Investing in Europe's cities and regions: public private partners for growth and jobs

EPC Policy Dialogue28 September 2006

Europe is facing a new reality

Globalisation has created new markets and new opportunities worldwide. But it has also increased competition and structural change both within and outside the EU.

The Single market is one of the answers to Globalisation. National solutions to deal with structural changes are no longer sufficient in Europe. Certain national economic policy instruments have lost their influence in the Euro-area. (For example; running a budget deficit, depreciation of the currency, changing of interest rates or state aid)

As a result the individual Member States have to adapt their policies when attempting to create jobs and growth

Globalisation:which way for Europe?

Europe in the world economyGlobalisation

is the challenge for Europe

Macro-regionaltrade integration

National solutions are insufficient

EU(25)

NAFTA(3)

ASEAN(10)

Data: merchandise trade, billions of dollarsSource: WTO, International Trade Statistics 2005

Europe in the world economy

Source: IMF, World Economic Outlook 2006, European Commission, OECD,

Brazil: +3,5 %

Mexico: +3,5 %

USA: +3,7 %

Canada: +3,2 %

China: +8,2 %

India: +6,3 %

Japan: +2,0 %

Australia: +3,6 %

EU 25: +2,2% (Euro zone: +2,0%)

Russia: +5,3 %

Africa: +5,9 %

g l o b a l g r o w t h : 4,8 %

Europe: how many economies?

Internal market and EUROare among the main factorswhich stimulate innovationand competitiveness

… and which reduce the scope for public economic intervention conceived within the national boundaries

Example: financial markets

.Rationale Allocation of capital is improved Higher efficiency of financial intermediation More opportunities for risk-diversification More consumer choice Lower capital costs+improved productivity Common playing field for EURO Global actors on the financial markets

“Regional” banks becoming European market leaders Unicredit – from Northeast Italy to Austria, Germany, Central and

Eastern Europe BBVA - Banco Bilbao Vizcaya + Argentaria …

The EURO era

Real short-term interest rates

Source: EU Commission, AMECO Database

Average 2002-2004, 3 month rateDeflator of private consumption

BE

ELES

FR

IE

IT

NL

AT

PT

FIDE

-2

-1

0

1

2

EURO Countries (except LUX)

%

Is Europe just aboutopening markets and

raising the competition game?

Economic and social cohesion

aims to the reduction of the ‘disparities between the levels of development of the various regions’

is embedded in the Treaty (art. 158)

i.e. the ‘backwardness of the least favoured regions’ and provides for a policy which considers the need of those regions which are lagging behind.

Economic and social cohesionRegional policyconfirmed in 2007-2013with a possible budget of307 billion EUR(36% of total)

Focusregions

Objectivereduce disparities + foster development

PartnershipEU+Member States+Regions+Social Partners

A forward-looking policyconvergence+competitiveness+employment

Not a merely redistributive mechanism

New set of tools for Europe

Some Macro-economic policy tools that used to be in the hands of the Member States are now available on EU level

Some of these tools are likely to have a greater impact on the creation of jobs and growth as efforts can be synchronized and destructive policies limited

EU, Member States, the regions and enterprises need to cooperate intensively (for example: industrial policy)

A strong EU industrial policybased on worldwide excellence…

Example: AIRBUS

Six Centres of Excellencebased around expertise in key production areas

… and a network of regional clusters

Example: AIRBUS

wing at Filton and Broughton, UK; forward and aft fuselage at Nordenham,

Varel, Bremen and Hamburg in Germany; nose and centre fuselage at Toulouse, Saint

Nazaire,Nantes and Méaulte in France; vertical tailplane in Stade, Germany; pylon and nacelle at Saint Eloi, France; horizontal tailplane and A380 sections at

Getafe, Illescas and Puerto Real in Spain.

… why regional clusters?

.Build world class competence regionsbased on strong inter-institutionaland public-private partnerships,and articulated on integratedinnovation platforms Education Research and Development Technological Transfer Entrepreneurship Access to finance

… sharing excellence across regions

.Partnership and Cooperation

Enterprises and Administrationsmake excellence together

Regions can learn each other 22 PAXIS regions of excellence 60 PRO INNO regions METREX – Network of European Metropolitan Regions and

Areas Innovative Regions Regions of Knowledge Etc.

Lisbon, what was about?

“The Union has today set itself a new strategic goal for the next decade:to become the most competitive and dynamic knowledge-based economy in the world, capable of sustainable economic growth with more and better jobs and greater social cohesion.….A meeting of the European Council to be held every Spring will define the relevant mandates and ensure that they are followed up.”

Conclusions European CouncilLisbon, 23 and 24 March 2000

Lisbon, midterm but not yet halfway!

“Five years after the launch of the Lisbon Strategy, the results are mixed. Alongside undeniable progress, there are shortcomings and obvious delays.…To that end, it is essential to relaunch the Lisbon Strategy without delay and re-focus priorities on growth and employment.…Union must mobilise to a greater degree all appropriatenational and Community resources – including the cohesion policy”

Conclusions European Council Brussels, 22 and 23 March 2005

“The Council approves the (24) Integrated Guidelines for Growth and Jobs 2005-2008…To follow the new three-year governance cycle, the Integrated Guidelines must now be translated into ambitious national reform programmes, to be established by the Member States in accordance with the timetable put forward by the Commission, which respond to their specific needs and situations, and which reflect this integrated and consistent approach involving macro-economic policies, micro-economic policies, and employment.”

Conclusions European CouncilBrussels, 16 and 17 June 2005

Lisbon, midterm but not yet halfway!

Lisbon, «time to move up a gear»Priority areas indicated by the last Spring European Council Investing more in knowledge and innovation

(i.e. national targets for RTD expenditure: 3% GDP European Institute for Technology, etc.)

Unlocking business potential, especially of SMEs(i.e. better regulation and simplification, one-stop shops for SMEs, access to finance, etc.)

Increasing employment opportunities for priority categories(i.e. «by end 2007 every young person who has left the school and is unemployed should be offered a job, apprenticeship, additional tranining within 6 months»)

An energy policy for Europe(i.e. integration and interconnection of national energy markets, sustainable renewable energy sources, etc.)

Conclusions European CouncilLisbon, 22-23 March 2006

Creating jobs and growth-what can be done on the regional level

Promote the creation of business clusters Develop local and regional action plans for growth Introduce entrepreneurship as a subject in schools Set up consultancy services for new entrepreneurs and

one stop shops for businesses Train civil servants in enterprise culture Expand cooperation with universities and disseminate

research results

Creating jobs and growth-what can be done on the regional level

Use spatial planning as an active instrument to boost jobs and growth

Assess the impact of decisions on enterprises-impact assessment should follow every decision

Improve procurement skills of officials Promote small business in procurement procedures Assess and explore creative forms of service delivery Labour market matching

Role the Committee of the Regions

Influence European Policy through consultation based on the Treaty

Bring forward new information through the Territorial Dialogue and the Lisbon Monitoring Platform

Open Days 2006 Disseminate information on Public Private Partnerships

as a tool to promote jobs and growth

Support new community initiatives such as Pre-commercial Procurement of Innovation

CoR political agenda on Lisbon A true partnership for jobs and growth

with cities and regions

Territorial approach= disaggregated targets + cohesive approach

Improved Governance= participated implementation and monitoring

Delivering through cohesion policy= sinergies with National Plans for cohesion policy.Added value of Territorial Cooperation

Awareness and dialogue= local debates with citizens, businesses,social actors

Territorial Dialogue

CoR survey on how National Reform Programmes (NRPs) were perceived by the Regions and Cities showed that although most of the regions were aware of the NRPs they were not involved when they were drawn up

The conclusion being that it is necessary that all stakeholders feel that the policies proposed concern them and they are truly involved in the decision-making and implementation process

Territorial Dialogue

Spring European Council of 2006 asked the CoR to submit a report on growth and jobs in early 2008

Monitoring Consultation

In-house expertise

(Surveys, Reports)

External Expertise

(Studies, Scoreboard)

OpinionsResolutionsDeclarations

Communication and exchange of experience(Conferences, Events, Forums, Press Releases, Publications)

SPRING

EUROPEAN

COUNCIL

TERRITORIAL

DIALOGUE

Lisbon Monitoring Platform

Launched at the first territorial Dialogue and will run until 2008

Operational tool for local and regional authorities Contains regional statistical data, interactive electronic

forums and a documentation centre Initially it will cover 50 EU local and regional authorities,

but the number will increase progressively Will provide important input to the CoR political message

on a more decentralized implementation of the Lisbon strategy

Platforms opens to the public on Open Days 9-12 October 2006

Open Days 9-12 October 2006

Theme: Investing in Europe's cities and regions: public private partners for growth and jobs

Forth consecutive year with more than 5000 participants, 600 speakers and 111 workshops

Organised jointly by the European Commission's DG Regio and the CoR

A trading place for knowledge on how to do things, how to do things better and how to exchange information and experiences

A novelty this year is that the Private Sector is involved

Open Days 9-12 October 2006 Geographical origin

75% of the participants will travel to Brussels specifically for the OPEN DAYS from all 25 Member States

Italy, the UK and Poland have the most participants – over 200 each

Organisational affiliation

40% work for national, regional or local administrations 15% are academics or consultants 10% from the NGO sector 6% from Regional Brussels offices 5% from business and banking organisations 5% from EU institutions

Open Days 9-12 October 2006

This year's addition will give special focus to Public-Private Partnerships (PPPs)

The advantages of PPPs are that they could provide: Additional capital Alternative management and implementation skills Value added to the consumer and the public at large Better identification of needs and optimal use of

resources

Open Days 9-12 October 2006

Example from Open Days Programme: Creating lead markets: pre-commercial procurement of innovation

Addresses the missing link in the European innovation cycle of public procurers acting as technologically demanding first buyers

Share with suppliers the risks and benefits of picking up exploratory research which has the potential to innovate public services

Open Days 9-12 October 2006

Local and regional authorities represent 80 % of public procurement in EU

Small percentage of the public procurement goes to innovative products

European Commission and CoR cooperation to explore opportunities to use public procurement as a driving force for to create lead markets in health, transport and government

Conclusion The private sector has already had

to adjust to a rapidly changing world environment, the public sector now has to follow

To be successful all levels of government have to cooperate and learn from the best