing to participate financially, it can hardly succeed. If the government is the sole financier, with everything dependent on subsidies, the chance of success is limited. In Eindhoven, there is a willingness to contribute. The private sector contributes hundreds of millions to infrastructure, for example, while this is typically seen as a government responsibility.
This willingness to have skin in the game is also evident on our high-tech campuses. We try to have a blend of companies and educational institutions on all our campuses. However, rent prices are often too high for educational institutions. On the Brainport Industry Campus, this was resolved by jointly agreeing to a different rent for technical vocational education programs. Why? Because they see the importance of having an educational institution on the campus.’

How is public-private partnership structured in Eindhoven?
‘We currently work with four funds in Eindhoven, which were created through the efforts of, primarily, the recently departed ASML CEO Peter Wennink: a mobility fund, a housing fund, a talent fund, and a social fund. The businesses in and around the city contribute to these funds, which finance new roads, public transport expansion, and new housing. The fourth pillar, 'Brainport for Each Other,' is the newest branch in our ecosystem. Until now, educational institutions and the government have helped the private sector reach its full potential. We have turned this around now and are asking companies how they can help us with our social issues. Together, we are launching projects, for instance, in the areas of debt counseling or educational disparities.’

How do you see your own role as mayor in public-private partnerships?
‘My principal aim as mayor is to get people together, create momentum, initiate projects, and sometimes to put out fires. The economy largely takes care of itself. I am not too worried about that now. My focus is on the surrounding aspects: the social structures that need to support the economic framework. That is where my main task lies. I need the Brainport partners to help shape this. Fortunately, the willingness to help is enormous. If I call businesses in this region with an urgent question, they are at my table the next day.’

What do you see as pitfalls in public-private partnerships?
‘The scale of development in Eindhoven means everything is under pressure in the short term. Companies keep growing, which puts pressure on public services. We need to build 100,000 additional homes. In the coming years, we will have to build more than 20 primary schools. We lack everything, and everything must happen quickly, with the risk of compromising on quality, such as building houses without ensuring quality or only constructing homes in the more expensive segments. As a municipality, we must remain attentive to the living environment. Eindhoven no longer has sites available for large new developments, so we are densifying the city significantly. But we must keep the city livable. We do this by reducing car traffic and planting trees. One of the most brilliant decisions by the city council was to purchase the Wielewaal estate, the former private estate of Frits Philips. It will become the largest city park in the Netherlands. But these kinds of choices are essential, failing to make them would leave us with an unlivable concrete city.’

On one hand, businesses want to grow and satisfy shareholders, but the government has other interests. How do you maintain that balance?
‘Frankly, this is easier now than 20 or 30 years ago. Back then, we had a far greater belief in leaving everything to market forces. The question back then was whether we should, perhaps, abolish the Ministry of Spatial Planning. That is the era we came from. Fortunately, this has changed. The spatial problems in the Netherlands will not be solved if no one takes control. If the municipality does not actively guide and adjust developments the result could be an area like Silicon Valley. Silicon Valley, to me, is a horror example. It is an area where economic development happened at breakneck speed. Due to a lack of spatial planning and political direction, middle-income people were pushed from the center. A government must ensure affordable housing, especially since two-thirds of jobs in the manufacturing industry are vocational. These employees have a right to affordable housing. I do not want Eindhoven to be a city where only high-income earners live.’

What is the biggest lesson you learned in the field of public-private partnerships and the role of government?
‘That an activist government is an absolute necessity. I say 'activist' deliberately because I believe that a government should have the ambition to take the lead based on a vision. A government must also be willing to invest and take risks. Here in Eindhoven, I have learned that there are enormous opportunities if you seek collaboration. We must not make the mistake of trying to achieve everything by ourselves, although there are areas where government must take the lead, especially in spatial development and public services. The private sector is not going to take over these responsibilities.’

Is sustainability an important theme within Brainport?
‘Certainly. Sustainability is integrated into everything we create here. Many of the technological innovations in the high-tech manufacturing industry relate to sustainability. They provide the solutions. Think of companies working on improving the energy efficiency of chips, companies capturing carbon from the air, and those advancing 3D printing. The advantage is that we have relatively clean industries here, especially considering direct emissions. However, our industries require a lot of specific raw materials and energy. The latter presents significant challenges. We face severe grid congestion issues. Network operators cannot keep up with the demand for energy. It now takes eight years for a large company to get a grid connection. That is unacceptable. The risk becomes that these companies consider leaving. Up to now we have managed to prevent this with smart, innovative solutions. For example, at the Kempisch Business Park in Hapert, companies coordinated their energy usage and use each other's surpluses. This requires additional investments, but it is preferable to waiting eight years for a power cable.’

Should the government take further steps to improve collaboration?
‘Yes, there certainly are areas we can improve on. At the beginning of a public-private partnership, for instance, we often face tax issues. It is not always clear how the tax authorities will assess certain forms of collaboration. This could be simplified. We also need more innovation in that area. We should develop models to make it easier for businesses to participate in public investments and projects. We could even provide tax incentives for this.
We need to make progress in reporting too. Large companies must, according to European regulations, account for their sustainability and social performance. We are exploring whether public-private projects can be included in these metrics. If so, it would make it much more attractive for companies to participate.’

And the businesses in this region? What steps can or should they take?
‘We see that large companies are relatively quick to engage in various collaborations. Small and medium-sized enterprises (SMEs) are more hesitant, which is understandable because the process is far more complex for them. SMEs do not have large HR departments; to them it is a major organizational challenge. However, SMEs also have a stake in the Brainport collaboration and the developments in digitalization and automation in this region. So, I think we have some work ahead to make collaborations more accessible to everyone.’

What do you see as your main challenge in the coming years?
‘One of the biggest questions in this region will be: do we have enough people to achieve all we aim for? Both in the industry itself and in all the supporting services. Do we have enough people in education, healthcare, and hospitality? The sustainable deployment of increasingly scarce labor is the major challenge. But if there is one region where innovation in this area should be possible, it is here. We have hundreds of companies working on robotics. They can have a noteworthy impact.’

This article was published in Management Scope 07 2024.