A broader perspective on earning capacity and space for a future-proof Netherlands

A broader perspective on earning capacity and space

In the framework, we argue for broadening the concept of earning capacity. It’s not only financial and economic capital that matters, but also human, social and natural capital.

From these forms of capital, we look at the adaptive capabilities of companies and institutions and their ability to respond to societal and economic change. This adaptive capability takes shape through activities such as research and innovation; renewal of economic activities; and education, training and talent development.

As all these activities manifest themselves spatially, a broader perspective on use of space is also needed. We distinguish between:

• Space: physical space, such as locations, infrastructure and networks
• Place: the social, cultural and institutional embedding of places

Only when space and place come together does room emerge for productive, innovative and resilient development. The four capitals, adaptive capability, three activities and a broad perspective on use of space together determine how agile and future-proof our economy is.

The TNO Vector framework

The TNO Vector Framework translates this broader perspective on earning power and use of space into a practical matrix with strategic questions. For each form of capital and each activity, the framework provides insight into:

1. the physical space required (space)
2. the social, cultural and institutional conditions that determine success (place)

The framework helps users assess spatial and economic choices not in isolation, but in relation to one another.

Using the framework in practice

In developing the framework, explicit attention was paid to how governments can apply it. This results in the following guiding principles:

• Deploy the framework from the start. Use the matrix already in the policy development phase as a discussion and assessment tool to reveal synergies, tensions and preconditions.
• Look at outcomes in an integrated way. Strategic questions from the matrix only gain meaning when considered in relation to one another and when they reinforce or constrain each other.
• Approach space and place as complementary. Physical space enables activities, but social and institutional conditions determine whether locations actually lead to innovation and value creation.
• Make dependencies explicit. The framework forces spatial choices to be assessed in terms of their effects on knowledge development, the labour market and adaptive capability.
• Support adaptive capability in a targeted way. By explicitly facilitating the three activities of the framework spatially and institutionally, room is created for adaptation and renewal.
• Work towards a future-proof earning capacity. By structurally taking economic/financial, human, social and natural capital into account, spatial strategies become more robust and sustainable.

Actionable perspectives

The strategic challenge for the Netherlands lies in connecting the allocative power of space with the organising power of place. Only by handling these perspectives in an integrated way can spatial-economic strategies better respond to the major transitions of our time. The TNO Vector Framework offers a concrete and actionable perspective for a resilient, inclusive and future-proof earning capacity.