The instruments of regional policy in European countries John Bachtler and Sara Davies Presentation to the Norwegian Ministry of Local Government and Modernisation, Oslo, 20 March 2015

Possible options for Norway Regional policy in other European countries Norway’s regional development challenges & instruments 2 Sara Davies, European Policies Research Centre, University of Strathclyde Overview

Sparsely populated regions Low population density Market access Narrow sectoral structure Skills mismatch Skill shortages in some regions Fewer skilled jobs elsewhere Pockets of high unemployment All regions Framework conditions Clusters Bottom-up strategic capacities 3 Sara Davies, European Policies Research Centre, University of Strathclyde Key development challenges in Norway

Periphery Regional Investment Grant & Regional Risk Loan Social Security Concession Action zone Small capacity building measures Skills mismatch Assessments of transport infrastructure impact on local labour market size All/Any regions Global centres of expertise Centres of expertise Arena programme Urban development strategies 4 Sara Davies, European Policies Research Centre, University of Strathclyde Main regional policy instruments in Norway

Context & capacity Business (Market access) costs Quality of life Agglom- eration effects 5 Sara Davies, European Policies Research Centre, University of Strathclyde Regional policies for sparsely populated regions

NorwayOther countries Higher education (networks)NationalNational (e.g. FI SE UK) Public research facilitiesNationalDE National Business parks & related infrastructure NationalAT DE EE FI FR IT CH Education & training facilities – F2F or ICT NationalDE National Local capacity & strategy building Bulyst, LUK, Programme for Small Municipalities AT DE HU PT CH 6 Sara Davies, European Policies Research Centre, University of Strathclyde Building context & capacity in sparsely populated regions

NorwayOther countries Investment grantsRegional Investment Grant EU28 except AT EE NL DK only SMEs Loans & interest rate subsidies Regional Risk LoanAT DK FI FR DE IT PT ES SI UK GuaranteesAT BE DE FI SI UK Tax relief & creditsBG HR CZ FR GR MT SK CH Seed capital funds Venture capital fundsDK FI Aid for business trainingHR CZ DE EE SE Aid to SMEs/start-ups onlyBE DE HR CY CZ DK LT PT SE 7 Sara Davies, European Policies Research Centre, University of Strathclyde Building business strengths in sparsely populated regions

NorwayOther countries Transport infrastructureBG EE FR IT NL ES National ICT & broadbandDE HR National Transport aidFI MT SE Subsidised ferry travelHR UK Other costs eg Wage subsidies Relief on social contributions Social security concession AT CZ EE FI FR DE GR LT LU MT PL PT RO SK SI BE(B) BG RO SK ES SE Aid to visit trade fairs etcPT SE Exporting/marketing adviceNational 8 Sara Davies, European Policies Research Centre, University of Strathclyde Reducing (market access) costs in sparsely populated regions

NorwayOther countries Expand the pool of skilled labourNational Assess LM effects of transport infrastructure National Support local supply chainsNationalNational (local/regional agencies) Knowledge spillovers - business networks NationalDE UK Entities tasked with building/ supporting links to external agglomerations NationalAT DE IE UK 9 Sara Davies, European Policies Research Centre, University of Strathclyde Building agglomeration effects in sparsely populated regions

Building quality of life in sparsely populated regions 10 Sara Davies, European Policies Research Centre, University of Strathclyde NorwayOther countries Solidarity mechanismsAction zoneDE IT ES Fiscal equalisation & interpersonal redistribution YesMost countries Grants/loans for local infrastructure BG HR CZ EE FR RO SI Support for householdsin Action ZoneHR EE FR LT Funding for local servicesMERKUREE Funding for ethnic/ linguistic minorities EE IE

Raise skills Spread effects Labour mobility Policy coord- ination Reduce job costs 11 Sara Davies, European Policies Research Centre, University of Strathclyde Regional policies to address skill mismatches across regions

Reduce employment costs in structurally weaker regions NorwayOther countries Wage subsidiesCZ EE FR DE LT LU MT PL RO SK SI SE UK Relief on social contributionsSocial Security Concession BE BG RO SK ES SE Raise skills of target groupsNorwayOther countries Grants for training workersHR CZ DE EE SE Policy coordinationNorwayOther countries Local partnerships on skillsNational 12 Sara Davies, European Policies Research Centre, University of Strathclyde Support for employment and skills

Support economic spreadNorwayOther countries Transport infrastructureAssess LM effectsBG EE FR IT NL ES National Transport aidHR FI MT SE UK ICT/broadbandNationalDE HR National Planning regulationsNational Support labour mobilityNorwayOther countries Public transportNational Public employment servicesNational 13 Sara Davies, European Policies Research Centre, University of Strathclyde Support for economic spread and labour mobility

Regional strategy building Regional enterprise & innovation Broader policies 14 Sara Davies, European Policies Research Centre, University of Strathclyde Policies to enable all regions to contribute to national prosperity

NorwayOther countries Broader economic & social policies NationalNational & EU level Support for existing strengths/clusters Arena, Centres of expertise, Global centres, Urban dev’t strategies DE FI FR NL Funding for enterprise & innovation National EU Cohesion policy 15 Sara Davies, European Policies Research Centre, University of Strathclyde Enabling all regions to contribute to national prosperity

Financial instruments Bottom-up strategies 16 Sara Davies, European Policies Research Centre, University of Strathclyde Shift of emphasis in EU Cohesion policy

Loans & low interest rates GuaranteesSeed capital Venture capital Business angels Disadvantaged areas only AT CZ DK DE IT NO SI ES SE BE DE SI SE CH NODK ITUK Favour disadvantaged areas FI FR HU PT UK FI ITFI HU Regional delivery of national funds FI FR CHFI FRFIFI SE UK Sub-national funds AT DE PL UKAT DE PLDEAT DE FR UK 17 Sara Davies, European Policies Research Centre, University of Strathclyde Financial instruments with a regional dimension

+- Administrative costs Risk of displacement Demand vs supply? Regional funds = small Evergreen EU CP rules Market gap 18 Sara Davies, European Policies Research Centre, University of Strathclyde Financial instruments for regional development

Holistic strategies for regional development NorwayOther countries Top-down strategies – NUTS 1 or NUTS 2 Action zone(FI) FR IT NL NO PL CH EU Cohesion policy Packages for smaller regions undergoing structural change EE FI FR LV MT NL SI Packages for economic zones with potential BE IT LV LT PL UK Bottom-up strategies in smaller regions AT HU PT CH EU Cohesion policy 19 Sara Davies, European Policies Research Centre, University of Strathclyde

Main themesType of regionLocal involvement Integrated sustainable urban development (ISUD) Environmental protection, Social inclusion UrbanDelegation of some tasks to local level Integrated territorial investments (ITI) RTDI, SME competitiveness, Low carbon economy, Social inclusion Mostly urban but also others Significant e.g. strategy design & implementation, project selection Community-led local development (CLLD) VariedUrban, rural, peri-urban Significant but not including strategic management 20 Sara Davies, European Policies Research Centre, University of Strathclyde Integrated territorial development in EU Cohesion policy : 5% of funds ring-fenced

+- Administrative burden Depends on local capacity High local expectations Politicised decisions Holistic strategies Local control –> builds capacity Accountability 21 Sara Davies, European Policies Research Centre, University of Strathclyde Integrated territorial development strategies

Socio- economic need Other policies Institutional context Evidence of effects Funding available 22 Sara Davies, European Policies Research Centre, University of Strathclyde Factors affecting regional policy options

Context Gaps in HE, R&D, education/ training infrastructure? Business Guarantees Tax relief VC funds Training aid Start-up aid Costs Transport links Transport aid Aid to visit trade fairs 23 Sara Davies, European Policies Research Centre, University of Strathclyde Possible options for sparsely populated regions

Skills Funding for training workers Active labour market measures Coordination Local partnerships Economic spread Transport infrastructure? Planning regulations 24 Sara Davies, European Policies Research Centre, University of Strathclyde Possible options to address skill mismatches

Financial instruments Guarantees Venture capital Business angels Territorial strategies Areas undergoing structural change Areas with potential Bottom-up strategies 25 Sara Davies, European Policies Research Centre, University of Strathclyde Possible options for all / any regions

Europe Wide variety of RP instruments New EU initiatives (FI & territorial strategies) Norway Varied challenges Range of existing instruments Options Possibilities for different aspects of RP But need to tailor to economic & policy context 26 Sara Davies, European Policies Research Centre, University of Strathclyde Summary of conclusions

Thank you for listening More Information is available at: 27 Sara Davies, European Policies Research Centre, University of Strathclyde