oecd territorial reviews randstad holland netherlands pdf

đ4_ AetsovirporurTs Acknowledgements ‘This Review was produced by the OECD Regional Competitiveness and Governance Division in co-operation with the Government of the Netherlands Minist

OECD

Territorial Reviews Randstad Holland,

Netherlands

OECD

Territorial Reviews

Randstad Holland, Netherlands

OECD Territorial Reviews

ORGANISATION FOR ECONOMIC CO-OPERATION

AND DEVELOPMENT

‘The OFCD ea unique forum where the governments af 30 democracies work together

tw address the economic, socal and environmental challenges of globalisation The OECD

fs lao atthe foreftont of efforts to understand ang to help governments respond to new

‘developments and concerns, such as corporate governance the information economy and the challenges of an ageing population, The Organisation provides a setting where {governments can compare policy experiences, seek answers to common problems, identify good practice and work ta co-ordinate domestic and international policies

‘The OECD member countries are: Australia, Austra, Belgium, Cana

the caech Republic, Denmark, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Japan, Korea, Luxembourg, Mexico, the Netherlands, New Zealand, Norway, Poland, Portugal, the Slovak Republic, Spain, Sweden, Switzerland, Turkey the United Kingdom

nd the United states The Commission ofthe European Communities takes pat inthe

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OFCD Publishing disseminates widely the results of the Organisation's statistics {gathering and research on economic, social and environmental issues, as well asthe conventions, guidelines and standatds agreed by its members

‘This work publish om the responsibly ofthe Seretary-Generl of

the OECD The opnine expressed and arguments employed erin do not,

necessarily reflect the ofl views ofthe Organisation ofthe goverrments

of ts member countries

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Foreword

‘Across the OECD, globalisation increasingly tests the ability of regional

‘economies to adapt and exploit their competitive edge, as it aso offers new

‘opportunitics for regional developntenL, This i leading public authorities 10 rethink their strategies Moreover, as a result of decentralisation, central

‘governments are no longer the sole provider of development policies Effective and efficient relations between different levels of government are required in onder to improve public service delivery

The objective of pursuing regional competitiveness and governance is particulary relevant in metropolitan regions Despite preucing the bulk of ational wealth, metropolitan areas are often characterised by unexploited

‘opportunities for growth as well as unemployment and distressed areas Elective policies to enhance their competitiveness need lo address theit functional region as a whole and thus call for metropolitan governance,

Responding to a need lo study and spread innov

development strategies and governance in a more syst OECD created in 1999 the Territorial Development Policy Commitee (TDPC) and its Working Party on Urban Areas (WPUA) as a unique forum for international exchange and debate The TDPC has developed a number

‘of activities, among which a series of specific ease studies on metropolitan regions, These studies follow a standard methodology and a common

‘conceptual framework, allowing countries to share their experiences This series is intended to prociuce a synthesis that will formulate and diffuse horizontal policy recommendations

đ4_ AetsovirporurTs

Acknowledgements

‘This Review was produced by the OECD Regional Competitiveness and Governance Division in co-operation with the Government of the Netherlands (Ministry of Economic Affairs; Ministry of Housing, Spatial Planning and Environment; Ministry of Agriculture, Nature and Food Quality; Ministry of Transpor, Public Works and Water Management and Ministry of Interior) and Regio Randstad Special thanks ane given to

Ms Willy Bruinsma from the Ministry of Economic Affairs and

Mr Piet Oudega trom Regio Randstad, local team coordinators, a5 well

as to all local team's members from the different ministries involved, and Regio Randstad, as well as all the authorities that cooperated during the review process,

A team of international peer reviewers and experts participated in the Review process: Mr Don Christiansen, Chief Executive Investinent New Zealand; Mr Wolfeang Knapp, Senior Researcher at the Research Institute for Regional an Urban Development in Dortmund:

Mr Christian Lefevre, Professor, French Institute of Urban Affairs, University of Paris VIII; Ms Gesa Miche-Nordieyer, German Federal Ministry of Economics and Technology; and Ms Joan Sollenberger, Executive Liaison of Transporation, Business, Transportation and Housing Agency for California, USA

This Review was directed by Mario Pezzini, Head of Regional

‘Competitiveness and Governance Division, and co-ordinated and drafted by Ms Dorothée Allain-Dupré and Mr Olaf Merk Substantial help to the drafting process was provided by MrGuang Yang, Individual contributions were provided by

Mr Jonathan Kings and Ms, Ritsuko Yamazaki-Honda Statistical data Were produced by Ms Brunella Boselli and Me Javier Sanchez-Reza

Ms, Alex Heron provided assistance for the editing of the Report Ms Erin Byme and Ms, Georgina Regnier prepared the Review for publication,

‘ranueorconrens -§

Table of contents

Assessments and Recommendations "

‘Chapter 1 ‘The Randstad: Economie Trends and Challenges 20

Introduction 1 What is the Randstad? 2 28

1.1.1, The Randstad: cities, population an land use 28

1.2, The Randstad: an abstract concept rater than a functioning eeallty 32

‘The Randstad: measuring is level of functios rd

‘The geographical boundaries ofthe Randstad: varied definilons 39

Limited funetional integration 39

1-2 Ths Rams eonamy: god perrnanes, bt ow provi grow AO 1.2.1, Economic significance ofthe Randstad 40

1.2.2 A wealthy region: high incomes, high employment,

high productivity but low productivity growth “Average income per capita a 4B

Economic growth, ’ 45

High employment rate a7

High productivity per houe 49

Low productivity growth s0

1.3 The Randstad: am open trade and services-based economy 1.3.1 The openness ofa serviees-based economy 33 33

1332 A diversified economy 58

‘Trade and logistics i 59

Financial andl business services ob

Creative industry 65

‘Tourism Horiculture industy von 66

[L4, Defining the challenges 14.1, Taking advantage of the proximity of urban networks, to improved grow a) 1

Internal accessibility within the Randstad: transport networks T0

Reducing duplication, promoting co-operation: the economy

education and culture a cre

6 s9m.eor corres

Housine %

14.2, Using knowledge, encouraging innovation

Randstad workforce with tertiary education

Limited conteibution by R&tD and innovation to regional ody

‘Chapter 2: Potices to Enhance Competitiveness 9 Introduction

2:1 Making Gtr ue of proximity 2.11 Accessibility

Congestion

Public transport External accessibility

2.1.2 High quality housing

Spatial planning

Housing policy

Erfeets Building in ‘green’ areas on high quality housing

‘Making better use ofthe Green Hear

Firm locations 119 2.1.3, Regional co-otdination

Regional economic policy

Urban poliey

Regional co-ordination Tourism

Regional co-ordination 'Co-ordination of harbour aeiviis - of eultural InfrastrUctUre .-o-ess -I27 eececeeeeeeceoeeecee T29 Regional ipord9 _—_— s0

tition between universities inthe resion better use of knowledge infrastructure and skill BL 133,

2.2.1, Higher education Pilots on variable Fees and sudentselocln „ -sccoosocoscosscccTẦ# aS Assessment of the pilot i aise Seas 2.2.2 Auraeting knowlege workers 136 Routes for knowledge workers to enter the Net 136 (Operation of the knowledge workers programme 138

“TAhiEorcowiTy-7 Integration tests

2.2.3, Attracting foreign direct i

23.4, Innovation ‘Knowledge transfer

2.3, Flexibility inthe labour market 23.1 Employment protection

2.3.2 Inactivity: ethnic minorities Policies focused on labour market integration of ethnic minorities vom °

Labour market integration and spatial segregation,

[Labour market integration and segregation in education

2.33, Working hours st elie

sah festment with knowledge spillovers 1401

‘Chapter 3: Governance in ‘The Randstad 155

Introduction 3.1 Government structure ofthe Randstad 5 2.155 136

Fiscal autonomy: how do Duteh municipaliies Fue? 102

‘Water boards and local central government agencies: another Get ou 1

‘On-going decentralisation; more powers and responsibilities for

municipalities lót

‘The tnee-tir systema sircture largely unchanged since 1848 165,

Municipal distiets

Changes in number of provinges and municipalities

Failed reform proposals Conclusion

322 Horizontal co-operation 3.2.1 Co-operation between municipalities and atthe level of the

city-region, 3.2.2 Co-operation atthe wing: level

43.2.3, Co-operation at the Randstad-evel

Making beter use ofthe knowledge infrastructure Higher education, -

Foreign direct investment

Knovledge ranser and the commercialisation of research and

Making beter use of labour 185

‘What obstacles to be solved by which government level? 186

| Vertical co-ordination At neighbourhood level seve vol 87 187

‘At municipal level von Sons BSS Ateity-region and provincial level 189 Atving level 190

‘At Randstad level 191 AÁt Ralional level seo 191

35 Civil society PllaisaoN v cecoeeoooocooooo _- sessaeooo.]92 192 Polder mode! 193 Crisis in public leadership? 195 Conclusion _— : 196 3.6 Governance tae Off Administrative croAvdedness and appropriale lunctional scale 199 "196 Local autonomy and regional decision Making poer ‘Regional decision making at the Randstad-level and autonomy 201 ofthe cityeity-regi0n 0

‘The relationship between a city-region andthe municipalities that

oem pat OF Hes sn 205

‘The relationship between Amsterdan/Rovterdam aa their

‘municipal district councils 207

‘Structure and practical improvements 208

“Metropolitan ambitions andl regional egalitarianism os Leadership and consensus seeiN : s22 210

splitan regions in 2002

Figure 14, Commuting paterns of the Randstad Figure 5 Average commuter travelling distance and time for residents residents 35

‘of Western Netherlands 1995-2003 (index 1998=100) 35

Figure 1.6, Interistrict commuting (four urban districts) i the Randstad by level of education wr Soe 36

Figure 1.7 General Funetional Poty-centiity Index Figure 18 Ranking of metropolitan regions by contribution ttheir national vd

‘igure 9 Regional distribution of GDP per capita (Gin index for GDP pet capi4) da

Figure 1.10.GRP per capita in 2006 corrected for costo ving, in OBCD ‘metropolitan regions, =

Figure 1.11 GDP per eapita gap between the North and Soalh Wnss 45

Figure 1-12 Average annual GDP growth 1995-2002 in selected OECD cites 46

Figure 1-13 Annual economic growth in the Ranta, 1996-2004 (4 GRP growth per year) a7

Figure 14 Rankings of employment rates aeross OECD countries 2002 48 Figure 1:15 Labour productivity (GDP per hour) in OECD countries 2004.49

[Figure 16 Labour productivity in 2002 inthe Netherlands (euro per hour) 50 Figure 1-17 Labour productivity growth (GDP per hour worked) in OECD

‘countries, 1995-2000 and 2000-2005 sn st

Figure 1.18, Annual labour productivity grovth 1996-2002 inthe Netherland the four Randstad provinces and the four large cty-egions inthe

Figure 1-19 Share of extemal tad in national GDP in OBCD counties 2004.54

Figure 1-20, FDI atvaction (cumulative FDI inflows) among OECD

‘countries, 1996-2005 (in billion USS) son 55

Figure 1.21, Employment in important sectors in the Randetad Š8

Figure 1.22, Value added per worker in important sectors in the Randstad 59 Figure 1-23 Trans-shipment harbours by volume (million tons) in

Hamburg-Le Havre range in 2005 0

Figure 1.24 patil concentration of business and Financial services in the Randeid, von

Figure 1.25, Spatial concentration of horticulture and food industries in the Randstad 61

Figure 1.26.Percentage of individuals wo take more than 20 minutes 10 travel tothe place where they Work OF sHUy TÔ

Figure 1.27, Railway capacity in selected OECD metropolitan areas (ametres per 1000 inhabitants in 2003) 74

Figure 1.28 Shae of socially rent housing and owner-occupied housing as share of total housing stock (2003) 16

Figure 1.20 Social rnúng and home ownership inthe four large

tes and city ett

‘Figure 1.30, Shae of population (between 2554 years) wih rary elation 80 Figure 31 Share of highly skilled people inthe work force (in Figure 132 Number of patents per million population 2002 81 „ Figure 1 33 Percentage of intemational students in tertiary enrolments (2001) 86 Figure 1/34 Shares of knowledge workers and foreign students at universities

inthe NGhetiaHfS sssccsceccser „u86 Figure 1.35.Foreign-born persons with tertiary education 2000 Figure 136 Business use ofthe Internet and websites, 2004 87 89 igure 137- Indicators of employment protection permanent workers IL Fue 138 Proportion of fosgners unemployed eave onatve-bom poptlaion 2003 rn 92 Figure 1.39.Part ime employment rate across OECD counties Figure 1-40, Actual hours worked in OECD countries 2005 (7) 4

(hours per year per person in employment) 95 Figure 2.1 Costs of work permits in selected OECD countries 139 Figure 22 Innovation budget, Ministry of Economie Affairs 2006 wn 143 Figure 3.1, The Randstad and its four provinces, four city-regions and four large cities 157 Figure 3.2 Sub-national expenditures as proportion of total government spending (2003) 158 Figure 33, Expenditures of central government, provinces and ‘municipalities (in million euros 2004) nsec ĐỂ Figure 3.4 Domains Figure 35 Average number of people per municipality in OECD in which municipal civil servants are working (2002)160

‘countries (2006) 16 Figure 3.6, Expenditure per capita for selected OBCD eides (2003) 161 FFigure 37, Subvnational tax revenues as share of total sub-national

162 igure 3.8, ct 163 Figure 39: Number Figure 3.10 The 8 city-regions ofthe Netherlands of municipalities 1985-2006 167 1 Figure 3.11: Average surface per municipality in various OECD counfreses 206 List Box 1.1 Concept of Boxes of polycentsic urban regions 30 Box 12 Criteria for defining egional competitiveness a4 Box 13 International attractiveness ofthe Randstad 56 Box 14 Schipholaigor Box 15 Horticulture eluster os 3 68 Box 16 Costs of congestion in the Netherlands 2 Box 17 Climate change and the water storage function of the (Green Heart 10

Box 2.1, Congestion charges in Stockholm russe Box 22, Randstad Rail 1105 108 Box 23 San Francisco Bay Area Rapid Transit 109 Box 24 Local housing allocation rules inthe Randstad 113 Box 25 Housing market support mechanisms in Londom sven 116 Box 26 Houjnginarelom 7 Box 27, Markot involvement in the development of frm locations 12 Box 28 Oresund University Box 29 Main recommendations on making better use of proximity 133 132 Box 210 Foreign direct investment and knowledge spillovers in Finland and leland „

Box 2.11 Life sciences luster in Leiden Box 2.12, Main recommendations for making better use of Knowledge 6

inorder to innovate 147 Box 2.13 Main recommendations for making better use of the labour force 152 Box 3.1, Provinces and munieipalievinthe Netelands 159 Box 32 Brief history Box 33 The Administrative Platform Green Heart of municipal districts in Amsterdam 165; 175 Box 34 Delta Metropolis Box 35 Governance in polycentric metro areas: Rhine Rub, and Regio Randstad, 199) 176 Box 36 The Greater London Authority Box 37 Regional transport authority In Frankfurt uss 202 208 Box 38 Regional government reforms in Denmark 207 Box 39 Municipal eistrcts in Stockholm 208 Box 310 The French eontatsd'agglomération Box 311, The VerbandRegio Stutigard m 200 20 Box 312, Recommendations for improving governance in the Randstad 213

ASSESSMENT AND RECOMMENDATIONS 13

Assessment and Recommendations The Randstad: a polycentric arew

covering the western Netherlands

‘The Randstad is commonly understood lo be the urban area ia the western Netherlands, comprising the largest Dutch cities (Amsterdam, Rotterdam, The Hague and Utrecht), as well as several medium-sized cities,

‘Geographically, the region consis of a green area in its contre (known as the Green Heart) surrounded by a semicirele of urban conurbations Inthe eademic literature, the Randstad is frequently considered t0 be a

‘metropolitan area, as it forms one closely connected urban area The Randstad is a polycentric area: unlike many metropolitan areas in the OECD, it does not have one single dominant core, Instead, its functions are spread over its entire area Although Amsterdam is the largest city in the Randstad, the national government is located in The Hague and the biggest port in Rotterdam In practice, the Randstad cannot be considered © be a lily urban system: most people commute, move house, pursue leisure ‘ctvities and shop within the more restricted areas of their city-region, such

as Greater Amsterdam, Greater Rotterdam, Greater The Hague and Greater Uureeht

Oficial boundaries forthe Randstad do not exist and it does not fit imo

‘one of the three government Gers in the Netherlands, I¢ remains an almost abstract concept as ao government policies are implemented using it asthe

‘geographical basis for intervention Nevertheless, the region is of considerable economic and social significance to the whole country: although it only covers 20% of the Netherlands’ land area, 42% of the Population tives there, and about half ofthe national income is earned within its boundaries, The result is that its economic development has a huạc impact on the economic development of the Netherlands as a whole, But it would not he correct to equate the Randstad economy with the Dutch

‘economy The Randstad economy is more services and trade oriented ‘whereas industry is largely concentrated in the rest of the Netherlands The Randstad economy is also more international: it generates three quarters of Duteh exports, and about 60% of foreign direct investment (FDI is invested there, IIs population is more highly skilled and richer than that of the [Netherlands ofthe whole

4

san area doing well economically, bur

ith low productivity growth

‘The Randstad might be best known for its role as the logistics hub for Europe, but is economy is diversified and includes other strong compatiive sectors, such as financial and business services, wade & logistics, horticulture and the creative industry Economic specialisation has led to different trajectories for growth within the Randstad, with the northern part {also known as the North Wing) of the Randstad doing hetter than the southern part the South Wing)

‘The Randstad economy scores well on many indicators It has a relatively high rezional income per capita, unemployment is one of the lowest in OECD metropolitan regions and labour productivity pet hour is high Economic growth, though sluggish in the early 2000s, was goox! inthe 1990s and has been picking up in 2006 The main challenge is the lo productivity growth exhibited over recent years, with the Netherlands having one of the lowest such growth rates in the OECD over the last decade The Randstad performed better than the country as a whole, with an annual average growth rate of 1.7% over 1995-2005, Several other regions

in the Netherlands had higher productivity grovth than this, Moreover, it was well below that of many other European cites ike Dublin (4.3%) and tockholm (37%)

moving toa more valuesadded

economy, but facing several challenges

Much of the economic strategy for the Randstad! as implicitly or cexplicily been based on generating high volumes The harbour of Rotterdam was, until relatively recently, the largest harbour inthe world and

is currently the third largest I is one of the seetors with ils strategie focus lirwoted towards generating high volumes of goods for transshipment Schiphol aitport is similar in tha it has managed to deveop into one ofthe Principal transport hubs in Europe by attracting large numbers of transfer passengers, which makes it possible to offer multiple destinations and high fight frequencies In turn, this has helped to atract many foreign companies

to the Netherlands Several policies over the last few decades have been timed at supporting this high volume strategy Examples are the freight transport line (Betuwvelfn) and the extension of the port of Rotterdam (Twreede Maasvake) designed to accommodate the growth ofthe harbour of Rotterdam and to provide government support forthe growth aspirations of Schiphol aipor

ASSESSMENT AND RECOMMENDATIONS IS

‘AL the same time, such activites face constraints regarding lam availabilty in the densely populated Ranistad The extension of the harbour

‘of Rotterdam is being constructed on artificial land built into the sea whilst in the area around Schiphol houses cannot be built because of the noise levels And if flight movements grow atthe same pace as is currently the

‘ease, Schiphol aitport will reach its legal limit for ght movements within a ‘ew years, taking info account the maximum permited noise levels

‘Over recent years, in view of the above obvious limits to high volume

‘economic activities, considerable efforts have been made to develop more Value-added activities In horticulture, for example, a kind of vital transit economy is being created where flowers are auctioned which are not physically present in the Randstad Several challenges, however, remain, Principally these are enabling the Randstad) to take better advantage ofthe

‘economic benefits which could be generated by the proximity of its City-regions, f) to exploit its high knowledge potential and its knowledge lrastructure so as increase ianovation, and i!) 0 ublise its labour

‘market more efficiently

Better use can be made of proximity

‘One ofthe ways to improve economic performance is to use the unique

‘characteristics of the area better is morphology as ä polyeentie ‘metropolitan area gives the Randstad as a whole, the opportunity to benetit from the proximity ofits several different ciies and their natural landscapes,

‘These opportunites are currently underused, principally due to i) the

«liffculies of travelling around easily within the Randstad, ii) the lack oF high quality housing which takes advantage ofthe nearby natural landseapes and ithe duplication of certain economie sectors

‘by solving congestion

“he road network in the Randstad is heavily congested, with journey time for more than one in five journeys being unreliable during the rush hour, Most of the trafic jams in the Netherlands (81% in 2005) are

‘concentrated in the Randstad The traffic congestion there appears worse than that experienced in other polycentric areas, such as the Flemish Diamond in Belgium and the Rhine Ruhr Arca in Germany

Several policy measures have been introduced over the last few years to tackle congestion, for example, the widening of the “hard shoulders” (the emergeney lanes’ at the side of highways) so that they can be used temporarily during the rush hour to facilitate the flow of heavy trafic

16

Building new roads also assists in resolving congestion problems and the

‘current priority area for such construction is the Randstad The miore radical step of road pricing has been under discussion for along time but a decision

to implement this has only recently been taken by the current govern

‘The scheme devised involves charging car users for each kilometre driven, with higher charges for more polluting cars and lower fees for driving

‘outside the rush hour and on less used roads This system, planed for introduction in 2012, will operate throughout the Netherlands in relation to all road networks

‘These government policies to reduce congestion are undoubkedly steps

in the eight direction, but the issue of poor accessibility within the Randstad needs to be approached with greater urgency The construction of new roads should be speeded up and particular priority should be given to roads

‘connecting Almere, the Randstad’s fifth largest city, with the rest of the region Road planning must also ensure that whilst transport within each city-region is facilitated, travel region-wide is also made easier This is 80 that the needs of industries, such as logisties and horticulture, and of individuals that rely on long distance transport or need to undertake long

‘commutes, are catered for AS congestion charges focused at specific bottlenecks are very effective to deal with congestion, and as 80% of the

‘congestion in the Netherlands is concentrated in the Randstad, it would hmuke sense to introduce congestion charges in the Randstad or atthe level fof the respective city-regions, rather than throughout the whole of the

‘country Moreover, it needs to be introduced much earlier than 2012 Improvements ean also be made by involving the corporate world in solving

‘congestion problems Regional governments should invite private

‘enterprises operating in their area and their business associations to discuss

‘reative solutions for increasing accessibility within the region

‘A unified and coherent public transport system serving the Randstad as

1 unified area does not exist For example, tain connections are usually between city centres, whereas many firms are located next to highways Although improvements have been made in The Hague and Rotterdam, metro and tram networks donot usually reach out into surrounding

‘municipalities, making travelling within a city-egion by public transport difficult, The connections between different modes of public tansport could also be improved In audition, the railway capacity inthe Randstad is one of the most underdeveloped of all the metropolitan areas in western Europe,

ASSESSMENT AND RECOMMENDATIONS 17

‘Together, these problems contribute to relatively high car usage, whieh, in lum, ereates congestion and ar pollution,

Several regional public transport networks within the Randstad at

\wing-level have been initiated recently or will be launched within the near future (such as Randstad Rail, the “Stedenbaan” and the North/South railway lines) There could be more coherence in all these initiatives Inthe short run, better co-ordination between systems should he ereated, for

‘example when it comes fo waiting time, travelers’ information, tariffs and ‘marketing For the longer run, plans could be developed to create more

‘connections between the actual sfstems, There should be more fequent fast trains between the large cities in the Randstad saing misonalch on the housing

market

‘There isa considerable mismatch in the Dutch housing market between

‘demand and supply in terms of both quality and quantity of accommodation,

“The qualitative mismatch is particularly apparent in Amsterdam where round 60% ofthe housing is suitable for those on lower incomes, whereas only 35% of the city population belongs to this group At the same time,

‘only 40%e ofthe low income groups manage to get appropriate housing This is caused by stringent regulation and limited influence of market forces, Clearly, the housing stock in Amsterdam and Rotterdam designed for ‘middle and higher income groups should be increased

‘More opportunities for increasing rents should be permitted, so that existing houses can be upgraded In addition, more should be done 0

‘combat distortions in the ental market by, for example, allowing rents for social housing to increase in line with a tenant's inereasing income This would provide an incentive for tenants whose financial situation is improving, to move to other housing, freeing up ebeap housing for those

‘who need it, Mobility in housing matkets, such as in Amsterdam, would be likely 10 improve as a result,

‘making better use of the Green

Tran

Where agriculture (which previously preserved the integrity of the landscape) is disappearing or where the implementation of strategic green projects is stagnating, housing designed to be environmentally friendly (green housing) may prove erucial 10 maintaining the health of the local natural environment, Building in green areas (those preserved for their natural landscapes and containing litle development), such as the Green Heart, is now highly regulated and construction is rarely permited Yet, siven the pressure on green space in existing urban environments, the Green Heart should be used more imaginatively to provide attractive high-quality housing, suck as green housing, which would also preserve the environment

In addition, its recreational use should be inereased and its water storage function strengthened,

‘qualities specific to an area which may be allracive to particular sectors Involving private players should be one way of ensuring advantage is taken

‘of such qualities and that supply anc! demand for office space are better ‘matched as such players will have a greater knowledge of the nature of

‘market demand Additionally, transferring the responsibility for designating ‘office space to the city-region governance level offers more opportunities for assigning different locations within the Randstad to specialise in providing different and more varied office accommodation

Improving the co-ordination of

the economic specialisations ofthe

Since 2004, regional economic policy in the Netherlands tas been focused on strengthening key economic fegions, such as the North and

ASSESSMENT AND RECOMMENDATIONS 19 South Wings of the Randstad This new regional policy looks promising as Strengthening regions will probably be more effective than trying to reduce the gaps between the poorer and richer regions Although this i a central

‘government policy initiative, itis region-led in that the key regions have the ‘major input into selecting the sectors to be encouraged in their area, This bottom up approach isin itself laudable, but more selection of sectors by the

‘central government is recommended to ensure that they are truly region specific Part of national urban policy is also directed a the economic development it woul make sense to integrate this policy with regional economic policy of cities, but it should be redirected to the city-region evel and

‘could be marketed ina unified way

In the next couple of years, Schiphol axpor will probably reach its

‘maximum permissible noise limits due to increasing flight movements, Existing regional aisports ia Flevoland and Rotterdam ate currently not suitable for absorbing the excessive demand placed on Schiphol The necessary investments should be made now to prepare them to accommodate the growth of air traffic inthe region of Schiphol

‘education institutions, they do not seore exceptionally highly

20

‘by improving the quality of

There are several strategies for tackling these problems The proportion

‘ofthe population obtaining a higher education can be increased by providing shorter educational courses and by matching students and institutions better, for example, by selection The quality of higher education can be influenced

by tuition fee levels, and by selection of students Universities currently have few opportunities to select their students, offer shorter courses or increase the tition fee above a ceriin level for Full~ime students under 30 From 2005 onwards, pilots have been launched that permit universities to take all these initiatives, Sueh policies should be implemented as structural reforms by a new government

attracting more foreign talent

Despite its many axvantages, the Randstad does not attract many highly skilled people, either highly skilled workers or students Although it is difficult to know whether there is a “brain drain” taking place fom the Randstad, more highly skilled Dutch people are admitted to the United States each year than the Netherlands is able to altraet fromthe rest of the world (outside the EU) In 2004, new regulations were introduced 10 facilitate the entry of migrant knovsledge workers Although these policies

‘ae sound, important limitations to the current strategy remain, For example, better use should be made of existing knovledge migrants, such as foreign students and highly qualified refugees The proposed new points system should he introduced more speedily so as to make it easier for knowledge workers, who are not employees, to obtain work in the Netherlands The iegration test should not be obligatory for former knowledge workers who have entered as such and spent several years in the Netherlands and, finally, the fees for work and residence permis should be substantially reduced level comparable to those of neighbouring countries,

is located in the Randstad A range of policies in the Netherlands have been directed towards attracting foreign direct investment, but the foreign firms in the Randstad have not, so far, generated! many knowledge spillovers there,

ASSESSMENT AND RECOMMENDATIONS 21 Since 2006, however, policy’ mechanisms have been revised 10 place an

‘emphasis on attracting Foreign companies that can add value to the Dutch

‘economy Nine sectors have been listed, in which foreign companies will be

‘contacted pro-actively This policy approach is a step inthe right direction, though it is suggested that further refinement within the sectors chosen

‘occur so as (0 target the most desirable foreign businesses Any such refinement should ensure that the sectors chosen correspond to clear regional priorities,

and stimulating use of knowledge by

firms

‘The public innovation infrastructure in the Randstad scores high on

‘many indicators, such as publicly funded R&D and the number of citations

ff articles in academic erature The picture for private sector innovation, however, is more mixed and there is room for improvement Only 35% of the total private Dutch R&D expenditure is spent in the Randstad, which is, well below the proportion of GDP generated there It is likely that improving collaboration between firms and knowledge institutes in the Randstad would lead to greater private innovation since, at the present time,

‘not much scientific knowledge seems to be translated into commercial activity

Although there are several initiatives at the local level 10 increase knowledge transfer, the pay structure for researchers at universities (and the funding of research al universities) remains dependent on their scientific Publications, not on interaction with the private sector Universities” pay and funding systems could be adjusted to create incentives for academe staf to

be proactive in creating such transfers The problem remains, however that,

‘not all firms are capable of absorbing the knowledge which already exists in

1 particular domain This is especially true for SMES although several

‘government programmes are designed to solve this problem However, as these programmes subsidise firms without demanding an additional R&D

‘effort, their value-added outcomes have been limited I has also been shown that market forees in the Netherlands are less likely to promote R&D totivities in SMEs than in large firms Government programmes should, therefore, focus their subsidies on new R&D activities and SMES

2

etter use of labour should be made by

enhancing the lxiiltyof the labour

market

Permanent employment in the Netherlands is highly protected as evidenced by the fact that in 2003, only three OECD counties provided ferealer employment protection for permanent employees than the Netherlands As the Randstad economy is more internationally oriented and

‘more influenced by international economic developments than the rest ofthe Netherlands, the sriciness of employment protection legislation has, arguably, a more profound impact on is economy than the Dutch economy 38a whole, Although the central government introduced legislation to reduce the administrative burdens connected with employment protection in

2006, such protection still remains heavy burden on firms It is recommended that the costs associated with the administrative complexity fof dismissals be further reduced and slditionally, that the financial

‘compensation payable toa dismissed employee be reduced

‘Amsterdam and Rotterdam, more than 80% of the pupils are of non-western

‘lhnic origin, Segregation (0 such a degree poses a challenge 40 social

‘cohesion inthe Randstad

Increasing the educational and vocational qualifications of ‘ethnic minorities is crucial to promoting their labour market pancipation; this in tum will assist their social integration, Certain schools with many pupils from ethnic minorities have, however, moe difficulties in finding teachers than other schools, thus affecting the quality of the education that they provide As schools do not have much freedom to vary teachers’ pay, such disadvantaged schools cannot offer better pay to attract more teachers It would probably, therefore, be advisable to allow the payment of higher wages 10 teachers in deprived neighbourhoods in the large cities in the Randstad so as to atract good teachers tothe schools there Improvement in the educational outcomes for their elhnie minority and other pupils would be

‘expected to result Furthermore, drop out rales in vocational education are

ASSESSMENT AND RECOMMENDATIONS 23

‘much worse for students from ethnic minorities; reducing these could improve their labour market prospects significantly Together with business,

‘vocational education institutions should ereate more flexible programmes allowing students to acquire competencies via work experience, in order 10 reduce drop out rates

‘A governance problem that is often mentioned in the Randstad is

‘alminstrative crowdedness Administrative erowuedness is, (0 some extent, lunavoldable as governments usually Wy to find the appropriate governance level at which to best perform diferent functions, As goveraments deliver a variety of local goods and services, there will also be a variety of governance levels at which they should be provided most optimally The fact that administrative erowdedness is @ particular dilemma atthe regional level may indicate that this level is of increasing significance when it comes

to delivering public services Nevertheless, local and regional politicians should be encouraged nol to creale nev institutions too often and to abolish redundant organisations when this is possible A way to stimulate this could

be to concentrate the main regional responsibiies in one institution as far

48 possible, probably at the level of the city-region, Provinces in the Randstad, especially North and South Holland, could then concentrate their saotvities on the areas not covered by the city-region,

ob) Strengthening the city-region

Many of the policies mentioned above could be implemented at the city-region level which curently Functions asthe daily urban system, At this level, pragmatic institutional arrangements, such a8 the so-called WGR plus-tegion, have proved to be useful, Some adjustments could however be

‘made to improve their functioning: more positive incentives 10 eo-operate ‘could be introduced and the awareness of existing, but underutilised, legal mechanisms t strengthen accountability shouldbe inereased among

‘municipal couneil members

24,

‘A more far-reaching way to strengthen city-regions would be to enlarge

‘municipalities as the average surface of ms the Randstal is small compared to other OECD counties Enlarging municipalities could be done in different ways The most radical is to merge all the municipalities that are currently part of a WGR plus-region, transfer the WGR plus-region responsibilies to the new municipality and abolish the WGR plus-egion arrangement, However, a more gradual and fess time-consuming approach

‘Would be to start by merging some ofthe surrounding municipalities of the four large cities

proving co-ordination for

Randstadspecific issues

Governance delivered atthe Randstad level is appropriate for resolving

1 limited number of the problems faced by the region: Randstad-wide transport, tourism and location of up market housing and offices There is fone organisation at the Randstad-level, Regio Randstad where the four provinces, the four eity-regions and four cities try to co-ordinate policies

‘An evaluation shows that special interests, rather than those of the Randstad

as a whole tend to be (aken into aecount by the governing board, Amore programme-focused approach might resolve this problem, This would wolve the selection of eoncrete projects (by central government, us Persuasion and if necessary sanctions to ensure they are followed throu

‘where eo-ordination on a Randstad-wide scale would take place Improving the public transport network within the Randstad, based on planning forthe region as a unified whol, should be one of the first priorities for such a programme-based approach For this a project management organisation

‘could be created

‘One problem preventing the development of a Randstad-wide approach

to major policy issues affecting i is that no one person or organisation

‘within central government is currently responsible forthe region Over the last four years this responsibilty has been divided between all the ministers

‘who parlcipated in the Aciministraive Committee Randstad with different Iministers being responsible for the differeat wings This has increased eenal government co-ordination with respect 10 the different wings However, a Randstad-wide focus for national policy development is also needed especially, as mentioned above, when it comes <entral government co-ordination is essential if this is 10 be aehiewed and it to wansport Stronger

is suggested that, in addition to ministers responsible for the wings, an existing minister should become responsible for implementing solutions to Randslad-wide issues A common Randstad-wide agenda could then be

developed, in co-operation with regional governments, in which transport shouldbe an important element

In the longer run, it may be necessary to metpe the four Randstad provinces Although ‘national governments in OECD countries have Sometimes ereated a special status for large metropolitan areas, none of these areas have the economic significance that a single province for the Randstad would have for the national economy of the Netherlands Only Seoul, for which a special administrative status has been created, comes

‘lose This would be a good reason for merging the provinces inthe north,

‘east and the south ofthe Netherlands at the sane time, although loyalties 0 provinces seem to he stronger outside the Randstad, than inside it

abolishing municipal district

boards

Amsterdam and Rotterdam have directly elected municipal district

‘councils with executive district boards, Municipalities’ decentralisation of ‘many of thei responsibilities to municipal districts seems to have gone too far a6 there are now considerable differences between municipal distrits in Wwhat should be standard levels of service provision and standardised bureaueratic procedures, Although decentralised provision of services in large cities needs to be retained, an elected municipal district council is not reded to deliver these

‘with an opportunity to determine which issues they find important andl it Would also give local politicians the mandate to do Something about it For

‘example, municipalities should be empowered to ask their residents by referendum, to agree to a new local tax or a tax rate inerease that goes beyond the rate increase that is allowed

| MEReANDSTAD: BeONONIC TRENDS AND CHALLENGES 27

“This Review's purpose is to produce poliey recommendations to assist i solving these issues I istly describes the Randstad, assesses its economic Performance and outlines the obstacles to he overcome in order to improve this sll further (Chapter 1) Chapter 2 assesses the extent fo which current Policies improve economic performance and makes recommendations where necessary lor policy changes which will further enhance the region’ economic competitiveness Finally, an evaluation of existing governance arrangements is made and reforms proposed to improve their effectiveness (Chapter 3) Where relevant, comparisons with other metropolitan areas in the OECD ae undertaken to assist with devising appropriate recommendations

This chapter focuses on () describing the Randstad in temis of the area itcovers and the differing ways in which ithas been defined geographically and assessing to What extent it operaes as an integrated unit (its functional integration) (i) describing the significance of the Randstad economy’ in

28 Te RANDSTAD: EPONDMC TRENDS AND CIALLENGES

termining national economic performance and outlining the main indicators measuring the degree of the region's economic success: (ii)

‘demonstrating the openness of the Randstad economy and the analysing the main sectors so as to assess the challenges they face; and (iv) assessing the key challenges fo the Randstad’ economie competi

“The name literally means ‘rim city’, referring to the geographical pattern of the area that consiss of a green area in the centee (the so-called Green Hear) surrounded by a semicirele of urban arcas ‘The Randstad covers a large part of the territory of four provinces, namely North Holland, South Holland, Utrecht and Flevoland’

Figure 1.1, Randstad, Holland

1 kieaNostAo- BeoNoNe TRENDS AND CHALLENGES 29 One of the most obvious characteristics of the Randstad is its polycentricity: it has several centres instead of one Its this morphology thal makes it diferent from almost all of the metropolitan areas in the OECD As this characteristic may have an impact on the way the area Performs and the development of policies to improve performance, itis important to have a clear understanding of how it affeets the region, In

‘xdition to its polycentric nature, choices about land use have also given the Randstad its character as an arew that s both very densely populated and yet largely used as agricultural land

‘one core city with surround: ‘monocentrc Instead, it consists of several large cites that are connected to

‘each other OF the 25 largest cities in the Netherlands, 12 are located in the Randstad: four large cites and eight medium-sized ones.” The Randstad

‘comprises a substantial number of the Dutch municipalities (147 out of 458 in dhe beginning of 2006), most of which are urban in nature, Part of the Randstad, mainly the so-called Green Hear, isnot urbanised The four large ities (often referred to as the "Big 4°) of the Randstad are Amsterdam (739 000 inhabitants), Rotterdam (506000), The Hague (46900) and ‘Uurecht (275 000), The daily urban system in these cities also includes their neighbouring municipalities These agglomerations willbe called city-regions in this Review The distances between cities in the polycentric area ofthe Randstad are small: the greatest distance between the centres of the four larg cities is between Amsterdam and Rotterdam (75km), and the smallest is between The Hague and Rovterdam (25km),

‘There isnot one dominant ety in the Randstad, since national poliy has successfully avoided the ereation of such a eit, bul the most obvious candidate for such predominance would be Amsterdam It was the leading city when the Dutch nation-state was ereated and it continues to be the largest Dutch city However, it lacks several functions which would have

‘made it clearly predominant asa consequence of the long history of policies targeted at preventing one city from becoming 100 powerful Sinee the 17" cenluy, the seat of the national government has been The Hague and a a result embassies and international organisations (sueh as the International

‘Court of Justice since 1919) are located there, Amsterdam is not even the seat of government of the province to which it belongs (North Holland) Which is Haarlem, National public radio and television are located not in Amsterdam, but in Hilversum The central point ia the national railway network is not Amsterdam, which would have been a sound choice (Bos, 1996), but Utrecht National policy since the 17" century has consistently tried to avoid the creation of one dominant city within whieh too much power is concentrated Spatial planning in the last half of the 20" eentury

30

has reinforced this tendency by regularly dispersing functions previously Undertaken in the Randstad 0 the rest of the Netherlands Economic specialisation has also made Amsterdam less important than it might have been: many trade and industrial activities have become increasingly

‘connected to the harbour of Rotterdam whieh has surpassed the harbour oF ‘Amsterdam in importance, whereas service industries have developed in Uuecht Amsterdam has only managed to safeguard its leading postion as a eente for cullure and for financial andl business services (Engelsdomp

‘Gastelaars and Ostendorf, 1994) As a result, not only Amsterdam, but to 4 lesser extent Rotterdam and The Hague, fave all claimed a prominent Position inthe network of world cites (Taylor, 2004; Hall and Pain, 2006),

Box 1.1, Concept of polycentric urban regions Polycentety refers both to the moephology’ of whan areas, steuctured around several urban nodes, and to the existence of functional relationships betwen the ets and centres of such regions in terms of commuting Nows, industrial and busines relationships, forms of co-operation and the division

of labour, However, as the literature on polycentric erban regions Is sil limited and therefore not consolidated, a diversity of concepts have ben applied, which sre largely synonymous with the polyeentic urban region

‘eancept Recent examples include "multi coe city-tegions "network cites “Hy networks’ and "poly-miclatedmetrapobian regions’ Moreover, in terms of ideas on spatial structure and inlerurban telstionships, the polycentric urban region concept builds on older concepts such 35 the “aispersed cit’, the “megalopolis ofthe ideas of Stein and Mumford about

“the regional city" (Meijers, 2005) The Randstad Holland, the Rhine Ruhr

‘Are andthe Flemish Diamond are often-ited examples of polycentric urban regions, Their sitvation is different from many other OECD metropolitan regions which usally conaia one dominant city that eonneets with numerous rural arcs, Polycentricity requires greter intercity region collaboration in spatial planning division of Iabour and various reted urban issues such 35

‘housing and congestion te

‘The Randstad contains a high proportion ofthe national population, Around 6.7 million people lived in the Randstad in 2005 (TNO, 2006)

‘This makes Randstad the fifth most populated metropolitan region of western Europe, after London, the Rhine Ruhr, Paris, and Milan, From

14 more global perspective, several cities are much larger However, among the large metropolitan areas in the OECD, the Randstad stands

‘out as metropolitan area that contains a huge proportion of the

| iitieaxost90- Boone TRENDS AND CHALLENGES 3 national population, namely 41.8% This is very high compared to

‘other metropolitan areas in the OECD (see Figure 1.2)

Figure 1.2, Proportion of country popwiation netropoltan area,

‘The population density in the Randstad is 1224 people per square kilometre, whieh is high and is indeed higher than the other metropolitan areas in westem Europe (see Figure 1.3) But though the Randstad is the

‘most densely populated area in the Netherlands, the rest of the country is also quite densely populated as the Netherlands is one of the most densely populated countries in the world,’ and the most densely populated OECD

‘country after Korea About 85% of the population fives in predominantly turban regions, the highest proportion among OECD countres.° Population density may feel higher to those living in the Randstad than the actual

‘density indicated by these figures, since only a small proportion of the land (26%) in the Randstad is used for housing The great majority of the land is used for agriculture (68%) and for nature reserves (10%) (TNO, 2008)

‘32_1 MIERANDSTAD EeONOMIC TRENDS AND CHALLENGES

Figure 13, Population density In selected metropolitan reglons in 2002 (peopletkm2)

“Sen TRO, AM,

1.1.2 The Randstad: an abstract concept rather than a functioning reality

Not every metropolitan area operates as a daly urban system for individuals and asa functionally integrated ent, for example with regard

to business activities A metropolitan area may’ in practice be bigger or smaller than the area that people use ona daily bass and private enterprise

‘may not operate across the area in a eaherent way This section looks a the extent of the Randstads functional integration (Jor both individual and

| iigieaXost9o- Boone TRENDS AND CHALLENGES 33 business activites); that is, whether the Randstad is more than just an abstract concept I is important to examine this as it i somtimes assumed that the Randstad functions inthis way Whether it does or not and to what degree, will affect the nature ofthe poly recommendations of this Review

‘The Randstad is an abstract concept rather than a territorial or institutional reality There is no government at the Randstad level and although there is general agreement that the Randstad consists of the urbanised part of the four provinees in aiition to the Green Heart, there is

‘no commonly agreed geographical boundary The definition of the Randstad used in the Spatial Policy Document in 2002 is, for example, somewhat different from the one used for the Randstad! Monitor (TNO, 2004; TNO, 2005) in which developments in the Randstad are compared with those in

‘other ets in Europe This is a common practice as definitions ean change according tothe policy focus of an analysis, whether itis spatial planning,

an assessment of the tate of local infrastructure, or an examination of the behaviour of private enterprise or labour markets, Regions can change shape

18 urbanisation processes evolve, Thus, the area meant to be covered by reference to the Randstad has not been stable overtime: it curently covers

‘more ferttory than when it was first used,

‘medium-sized cities in a non-urbanised countryside Second, 10 give too

‘much priority to the Randstad would imply that fewer resources were available for the rest of the country — an unacceptable idea within the Netherlands where adherence to a policy of broadly equal distibution of resources throughout the country prevails (Cammen, 1990),

‘The term the Randstad has had diferent connotations over time and has been used as a focus for difering policy objectives In 1958, the Randstad was presented by a state commission as an ideal for the future which woul avoid excessive urbanisation in the western Netherlands (Werkcommissie Westen des Lands, 1958), whereas in the 1990s, the Randstad was used as & vehicle to create an increasingly urban and cosmopolitan approach in onder

‘34 mipRasostaD ceoNowe TENDS AND CHALLENGES

to increase economic competitiveness The current Dutch discussion about the Randstad seems rather more concentrated on solving governance

problems, as will be futher analysed in chapter 3

The Randstad: measuring its level of functional integration

“The Rasta has, since the 1960s genes! lot of academic attention It has then describe ‘one ofthe principle examples of polycentric mewopolitan areas In many of Hse as one ofthe seven word tes Hall, 1960) and has ben refed to as papers it has been assumes thế the Rana functions 36 a coberent metopolian snea This tendency has heen repeated in several commission reps (ee example Conmissi Burgmans, 200) However, i is no self-evident tht the Ranta is funesionallyinegratcd Boer, 1992; Boer, 1996) There are several ways to examine

‘whether i i buh for individuals and fis, An important csieion i water it fuesions as an inepraed labour market, Other cite include whether people consider the whole area to be rekvant foe living, educational, shopping and recreational purposes (hut i it operass as a daily urhan system) Poe fis, the Rasta could be considered functional ara if they have multiple busines inks sss the area, if ferent parts ofthe region complemented cach other economically tan foreign firms consider the whole area, and no jus a part of i a potential location for tei busins,

Using thew crea, the Randstad canoe be characterised as a functionally integrated ava For example, it his several epioal labour muskets inseal of one imgraed one, as demos, or example by is comming pattems Tree ques ‘ofthe population works witia is ovn ety-egion, such as Greater Amsterdam or

‘Greater Rotem Around 154 work in aethr city-zegion within the Randel and 107% works cus the Randstad (CBS, 2006) The commuting between ctysegions in the Rana i skew owaeds tho closest cy econ: there considerable commen eueen Amsterdam an Usec and The Hague and Rede), but etivey ile hesween Amstelam an Rovtrdam This is deste the sgifcant ince of aoxt 20fe in the number of commutes between 1995 and 2003 (fem 25 milion milion) Traveling heyond municipal or iy-region bees as increas very lithe, Prtculaly tat undertaken acess the Rancal as a whole (Figure 14), Despite the

‘seater ub of indvidils commuting, te average traveling dsc ae Ue bas Fay incase over 1995-2003 (Figur 1.) In addon, the commusing between the Rant and areas ouside its bourse marginal: commusing Hows om the province of Noth Brant are, for example, a big as dose from Rotem to Amsedam However, witeer geogptical boundaries at chon tb examine

‘whether tbe Ranch operates as a interaed labour meet, seems at this futon takes place either ona smaller sea than the Ranta as a whole, ona ager cme,

“operiting bey ts boundaries

1 EReANDSTAD: BeONONIC TRENDS AND CHALLENGES 35 Figure 1a, Commuting patterns of the Randstad’s residents

Sones C8, 2006,

Figure 1.5 Average commuter traveling distance and time for residents of western ‘Netherlands 1995-2003 (index 1995=100)

—>

Anwer vay to deny a labour market which works in iterated manner is

by looking atthe complementary activites existing in an area, Am area may be Sti o be inlegrae fone part of i provides housing and the other ermployment In fact, it appears that the largest complementarities in employment and housing functions exist between neighbouring matiipdi0es, but not on a Ranstacewide scale (Ritsema van Eck and Daalhuizen, 2005), Several cits thal provide housing

‘36— 1, MipRaNDsTAD eeONOMIC TRENDS AND CHALLENGES

rather than work opportunities are strongly connected wo the nelghbouring large ties dat have a et surplus of jobs: Dordrecht with Rofenlam, Alkmaar with ‘Amsterdam and Leiden with The Hague (Van der Laan and Schalke, 001) Sul another approach is © look at tavel distances It has been shown that dhe shoet travelling distances berween the cities inthe Randstad make it possible t0 view it

2 one functional labour market for those willing f0 commute for 45 minutes or

‘more, But it appears that only a small proportion ofthe working population does this, amongst whom highly skilled workers feature prominently For the majority

‘of the population, especially the low-skilled, it is more realistic w0 expect 15 ‘minute commuting times, with longer commutes being undertaken reluctantly and

‘exceptionally (Ham, 2002),

Even if commuting flows take place largely within the different city-regions, flows between city-ezions have nevertheless inereassd in recent Yeas, predominantly driven by highly skilled workers As mentioned above, highly skilled workers sem to have a higher tolerance for Fonger commuting times, It should therefore not come as surprise that the increased commuting between ciy-regions in the Randstad has ben predominantly driven by highly skilled workers (se Figure 1.6), as vell as by the increased commuting, between the Randstad and its surrounding provinces

Figure 1.6, Interdistriet commuting four urban districts) inthe Randstad by level of ‘education

| MikieaNostAo- Boone TRENDS AND CHALLENGES 37 Similarly, on the basis of the other daily activites undertaken by its inhabitants, the Randstad cannot be considered 10 be a dily urban system Most people look for housing within a imived area thats, within ther own region, and the proportion doing this has been almost constant over the lst few decades Around 70F% of those wanting to move would like to-do so within their own

‘municipality: and although 20°% would prefer to feave their municipality, they wish (0 stay in the province (CPB ef af, 2001) People mostly study, shop and pursues leisue activites in thee ety repion (Ritsema vn Eck etal, 2006)

Research also confiems the lack of integrated business activity Randsad-Wwide, Economic relationships age Toemed mostly atthe city-region level with the proportion of such relationships between firms indifferent central ities of the Randstad being relatively small OF all the business relationships ‘which a firm has, those with firms outside the Randstad represent an average of 48% (Van Oowt er al, 2006) With respect to services and goods that are

‘ousourced, geographical proximity seems o be important: intra-regional business relations (that i within the city-region) are mere numerous than interepional relations (that is within the Randstad) For this purpese, two separate elusters have boon observed within the Randstad: one in the noth where Amsterdam and

‘Utrecht are the ores and one in the south to which The Hague and Roderdam ae

‘ental, In contrast, with regard © co-operation between firms inthe manufacturing sector, functional integration does appear to have developed as there doesnot seem tobe a division between the norm and soem parts of te Randstad, but rather co-operation throughout the whole area In addition to

‘coroperaton within ppovinees (Van der Knaap, 2002) Analysis of office nenworks of avanced the Randstad there ane also many links with fms in the other busines service providers ako shows that their busines relationships are largely Randstad-wide However, they have ended t establish offices in several cies in the Randstad, especialy in Amsterdam and Roterdam, but also in other large Cites This Randstad-wide setivty could be interpreted in diferent ways It might be tempting to view it as evidence for Randstad funetional integration It could, however, also be taken as an inliestor for fragmentation inthe Randstad, since it nay mean that one urban centre cannot be served fom another (Lambyegts, 2045) Turing to an assessment of firm relocations, empirical esearch shows at 68% of relocating firms stay in their own cityzegion When it comes to relocations between the large cis, the interaction between Amsterdam and

‘Unecht isthe largest whereas the office markets of Rotterdam axl The Hague

‘ppear to operate separately from each otber (CPB etal, 001)

(OF all the leading foreign business service providers that have chosen 10 be located inthe Netherlands, more than 75% have opted fo Greater Amsterdam a their office location, even i itis the business potential fered by the Randstal as whole that ttt them to the area Moreover, when its economy i adjusted for its domination by service industries, Amsterdam sill stands out (Lambregs and