The European Regional Competitiveness Index (RCI) was set up as a tool to assist European Union (EU) regions in setting the priorities to increase their competitiveness by measuring the strong and weak points in terms of territorial competitiveness for each of the EU regions. The index builds on the Global Competitiveness Index methodology developed by the World Economic Forum. It covers a wide range of issues related to competitiveness including innovation, quality of institutions, transport and digital infrastructure and measures of health and human capital. As such, the RCI extends the traditional analysis of competitiveness from a purely economic measure to incorporate social elements. In this way, it goes beyond the perspective of businesses to integrate the concerns of residents. In addition, the index takes into account the level of development of a region by shifting the emphasis from more basic issues to innovation-related factors. This chapter presents the RCI and discusses its evolution between the 2010 and 2013 editions. The use of updated and regional-level sourced data, together with method refinements, are considered. These refinements smooth the transition between the different levels of development and take into account commuting patterns. The chapter goes on to outline how regions in Italy, Spain, Belgium, Germany and Luxembourg have already started using the RCI to pick priorities for their development strategies. The index can provide indications of what each region should focus on, taking into account its specific situation and its overall level of development.
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Paola Annoni and Lewis Dijkstra
Lucía Sáez and Iñaki Periáñez
Globalization has been made possible by the development of worldwide trade, the elimination of trade barriers, and by new information and communication technologies (ICTs). With integration progressing, political borders between countries have become less important, and the roles of cities and the competition between them become more significant. Cities face the challenge of redesigning themselves as systems that can adapt quickly and effectively to the challenges and opportunities entailed by a dynamic global environment. They must compete with one another to attract resources and investment that can create wealth and employment and assure regeneration. Engagement in benchmarking can help city managers identify competitors, establish competition profiles and determine where their competitive advantage may lie on the one hand, and to develop distinctive positioning strategies on the other. In Europe, the expansion of the European Union (EU) has resulted in a union of territories with widely varying levels of economic development, but no current benchmarking studies refer exclusively to cities in Europe. Therefore, the main contribution of this chapter is a benchmarking of European cities in terms of how competitive they are when it comes to attracting businesses and investment. Urban competitiveness is a complex, multidimensional issue, so a scale of measurement has been drawn up based on a synthetic index, the Urban Competitiveness Index (UCI). This index is made up of sub-indicators representing the basic, efficiency and innovation dimensions. The sample comprises 159 cities from 26 EU countries, classed as larger urban zones (LUZs), with populations of at least 100 000.
Robert Huggins and Piers Thompson
Notions and theories of regional competitiveness are broadly cognate with theories of endogenous growth, which focuses on the role of knowledge as a key driver of productivity and economic growth, and departs from the traditional emphasis on the accumulation of physical capital. However, despite contemporary theoretical developments in the field of economic growth, there is a need to further widen our conception of the investment resources underpinning economic growth. Indeed, it is suggested that perhaps the most interesting implications of endogenous growth theory relate to the impact of the spatial organization of regions on flows of knowledge. In particular, it is considered that differences in regional growth can potentially be explained by differences in the conditions for creating, accumulating and _ crucially _ transmitting knowledge. The aim of this chapter is to propose that the inter-organizational networks underpinning the flow of knowledge within and across regions are a key capital input within regional growth and competitiveness processes. The chapter proposes that the concept of ‘network capital’ _ in the form of investments in calculative relations through which organizations gain access to knowledge to enhance expected economic returns _ should be incorporated into regional growth models. The chapter outlines the case and potential methods for integrating network perspectives into theories of regional competitiveness and growth, with the particular importance of the network capital built by entrepreneurs and their firms explored. The case of Silicon Valley provides some empirical insights which are then used to draw implications for regional economic development policy and future research.
Johan Jansson and Anders Waxell
Regional development, growth and competitiveness research has to a large extent come to focus on innovation and technological change. However, it is apparent that some economic activities remain competitive despite little or no innovation. To explore this, the chapter focuses on the role of ‘quality’, or quality processes, which lead to a ‘quality promise’ that is experienced, constructed, mediated and negotiated by systems of actors in specific spatial contexts. Few studies have seriously recognized the relationship between space and quality, especially in explaining global and regional competitiveness. The aim of this chapter, therefore, is to develop a theoretical framework for identifying and analysing quality processes creating and recreating understandings, perceptions and experiences of a quality promise. These processes are deeply rooted in space, stimulated by localized learning, which in turn facilitates place-based branding. Adding quality to the discourse of regional competitiveness may complement a traditional view criticized for treating growth as equivalent to regional prosperity, and thus contributing to regional, urban, and rural resilience and sustainability. Hence, quality is not only pertinent for development in advanced economies, but could also be part of development and progress in developing regions and countries. Additionally, a quality-based regional competiveness framework provides an increased focus on traditional (craft) products and processes. As such it may offer an alternative or additional way of upgrading local and regional products in global production networks, while encouraging local uniqueness and global adaptability.
This chapter presents an overview of various models of regional growth that have appeared in the literature in the last 40 years. It considers the past, and therefore supply-side models such as the standard neoclassical, juxtaposed against essentially demand-side approaches such as the export-base and cumulative causation models (as integrated into the Kaldorian approach); before moving on to the present and more recent versions of the neoclassical model involving spatial weights and ‘convergence clubs’, as well as New Economic Geography core_periphery models, and the ‘innovation systems’ approach. A key feature of the more recent literature is an attempt to explicitly include spatial factors into the model, and thus there is a renewed emphasis on agglomeration economies and spillovers. The discussion of ‘present’ and ‘future’ approaches to regional growth overlaps with the current emphasis in the literature on the importance of more intangible factors such as the role of knowledge and its influence on growth. Lastly, there is a discussion of the greater emphasis that needs to be placed at the micro level when considering what drives growth, and thus factors such as inter alia firm heterogeneity, entrepreneurship and absorptive capacity. Recent micro-level evidence is also presented and related to the earlier discussion of the various models of regional growth.
Karl Aiginger and Matthias Firgo
The term ‘competitiveness’ has been used in conceptually distinct ways at the firm, regional and national level, and after reviewing existing concepts at the national level this chapter introduces a new definition of regional competitiveness, adapting definitions used in the academic literature. Specifically, it assessess ‘outcome competitiveness’ not in reference to gross domestic product (GDP) or employment but under the new perspective of a more socially inclusive and ecologically sustainable growth path, as envisaged in the WWWforEurope research programme, in which 33 European research groups are taking part. Evaluating competitiveness requires both an input assessment (costs, productivity, economic structure, capabilities) and an outcome assessment. The chapter defines regional outcome competitiveness as the ability of a region to deliver Beyond GDP goals. For regions in industrialized countries, this ability depends on innovation, education, institutions, social cohesion and ecological ambition. Given this new perspective (of broader Beyond GDP goals), social investments and ecological ambitions should not be considered costs, but rather drivers of a ‘high-road competitiveness’. This is compatible with a new innovation policy fostering non-technical innovations and a new industrial policy supporting societal goals. Applying this concept to European regions, the chapter shows which regions take the ‘high road’ to competitiveness and compares results with the existing literature.
Mari José Aranguren, Edurne Magro and James R. Wilson
The development of regional competitiveness as a powerful policy discourse has been built on the co-evolution of academic literature and policy practice around a series of influential place-based concepts. It also coincides with evolving theory and practice in policymaking, by which policy is increasingly seen as an outcome of dialogue and decision-making processes among networks of place-based agents, breaking down the traditional public_private divide. The confluence of these trends is very clearly evident in debates on territorial strategy, which in Europe have taken shape around the notion of regional innovation strategies for smart specialization. The aim of this chapter is to discuss regional competitiveness policy in today’s era of smart specialization. The emergence and evolution of regional competitiveness policies is traced, with two of the most influential place-based competitiveness concepts _ regional innovation systems and clusters _ highlighted. Sources of policy complexity are identified in the interactions between distinct policy rationales, the multiple policy domains and difficult processes of instrument choice, and the presence of multiple actors at multiple scales. Governance and learning processes around policymaking are increasingly important, an aspect that is prevalent in debates around smart specialization. The chapter then addresses the concept of smart specialization, making links with previously analysed features of regional competitiveness policies. This leads to a series of concluding reflections that disentangle the novelty of smart specialization strategies from other policy approaches and highlight some implications for the way in which governments operate around regional competitiveness policies.
Philip McCann and Raquel Ortega-Argilés
The notion of competiveness is not without its detractors. However, it has evolved largely outside of orthodox economics in the engineering and management disciplines, and emerged primarily as a systems type of perspective and approach which is also central to modern analyses of both entrepreneurship and innovation. Over time the concept has become increasingly adopted within mainstream economics and is regarded as having particular relevance in the context of regions and geography. The concept has now become a central pillar of many economic policy narratives within the international arena and also plays an important role in the international policy transfer agenda. This is particularly so in the case of the European Union smart specialization agenda, which although emerging from slightly different origins and emphasizing different priorities and mechanisms still follows many similar or related principles to those highlighted in the competiveness literature. This chapter examines the evolution of the concept of competitiveness and discusses its increasing application with regard to identifying the underlying economic performance of regions and the appropriate and relevant policy settings which might be employed in order to enhance such performance. Its importance in partly influencing and shaping some of the themes of the smart specialization agenda of the European Union Cohesion Policy are discussed.
Frank van Oort and Mark Thissen
Analysing regional competitiveness by benchmarking regions on various indicators is a common practice. However, such rankings of regions are not based on actual competition; instead, they compare a set of regions on various indicators. This chapter benchmarks regions using a measure for revealed competition based on product-specific spatial market overlap on firms’ export markets, on knowledge cooperation among scientists, and on the attraction of foreign direct investment (FDI). This analysis shows that this revealed competition is not only spatially different for these three types of competition, but that it is also region- and market-specific. This confronts policymakers with complicated place-based decisions concerning investments aimed at enhancing a region’s competitive position in Europe, which is far more complicated than suggested by existing benchmarking exercises. The chapter illustrates this with the example of the city of Utrecht, which is currently the most competitive region according to the European Regional Competitiveness Index.
Roberto Cellini, Paolo Di Caro and Gianpiero Torrisi
The concept of resilience has attracted increasing interest in regional economics. In the flourishing literature, however, results are mixed, even when referring to the same case study. This mixed evidence stems also from different operationalization of the multifaceted resilience concept; the main difference being between studies using gross domestic product (GDP) series and those measuring regional economic performance in terms of fluctuations in employment levels. It is important, therefore, to address what kind of relationship – if any – exists between the two measures. To this end, the chapter analyses and compares results concerning regional resilience in Italy over the last 40 years, focusing on the differences deriving from the choice between the two aforementioned measures. The analysis reveals that the information contained in the different series are not alternative and overlapping but complementary.