Dortmund Consensus: Common Sense for Common Wealth by Hans Werner Franz

Dortmund ConsensusCommon Sense for Common Wealth

by

Hans-Werner Franz

Tilburg 2016 : European Week of Social Innovation

SIC Summer School, 22-23 September 2016

„What comes up must go down“Blood Sweat & Tears (Spinning Wheel), also Isaac Newton

• More than 100 years of rise,followed by 40 years of decline,loss of about 70.000 jobsfrom 1970-2000in coal, steel and beer

• 1980 – 2020nearly 40 years of shapingstructural change

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In the Ruhr: Only Dortmund‘s Population is Growing

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565000

570000

575000

580000

585000

590000

595000

600000

605000

1990 2000 2005 2008 2009 2010 2011 2012 2013 2014 2015

Dortmund Population

Employment

• In 2013, the active population had reached and surpassed the level of1983

• Instead of coal, steel and beer with large companies and a greatnumber of small dependent industrial services

• Now: SME-structured, technology-based local economy with86 per cent of workforce employed in services (industry: 12.6%)

• Largest employers: City and University, city-owned services like Electricity, Gas and Water supplier and Public Transport

• Largest private company is world market leader in high-tech pumps(Wilo)

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What remained (2000)& what‘s there now

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Social Science Centre, e.g. sfs

+ commerceWarehouses

Transport logistics

New quarter & jobs around lakeDevelopment &

production

University (*1968) &

Technology Centre

U Tower & creativity quarter

& new housing

Thier Gallery (Mall)

IKEACentral Europe

Warehouse

Nearly 50,000 students in

university anduniversity of applied

sciences + otherinstitutes

280.4 km²

The most astonishing changes 1

TechnologyCentreDortmund - 1983 TechnologyCentreDortmund - 2016

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More than 12,000 new jobs

The most astonishing changes 2

Phoenix East – the steelworks Phoenix East – the lake

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Representatives ofthe shareholders

Dortmund Consensus – Where it comes from

• 1951: a long tradition ofCo-determination in theCoal and Steel Industries

• Equal representationon the Supervisory Boardfor companies withmore than1000 employees

• Labour Director on theManagement Board(cannot be elected against employee votes)

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Representatives ofthe employees

Representatives of the tradeunions elected by the employee

representatives (works councils)

Chairperson

Neutral person

Example for11 seats

Continuity ofsocial democratic city government• Election results:

1950 – 1999: between 58 and 50 per cent (SPD governing alone)

1999 – 2016: around 40 per cent(SPD governing with established coalitions or changing coalitions)

• Responsible positions in city administration are shared with otherpolitical parties (black/green) approx. according to their share in votes

• Example: most of the Ruhr Area city governments are controlled bythe Land (Bezirksregierung; intermediate administration level between federal state and

municipality levels) due to financial restrictions. Dortmund has always achieved a common vote on budget.

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Representative Boards and Advisory Boards in all relevant institutions• Examples

Supervisory Board TechnologyCentreDortmundSupervisory Board of Local Labour AgencyAdvisory Board Economic and Labour PromotionLocal Further Education Council

• Representation of all relevant parties, Chambers, Trade Unions, churches, other relevant civil society representatives

• By law: all relevant construction projects on the municipal and thequarter level need regular two-step participation of citizens

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Specific local governance model has developed: from strong ties to the strength of weak ties

• Based on what Grabher has called „controlled redundance“

• All players with a large variety of interests influence decision-makingprocesses in many places and through many channels

• Once decisions are made, common action in the same direction is prevailing

• What used to be a corporatistic model (co-determination) and felt-like structure of strong ties and politically based bondinghas become a relatively open model of networking and co-operation

• Evidence: most important non-electoral jobs in public life are now obtainedthrough open, competence-based procedures with most positionsoccupied from outside (non-dortmunders)

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Structure vs. strategy dilemma

• Structure follows strategy(Chandler) or

• Strategy follows structure(Hall and Saias; Mintzberg)

• Overcomeby culture of co-operation(following idea of Sattelberger:Continuous improvement)

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Structure

Strategy

Culture

StrategyStructure

Chandler, A.D. Jr. (1962). Strategy and Structure: Chapters in the of the American Industrial Enterprise. Cambridge, MA: MIT Press

Hall, D.J. and Saias, M.A. (1980). Strategy Follows Structure! Strategic Management Journal, Vol 1 No 2 (April-June 1980) 149-163

Mintzberg, H. (1990). The Design School: Reconsidering the Basic Premises of Strategic Management,Strategic Management Journal, Vol 11 No 3 (March-April 1990) 171-195