28 Outstanding European Regions

The new edition of the Regional Competitiveness Atlas has arrived! Presentedduring the “Open Days” (European Week of Regions and Cities) of the Committee of the Regions held in Brussels from 6 to 9 October, this study has been carried out since last year by Eurochambres (the Association of European Chambers of Commerce). It offers its readers a snapshot of where the different European regions stand in terms of economic development, and more importantly, on how they are progressing in relation to six key economic indicators: economic performance (economic context and GDP), employment, education, R&D and innovation, transport and internationalisation.Please note however that this second analysis is somewhat different from last year’s edition, as it focuses on how the regions have progressed compared to the previous year. European regions have been ranked according to the chosen indicators, and for each Member State and indicator, the best progressing region has been singled out, resulting in a comparison of the best progressing regions of the 27 Member States.The atlas shows clearly that the regions show-ing the most progress in the Member States are not automatically the best performing ones, and that thus the less prosperous regions are catching up with the more prosperous. With regard to the absolute ranking of the 268 Nuts 2 regions, it can be observed that several regions within the same country appear regularly in the top 10 of the best progressing regions.The top 10 progress ranking of the GDP and employment indicators are largely dominated by regions from the 2004 and 2007 EU entrants, while the education progress top 10 is exclusively made of regions of the EU15, with a clear predominance of UK regions (6 out of 10).The innovation indicator has been analysed in terms of absolute values, and the picture is dominated by German regions with 6 out of 10 top regions showing the highest number of patent applications per million inhabitants with the EPO. The regional air and maritime freight indicators have also been analysed in absolute terms, and regions from the EU15 exclusively make up the top 10 rankings. As a partner of Eurochambres, Commerce International was keen to take part in drawing up this new panorama of European regional competitiveness for this 2008 edition. The magazine’s editorial team met with many Chamber and economic representatives in the 28 regions obtaining the best results in each of the study’s indicators. You will discover their findings integrated with the official Eurochambres study in the pages of the exclusive dossier “28 Outstanding European Regions”. As the results for internationalisation are available for countries rather than for regions, Commerce International has not reproduced results for this indicator in this dossier. The full results of the Region Competitiveness Atlas can nevertheless be consulted on www.eurochambres.eu 
Economic background and GDPThe first indicator sets the overall economic background and offers a regional analysis in terms of actual economic growth rate and GDP in PPP per capita.In 2005, the average EU GDP in PPP per capita amounts to 22,400 euros and the EU27 witnesses 1.9% economic growth. The standard of living in European regions varies greatly: the GDP in PPP per capita of the richest region, Inner London (67,798 euros), is more than 12 times higher than that of the least prosperous one, North-East Romania (5,430 euros). Although the GDP in PPP per capita of most regions from the 2004 and post-2004 entrants is below the EU27 average, their annual growth rate is higher than that of the EU15 Member States regions, a sign that they are gradually catching up with the latter. Among the 2004 and post-2004 EU entrants, the highest growth rates are found mostly in capital regions, while this is not the case for the best progressing EU15 regions. For the best progressing regions as well, the services sector is overall an important contributor to the gross value added, attaining 72.4% on average. 
EmploymentThe total employment rate of the EU27 progressed by 0.9 percentage points from 2005 to 2006, which means that over 4 million people successfully entered the job market. Based on the 2006 employment figures, an average annual employment growth of 2.15 % would be needed if the EU27 want to achieve the 70% overall employment target by 2010, and an average female employment growth of 1.25% p.a. for its female employment target. Out of the 268 NUTS2 regions in the European Union, 71 have reached the Lisbon target of 70% employment, 153 are above the European average of 64.3%, 2 are at the same level as the EU average, and the remaining regions below. From an employment growth perspective, 127 regions progress at a faster pace than the EU average, 12 regions at the same pace, whereas 129 regions progress more slowly and part of the latter group witness a negative progression.The Bulgarian region of Severozapaden (BG31) witnesses the highest progressionwith 4.1 points, whereas Cumbria (UKD1) witnesses the highest setback. The two regions are nevertheless not comparable as Cumbria has an employment rate of 72.3% in 2006, and Severozapaden 53.5%.The unemployment rate and long term unemployment both continue to decrease in 2006, yet as for employment, there are big discrepancies between European regions, and even between regions in one country. Women are still more affected by unemployment than men.Based on the selected regions, there is a clear difference in average weekly working time between the northern European countries, the southern European countries and those that joined the Union in 2004. The European Union’s progression to a services economy is evident from employment per sector results: for the reference year, 66.5% of all employment is in services, 27.6% in industry and the remaining 5.9% in agriculture, hunting and forestry.
Education and Lifelong learningEducation and training are clearly connected to the economic performance of a region, as they directly influence the quality of the labour force.  In 2006, nearly half of the EU27 population aged 25-64 have completed upper secondary education and 22.7% have obtained a university degree or equivalent.Nine out of the 27 top national regions for ISCED5-6 education are beyond the EU target of 85% minimum for upper secondary education (ISCED level 3). Prague region (CZ01) scores highest with 95.4%, Malta is at the bottom of the list with 26.5%. It can be noted that the regions from the countries that joined the EU in 2004 and after are at the upper end of the ranking, except Malta and Cyprus.  Among the best progressing regions in the EU27 for ISCED5-6 level education, five reach the EU upper secondary education benchmark. Those regions are all located in countries that joined the Union in 2004 and afterwards.In a fast changing knowledge-based economy, lifelong learning is crucial to the European competitiveness. Yet, across the EU27 the average participation of the 25-64 age group in life-long learning decreases to 9.1% in 2006, moving away from the 12.5% target by 2010 that has been agreed on in the European Education and Training 2010 work programme. Among the best progressing national champions, six are above the lifelong learning target, one has reached the threshold of 10%, the others are below. Denmark (DK0), Aland (FI20) and Sydsverige (SE22) have the highest participation rates, each above 20%. In Yuzhentsentralen (BG42), the participation rate is below 1%. 
InnovationInnovation has for long been recognised as a key driver for growth and competitiveness. And even though the concept has been broadened to include different aspects of enterprise life, R&D remains an important aspect. The knowledge-based society would not be possible without the widespread usage of ICT and the full integration of the three sides of the “Knowledge Triangle” (Higher Education, Research, Business-Innovation). A region’s R&D dynamism may be determined by the number of patent applications filed with the EPO. The results for 2005 show again the strong domination of EU15 regions in this respect, the figures of which are well above those of the countries that joined the European Union in 2004 and after.One of the main human resources challenges for the European Union is to stop its brain drain and promote R&D careers as attractive employment opportunities. The analysis of the 27 best performing regions shows that the share of total R&D personnel in the business enterprise sector is below that of the cumulated government and higher education sectors in fifteen regions, whereas it is higher in six regions. Not surprisingly, those six regions are located in countries where the R&D expenditure contribution from the business enterprise sector is very high in comparison to the government and higher education sectors contribution. Access to the internet has been progressing rapidly during the last five years, yet the access level of households remains clearly below that of enterprises. Among the enterprises having access to internet, over three quarters on average use broadband connections. Nevertheless big differences are noted between European Union Member States on one hand and between different sized enterprises on the other.
TransportThe global environmental and climate challenges Europe is facing make the promotion of environmentally sustainable transport networks essential for generating sustainable economic growth and competitiveness and for ensuring a habitable environment for the generations to come. While road and sea are clearly the main carriage ways for freight in the EU27, representing over 80% of the modal split of freight transport performance based on tonne-kilometres, alternative modes are being developed in the frame of the European Union-wide TEN projects. In 2005, the number of regional airports declaring airfreight increases. In comparison to last year’s figures, the regional airports of Mazowieckie (PL12) in Poland, as well as Slovenia and Slovakia enter the ranking at the lower end. From the general perspective, the top EU regions are the same as previously, except in Sweden, where “Västsverige” (SE23) takes the lead over Stockholm (SE11) and enters the top EU27 ranking.Maritime freight remains a significant transport mode, second only to road transport.The “Northern Range”, a line of ports running from Le Havre (FR) to Hamburg (DE), confirms its leadership position among all European ports in terms of goods transit. The two outstanding regions are the same as last year: Zuid-Holland (NL33), with the port of Rotterdam, and the province of Antwerp (BE21), with Antwerp port. Energy sources and energy consumption have become burning political issues in the course of the last ten years as all European regions confront the problems of climactic changes and energy supplies. An overview of energy supplies has been included in this year’s atlas, as well as energy dependency rates.
Note: Although the objective of the atlas is to offer a regional perspective, national data is used in the absence of updated regional data. Regional analysis was carried out using the Eurostat NUT2 ranking. All data, with the exception of the number of patent applications per million inhabitants, come from the Eurostat server and refer to the last available year at the time when data was collected. Patent application figures come from the OECD REGPAT database.