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Open Seminar “ESPON Evidence for Regional Policy-Making” –
Contributing to the Europe 2020 Strategy in Alcalá de Henares, Spain
SEARCH | Structured empirical analysis for convergence regions:
identifying success factors for consolidated growth
Lead Partner: Naples University “Federico II” L.U.P.T.
Partner: Basel University
ESPON – SEARCH: Content
Objectives / Approach
Lessons learned from the…
…literature on regional success factors
…regional survey on success factors in the stakeholder regions
…case studies on information and innovation society
…econometric analysis on regional success factors
Options for policy development and further research
possibilities
ESPON – SEARCH: Objectives
The main objectives of the project were
first
second
to understand the factors relevant for the overall economic
success for convergence regions’ economies and
to identify determinants of a successful (efficient and
effective) cohesion policy in convergence
regions.
ESPON – SEARCH: lessons learned…
…from the literature
Three different groups of factors
1. Economic drivers
..such as knowledge and innovation potentials, accessibility, connectivity etc.
2. Economic enablers
..such as taxation for companies, regulation of labour markets etc.
3. Factors relevant for a successful cohesion policy
…such as the efficiency of regional administrations, level of decentralisation etc.
ESPON – SEARCH: hypotheses…
…from the literature on regional growth factors
No.
Regional growth factors
direction of
influence
1
knowledge and innovation potentials
+
2
accessibility
+
3
connectivity
+
4
quality of life
+
5
economic structure (for example high share
of service sector)
+
6
regional financial means (EU funds)
+
7
Population structure/growth
+
8
Company taxation
-
9
Taxation for highly qualified persons
-
10
Regulation of labour markets
-
11
Regulation of product markets
-
12
Efficiency of regional administration
+
13
Level of decentralisation (regional
autonomy)
+
14
Bureaucratic transparency and
accountability (e.g. low level of corruption)
+
factor category
economic drivers
economic enablers
EU funds allocation
ESPON – SEARCH: hypotheses…
…from the literature on different region types and on factor interreations
first
there are different regional success factors for
- weak convergence regions,
- catching up convergence regions and
- above average GDP regions
second
Factors important for an efficient allocation of EU funds are a
precondition for other factors!
ESPON – SEARCH: lessons learned…
…from the regional survey: questionnaires
Weak convergence regions
Factors
Catching-up region
Median
Mean
Factors
Median
Mean
1.
EU funds allocation
9
8.94
1.
Quality of life
8
7.99
2.
Connectivity
9
8.49
2.
Accessibility
8
7.83
3.
Innovation potentials
9
8.43
3.
Population/social
8
7.82
4.
Accessibility
9
8.39
4.
EU funds amounts
8
7.80
5.
Governance/admin
9
8.23
5.
Regulation
8
7.80
6.
Quality of life
9
8.18
6.
EU funds allocation
8
7.70
7.
EU funds amounts
9
8.08
7.
Innovation potentials
8
7.69
8.
Economic settings
8
7.92
7.
Governance/admin
8
7.69
9.
Taxation
8
7.60
9.
Economic settings
8
7.66
10.
Decentralisation
8
7.47
10.
Decentralisation
8
7.63
11.
Regulation
7
6.80
11.
Taxation
8
7.54
12.
Population/social
7
6.67
12.
Connectivity
7
7.42
Weak and catching up convergence regions differ in regard to growth factors!
ESPON – SEARCH: lessons learned…
…from the interviews
Impediments to regional development in weak convergence regions are:
• geographic isolation
• underdeveloped transport infrastructure (rail, road and airport connections)
• organised crime, loss of civic sense
• high share of agricultural sector
• depopulation
• Insufficient exploitation of e.g. innovation resources etc.
Success factors for catching up convergence regions are e.g.
• economic structure: construction sector boosted the whole economy
• regional administration: efficient activities (especially in spending funds)
• common effort of all regional institutions towards an innovation strategy
• high investment in R&D
• decentralisation
ESPON – SEARCH: lessons learned…
…from the interviews: conclusions
•
potential for economic success exists in each of the four stakeholder
regions!
•
But: different exploitation (in terms of efficiency) of resources in
weak and catching up convergence regions due to for example the
- different levels of skill and economic incentives of civil servants and
regional officials,
- kind of interaction of regional institutions,
- different level of decentralisation,
- transparency in processes and controls etc.
-> Weak and catching up convergence regions differ in regard to the
exploitation of resources!
-> It seems that factors important for an efficient allocation of funds are a
precondition for other factors
ESPON – SEARCH: lessons learned…
…from the case studies (information and innovation society):
Common impediments in the weak convergence regions are
•
•
•
•
•
too little decentralisation (regional autonomy)
a lack of private business involvement and initiatives
a lack of public and private funding
lack of joined-up strategy in innovation and IS and links to other
strategies
difficulties in setting-up permanent structures that can survive
independently of EU funds (sustainability).
->In contrast, in Valencia, e.g.permanent structures have been successfully
created (competence centre for coordinated activities towards the demands of the
EU, which has shown impressive results)
ESPON – SEARCH: lessons learned…
…from econometrics: research questions
•
Which factors explain best the overall economic growth and
successful cohesion policy of convergence regions? Which are the
main drivers of economic growth in convergence regions?
•
Which are the differences between the factors in weak convergence
regions, catching up convergence regions and above average
GDP regions?
Aim: to verify the results from the foregoing analyses on a macro level
ESPON – SEARCH: lessons learned…
…from econometrics:
Classification of regions
GDP per capita level
high
low
high
catching up
n=65
strong
n=32
GDP growth
mean
low
weak
n=44
losing ground
n=89
convergence
regions
n=109
above average
GDP regions
n=121
mean
Total n=230
ESPON – SEARCH: lessons learned…
…from econometrics: Convergence effect among European regions
10
real average GDP growth 2000-2007 in %
8
catching up regions
n=65
strong regions
n=32
6
4
2
y = -0.0478x + 3.6117
R2 = 0.1523
0
0
-2
10
weak regions
n=44
20
30
40
losing ground regions
n=89
GDP per capita 2007 in 1'000 €
Source: Oxford Economics 2009
50
60
70
ESPON – SEARCH: lessons learned…
…from econometrics: regression analysis
Performance = α + β1*X1 + β2*X2 + … + γ1*Z1 +γ2*Z2 + … + ε,
• α, β and γ are fixed but unknown parameters
• ε is an error term
• Xs are various economic and political variables affecting economic
performance which cannot be influenced by the regional authorities (such as
geographical accessibility or national regulation)
• Zs are different aspects of variables that can be influenced by regional
authorities (such as infrastructure or education).
Source: Oxford Economics 2009
ESPON – SEARCH: lessons learned…
from econometrics: summary: Influence on average GDP growth 2000-2007
weak
convergence
regions (n=44)
catching up
convergence
regions (n=65)
Above
average GDP
regions
(n=121)
Factor category
Convergence
regions
(n=108)
GDP per capita 2000
---
---
---
---
Convergence
control variable
Unequal distribution of GDP per
capita 2007 among regions within
a country
---
(-)
---
---
Economic
drivers
Population growth 2000-2007
+++
+
+++
+++
Region size (in km2)
+++
-
+
+++
Share of human capital in
science and technology 2007
+++
(+)
++
(+)
Share of human capital in the
primary sector 2007
---
(-)
(+)
(-)
EU funds 2000-2006
---
-
(-)
+++
+++
-
(+)
---
EU fund
allocation
Variables
EU funds 2000-2006 * corruption
2007
Share of internet users 2002
---
+++
Economic driver
manpower taxation
--
---
Economic
enabler
+++
--
EU fund
allocation
Vertical decentralisation
-significant at a 10 per cent error level, --significant at a 5 per cent error level, ---significant at a 1 per cent error level
ESPON – SEARCH: lessons learned…
…from econometrics: concluding remarks
We had been able to partly assess convergence. But whether this can be
assigned to convergence policy has to be questioned critically.
Today it is clear, that the observed stronger growth in many Mediterranean and
eastern European countries was not based on a solid foundation, but on not
sustainable real estate bubbles.
Correspondingly, these areas now suffer more: The crisis was deeper and the
recovery will take longer time.
Furthermore, caps on public spending and stringent measures to reduce public
debt may impact negatively in particular on convergence regions.
In short, in 2012 there will be hardly any convergence effect (exception: Poland)
ESPON – SEARCH: Options…
…for policy development and further research possibilities
Based on the insights that
•
regional success factors differ between weak convergence regions,
catching up convergence regions and above average GDP regions and
•
factors for an efficient allocation of resources are a precondition for
other factors we can state that
Therefore: not one policy fits all!
For convergence regions, it is very important to continuously improve the
economic drivers within the region and to establish stable regulatory
frameworks which serve as breeding grounds for economic well being.
Preconditions for stable regional frameworks or systems are for example the
absence of corruption and the transparency of processes (factors relevant
for an efficient allocation of resources).
ESPON – SEARCH: Options…
…for policy development and further research possibilities
The transparency of processes is assumed to be more easily achievable with a
high level of decentralisation and a high degree of proximity to the citizens.
The absence of corruption and a high level of decentralisation appear as
efficiency factors for a successful cohesion policy and an effective fund
management.
In order to enable innovation potentials on the regional level, it is important that
the regulatory framework as an economic enabling factor is consistent also on
the national level.
Therefore, the good interaction and collaboration between the national, the
regional and certainly the EU level is of the utmost importance, because an
isolated e.g. regional innovation system does not exist.
ESPON – SEARCH: Dissemination
Completed Activities
In progress
•
•
•
•
•
•
Presentation Italian Info Day
Rome 23 September 2009.
Presentation Italian Info Day Milan
25 September 2009.
Coordination with Stakeholders
and Umbrella Groups (preparatory
meeting in Brussels Oct. 09)
Presentation at Internal Seminar
"The ESPON Knowledge Base as
Potential for Territorial Analysis
and Policymaking at Regional
Level" in Malmö, 02 – 03
December 2009.
•
•
•
SEARCH website in test phase
Local language Powerpoints in
preparation of draft results for
local seminars for stakeholders,
Local seminar for Campania
Region decision-makers,
stakeholders and scientific
community - July 2010
TPG – Stakeholders – Umbrella
associations (AER, CPMR)
meeting planned – July 2010
Participation at ESPON Open
Days and TA Conference in
Brussels.
ESPON – SEARCH: Options…
Thank you very much for your attention!
[email protected]