University of Rome “Tor Vergata”
Entrepreneurship and Local Development:
how to build a cohesive model towards
competitiveness
Maria Prezioso
European Summer University on Entrepreneurship (ESU) 2009
8 - 13 September 2009
Università del Sannio di Benevento
Italy
What are we talking about?
1. Demand & Supply of economic and social cohesion to
support analysis of economic and social disparities in the
enlarged EU (Bristol, 2005; Territorial Agenda, 2007;
Cohesion Report, 2008; European Chart for SMEs, 2009 )
2. Recent developments of competitiveness in sustainability
and their impacts on the bottom-up
territorial
development by the entrepreunership’s subsidiarity and
the trans-national co-operation (UE Territorial Agenda,
2007; Lisbon, 2008-09)
3. Identification of enterprise investments localisation models
and influence factors
4. Policy perspective, to identify regional key-mesures to have
a positive impact for the models application
DRIVING THEMES from literature review
Scientific/political documents and data collection at
Regional, National and European level obtaining:
 Cohesion, Competitiveness, Subsidiarity and Sustainability as keywords of new European polycentric entrepreneurship
 Citizens and citizenships (i.e. enterprises) bottom-up participation
as the way to realize a social and economic cohesion by
appropriate governance’s rules
But also:
 polycentric co-operative territorial structures based on multilevel
integrated programmes by a planning action
 EU entrepreneurship re-interpretation of indicators for the
territorial sustainable government to be competitive
 a common territorial dimension/vision/definition for
understanding enterprise phenomena
Some suggestions from Literature
• Orthodox perspective
– Localisation of economic activities
•
•
•
•
•
Hedging costs
Neoclassic school
Technology as hexogen element
All economics growth at the same rate in balanced conditions
Convergence
• Heterodox perspective
– Development (sustainable development)
– Multidisciplinary and multilevel
• Territorial and regional development
– Convergence vs. divergence, top-town and centreperiphery; external economies vs internal economies
Different schools of regional growth/development
Theory
Main Source of Growth
and Productivity
Export-base theories
productivity of a region’s tradable base
Endogenous (or ‘new’) growth theory
accumulation and attraction of educated
and skilled human capital
Neo-Schumpeterian theory
innovation, technological advance and
entrepreneurialism
Cluster theories
clusters of specialised export-orientated
industries, and associated supporting
supplier and institutional networks
Evolutionary theory
adaptive capabilities of a regional economy
to respond to shifts and changes in
markets
Institutionalist theory
well-developed and regionally embedded
set of informal and informal institutions
Cultural theory
cultural diversity and tolerance and
favourable cultural amenities and
infrastructure
ENTERPRISES’ COMPETITIVENESS
IN TRADITIONAL TERMS (Kok Report, 2004)
• there is no unique definition of enterprises’
competitiveness
• productivity is the key to competitiveness of
European economies and enterprises
• domestic factors are less dominant determinants of
the enterprises competitiveness
• the concepts from neo-classical, new growth theory
and cost competitiveness apply equally well to
regions as to nations
• knowledge and innovation, and
localisation/specialisation effects are critical factors
in regional competitiveness
• regional competitiveness is an empirically concept
across both regions and time
New Terms of Territorial Competitiveness in
Sustainability for EU entrepreneurship
• “high and rising standards of living of a nation with the lowest
possible level of involuntary unemployment, on a sustainable
basis” (European Competitiveness Report, 2003; ESPON,
2006)
• regional competitiveness factors include issues such as
innovation, information and communication technologies
(ICT), and environmental protection
• The regional and national territory cannot treat/discuss as
undifferentiated space of the social and economic action but
as a physical place where receive and check the territorial
capability of the competitiveness
• the territory becomes a parameter to measure virtuous
solutions supporting the regional entrepreneurial structure in
terms of both environmental sustainability, improvement of
cohesion and integration levels between different territorial
actors (institutional and not institutional)
Enterprises’ Competitiveness is a
multidimensional concept
It is changing in time and space
The choice of a definition and a measure invests a political-social
dimension (no-competitiveness may become a cause of exclusion
from the mechanisms of setting-up collective decisions).
The approach more appropriate is therefore an approach of
territorial-multidimensional type that revolves around three key
objectives/principles:
•sustainability
•cohesion
•integration
They constitute the foundations for the activities of various actors
who interact on a given territory and define their inter-relations
with other territorial dimensions
Factors influencing territorial
competitiveness of enterprises
•
•
•
•
territorial attractiveness
continuous qualitative improvement
cultural and social heritage valorisation
sustainable use of resources (natural,
economic, social)
• preventive assessment of policies, programs
and projects
Main competitiveness determinants:
A Porter’s Diamond revision (Prezioso, 2006)
Human
Resources
Global/local
interaction
Quality
(process, environmental,
production, service)
Local
demand
Regional cluster
Efficient use of
resources and funds
Innovation & Research
Strategic
localization
New Territorial dimension of the
entrepreneurship
•
•
•
•
medium-high and distributed standards of living
lowest possible level of unemployment
sustainable basis
regional factors including issues such as innovation, information
and communication technologies (ICT), and environmental
protection
• the regional and national territory cannot treat/discuss as
undifferentiated space of the social and economic action but as
a physical place where receive and check the territorial
capability of the competitiveness
• the territory becomes a parameter to measure virtuous
solutions supporting the regional structure in terms of both
environmental sustainability and improvement of cohesion and
integration levels between different territorial actors
(institutional and not institutional)
Conceptual framework
– Economy based on knowledge and innovation
– Slow growth cycles with low growing rates of the productivity and
the demand
– Economic attractiveness more and more linked at specific places
/contexts
– Contexts focused on externalities (post-fordism) and not only on
internalities (fordism)
– Fiscal and ideological restrictions
– Public policy oriented to indirect investments by the creating of
externalities
– Increasing importance of regional resources
– Remetropolitisation and reconcentration of economic activities in
areas with right framework conditions
The Innovation and Technology weight
The Innovation and Technology weight (continue)
Regional
competitiveness,
Innovation and
Technology
NeoSchumpeterians
approaches,
Regional systems
of innovation,
learning regions
(integration
bettween quality,
innovation,
sustainability)
Conceptual Framework of link between
competitiveness/SMFs (ESPON, 2006)
Entry-exit models of development vs growth
A right infrastructural organisation is a necessary but not sufficient
condition for the development, particularly in a more and more
international and competitive context
Entry walls
• Economies of scales
• Advantages for monopolistic acquisitions
• Productive diversity (fedelium premium, patents,….)
• Finance/credit
• Prices war
• Laws, normes, regulations
Entry-Exit potential determinants
• Local demand
• Professional skills
• Richness
• Entrepreunership
Location of
Forbes 2000
company
headquarters
in Europe
(sorce: ESPON, 2006)
Hypotheses on regional effects of current policies
– price stability as absolute priority reduces the adjustment
opportunities available in the past => immediate competition, even
for lagging regions with low productivity
– globalisation and deregulation policies create competition for jobs,
thus exerting pressure on direct and indirect wages and on working
conditions
– lagging regions specialise in those economic sectors where wage level
important competition factor
– very limited redistribution of productivity gains towards salaries =>
regressive specialisation
– increased difficulty for lagging regions to catch up
but: empirical evidence concerning convergence is very ambiguous
The weight of risks
on the enterprise planning
Regional policies
A New Methodological Approach
A new geographical methodological approach for
analysing the territorial dimension of the regional and
sub-regional competitiveness is a territorialmultidimensional process in accordance with a multilevel and multi-actor approach
It is named STeMA (Sustainable
Territorial/Environmental/Economic Management
Approach) and it is organised by 10 scientific
simplified hypothesis
How does STeMA work?
STeMA has five key objectives/principles based on
a subsidiary territorial vision:






competitiveness
sustainability
cohesion
integration
polycentrism
convergence
STeMA consideres the indicators’ qualitative and
quantitative relationship in a continuous
confrontation and updating to increase the levels of
awareness and participation in development
choices.
STeMA application
has demonstrated (Bencardino, Prezioso 2009) that the
concept of territorial competitiveness is composed by some
determining factors or determinants that can be further
decomposed to arrive at indicators level
 to (territorially) contextualise the measurement or, in statistical terms,
to normalise/standardise the polycentrism in order to compare the
different territories
 to standardise the single indicators
 to link enteprise competitvenessin sustainability to the EU regional
typologies (i.e. the urban-rural typologies or MEGA-FUA-PIA or
polycentric territorial typologies)
 to weigh the various indicators (in this respect, a fundamental support
is represented by the case studies),
 to control in real time: static data/phenomena and dynamic data (to
monitor the changes in time)
EU regional typologies for STeMA
FUA_TYPO
URBAN-RURAL
TYPOLOGY
aggregation
0.
No special
function
2.
Regional/Loc
al
3.
Transnation
al/
National
1,2,3
High urban
influence with
No special
function
High urban
influence with
Regional/Local
functions
High urban
influence
with
Transnation
al or
National
functions
4,5,6
Low urban
influence with
No special
function
Low urban
influence with
Regional/Local
functions
Low urban
influence
with
Transnation
al or
National
functions
Class 1 - High urban influence, with Mega functions
Class 2 - High urban influence, with Transnational or National functions
Class 3 - High urban influence, with Regional/Local functions
Class 4- High urban influence, with no special function
Class 5- Low urban influence with Transnational or National functions
Class 6 - Low urban influence with Regional/Local functions
Class 7 - Low urban influence with no special functions
4.
Mega
High urban
influence
with
Mega
functions
Polycentric territorial base at NUTs 2 and 3 (from:
ESPON 3.3 project)
List of new regional policies. An Example
Bridging digital divided
Homogeneisation of enterprise costs
Technological\innovative dissemination for the enterprises
and institutions
Innovation
Support enterprise creation
Employment
Support to transregional cooperative projects
Support employer mobility
Use/development of environmental friendly techologies
Support equal opportunities
Quality certification and assessment tools
Development of telecomunication networks
R&D infrastructures
R&D
Support to BAT
Transport/network
Development of energy networks
Development of recycling technologies of waste
Increase of phisical accessibility
Supply of education
Human Capital
Human capital internationalisation
Use of renovable resources
Reinvolvement of aging people
Active Protection of Natural resources
Support leisure
Natural
Resources
Reduction of Natural Resources consumption
Social integration
Age
Child protection
Natural hazard prevention
Poverty reduction
Energy policies
Policies dissemination for transparency and efficency of
burocracy
Climate
Flexible Mechanisms
Cultural integration
Climate Active Protection
Support Local productive identity
Promotion of a global enterprise culture
Economic
development
Social Programme Financing
New business/service instruments
Public Healt
Safety
Inflation control
Internationalisation of good and services
Support Welfare
STeMA
Policies recommendations with regard to
Innovation & Research
-
-
-
-
-
-
common measures directly dedicated to the countries showing very low I&R profiles, with
respect to the national plans to invest in an appropriate technological base (I&R exchanges
and growth about ICS)
improving the share of population and firms “surfing the web” in Eastern countries and
Mediterranean area to sustain internationalisation
common education as a base of the ICS (from the tertiary education level by life-long
learning projects) putting attention towards the medium age population and their possible
re-involvement into the productive system with new responsibility positions
innovation and restructuring of the knowledge structures and R&D infrastructures (new
telecommunication systems and dedicated technologies by European patents) to sustain
exchanges between research products and their applications
a better link between I&R and local job market, opening new Structural Funds at the SM
firms-regional institutions-educational/research system joint;
the SF participation in the public-private cooperation about education (Mediterranean and
North Sea regions, Baltic ones including Estonia, Latvia, Lithuania, Eastern European
regions) balancing the EU offer and mobility of Human Capital towards the Eastern regions;
the actualisation of the tertiary education level to the international needs (Mediterranean
regions) in order to realise more telecommunication, horizontal structural connection and
integration, over taking the design of the positive ‘Y’, using especially new technologies
contributions.
Policies recommendations
with regard to Global Local Interaction
• to create a common language in the global ‘arena’ of competitiveness and
sustainability
• to guarantee an appropriate level of security of population migration
• to valorise tourism into a general territorial appeal, linking tourism to the
education mobility, sustaining the family income offering a new educational
and knowledge system by globalization inputs and ICS;
• to launch specific environmental projects for excluded active population
(new job market in the coastal or boundary countries)
• to sustain a global vision into the student and researcher outbound regional
mobility
• to launch specific manufacturing enterprise policies
• to improve polycentric models as alternatives to the capital regions
• to implement G/L infrastructures involving credit institutions level and
insurance companies to sustain a better general management attitude
• to stress the delocalization particularly in borderline regions
• to confirm the cohesion regional funds to reinforce the local social
interaction, involving the manufacturing enterprises and local trade
activities, by specific fiscal and financial instruments
• to consolidate the internal goods and services trade using the same rules of
the free EU market circuits, favoring the internationalization position of
regional systems
• to re-organise a balanced distribution of management attitude
Policies recommendations
with regard to Quality
-
-
to use more indicators than one to assess the country positions and to harmonise
consumer prices index and the consumption aggregates towards a common medium
level in all UE;
to connect the level of employment (employment index) and its organisation in the
traditional industrial regions to the de-industrialisation process;
to change the parameters of calculation of buying power looking at EU goods of large
consumption;
to stress the infrastructural variables of cohesion as significant measure of welfare
efficiency,
to complete the network of physical accessibility and multimodal organisation
to consider life quality as a complex synthetic index, representative of the regional
identity into EU context;
to consider government quality as a fundamental point of European integration and a
measure of the common European political feeling (using the government quality as
a synthetic index);
to apply the subisdiarity principle and its rules to create intra and interregional
cohesive instrument;
to fix different governance rules with respect to the geographical/territorial scale
to improve citizenship confidence in some countries
to propose a common reflection about Social Quality and Cohesion
to sustain the social wellness aptitude to reinforce the cooperative regional projects
Policies recommendations
with regard to Resources and Funds
-
-
to balance the regional differences on the base of regional capability
to relate the Lisbon Strategy (Structure) to regionally led innovation poles
to link Human Capital Expenditure to Public Expenditure for Employment as well
as sustaining more specific Human Capital Policies (for example, in Austria and
Belgium)
to sustain Firms Aids, reflecting on polarisation as economic support (in Central
and Eastern Europe, Ireland and Portugal)
Addressing Public Expenditure for Employment to contrast the high public
expenditure along the diagonal concentration (from Ireland through to Italy, with
the South-West, North-East and Central-East regions), building up the service
sector in IT
To stress international exchange in I&R and cross-border activities in pollution,
risk prevention and tackling environmental problems (particularly in the Eastern
regions)
to improve the link between Structural Funds and Accessibility by Population by
the development of corridors between urban areas
to address the policies for the Gothenburg Strategy (Structure) to contrast the
lowest expenditures
about Public Expenditure for Poverty and Ageing, it’s needed to have more
expenditure for labor markets including older workers
to overcome the North/South divide by a new ESDP
What means for enterprises
the new vision 2007-2013
•
•
•
•
•
To be able to sustain the market concurrence through those endogenous factors
that differentiate the territorial whole/system (mix of social, environmental,
economics indicators influencing the regional ranking within the enlarged Europe
and in the international context)
To have some cheap raw materials linked to entrepreneurial vital and innovative
factors within a stable social context
To face market competition with scenarios capable of guaranteeing environmental,
social, cultural and economic sustainability
To have some management faculties (components) capable guaranteeing
territorial competitiveness: awareness of its innovative capacity, organisation in
networks, capacity to integrate the different sectors and levels of activities, to
cooperate in and with other territories, to involve different public and private
subjects and institutions, to have both a global, coherent vision respecting the use
of local resources and to organise international, European, national, regional
policies in a subsidiary point of view
To have confidence in internal cooperation between different subjects and UE level
for the environmental protection and development
It means cohesion
to establish a connection between economic
and social progress and entrepreneurship
Cohesion is typified by the behaviour of European institutions and enterprises, to whom the
concepts of territorial cohesion and quality have become synonymous with success in
competitiveness, as testified by the achievement of certifications like ISO or EMAS, followed by
the enlarged concept of social responsibility (i.e. Territorial more than Corporate Social
Responsibility) considered as a useful and necessary instrument of cohesion and
competitiveness.
The effects of an action towards cohesion could inspire many variations on European regions:
• broadening and strengthening the internal market;
• ensuring open and competitive markets inside and outside Europe (trans-border, trans-national
and trans-regional co-operation policies);
• improving national European regulations;
• widening and improving European infrastructure;
• increasing and improving investments on R&D;
• simplifying innovation, TLC’s adoption and a sustainable use of the resources;
• contributing to a steady European industrial fundament which would adopt certification
systems and CSR (Corporate Social Responsibility) as means of cohesion and competitiveness;
• increasing labour market’s attractiveness and flexibility;
• increasing investments in human capital by improving education and expertise;
• improving the preservation of public health and environment in the communitarian policies, as
an opportunity of sustainable development