Not only is the power out in Brabant – so is the patience.
That is the message from Brainport, the knowledge and business cluster of the Eindhoven region, when the administrative consultation with five new ministers takes place on Wednesday 15 June.
The province is bogged down by the economic success of the high-tech industry: new homes and roads are needed to accommodate new employees and to keep the environment livable. If the growth engine of the Dutch economy does not want to stall, then the government must step in now and support a plan worth 1.3 billion euros, according to Brainport.
Last week it turned out that the electricity network is at maximum capacity. Grid operators Tennet and Enexis put all new applications from companies and large consumers – including for their sustainability plans – on a waiting list.
It is one of the bottlenecks that hit the heart of the technology sector. Around Eindhoven are companies such as Philips, DAF, NXP, VDL and technology company ASML and its chain of suppliers. ASML makes lithography machines. These complex devices produce chips; they cannot be dragged along by global chip shortages and expansion plans for the European chip industry. And the most advanced machines are not made anywhere else than in Brabant.
ASML booked an annual turnover of 18.6 billion euros in 2021 and is counting on a 20 percent growth in 2022. The suppliers in the region must also keep up with that pace. By 2030, ASML expects to hire another 18,0000 people in Veldhoven (a doubling). In total, this concerns 70,000 jobs for ASML, its suppliers and their suppliers.
Those people have to live somewhere. More than 50,000 additional homes are planned in the Eindhoven region, for new employees and for the local population.
In order to speed up housing construction, ASML is prepared to contribute to the realization of new homes in the region. Sources around the company confirm this NRC† The company wants to keep housing in the area affordable, also for people who work outside the technology sector. ASML employees, who often come from abroad, have good salaries and more budget for mortgage or rent. This is pushing up house prices in the region, in addition to the increase due to the general housing shortage.
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ASML’s aim is not to build its own neighbourhood, like Philips – from which ASML originates – built the Drents Dorp in Eindhoven in the last century for new employees and their families. ‘In principle’ ASML wants to contribute. It is not known how much money is involved, but it would be a multiple of previous public-private partnerships.
In 2017, ASML contributed 12.5 million euros to improving the accessibility of the De Run campus in Veldhoven – a project that cost a total of more than 80 million euros.
Not that that solved the congestion problems. Traffic jams continue to increase due to the growth of the tech sector and the manufacturing industry. The housing shortage in and around Eindhoven means that new employees are looking for a house further from their work. Extra commuters also result in more traffic jams. In Brabant, they are now back to the level before the corona pandemic.
Other Brabant companies also want to invest in solving bottlenecks. For example, there is a new mobility plan of 186 million euros for improvements to highways, in which municipalities, provinces, central government and local businesses each cover a quarter of the costs. Construction depends on nitrogen restrictions, permits and other impediments.
One sentence
The province of Noord-Brabant and the local municipalities cannot handle the success of the high-tech sector on their own. There is a plan for 1.3 billion euros for structural improvements in mobility and housing up to 2030. The government should contribute two thirds of this, the other part is supplemented by municipalities, provinces and the business community.
Brainport clings to one sentence in the coalition agreement: that the intention is to further develop the Eindhoven area into a mainport. The other main ports (Amsterdam-Schiphol and Rotterdam with the port area) were given priority by the previous cabinets, Brabant had to make do with incidental investments. That does not do justice to the economic importance of the region, which is expected to be the main growth engine of the Dutch economy in the coming decades, according to Brainport.
The impatience, after a lengthy cabinet formation, is growing. In April, ASML CEO Peter Wennink sent an appeal to Minister of Economic Affairs Mickey Adriaansens (VVD) on behalf of the Eindhovensche Manufacturers’ Circle and Brainport. The letter accuses the government of “lack of urgency and lack of pace to invest in mounting shortages of IT talent, lack of affordable housing, congestion and quality of life”.
Earlier that month, ASML received Hugo de Jonge (Minister of Spatial Planning, CDA) and Mark Harbers (VVD) and Vivianne Heijnen (CDA), the Minister and State Secretary for Infrastructure and Water Management at its headquarters in Veldhoven. The message was identical: Brabant has all the ingredients in-house to achieve sustainable economic growth from which the whole of the Netherlands can benefit. But then the government has to step in with substantial, concrete investments.
VDL CEO Willem van der Leegte expresses the feeling: “The government has structurally invested too little in our region, which creates real added value. Getting such a title Mainport is one thing, but how are we going to ensure that the goose that lays the golden eggs continues to lay many eggs?”
VDL does not consider investing in housing a task of the manufacturing industry. “We prefer to provide the technology that allows homes to be built much faster.”
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Van der Leegte notices that it is also difficult for his companies – VDL Groep has more than a hundred divisions – to find new employees. Lack of living space is a thorny issue. “Normally we as VDL Groep have four hundred vacancies, now more than eight hundred – especially in Brainport.”
His employees do not have to be accommodated in holiday parks, as sometimes happens with newcomers at other Brainport companies. “Our people are going to live further from their work. There must be more living space for new talent,” says van der Leegte. “It also makes no sense to take employees away from each other. At ASML they know that if they take on too many employees from suppliers, they will get into trouble themselves. Because we can no longer supply the parts for their lithography machines.”
No sustainable boiler
The fact that Brabant is getting into trouble is noticeable in the power cut that Tennet and Enexis announced: they are at the maximum capacity on the electricity network. Large employers such as VDL and ASML say they will not be affected by these restrictions, because they planned enough ahead because of their expansion plans.
The Dommelsche brewery in Valkenswaard is less fortunate. That company wanted to invest in an electric boiler worth 1 million euros, in order to be able to get rid of gas completely. But two weeks ago, the brewery was told that Enexis could not supply the necessary extra grid capacity. The boiler has been reordered. That is an example that worries Willem van der Leegte. “At a time when we want to get rid of natural gas and have to make it more sustainable, we cannot allow ourselves to be limited by the electricity grid.”
Ingrid Thijssen, chairman of the VNO-NCW business organization, sees the power cut as an obstacle to business expansion and sustainable investment projects. “Certainly in the Brainport region. This will be the first economy in the Netherlands. We have to make choices about what we want to earn our money from in the future. We excel in high-tech, so we have to keep growing in that.”
However, growth also faces democratic barriers. Such as a group of residents protesting against a bicycle path that should connect Eindhoven Central and the ASML campus in Veldhoven.
Local interests often clash with the interests of multinationals. They also notice this in the Brainport region, a collection of 21 cities and villages around Eindhoven. This fragmentation is characteristic, but it does not make a joint strategy any easier. Plans for a municipal reorganization – a ‘Greater Eindhoven’ – have no chance because the municipalities do not want to lose their own identity.
Brainport thinks it has found the golden mean: an overarching ‘accelerating team’ of forty to sixty professionals, who support local aldermen with zoning plans.
The question is whether the expansion is even feasible in this place. But that’s not a popular question. According to John Jorritsma, mayor of Eindhoven and chairman of the Brainport foundation, the growth of the semiconductor sector is “a train that can no longer be stopped. There is plenty of room, only we have all ended up in a Gordian knot of rules and regulations. The government should help us with that.” Jorritsma hopes that there will be a concrete mainport plan before the summer.
At the same time, companies are making a plan B, says Willem van der Leegte. “VDL has always said that we want to produce in the Netherlands and Flanders. But if this region is saturated, and there are no growth opportunities, then we have to look further. Stagnation means decline.”
A version of this article also appeared in the newspaper of 11 June 2022