The instruments of regional policy
in European countries
John Bachtler and Sara Davies
Presentation to the Norwegian Ministry of Local Government and
Modernisation, Oslo, 20 March 2015
Overview
Possible options for
Norway
Regional policy in other
European countries
Norway’s regional
development challenges
& instruments
2
Sara Davies , European Policies Research Centre, University of Strathclyde
Key development
challenges in Norway
Sparsely
populated
regions
• Low population
density
• Market access
• Narrow sectoral
structure
3
Skills
mismatch
• Skill shortages in
some regions
• Fewer skilled jobs
elsewhere
• Pockets of high
unemployment
All regions
• Framework
conditions
• Clusters
• Bottom-up
strategic
capacities
Sara Davies , European Policies Research Centre, University of Strathclyde
Main regional policy
instruments in Norway
•
•
Periphery •
•
Skills
mismatch
All/Any
regions
4
Regional Investment Grant & Regional Risk Loan
Social Security Concession
Action zone
Small capacity building measures
• Assessments of transport infrastructure impact on local
labour market size
•
•
•
•
Global centres of expertise
Centres of expertise
Arena programme
Urban development strategies
Sara Davies , European Policies Research Centre, University of Strathclyde
Regional policies for
sparsely populated regions
Agglomeration
effects
Context &
capacity
Quality
of life
Business
(Market
access)
costs
5
Sara Davies , European Policies Research Centre, University of Strathclyde
Building context & capacity in
sparsely populated regions
Norway
Other countries
Higher education (networks)
National
National (e.g. FI SE UK)
Public research facilities
National
DE
National
Business parks & related
infrastructure
National
AT DE EE FI FR IT CH
Education & training facilities –
F2F or ICT
National
DE
National
Local capacity & strategy
building
Bulyst, LUK,
Programme for
Small Municipalities
AT DE HU PT CH
6
Sara Davies , European Policies Research Centre, University of Strathclyde
Building business strengths in
sparsely populated regions
Norway
Other countries
Investment grants
Regional Investment EU28 except AT EE NL
Grant
DK only SMEs
Loans & interest rate
subsidies
Regional Risk Loan
AT DK FI FR DE IT PT ES SI UK
Guarantees
AT BE DE FI SI UK
Tax relief & credits
BG HR CZ FR GR MT SK CH
Seed capital funds
Seed capital funds
Venture capital funds
DK FI
Aid for business training
HR CZ DE EE SE
Aid to SMEs/start-ups only
BE DE HR CY CZ DK LT PT SE
7
Sara Davies , European Policies Research Centre, University of Strathclyde
Reducing (market access) costs
in sparsely populated regions
Norway
Other countries
Transport infrastructure
BG EE FR IT NL ES National
ICT & broadband
DE HR National
Transport aid
FI MT SE
Subsidised ferry travel
HR UK
Other costs eg
• Wage subsidies
• Relief on social
contributions
• AT CZ EE FI FR DE GR LT LU
MT PL PT RO SK SI
• BE(B) BG RO SK ES SE
Social security
concession
Aid to visit trade fairs etc
PT SE
Exporting/marketing advice
National
8
Sara Davies , European Policies Research Centre, University of Strathclyde
Building agglomeration effects in
sparsely populated regions
Norway
Expand the pool of skilled labour
National
Other countries
National
Assess LM effects of
transport infrastructure
Support local supply chains
National
National (local/regional
agencies)
Knowledge spillovers - business
networks
National
DE UK
Entities tasked with building/
supporting links to external
agglomerations
National
AT DE IE UK
9
Sara Davies , European Policies Research Centre, University of Strathclyde
Building quality of life in
sparsely populated regions
Solidarity mechanisms
Norway
Other countries
Action zone
DE IT ES
Fiscal equalisation &
Yes
interpersonal redistribution
Most countries
Grants/loans for local
infrastructure
BG HR CZ EE FR RO SI
Support for households
in Action Zone
HR EE FR LT
Funding for local services
MERKUR
EE
Funding for ethnic/
linguistic minorities
10
EE IE
Sara Davies, European Policies Research Centre, University of Strathclyde
Regional policies to address
skill mismatches across regions
Reduce
job costs
Raise
skills
Policy
coordination
Spread
effects
Labour
mobility
11
Sara Davies , European Policies Research Centre, University of Strathclyde
Support for
employment and skills
Reduce employment costs in Norway
structurally weaker regions
Other countries
Wage subsidies
CZ EE FR DE LT LU MT
PL RO SK SI SE UK
Relief on social contributions
Social Security
Concession
BE BG RO SK ES SE
Raise skills of target groups
Norway
Other countries
Grants for training workers
Policy coordination
Local partnerships on skills
12
HR CZ DE EE SE
Norway
Other countries
National
Sara Davies , European Policies Research Centre, University of Strathclyde
Support for economic spread
and labour mobility
Support economic spread
Transport infrastructure
Norway
Assess LM effects
Transport aid
ICT/broadband
BG EE FR IT NL ES
National
HR FI MT SE UK
National
Planning regulations
Support labour mobility
Other countries
DE HR
National
National
Norway
Other countries
Public transport
National
National
Public employment services
National
National
13
Sara Davies , European Policies Research Centre, University of Strathclyde
Policies to enable all regions to
contribute to national prosperity
Broader
policies
Regional
strategy
building
Regional
enterprise &
innovation
14
Sara Davies , European Policies Research Centre, University of Strathclyde
Enabling all regions to
contribute to national prosperity
Norway
Other countries
Broader economic &
social policies
National
National & EU level
Support for existing
strengths/clusters
Arena,
DE FI FR NL
Centres of expertise,
Global centres,
Urban dev’t
strategies
Funding for enterprise &
innovation
National
15
National
EU Cohesion policy
Sara Davies , European Policies Research Centre, University of Strathclyde
Shift of emphasis in
EU Cohesion policy
Financial
instruments
16
Bottom-up
strategies
Sara Davies , European Policies Research Centre, University of Strathclyde
Financial instruments
with a regional dimension
Loans & low
interest rates
Guarantees
Disadvantaged AT CZ DK DE IT BE DE SI
areas only
NO SI ES SE
SE CH
Seed
capital
Venture
capital
Business
angels
NO
DK IT
UK
Favour
disadvantaged
areas
FI FR HU PT
UK
FI IT
Regional
delivery of
national funds
FI FR CH
FI FR
FI
FI SE UK
Sub-national
funds
AT DE PL UK
AT DE PL
DE
AT DE FR
UK
17
FI HU
Sara Davies , European Policies Research Centre, University of Strathclyde
Financial instruments for
regional development
+
18
-
Sara Davies , European Policies Research Centre, University of Strathclyde
Holistic strategies for
regional development
Norway
Other countries
Top-down strategies – NUTS Action zone
1 or NUTS 2
(FI) FR IT NL NO PL CH
EU Cohesion policy
Packages for smaller regions
undergoing structural
change
EE FI FR LV MT NL SI
Packages for economic
zones with potential
BE IT LV LT PL UK
Bottom-up strategies in
smaller regions
AT HU PT CH
EU Cohesion policy
19
Sara Davies, European Policies Research Centre, University of Strathclyde
Integrated territorial development
in EU Cohesion policy 2014-20:
5% of funds ring-fenced
Main themes
Type of region
Local involvement
Integrated
sustainable urban
development
(ISUD)
Environmental
protection, Social
inclusion
Urban
Delegation of some
tasks to local level
Integrated
territorial
investments (ITI)
RTDI, SME
competitiveness,
Low carbon
economy, Social
inclusion
Mostly urban
but also others
Significant e.g.
strategy design &
implementation,
project selection
Community-led
local development
(CLLD)
Varied
Urban, rural,
peri-urban
Significant but not
including strategic
management
20
Sara Davies , European Policies Research Centre, University of Strathclyde
Integrated territorial
development strategies
+
21
-
Sara Davies , European Policies Research Centre, University of Strathclyde
Factors affecting
regional policy options
Socioeconomic
need
Funding
available
Other
policies
Evidence
of effects
22
Institutional
context
Sara Davies , European Policies Research Centre, University of Strathclyde
Possible options for sparsely
populated regions
Context
Business
Costs
• Gaps in HE,
R&D,
education/
training
infrastructure?
•
•
•
•
•
• Transport
links
• Transport aid
• Aid to visit
trade fairs
23
Guarantees
Tax relief
VC funds
Training aid
Start-up aid
Sara Davies , European Policies Research Centre, University of Strathclyde
Possible options to
address skill mismatches
Skills
Coordination
• Funding for
training workers
• Active labour
market
measures
• Local
partnerships
24
Economic
spread
• Transport
infrastructure?
• Planning
regulations
Sara Davies , European Policies Research Centre, University of Strathclyde
Possible options for all /
any regions
Financial
instruments
• Guarantees
• Venture capital
• Business angels
25
Territorial strategies
• Areas undergoing
structural change
• Areas with potential
• Bottom-up strategies
Sara Davies , European Policies Research Centre, University of Strathclyde
Summary of conclusions
• Wide variety of RP instruments
Europe • New EU initiatives (FI & territorial strategies)
• Varied challenges
Norway • Range of existing instruments
• Possibilities for different aspects of RP
Options • But need to tailor to economic & policy context
26
Sara Davies , European Policies Research Centre, University of Strathclyde
Thank you for listening
More Information is available at:
http://www.eprc.strath.ac.uk/eorpa/default.php
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Sara Davies , European Policies Research Centre, University of Strathclyde