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 27 Sara Davies , European Policies Research Centre, University of Strathclyde