DQE Towards the Sustainable Region /DQE / 2NOO27I Project co-financed by the Structural Funds 13/06/20151 Territorial issues in business location IWG 3 Athens University of Economics and Business Kainuun Etu Oy

DQE Towards the Sustainable Region /DQE / 2NOO27I Project co-financed by the Structural Funds 13/06/20152 Territorial issues in business location IWG 3 Content of the lecture –To review main territorial issues relevant to business development –To identify potential link between these issues and the DQE approach Question: how do territorial issues relate to sustainable competitive business development?

DQE Towards the Sustainable Region /DQE / 2NOO27I Project co-financed by the Structural Funds 13/06/20153 Territorial issues in business location IWG 3 Objectives –To review key-territorial parametres in business development –To help SME:s in their localisation decision making –To highlight the links between business and regional sustainable competitive development –To point out potential links between territorial organisation and the Gothenburg strategy (3-pillared development approach)

DQE Towards the Sustainable Region /DQE / 2NOO27I Project co-financed by the Structural Funds 13/06/20154 Territorial issues in business location IWG 3 Background for business location Today regions compete to attract and keep businesses and qualified people Regional competition may be at international level, but also at national level. –Competition of regions at national level is reflected in national level urban concentrations and population migration –Competition of regions at international level leads to world – important economies of scale, for example stock market economy –base in London, New York, ….. Regional competition ultimately leads to regioanal economic concentration and specialisation, and to a world-level redistribution of production and R&D centres Branch – expertise is becoming very important again To attract and keep businesses a region must dispose of branch – opportunities and a favourabale business development context

DQE Towards the Sustainable Region /DQE / 2NOO27I Project co-financed by the Structural Funds 13/06/20155 Territorial issues in business location IWG 3 Territorial issues affect businesses in two ways: (1) in the sense of branch-related opportunities and(2) in the sense of the business development context Analysis and assessment of branch opportunities – what to produce where Analysis and assessment of favourable business development context – under what terms to produce Decision making for locating / expanding a business - combination of private and public sector contexts and itneraction

DQE Towards the Sustainable Region /DQE / 2NOO27I Project co-financed by the Structural Funds 13/06/20156 Territorial issues in business location IWG 3 Key – territorial parametres in business development –1st issue – milestone: what to produce where –2nd issue - crucial: under what terms to produce –Decisions involve both private and public sector parametres

DQE Towards the Sustainable Region /DQE / 2NOO27I Project co-financed by the Structural Funds 13/06/20157 Key – territorial parametres in business development PRIVATE SECTOR: Production or / and demand opportunities –Differentiation –Selling –Lowering of cost PUBLIC SECTOR: Legal and institutional framework –Clear framework of land ownership and / or land leasing –Land use plan –Development framework regional / municipal development plan framework of environmental sustainability measures incentives for business development (business services, financial…)

DQE Towards the Sustainable Region /DQE / 2NOO27I Project co-financed by the Structural Funds 13/06/20158 What to produce where: production/demand opportunities + the regional / municipal development approach Examples of basic orientations of regional development approaches 1.Supply-based regional economy: regional competitive advantage based on (all or some) Raw materials Locational advantages Low labour costs Highly skilled workforce –framework of environmental sustainability measures –incentives for business development (business services, financial…) Key – territorial parametres for business development

DQE Towards the Sustainable Region /DQE / 2NOO27I Project co-financed by the Structural Funds 13/06/20159 Territorial issues in business location IWG 3 - examples of regional development strategies 2.Demand-based regional economy: regional competitive advantage based on consumption patterns (all or some) Tourism, Athletics, Commercial, Cultural ….. 3.Decision – makers’ economy: highly specialised functions and services of international impact (all or some) Stock markets, …… 4.Financial, taxation, funding redistribution from national level economy: highly favourable terms for attracting businesses in a certain area.

DQE Towards the Sustainable Region /DQE / 2NOO27I Project co-financed by the Structural Funds 13/06/ Territorial issues in business location IWG 3 Under what terms to produce – legal+ institutional +development frameworks = development regulation + development measures –Development regulation Clear framework of land ownership and / or land leasing Land use plan (what may be built where, under what construction terms) –Development measures Regional / municipal development approaches (see slides 8 + 9) Permits (e.g. Construction) and Licesnsing (e.g. Business and Professional) Access to skilled labour and R&D Framework of environmental sustainability measures Incentives (financial, funding, taxation, …) Business services Connectedness (transport and communication) Bureaucracy compressed Trust, cooperation, ….

DQE Towards the Sustainable Region /DQE / 2NOO27I Project co-financed by the Structural Funds 13/06/ Territorial issues in business location IWG 3 Business and regional sustainable competititive development Sustainability Businesses needRegion provides -Opportunities -Good regulation -Incentives, Business services, -…….…. 1. Economic sustainability 2.Social sustainability 3. Environmental sustainability Businesses needRegion provides / encourages - Labour, skilled labour - Transfer of knowledge - Cooperation -……. Businesses comply / benefit / contribute Region regulates / encourages -Energy and resource technology (  lower production costs) -Waste management (internalisation of externality) -Cardiff process (branch – based process for environmentally friendly products) -Corporate responsibility, education(’design with the environment), services…..

DQE Towards the Sustainable Region /DQE / 2NOO27I Project co-financed by the Structural Funds 13/06/ Territorial issues in business location IWG 3 Conclusion – where do things go wrong? –International consensus for environmental protection still weak. Environment still considered an enemy of economic development, e.g. nature reserves in Alaska –Cardiff process has been slowed down –Regions sell ’low cost’ only –Regions do not provide tailored incentives for business development and environmental sustainability –Regions do not coordinate economic to education & vocational policies –Regions do not include specialised business services as part of their development strategy –………….