It’s Friday and our study trip is coming to an end. To wrap up the past days, we offer you an overview of our last engagement here in Amsterdam.
With the visit to Amsterdam University on our agenda for the day, we prepare our class for the upcoming presentation. Arriving at The Student Hotel Amsterdam after a good nights sleep and a fresh cup of coffee we started off our introduction with facts about our host.
The University of Amsterdam, as one of the largest Universities of the Netherlands, started off 1632 solely offering education in medicine. Nowadays they supply students with knowledge in seven different faculties. One of them being the faculty of Economics and Business. Where Prof. Dr F.D.J. Frans van Schaik welcomes us as Professor of Management Accounting. Waking us up with his critical point of view towards the prevailing accounting system in the Netherlands. Pointing out, that the National Court of Audit and the Tax Administration both are content with following the law without going beyond to globalize themselves. Exemplary for the Netherlands rather outdated accounting system, Prof. van Schaik stated the fact, that they still use cash accounting on the governmental level even though many municipalities already made the switch to the more modern and standardized accrual accounting system.
Following this introduction, our host compared the Swiss and Dutch financial and socio-economic indicators. Concluding that, besides the use of accrual accounting systems, there are not many differences between the countries in terms of size, government bond ratings, GDP, the government’s expenditures and many other factors.
Edging towards the end of his presentation he introduced a topic that stimulated a lively discussion: The Dutch Disease. If one economic sector grows rapidly, like the natural gas concession once did in the Netherlands, and therefore increases the economic wealth, other sectors suffer under the loss of competition.
Does Switzerland suffer from the Dutch Disease?
During the discussion, arguments were made for and against the Dutch Disease being recognized in the Swiss Financial Sector. While some sectors might suffer under the strong Swiss Frank, one should keep in mind that external factors, such as the value of surrounding currencies or political stability, could influence the value of the Swiss Frank. Because of this, the group did not come to a final conclusion – unlike our study trip, which came to an end.
On that note, we thank Prof. van Schaik for his dedicated time, our instructors for the organization of a great study trip and our class for a fun time and vivid discussions. Have a safe trip home and see you soon in Winterthur.
Den Haag is
a city near the Western Sea Side, the seat of Netherlandish Government,
Binnenhof (the Parliament) and the International Court of Justice, home to half
a million citizens and the King himself.
we had to get up quite early. Nevertheless our group was looking forward to
today’s program: Den Haag is calling! As there have been some spontaneous changes
in the agenda, we had to improvise a little during the briefing. Before getting
into the train everyone had time to catch a hot awakening coffee. While
traveling to Den Haag we could enjoy the beautiful landscape.
Welcome to the Netherlandish Court of Audit (Welkom bij de Algemene Rekenkamer)! We were instructed about the autonomous government organ (Hoog College van Staat), whose task is to audit how the Netherland’s ministries spend the revenues. These are provided by the Netherlandish tax payers. Our hosts, Maaike Damen, Jost van Hofwegen (Research and Audit Director), Martin Dees, Gijs Koop (Senior Researcher), Rudi Turksema, Maarten de Jong started with a couple of key facts about the Court of Audit. They underlined that it is important that public spending is more than just finances, it also impacts the environment. The Netherlands recognized that impact very early and implemented the Court of Audits in their constitution in 1814 as a counterweight to the government. The Netherlandish law secures that; Cooperation is mandatory for all governmental bodies as the likes of ministries. They have to provide the Court of Audits with all the financial information they ask for. Other bodies are audited as well, Quasi Non-Governmental Organisations (QUANGOS) for example. Digitalization, which were also discussed on Monday and Tuesday (of our Study Trip), also takes place in the Algemene Rekenkamer. Accounting and audit are more and more shifted into a digital form. However, there’s a lack of qualified personnel in the field of IT and programming such systems in the Netherlands. Therefore the few people available in this branch were invited to an accountability-hack (a kind of competition who can program the best accounting-system). The Court of Audit’s internal personnel was trained in IT as well. Structuration and automation were the goals of these actions. On the other hand, the more data is collected, the more difficult it is, to handle. Therefore, complexity, data ethics and security are the downside/challanges of this digitalization-trend. Untypical for an innovative country like the Netherlands is, that on central government level, still the simplified version of cash accounting is in use (in which expenses and revenues are taken into account when they are paid, not when they occur). While the OECD encourages accrual accounting, the European Union (EU) makes no progresses in invoking the much rumored EPSAS (European Public Sector Accounting Standards), which would have that and other detailed accounting regulations in write. The EU was a target of justified critics this morning, as its suboptimal revenue-collection and redistribution was addressed as well. Finally, the New Public Management approach of output-oriented budgeting was discussed in a critical manner as well.
having our delicious lunch in the historical center of Den Haag.
het ministerie van Financiën (Welcome to the Ministry of Finance)!
First we got background information from Bart about the tax and customs administrations and the organization of the tax collection. He pointed out also several deficiencies. The most important ones were legacy, management-information and strategic personal planning. He then presented Moore’s strategic triangle and encouraged the students to map the challenges of the Tax and Customs Administration by refering to that framework to cut through the complexity of the organization.
Kloster, International Affairs, talked to us about the international strategy
and cooperation against tax avoidance. He pointed out that internationalization
and globalization cleared the path for multinational companies to avoid taxes.
In the meantime
new sources of information like social media and Internet in general changed
the people’s expectations about the government’s institutions. More precisely,
transparency has become more and more important to ensure the high compliance
of civil taxpayers in the Netherlands and the G20 countries. The OECD BEPS
(Base Erosion and Profit Shifting) replaced the system of earlier, mostly
bilateral, tax treaties. These bilateral treaties had been used as a
playground. Some multinational companies even shaped their business structures
in a way that no or very little tax had to be paid. According to Bert, not only
the developed countries suffered from tax avoidance. Also, developing countries
like Ghana and Malawi did not receive the amount of taxes they should have.
These countries did not have the resources (HR or financial) to deal with the
taxing duties of multinational companies. BEPS made it possible not only for
the G20 to take in the guidance of OECD into their national legislation, it
also provided practical help and technical assistance for developing countries,
which originally felt the negative consequences of BEPS.
The 08:16 intercity train from Amsterdam Centraal took us almost straight to the door of the Utrecht municipality building where an interesting half day with the CFO of Utrecht was awaiting us. The municipality decided to move to this very central location to be more prominent and accessible for the public. The building from 2014 is light and open – even though it is constructed from more steel than the Eiffel tower as we would learn later during our tour.
Frank Halsema, CFO of Utrecht, welcomed us with coffee, cake and an introductory presentation on the city of Utrecht. Utrecht is the 4th largest city in the Netherlands with approximately 350’000 inhabitants and an expected growth of 20% in the next 15 years. “The city of growth”, “the city of work” and “the city of bicycles” has a long history starting 50 years a.c. and is proud of its heritage with the tallest dome tower in the Netherlands (112m) but also its modern status with the biggest bike parking in Europe (12’500 bikes) and its healthy urban living vision (video on youtube).
Frank Halsema, CFO of Utrecht, giving his introductory presentation
The morning continued with Jasper Woelfjes, tax expert for the municipality who gave us some insight into the specialities of their system compared with the Swiss system. Only 3.5% of taxation is done on municipality level whereas 95% is taxed by the national government. This and the system of the municipality fund with 60 criteria defining who receives how much budget gives the municipalities much less autonomy than Swiss municipalities. If the national government does not spend enough money, then the municipalities also receive less spending money – the frustration on this point was noticeable and the Swiss system preferable in the eyes of the Utrecht financial experts. Furthermore, municipalities cannot define new taxation methods for their citizens, these are also defined on national level. However, in the municipality of Utrecht a group of businesses approached the taxation office and requested an increase in taxes of 11.1% to create a business fund which is then reinvested in community projects in the regions the businesses are active in. And the bottom line of the budget: always 0. Revenue has to equal expenses.
A second Frank then gave us a tour of the building. The building is situated on the “other” side of the railway station – previously no-mans-land, now becoming the new city centre. The first six floors of the building are open plan and can by used by the public for studying, working and marrying. The other 15 floors are occupied by the municipality. The views across Utrecht from the 21st floor, where we spent most of our time, were spectacular – even in the rain.
City model of Utrecht being explained by the second Frank
Auke Timmerman, business controller for the work & income unit, took us on a simulated retreat of the council of the mayor and aldermen of Utrecht. Part of their yearly planning cycle is the spring note where they discuss and negotiate the use of the yearly allocated revenue for the next year. In five groups representing the mayor and four aldermen we made proposals to adapt the budget to meet the final goal of having zero difference between revenue and expenses. The aim: “everybody has to leave the building as a winner”. The reduction of the budget for sports fields expansions and the Vuelta which passes Utrecht in 2020 were measures to achieve this aim.
The council of mayor and aldermen trying to solve the budget challenges
Last but not least the CFO gave us an insight into their digitalisation journey. After nearly killing the internet for the entire city of Utrecht with their blockchain project in 2017 the aim this year is to fully digitally check the flow of the 1.49 billion Euro municipality budget by the end of this year “met een druk op de knop”.
After saying goodbye to our great hosts most of us took a walk through the old city of Utrecht, which is beautiful even in the rain. This evening our group will meet at Cafe de Kroon in Amsterdam for an informal get-together.
38% of children worldwide do not complete basic education. Today, Wendy, Livia and Shirin from the NGO Aflatoun gave us an introduction into how their organization fights against that fact and helps children and young adults all over the globe to improve their livelihoods. Aflatoun’s methodology follows the «train the trainer» approach: By providing local partner organizations and government institutions with their curricula and services, the NGO aims at giving the beneficiaries a better self-image, promoting their critical thinking, raising awareness about their rights, and fosters their entrepreneurial attitude. In collaboration with partners and stakeholders, Aflatoun adapts their curricula according to local contexts, which allows them to be active in more than 100 countries. Depending on their financial capacity, the organization started to charge their partners for these services and thus considers itself nowadays a social enterprise rather than an NGO. Surprisingly, the great majority of partners did not seem to mind the change of business model and are willing to pay a licence fee for accessing the Aflatoun curricula. The organization acts as a hybrid of an NGO and a private business, which is exemplary for the transformation the world of international development is going through. The traditional way of raising funds solely through donations becomes harder to walk with a rising number of competing organizations entering a stagnant donor market. Modern organization need to find alternative ways to fund their projects if they want to keep up the quality of their work. In the case of Aflatoun, their transformation to a social enterprise comes with high ambitions: In 2020 the organization aims at delivering their programs to 20 million children.
second visit of the day, we were welcomed by Marije Poel at the Smart City
Academy of the Hogeschool van Amsterdam. The afternoon was insightful: we learnt
that our colleague Bettina sneezes every morning after waking up and that the
city of Amsterdam is turning its roofs blue-green. Relying on a bottom-up
approach, Smart City Amsterdam stimulates small businesses to make the
metropolitan area economically, ecologically, and socially future-proof. The
Smart City Academy supports these developments in several ways: it develops expertise,
connects stakeholders to exchange their knowledge, acts as a portal to other
Smart Cities worldwide, and implements education programs in the fields of
Smart City. Marije presented three specific Smart City projects, for us to better
understand how this buzzword translates to the real Amsterdam. Through the
project Resilio, the city wants to encourage citizens and investors to turn
their roofs into urban gardens and water storages. In terms of environmental
protection and economical use of resources such as energy and water, a lot can
be gained. Green-blue roofs save energy by insulating houses and add to the
quality of life in the city. In a group exercise, we had the chance to
brainstorm about ways to involve citizens in the implementation of this project
and business models that can make this approach economically feasible.
marked the end of the Smart City-focus of our study trip. For the remaining 3
days, we are excited to learn about Public Financial Management in the
Netherlands and to excursions to Utrecht and Den Haag. Stay tuned!
As representation for the expedition team, Alissa Brenn, Svenja Hofmann and Chantal Menzi
On a typical autumn day at the beginning of September, about 20 students met in a bright, old-fashioned coffee house. Only a few steps away from Amsterdam Zoo. And this closeness has a truly symbolic character. Because on this day the group is trying to trace an exotic-sounding organism. The Smart City Amsterdam. At this first meeting in the city on the shores of the river Amsel, a short briefing was held on the forthcoming mission. It quickly became clear that if the group wanted to learn something about this Smart City Amsterdam, first the ecosystem in which this idea occured had to be studied in depth.
As soon as all had their coffee, the group went to the centre of the city, where the students had arranged to meet someone who might be able to help them analyse the Amsterdam ecosystem. Once there at the Dam Square, the temporary city researchers were immediately greeted warmly by Leonie, who invited the group on a city tour.
The tour with a focus on the historical and social conditions that shaped the city, started directly in front of the National Monument, that was built to keep in memory the suffering of WW2. The students learnt a lot about the role of the Netherlands during the time of war and especially about the probably unparalleled economic rise of this legendary trading city in the 17th century. Additionally, interesting background information ranging from business and architecture to local traditions and cuisine were given to the group.
With each new insight, the understanding of the conditions under which this Smart City seems to thrive grew. The sophisticated art with which the city tames the water suggests that there must be a very innovative climate in this urban area. The peculiarity that everyone in this city can look into each others home and that very liberal and open minded image that is being cultivated suggests that cooperation and participation seems to be welcomed by the residents. And last but not least, a look at the traditional menu reveals real pragmatism in action.
Shortly before the tour was over, a phone rang. Someone supposedly spotted the Smart City Amsterdam near the harbour. For everyone it was immediately clear: Now or never. The measuring instruments were quickly calibrated and the meshes in the net were checked one last time. There was no time to lose.
On a former harbour area, very close to the shipping museum, the group finally found what they were looking for. After a short wandering on the winding terrain, the Smart City Amsterdam revealed itself to the students in the shape of an open door.
As the curious group members stepped through the door, they were warmly greeted by Cornelia. Cornelia works for the organisation Smart City Amsterdam, an organisation which acts kind like the brain of the hole Smart City by connecting the different parts of the organism. In the following hour and a half Cornelia explained to the students what the Smart City Amsterdam is or rather what it is about to become.
The term Smart City probably has more definitions than there are cities that want to become smart. However, as the lowest common denominator, it can be said that Smart City is an answer to the increasingly complex challenges faced by large cities today. After all, more than 50% of the world’s population lives in cities – and according to the United Nations this trend continues to rise.
Where many people come together, traffic problems are usually not far. The danger of accelerating climate change, on the other hand, calls for a rapid rethinking of the way we use our resources in general – especially in terms of energy supply. And last but not least, large cities are struggling with the atomisation of society and the increasing alienation of the population from the public institutions. Smart City is intended to be a solution to at least one of these challenges – but usually for several at the same time.
On the one hand, the technologies available today are to be used for sustainable urban development and, at the same time, the collective intelligence of the urban population, businesses, science and government agencies is to be transformed into innovative solutions via collaborative processes. However, different smart city approaches are used around Europe. So also Amsterdam has its own idea, what a smart city is about.
For Amsterdam, Smart City means being economically strong and sustainable at the same time. The programme focuses on the four themes (1) energy, (2) digital city, (3) circular city and (4) mobility. To make progress in these areas, Amsterdam has designed its Smart Governance around a specially founded organisation which acts as kind of a Network Administrative Organisation (NAO). It coordinates the various activities of the actors involved, helps with networking and thus promotes collaboration within the network.
The two essential spheres of Smart City Amsterdam are: The Public Private Partnership and the Smart City Platform. The Public Private Partnership consists of governments (e.g. City of Amsterdam), knowledge institutions (e.g. Hogeschool van Amsterdam), companies (e.g. Eurofiber) and civil organisations like foundations. These partnerships are particularly about sharing resources and jointly initiating smart projects.
The platform in turn is intended for the entire Smart City community. This platform should enable collaboration and participation of as many stakeholders as possible. So far, almost 7,000 people have registered. On the platform projects can be presented, event suggestions can be posted and discussions about the desirable further development of Smart City Amsterdam are held.
Fortunately, the interested listeners were able to ask questions at any time and so the students more and more managed to understand this new and special Smart City phenomenon. Even though some terms might not have been fully clarified by the end, it was a very enlightening encounter for the group. And a successful prelude to further research on Smart City Amsterdam.
As representation for the expedition team, Fabian Annaheim, Fabio Brändle und Kevin Andermatt
entering the final year of their studies, the MSc Students majoring in Public
and Nonprofit Management traditionally embark on a one-week study trip to gain
practical insights and discuss contemporary trends and challenges with
high-level public sector managers, government officials and practitioners.
This year’s study trip goes to the Netherlands and the students will learn about the development and implementation of ‚Smart City’ agendas, the management of respective projects and trends in the digitalization of public administration. Another focus is on the management of financial resources at local and central government level as well as in NGOs. Given that public and nonprofit organizations are unlike corporates not ultimately aiming for revenue maximization and profit margins and rather strive for public value creation and/or societal impact, other performance measurement indicators, management instruments and processes are required. In line with these topics, the students is awaiting a series of interesting and hopefully inspiring meetings and presentations. During the next week, the students will take over this blog and share their impressions and learnings.
As part of their unique curriculum, the MSc BA Students with the Specialization in Public and Nonprofit Management embark on a study trip to Vienna to learn about Austria’s government institutions and to dive into its administrative context. In particular, allocating, administering and making effective and efficient use of taxpayer’s money are topics, which will be covered during the visits at the Austrian Ministry of Finance, the Austrian Court of Audit or the Ministry of Science and Education as a budget executing entity. A second focus of the study trip is on digital transformation of public administration, which will be touched by visits of the City of Vienna, which has launched its “Digital Agenda”, or the newly established Ministry for Digital and Economic Affairs. An exciting and insightful week is awaiting the students, who will take over this blog and share their experiences.
ZHAW Zurich University of Applied Sciences, School of Management and Law