Sectorial background of urban–rural economic development inequalities dr. Jeney László Senior lecturer jeney@elte.hu Economic Foundations of Local Development Module 1/b: Urban and Rural development by sectors Autumn term 2015/2016. CUB Department of Economic Geography and Futures Studies

Shifting of the economic Core 2 2

Geographical concentration of the economy still remained in the Core Economic development: GDP per capita Economic density: area GDP per area 3 3

The European Pentagon Pentagon/Core Area: 20% Population: 40% GDP: 50% Cities over 500 thousand residents: population: 20% GDP: 29% GDP/cap.: 141% GDP-growth: faster with +8%-point 4 4

Economic Importance of Cities in North America Economic development measured only with per capita GDP At current market prices in € Examined area: V4 Countries (CZ. HU. PL. SK) Examined regional level: NUTS3 Examined period: 1995–2004 Data source: Eurostat http://epp.eurostat.ec.europa.eu/ Proportion of cities in Canada/USA country population GDP USA (SMA) 38% 49% Canada (CMA) 45% 54% 5 5

Key Factors of Urban Competitiveness in European Space Structure 6

The subject of research. basic assumptions New factors affecting the regional processes of East Central Europe at the turn of the millennium Transition (the end of the bipolar world system) Integration (accession to the European Union) Globalization Dynamic take-off. but cities and rural regions get different developmental impulses Dual effects on economic pattern of V4 Countries (trade-off theories) Divergence in urban–rural relation Convergence in pan-European relation (catching-up)

Definition of the Concept of Cities and Rural Regions City (urban region) Only on the basis of population number: over half million population + Bratislava Without suburbs Actually data refer to regions at NUTS3 level (Bratislava  Bratislavský County) Rural region Not only villages Not only regions with rural characters (e. g. sparse population. importance of agriculture) Complementary regions (total area outside the cities)

Database used Economic development measured only with per capita GDP At current market prices in € Examined area: V4 Countries (CZ. HU. PL. SK) Examined regional level: NUTS3 Examined period: 1995–2004 Data source: Eurostat http://epp.eurostat.ec.europa.eu/

Cities as positive residuums of the East Central European space structure population 2004 (million) GDP 2004 (billion €) per capita GDP 2004 (€ per capita) GDP growth 1995–2004 (%) V4 Total 64 407 6377 206 Cities 8 106 13368 237 Relative state of cities 12% 26% 210% +31%-point EU 20% 29% 141% +8%-point

Growing Importance of Cities in European Economic Pattern Studying success of cities becomes a key issue for current European regional trends and regional policy Most of the cities over average Some countries: only the cities are over average (e. g. V4) Some countries: other inequality factors are more important (Germany. Italy. Romania. Spain) Economic Development State of Cities and Rural Regions Related to their National Average. 2004.

Measuring Urban–Rural Duality DUR: urban–rural duality index xU: average per capita GDP of cities in a country xR: average per capita GDP of rural regions in a country 12 12

Differences of Urban–Rural Duality in Member States of EU. 2004 Cities over 500.000 residents: population: 20% GDP: 29% GDP/cap.: 141% GDP-growth: faster with +8%-point Measuring Urban–Rural Duality DUR: urban–rural duality index xU: average per capita GDP of cities in a country xR: average per capita GDP of rural regions in a country Source of data: Eurostat. basis of map: World Gazetteer

Relationship Between State of Development and Urban–Rural Duality for EU Members. 2004 Source of data: EuroStat 14 14

Post-socialist countries: characterized with growing urban–rural dualism Source of data: EuroStat Chiefly the outstanding of capitals More remarkable in case of underdeveloped. catching-up V4 countries than older members Change of Urban–Rural Duality in EU Member States. 1995–2004 15 15

Role of urban–rural inequality in overall regional inequalities Measuring overall economic inequalities at level of NUTS3 regions (H. Hoover index): n: number of regions at NUTS3 level (n = 87 for Visegrad Countries) xi: share of “i” region of the total GDP of the country fi: share of “i” region of the total population of the country Measuring urban–rural inequalities (Hur: Hoover index same formula) n = 2 (aggregate of 8 cities and aggregate of 79 rural NUTS3 regions) Role of urban–rural inequality with the overall regional inequalities (Rur):

Degree of urban–rural inequality in proportion to the overall regional inequalities in EU. 2004 Source of data: EuroStat

Role of urban–rural inequality in overall regional inequalities of EU member states. 2004 Rur: role of Hur in overall regional inequalities (H) Hur: urban–rural inequality Source of data: EuroStat

Groups of EU members according to the inequality at urban–rural and NUTS3 regional level. 2004. Hur. urban–rural inequality (10%) H. overall regional inequality at NUTS3 level (10%) Rur. role of urban–rural inequality in overall regional inequalities (70%) Types of countries High BG. CZ. F. GR. LV. LT. H. P. PL. SK Low A. B. GB. D. I. RO SF. S DK. NL. E Source of data: EuroStat

Role of urban–rural inequality in overall regional inequalities in V4 countries. Hoover-index 2004 Source of data: EuroStat

Role of urban–rural inequality in overall regional inequalities of V4 member states. Hoover index 2004 Source of data: EuroStat

State of cities and rural regions as compared to the national averages of V4 member countries. 2004.

Economic development state of cities and rural regions related to their national average in EU. 2004. Most of the cities over average In some countries only the cities are over average (e. g. V4) In some countries other inequality factors are more important (Germany. Italy. Romania. Spain)

Post-socialist cities are to join to the 2nd level of European city-network Post-socialist cities: new development wave (similar to Southern Periphery) based chiefly on international investments New European models on Peripheries should adjust the classic urban zone of Blue Banana Sunbelt or (Golden Banana) Central European Boomerang) 24 24

The sectoral background of the urban–rural development inequalities

V4: success of cities not independent of the shift of their sectoral structure Increase of urban–rural inequality is mainly tertiary based Industrial renewal hide in the background of fine differences among rural regions Agriculture Industry Services Cities 1995–2004. 1.3 1.8 2.6 Rural regions 1995–2004. 1.9 2.1 Growth Indexes of Gross Value Added (GVA) in the Sectors in V4 Countries. 1995–2004. 26 26

Growth of GDP and GVA by Sectors for Cities and Rural Regions Agriculture Industry Services Czech rural regions 2.0 1.4 2.1 Hungarian rural regions 2.3 1.7 2.5 Polish rural regions 1.8 1.2 Slovakian rural regions 2.2 1.6 2.4 Prague 1.9 2.6 Budapest 1.1 Polish cities 1.5 Bratislava Total GDP 1.3 27

Regional and Sectoral Shifts within Industry after Transition (1992–1998): The Case of Hungary 28

Regional Shifts in Hungarian Industry. 1992–1998. Employment: 995 790 750 900 BUDAPEST (%) 29 22 Industrial output 23 524 33 316 36 24 Industrial export 5 449 16 371 FEJÉR county (%) 7 38 17 29

Sectoral Shifts in Hungarian Industry. 1992–1998. Industries 1992 1998 Employment Machinery and equipment (%) 21 25 Textile. wearing apparel. leather products (%) 15 17 Food. beverages and tobacco products (%) 18 16 Output 13 36 23 Chemical industry (%) 19 Electricity. gas. steam and water supply (%) 20 12 Export 27 61 8 30

Changes in Regional Industrial Specialization in Hungary. 1992–1998 Changes in Regional Industrial Specialization in Hungary. 1992–1998. Hirschman–Herfindahl index 1992 1998 employment output export 31 31

Regional Differences of the Economic Development Level in Hungary. 1998. (NUTS3) 32 32

Conclusions Postsocialist countries: characterized with growing urban–rural dualism Chiefly the outstanding of capitals More remarkable in case of underdeveloped. catching-up V4 countries than older members (proving of Williamson’s hypothesis) Not only the urban–rural inequality increases. but its role is more and more appreciated in overall regional inequalities V4: success of cities not independent of the shift of their sectoral structure Increase of urban–rural inequality is mainly tertiary based Industrial renewal hide in the background of fine differences among rural regions 33 33

Growing Importance of Cities in European Economic Pattern Studying success of cities becomes a key issue for current European regional trends and regional policy Post-socialist cities are to join to the 2nd level of European city-network Post-socialist cities: new industrialization wave (similar to Southern Periphery) based chiefly on international investments New European models on Peripheries (Golden Banana and Central European Boomerang) should adjust the the classic urban zone of Blue Banana 34 34