IS A EUROPEAN REGIONAL APPROACH FRUITFULL WHEN IT COMES TO DEVELOPING

ECONOMY AND EMPLOYMENT?

4th Coffee of the RegionsBrussels 26-2-2015

Louis DelcartHead of Department EIR

Summary

• Regional approach: sceptics and believers• Stick to regional policies?• Question tags on European regional

development policies• Role of regional authorities• Collaboration with civil society

Skepticism about the regional approach

• European regions will be overwhelmed by global forces – regions that try to develop employment on their

own, even with European aid, are wasting time and energy

• Development policy related issues

Scepticism on regional approach:Development policy related issues

• since development strategies always have a medium to long-term effect, it may still be too early to accurately assess the impact of the reform of the Structural Funds

• despite the increase in the volume of development funds, the funds available are still too scarce to have any significant impact on growth rates

Key words for the successful areas

• flexibility and adaptability• regions have to be able to adapt constantly to

new challenges and new market demands• businesses within the region have to be

convinced that – a strategy is needed and that – they have to adapt their activities towards that

strategy

Camp of the believers

• business support is positively associated with higher employment growth in industries that are initially smaller then in those with higher growth opportunities– The results suggest that direct support to businesses by the

European Cohesion Policy contributes to the growth process of employment in different industries

• a serious step forward– most recent changes in the European Fund allocation policy – attribution of funds based upon real needs and upon

previously stated conditions, whereas before investments were evaluated after the investment was already made

Stick to regional policies?

• Not all countries are convinced about the enactment of regional policies for the development of economy and employment

• setting up regions as a larger entity above arrondissements or provinces, because they have a better perspective of the local situation and they can also more efficiently manage larger volumes of attributed money

Question tag on European policy?• Europe imposes investment targets based upon an overall strategy• ERDF investment programme concentrates on four key themes:

– 1)innovation and research, – 2) information and communication technologies (ICT); – 3)support for small and medium-sized enterprises (SMEs); and – 4)promoting a low-carbon economy

• The types of investment therefore can be: – in SMEs to create and safeguard sustainable jobs, – in all types of enterprise in the fields of innovation and research, – the low-carbon economy, as well as– ICT where SMEs are involved,– in infrastructure providing basic services in energy, environment, transport,

and ICT, but also in social, health and educational infrastructure, and – in development of indogenous potential

Question tag on European policy? 2

• if everybody is investing in the same future, there is so much competition inside Europe, that nobody is able to derive any benefit from it.

• In other words, circumstances are so different, that one cannot describe the strategy for a continent in 4 key sentences.

Regional development is also …

• The future of Europe in many places is also– in efficient, healthy and qualitative agricultural

products; – beautiful, original, qualitative clothing and furniture; – artistic features such as design; wood carving and metal

working products and special fabrics;– preservation, promotion and accessibility to our vast

historic and cultural heritage; – recycling of 90% of our waste as new raw material for

the above mentioned products– …

Goals of regional development• Economic development is the sustained, concerted actions of policy makers

and communities that promote the standard of living and economic health of a specific area. Economic development can also be referred to as the quantitative and qualitative changes in the economy. Such actions can involve multiple areas including development of human capital, critical infrastructure, regional competitiveness, social inclusion, health, safety, literacy, and other initiatives. Economic development differs from economic growth. Whereas economic development is a policy intervention endeavor with aims of economic and social well-being of people, economic growth is a phenomenon of market productivity and rise in GDP. Consequently, as economist Amartya Sen points out, "economic growth is one aspect of the process of economic development.“http://en.wikipedia.org/wiki/Economic_development

• Sen, A. (1983). Development: Which Way Now? Economic Journal, Vol. 93 Issue 372. pp. 745–762

Goals for common people

• These are goals for common people, with common ideas and skills and with the ambition to offer a healthy prosperous life to their family and maybe even some other people in their neighbourhood.

• That is also a regional approach to economic and employment development.

• And on some occasions, some of those local entrepreneurs have the potential to outgrow their regional context. – They have to be fostered by regional authorities in order to

give them the necessary support to spread their wings

Regional approach

• Input from the regions is required in the overall strategy development and policy making

• Not every region or province has had a glorious past with successful entrepreneurs and creative universities

• Sometimes things have to be created from scratch.

Role of regional authorities

1. Regional authorities have to create the circumstances and sometimes to interfere in an overall capitalistic scheme

2. Regional authorities have to give the floor to civil society and involve them in common debates is mostly the role of an active regional authority

3. Regional authorities have to persuade the key players on the field to collaborate around a regional strategic plan

Create the circumstances and sometimes interfere

• Assisting SMEs to redevelop shopping streets in a city means also intervening in the burden of rental schemes for shops.

• Managing industrial zonings at cost price but with excellent services.

• Lowering taxes required from SMEs. • Jointly promoting the offer from SMEs. • Stimulating innovation and (inter)nationalisation• …

Give the floor to civil society• A dynamic social and political environment disposes of a civil society. That civil

society can be promoted with governmental input, but also through memberships and/or sponsoring.

• That civil society promotes a better, healthier and happier society as a whole: – Chambers of commerce,– labour organisations, – cultural organisations, – health care organisations, – universities and technical university colleges play an important role in a regional civil

society.• The civil society is closely involved to what lives in the community in general.

– They recognise (lack of) expertise,– they recognise institutional, social and economic needs.

• Each of them promotes of course the needs of the group they represent. • Looking for consensus and making choices for coping with the most urgent

needs in a region, that is the art of negotiation and compromise.

Regional strategic plan

• Regional bodies cannot always put the necessary funds on the table in order to solve everybody’s problems.

• They can persuade the key players on the field to collaborate around a regional strategic plan.

• They can persuade particular company managers to take part in a regional development program. – Public recognition is therefore one of the most powerful

arguments they dispose of. • Transparent and honest taxation systems are also part of

the tools enabling them to obtain the right results: employment, social cohesion and progress.

Role of civil society in less developed areas of Europe

• Have to work hard to develop a regional policy to survive

• Development of factories and companies in these areas have to see light mostly from own initiatives

• Need for a strong civil society especially in those areas– The civil society recognises talent, – The civil society monitors development– The civil society promotes solidarity with the local

population