ECONOMIC COMPETITIVENESS IN SMÅLAND-BLEKINGE (Ch.2) Yancy Vaillant Regional Development Policy Division Directorate for Public Governance and Territorial Development OECD 10 November 2011

Competitiveness in Småland-Blekinge Småland-Blekinge development paradox: The region has continued to compete successfully in sectors which in other OECD countries have largely lost out to developing countries. 10 November 2011 Ronneby Seminar2

Competitiveness in Småland-Blekinge Development of knowledge-intensive businesses is a promising route for ensuring the maintenance and growth of the region’s prosperity 10 November Ronneby Seminar

Competitiveness in Småland-Blekinge “knowledge-based economies” - economies which are directly based on the production, distribution and use of knowledge and information (OECD 1996). 10 November Ronneby Seminar

Competitiveness in Småland-Blekinge The four counties have a promising firm structure, but an urgent need of new skills to make the most of that structure. 10 November Ronneby Seminar

Old and New Industrial Paradigm 10 November Old ApproachNew Approach Strategic focusEfficiency-drivenKnowledge-driven Competitive strategyCost LeadershipInnovation-based differentiation Source of competitive advantage Tangible resources, Market Power Human and intangible resources Keys for competitiveness Scale efficiencies, Process innovation Flexibility, Strategic innovation Productive objectivesQuantityQuality Capital focusFinancial capitalSocial and human capital Organisational Structure Rigid organisational structure Flexible organic structure Preferred leadership styleManagerialEntrepreneurial Dominant firm sizeLarge corporationsSMEs Ronneby Seminar

Competitiveness in Småland-Blekinge The adjustment of the local industrial fabric will require: A prior shift in the characteristics and availability of the local labour supply, But, this will not occur unless skilled workers find Småland-Blekinge an attractive place to live and work November 2011 Ronneby Seminar

Competitiveness in Småland-Blekinge Need for simultaneous change: Shift in local industry and in the local labour markets Must change together to successfully transition towards a more strategic and competitively sustainable future November 2011 Ronneby Seminar

Competitiveness in Småland-Blekinge Three main targets for closing labour-market mismatches in the transition towards a knowledge-driven economy are: i. Better integrate young people in the regional economy; ii. Attract talent from outside; and iii. Better integrate women in the private sector November 2011 Ronneby Seminar

OPPORTUNITIES FOR YOUNG PEOPLE November 2011 Ronneby Seminar

Opportunities for Youth Young people may well be a leading indicator of a region’s future trajectory… …but youth in Småland-Blekinge tend to leave the region November 2011 Ronneby Seminar

Opportunities for Youth Steps to retain and regain skilled youth: Assure a good match between the educational system and local business; Promote a favourable framework for the personal and entrepreneurial development of youths; and Engage youth in the development of the region November 2011 Ronneby Seminar

OPPORTUNITIES FOR IMMIGRANTS November 2011 Ronneby Seminar

Opportunities for Immigrants Immigrant labour may also play an essential role in filling the existing skilled labour gap Foreign students should be encouraged to stay Opportunities for immigrant entrepreneurship should also be promoted November 2011 Ronneby Seminar

OPPORTUNITIES FOR WOMEN November 2011 Ronneby Seminar

Opportunities for Women A knowledge-based economy will help change the labour market gender bias, and vice versa Better integration of women in the private sector should be favoured Through entrepreneurship the human capital potential of women can be more effectively utilised November 2011 Ronneby Seminar

Attractiveness of Småland-Blekinge Things that can help make Småland-Blekinge an attractive place: i.The region’s natural and cultural amenities; ii.A stronger and more diversified business framework; iii.Improved regional connectivity to better promote regional development November 2011 Ronneby Seminar

AMENITY-BASED DEVELOPMENT November 2011 Ronneby Seminar

Amenity-Based Development Natural Amenities, Cultural Amenities, Systems Amenities November 2011 Ronneby Seminar

Amenity-Based Development ABTD requires agreement on how to promote, protect and make productive use of local amenities Good public and private services can complement the attractive power of natural and cultural assets November 2011 Ronneby Seminar

FRAMEWORK FOR COMPETITIVENESS November 2011 Ronneby Seminar

Framework for Competitiveness Local businesses need to modernise and diversify Share of workers in professional and scientific activities November 2011 Ronneby Seminar

Framework for Competitiveness Need for quality entrepreneurship: Allows a territory to commercialise its endogenous resources and capabilities efficiently and sustainably through an optimal use of the region’s human capital, whether as entrepreneur or as employee November 2011 Ronneby Seminar

Framework for Competitiveness However, business retention and expansion are as important as business creation. For this, authorities must have clear and unbiased knowledge of the local business fabric. (public-private relationship, trust and better coordination) November 2011 Ronneby Seminar

BETTER CONECTIVITY November 2011 Ronneby Seminar

Improving Regional Connectivity Increasing regional attractiveness, competitiveness and interactions requires better connectivity, but, Småland-Blekinge’s existing Regional Connections are in need of improvement… November 2011 Ronneby Seminar

Improving Regional Connectivity New strategic role of south-east in a new eastern-oriented trade context. Firms in Småland-Blekinge may be particularly well situated to take advantage of these opportunities, which fall in line with the region’s need for a new diversified client base November 2011 Ronneby Seminar

Improving Regional Connectivity However, better connectivity requires better territorial co-ordination… Improvements in infrastructure are necessary, but not enough! November 2011 Ronneby Seminar

CONCLUSIONS November 2011 Ronneby Seminar

Conclusion A shift is needed in Småland-Blekinge’s labour force to encourage the transition towards a greater value-added and knowledge-intensive business model. There is a need to better promote the area’s strong endowments and improve connectivity in the region, Strong SME structure and managerial capabilities are a good basis for establishing a modern knowledge-based economy November 2011 Ronneby Seminar

ECONOMIC COMPETITIVENESS IN SMÅLAND-BLEKINGE (Ch.2) Yancy Vaillant Regional Development Policy Division Directorate for Public Governance and Territorial Development OECD 10 November 2011