Second tier cities matter Michaela Gensheimer ESPON EGTC European second tier cities in cohesive territorial development ESPON workshop, 1 June 2016, Berlin

What are we talking about? Second tier cities: Group of largest cities in a country excluding the capital. Their economic and social performance is sufficiently important to affect the performance of the national economy. The 127 second tier cities in Europe vary considerably in size, accessibility and economic performance. No second tier cities are defined for Iceland, Cyprus, Luxembourg, Malta and Liechtenstein due to the small size of the countries and consequently the absence of other larger cities apart from the capital.

Population development Second tier cities growing in population Population growth in second tier cities > European average in NO, SE, CH, AT, FIN, FR and ES Baltic and some eastern second tier cities with negative migratory balance RO and HU experienced considerable downturn Young, well-educated people moved from East, partially South, to other parts of Europe to find jobs Recipient regions and second tier cities benefited of immigration in their own recovery from crisis

Economic development Second tier cities recovering faster economically than capitals Second tier cities still contribute strongly to their national economic performance. In 18 out of 26 European countries second tier cities had higher annual GDP growth rates than their capitals. Contrary to pre-crisis period, also several Eastern second tier cities outperformed their capitals.

Economic development Second tier cities recovering faster economically than capitals Polish second tier cities not at all affected by crisis or recovered very quickly. Nevertheless: Eastern capitals still outperform their second tier cities in absolute GDP values. For example, in 2013, the GDP in Bucharest was six times that of Cluj- Napoca. Some Spanish second tier cities had not reached their pre-crisis GDP level in Also some second tier cities in southern Italy still performed less strongly in 2013 than before crisis.

Accessibility dynamics Major improvements in second tier cities’ potential air accessibility Highest relative changes in eastern and south-eastern Europe. Second tier cities with < average accessibility by air in 2001 experienced growth of up to or more than 50%.

Accessibility dynamics Major improvements in second tier cities’ accessibility In most western and central European countries, potential air accessibility comparatively deteriorated in second tier and capital cities. Potential air accessibility still high there, though.

Educational attainment Human capital of many second tier cities is well educated In 2014, at least six European second tier cities outperformed their capitals in terms of education levels of their population. Most of these cities are research intensive, focus on ICT, host companies from related economic activities, and offer tertiary education. Research and economy in these cities often benefit of synergies.

Educational attainment Human capital of many second tier cities is well educated Some other second tier cities show high shares of population with tertiary education, although not as high as in capital. Some second tier cities’ share of population with tertiary education < national average, e.g. in DK, HU, CZ, and partially ES and IT. This is partially a consequence of crisis, which caused many young, well-educated people to leave their cities/countries to find jobs in other parts of Europe.

Key messages for policy consideration Territorial governance matters for the performance of second tier cities Several European second tier cities fared better than their capitals throughout the economic crisis. Second tier cities differ and require tailor-made, place-based policy development. The smaller the socio-economic difference between second tier cities and the capital, the more successful national economies will be and the better second tier cities will perform. Accessibility improvements for second tier cities often imply investments in secondary transport networks. Regional airports can in certain circumstances improve the development potential of second tier cities with low accessibility by air.

Key messages for policy consideration Territorial governance matters for the performance of second tier cities Access to higher education, eventually with a focus on the locally prevailing economic structure, should be further improved for second tier cities, so that they can continue attracting young people. Policies and investments should stimulate positive development trends in Europe’s second tier cities, in particular in countries where capital cities still strongly dominate the national economy.

ESPON 2020 Thank you for your attention Inspire policy making by territorial evidence