CENTROPE pilot project “Regional Development Report”
The CENTROPE Region as one of the most important cross-border economic areas at the former external border of the European Union is characterised by substantial internal disparities and – at the same time – by increased integration and cross-border co-operation. Once the remaining institutional barriers to cross border exchange will be removed, it can be expected that the region will develop into a highly integrated economic area. If this integration shall be supported, transnational analysis and policy co-operation has to be enforced.
The concept of the CENTROPE Regional Development Report is based on the experiences of the CENTROPE Business & Labour Report which was elaborated as a prototype in 2007. The Regional Development Monitoring provides a valuable overview of major economic developments in the region especially with regards to the consequences of the current economic crisis. Some interim results:
Strong economic framework: an advantage for post-crisis recovery. The CENTROPE region disposes thanks to its geographical location and well developed infrastructures of a high potential of economic growth. However, the national economies of the CENTROPE countries were strongly affected by the global economic crisis. Before the crisis CENTROPE was – in terms of GDP – one of the fastest growing areas within the EU, though the individual performance of the countries differed significantly. Nevertheless, the average growth rates during the period 2004 – 2007 were higher that the EU-27 average. The crisis of 2008 struck CENTROPE heavily due to its high dependence on foreign trade and manufacturing industry, but this dependence permitted at the same time a relatively strong recovery, as global trade grew strongly in the 2nd quarter of 2010.
Regional convergence: a benefit for the region. The division line between the Austrian and the new member state regions in CENTROPE, which was and still is one of the main division lines in the region, is becoming increasingly blurred. The division line between large urban agglomerations, industrial regions and rural-peripheral regions also existing in the region is, however, becoming increasingly important. The process of convergence has important consequences on the comparative advantages in the region mostly with regards to the still low wages of the medium skilled labour force in the new member state areas of CENTROPE. Moreover, the geographical proximity within CENTROPE of low cost high growth areas with some of the most developed parts of the EU-27 is of advantage for the region.
Fast recovery from the crisis: future challenges. All in all, as shown by the available data most of the regions of the CENTROPE have emerged from the crisis more rapidly than expected and will probably continue to grow more rapidly in the post-recession period. Nevertheless, the crisis has shown some new common policy challenges which need to be faced in a more coordinated way in order to create a comparative advantage for the region: reducing the cyclical risks by diversifying the industrial structure, fostering knowledge economy, integrating sectoral policies and encouraging further development of existing co-operations in active labour market policy.
While the Regional Development Report provides a valuable annual overview of major economic developments in the region, four focus reports allow for a more pointed look at specific areas: (1) extent of spatial integration within CENTROPE and of the region itself within the EU, (2) technology policy, R&D and innovation, (3) human capital, education and the labour market, and (4) the service industry as a growth factor in CENTROPE.
Conducted by a four-country research consortium, the “CENTROPE Regional Development Monitoring” provides not only a thorough knowledge base for discussing the region’s future, but also includes concrete policy recommendations.
The 2010 results of the Regional Development Monitoring: post-crisis recovery
The results of the 2010 report show that the strong existing economic framework of CENTROPE represents a considerable advantage for its post-crisis recovery. Thus, thanks to the fact that CENTROPE had been one of the fastest-growing areas within the EU before the crisis, its recovery afterwards was all the stronger. Furthermore, the economy of CENTROPE has continued to converge, and the disparities between the member regions are slowly disappearing. In this time of change, however, new policy focuses are necessary, especially with regard to the development of the knowledge economy.
Focus Report on Spatial Integration
The Focus Report on Spatial Integration concentrates on the economic integration within CENTROPE concerning the four basic freedoms of the EU (i.e. free movement of goods, services, capital and people). The main results address internal and external economic integration, investment flows and cross-border labour mobility as well as consequences for the competitiveness of the region.
The 2011 Regional Development Monitoring results: long-term challenges
After a steady recovery from the 2009 crisis which became apparent during 2010, CENTROPE is entering a new stage in its economic development. Whereas the economy still continued to grow in 2011 – somewhat more slowly in the case of Slovakia and the Czech Republic –, the end of last year presented deteriorating growth prospects. This challenge is coupled with continued population ageing and lower labour productivity. However, despite these issues, CENTROPE as a whole has proven more than resilient throughout the crisis, with an economic growth rate above the EU average. The policy measures that will be necessary to tackle the demographic changes and weak economic prospects can draw on CENTROPE’s strengths: high economic competitiveness both within Europe and compared with other cross-border regions as well as a still-ongoing economic convergence process.
Focus Report on Technology Policy, Research and Innovation
For CENTROPE to become competitive at an international level, a strategic approach concerning regional development, technology transfer and innovation is called for. The Focus Report points out both existing and lacking prerequisites for such a strategic approach, especially with regard to stronger co-operation between the universities in the region, the interlinking of existing technology clusters and the mobilisation of the necessary funds.
Focus Report on Human Capital, Education and Labour Markets
At first glance, the labour market in CENTROPE is better off than the EU average. The substantial institutional changes in the region’s labour market over the past decade strongly affected the employment levels in CENTROPE, the most important change being the opening, as of 1 May 2011, of the Austrian labour market to workers from the 2004 EU accession countries. The Focus Report on Human Capital, Education and Labour Markets analyses the situation in CENTROPE after this liberalisation, points out trends, challenges and potentials in the region’s labour market and provides policy recommendations with regard to labour and student mobility and increased co-operation in CENTROPE.
The 2012 Regional Development Monitoring results
The satisfactory performance of the CENTROPE region in the wake of the financial crisis is still continuing in 2012, with good perspectives also for the two following years: such are the results of the evaluations and projections of the newest Regional Development Monitoring annual report. In more concrete terms, growth of added value in the region is expected to continue above the 2% threshold and the attractiveness of centrope for foreign direct investment should not waver. Against this background, the 2012 Report offers perspectives on the strengths, weaknesses, opportunities and potential threats for the four-country region, evaluates the performance of the cross-border cooperation and spells out policy recommendations.
Focus Report on the Service Industry as a growth factor in CENTROPE
This focus report analyses the situation of the service industry in CENTROPE by considering the specialisation of its constituent parts and with emphasis on their different comparative advantages. Special attention is paid to the tourism industry and its current situation, as well as the outcomes and perspectives of cross-border cooperation in this field.