News item | 14-01-2022 | 16:05
‘Government must take control’ a frequently heard phrase on TV, in the newspaper and on social media. But it is often not clear what exactly is meant by ‘taking control’ and the reflex is to put more money into something. But smart management means pulling the reins on major social challenges and, where necessary, letting them relax and letting the solution come from companies and consumers themselves. And being honest and clear about the sometimes painful choices and their consequences.
Secretary-General Lidewijde Ongering (Ministry of Economic Affairs and Climate) writes about this in her annual New Year’s article, which appears today in Economic Statistical Messages (ESB).
Climate and digital transition: taking and giving direction
In the climate and energy transition, the government takes control because otherwise the transition will not get off to a good start. This can be done, for example, through pricing, by setting a price for CO2 emissions, and by setting clear standards. In this way we use the power of the market by letting companies, entrepreneurs and consumers come up with the best solution themselves. In addition, central coordination is necessary to keep sustainability affordable, for example when a choice has to be made for an alternative energy source for a residential area.
The digital transition requires a completely different form of government management, aimed at intervening in excesses. For example with large digital platforms with a lot of market power or in making digital products and services more secure. The challenge is to apply new regulations in a targeted manner and make them future-proof. And at the same time leave enough space to retain the benefits of digitization.
Clear choices in painful changes
Transitions involve painful changes that require clear choices. Nitrogen emissions that have to be reduced, extensions of the electricity grid that get bogged down in long permit processes and increasing pressure on scarce space.
Ongering: “Just three examples that show that there is no longer time for the gradual and decentralized investment of spatial issues without coordination. And a society and economy in transition sometimes also means daring to break with existing activities and habits. And leave room for new winners and losers. Redistribution is necessary to bring about social change, but the government cannot or should not compensate for all losses.”
Stimulating transitions with a future-oriented labor market and education
Transitions are hampered because the Dutch labor market is struggling with serious staff shortages and stagnating flow to tight sectors. Ongering argues that the government can take more control by aligning education more closely with the labor market. For example, by making more resources available for technical studies, by introducing an obligation to spend the transition payment on training or by bringing more international students to the Netherlands to follow training in a shortage sector.