My latest Business in Vancouver column:

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Delving into the Dutch Way and the Netherlands’ world-beating power of consensus-based economics
Last month, I had a chance, at the invitation of its government, to visit the Netherlands. Here is what I learned about the Dutch Way.
It doesn’t take long for the word “polder” to come up in the conversation. Specifically: the Polder Model – the Dutch Way of consensus-based economic – and social-policy making.
I’m assuming this has something to do with the fact that the Low Countries are low, rather easily flooded and flat. There’s no high ground for just the rich and powerful. Everyone has a stake in public infrastructure like dikes that protect reclaimed land – or polders – from the sea. Therefore, there has to be a buy-in from almost everyone on critical decisions and cost sharing.
This strategy for knowing how to work well with others turns out to be a good strategy for doing business in a global world. Better yet, the Dutch figured out a way to make money with it.
They market their skill at logistics: managing the flow of resources between origin and consumption – everything from containers to time, information to energy – and at every stage minimizing the use of resources.
In the Netherlands, logistics is already a big business: a half-trillion-euro industry, worth 10% of GDP, with 12% of jobs (813,000 of them), and it’s perfect for the Polder Model: communication, co-operation, adaptation.
In 2008, the government even launched a strategy – a logistics action plan for the Netherlands – so that by 2020, the Dutch expect to be the top European provider for supply-chain co-ordination, not to mention a role in such operations around the world.
They set up “platforms” and “tables” – places where various interests can come together. They funded universities and specialized professors. They established Dinalog, a “conversion factory” that analyses research from those universities, matches it up with enterprises, especially small- and medium-sized ones that couldn’t otherwise afford such research, and then facilitates dialogue, especially with younger people whom they recruit from around the world.
Seems all rather obvious? Who would object to more co-ordination and co-operation, more sharing for mutual benefit?
Ever tried to get Canadian railways to talk to each other? Or trucking companies? Or different levels of government? Or unions and management?
So what are the results on the ground?
There is at the Port of Rotterdam, the third largest in the world by some measures, one of the most extraordinary scenes I have ever viewed:

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There are no human beings in this picture – even though all that equipment is in motion. From the containers on the ships to the cranes to the flatcars to the trucks, it’s all completely automated.
The manager of this terminal is Dutch-based European Gateway Services (EGS), a company that started in 1966, a mere decade after the introduction of the container, with 35 boxes. By 2012, that was up to 7.7 million. Now the company is in 52 ports in 26 countries.
These systems require the exchange of information. And exchanges of data require trust, confidence and a cultural tradition of co-operation. Sound familiar? EGS has marketed itself as the trusted middleman – figuring out the mutual advantages to be gained if all the partners are open.
The issue is not the automation; it’s been around since the 1990s. It is getting the agreement with unions to introduce it even though there will be a significant loss of certain kinds of traditional jobs. Because business has been good for EGS, it has seen a modest increase in employment even as systems become more automated.
However, resistance in North America, including at Port Metro Vancouver, has meant that our ports are vulnerable to those that, having succeeded in automating, offer savings in time, cost and security – advantages that have not yet overcome our superior location.
You can guess that we will frame the issue – just as I did in that last paragraph – as one of competitiveness: how the forces of change will prevail over the interests of the least efficient or least powerful – unless they successfully fight back. Our expectation is that change is about contested ground, not conciliation.
Or unless we find another way to accommodate the future. Possibly, one might hope, the Dutch Way. •

Comments

  1. My recent doctoral research on border controls and transportation that examined comparable case studies in Canada and the Netherlands also confirmed the Dutch Polder model as a crucial component in dealing with the challenges of disruptive innovations and technologies. Even more remarkable is the Dutch have few natural resources, save good quality farm lands, and have managed to be highly competitive in the global logistics business. Much can be learned from those “natural resource poor” states that focus on building “human resource” systems such as described in Gordon’s article.

  2. Thanks Gordon. I had not heard of the ‘polder model’ but it also seems to explain the Dutch approach to provision for cycling. And as Joe above suggests it is a very practical and positive application of systems thinking.

  3. I don’t doubt that there is a Dutch way, the Polder Model, but as I have commented on in previous comments, it can be hard to get things done. The Betuwe Line took decades to do. There are also some numbers issues in this post. The GDP of the Netherlands is about 600b euros per year, so 10% would be 60b and not 500b. It is possible that the 500b number is some sort of revenue number. Europe Container Terminals reports that it handled 7.7m teu – twenty foot equivalent units – but since nearly all containers these days are forty foot, that is around 3.85m cans. I’m seeing the expression “feu” – forty foot equivalent units – more and more, probably because the teu unit just meant endless dividing and multiplying by two.
    Europe Container Terminals is now owned by Hutchison Whampoa, Li Ka-shing’s company, which is a connection seemingly closer to home.
    With the expansion of the Panama Canal, and the mooted Nicaragua canal, costing $10 to $20 billion with associated port improvements, I’ve wondered whether there was a chance for BC to considerably expand its role in the trade between Asia and North America. The Google Maps distance measuring tool shows that the shortest distance between most central and eastern North American markets and the northern Asian ports is through Prince Rupert, Even Shanghai to Houston runs through Prince Rupert. There is a container terminal there now, but it isn’t that large yet. I was wondering whether a new rail line through the mountains would allow Prince Rupert to handle more of the container traffic between Asia and North America east of the Mississippi, especially traffic that might transit the Panama Canal. Such a new rail line would be very expensive as it would involve huge tunnels through the Coast Range and the Rockies, something like the Gotthard Base Tunnel project times two, but the potential traffic is also huge. North America’s total container traffic is around 11m per year on the Pacific and around 6m per year on the Gulf and Atlantic and is growing. CN already has a line that it uses to service Prince Rupert, but if that port were to become very large, one line would not be enough. That line is also not that direct though the mountains and goes through Edmonton whereas a more direct route would travel closer to Red Deer.

  4. It always looks better somewhere else. Why? Because it can be viewed surficially, uncritically.
    Port Metro Vancouver have several staff teams of specialized professionals who do nothing else daily but collaborate with Port users and shippers on refinement of logistics. The private companies have considerable incentive to reduce costs and time. Most trucks to and from the Ports are on GPS for tracking and real-time redirecting. There is zero need to involve academics – particularly from the 2nd rate, ‘smaller world’ dogma of SFU. We’re sure they can sit in the faculty lounge and dream up new, popular (surficially, uncritically) topics (of which they know nothing about) and hope for more provincial funding.
    There are well-known limits to the efficiencies in the Vancouver-area port system. One is that most of the volumes are bulk – minerals, fluids, etc – and there is only so much you can do over a 14-hour physical pour or dump into a cargo hold. Killer apps can’t assist that, but with container logistics (Rotterdam’s domain) there is room for routing efficiencies.
    Secondly, and unlike Europe – our rail system is limited and is under capacity for current and future shipments. We have allowed all sorts of urban settlement (particularly residential) at or close to rail and tidal water land that is best used for Port purposes. That’s why 17 rail overpasses are being built right now in Greater Van.
    But many of these water-near and waterfront developments were undertaken because it seemed like such a cool place, and academics often lauded them as fresh, new, and innovative. Low-densities inland, and higher denisites on working waterfronts. Brilliant.

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