1. REGIONAL COMPETITIVENESS: COMPARATIVE ADVANTAGES AND UNUSED RESOURCES by Vincenzo Spiezia OECD – Territorial Statistics and Indicators
Regional and Urban Statistics Working Party meeting Luxembourg, 3-5 November 2004

2. OECD Territorial Development Committee
policy focus is on policies to enhance regional competitiveness
Working Party on Territorial Indicators
statistical focus is to benchmark the policy debate
how can each region valorise its underutilised resources

3. OECD Regions at A Glance (2005)
3 themes:
Regions as actors of national growth;
Making the best of local assets;
Competing on the basis of regional well-being

4. OECD Regions at A Glance
Regions as actors of national growth:
factors of national growth tend to be strongly localised in a small number of regions so that promoting national growth would require improving the use of these factors within regions.

5. OECD Regions at A Glance
Making the best of local assets:
assess the economic performances of regions and identify unused resources that can be mobilised to improve regional competitiveness.

6. OECD Regions at A Glance
Competing on the basis of regional well-being:
different dimensions of well-being (accessibility, health, education, security) are key factors to improve regional competitiveness.

7. 1. Regions as the actors of National Performances
From 1996 to 2001, employment growth varied significantly among OECD countries…
…but the differences in employment growth were even larger among regions within countries.

8. 1. Regions as the actors of National Performances
69 % of job losses in OECD countries was due to only 10 % of regions.
10% of regions explained for 56% of employment creation in OECD countries.

9. 1. Regions as the actors of National Performances
Concentration of unemployment is the highest in Australia and Canada and the lowest in the Slovak Republic.
On average, 37 per cent of national unemployment in 2001 was concentrated in only 10 per cent of regions.

10. 1. Regions as the actors of National Performances
About 47 per cent of unemployment in OECD countries is concentrated in urban regions.
Concentration of unemployment does not mirror concentration of the labour force.

11. 1. Regions as the actors of National Performances
Regional policy may give a significant contribution to the reduction of total unemployment

12. 2. Making the best of local assets
Identifying Unused Resources
Methodology
To compare regions against a common benchmark
3 Benchmarks:
National Averages
OECD Average
Regional Type (Urban / Rural)

13. What explains regional differences in GDP per capita?
Average Labour Productivity
GDP
Employment at the workplace
Employment rate
Employment at the workplace
Labour force at the workplace
Commuting rate
Labour force at the workplace.
Resident labour force
Activity rate
Resident labour force
Resident population

14. What explains differences in Average Labour Productivity?
Productivity is higher in Manufacturing than in Agriculture or Services
Sectoral Specialisation
Technology & Infrastructures

15. What explains differences in Employment Rates?
High-skills individuals have higher employment rates than low-skills ones
Labour Force Skills
Labour Market Efficiency

16. What explains differences in Activity Rates?
Activity rates are decreasing with age
Age-profile of the population
Labour market participation

17. Identifying unused resources
Natural Endowments
Unused Resources
Specialisation
-Natural resources
-Geographic location
-Rural or urban type
-Demographics
-Infrastructures
-Transportation
-Tourism facilities
-Labour market
-Human capital
-Social capital
Technology & Infrastructure
Skills
Labour market
Ageing
Participation
Commuting

18. Identifying unused resources
Natural Endowments
Unused Resources
Specialisation
Specialisation
Technology & Infrastructure
Technology & Infrastructure
Ageing
Skills
Skills
Commuting
Labour market
Labour market
Ageing
Participation
Participation
Commuting

19. Benchmark 1: National
Looking at selected regions in Spain
-40% % % % %
Comparing GDP per capita of the region to the national average:
What is the contribution of each component to the percent difference?
Percent contribution of each component
Presentation to the OECD Territorial Development Policy Committee, November 27, 2003

20. Benchmark 1: National
Looking at selected regions in Spain
-40% % % % %
Comparing GDP per capita of the region to the national average:
What is the contribution of each component to the percent difference?
Percent contribution of each component
Presentation to the OECD Territorial Development Policy Committee, November 27, 2003

21. Benchmark 1: National
Looking at selected regions in Spain
-40% % % % %
Comparing GDP per capita of the region to the national average:
What is the contribution of each component to the percent difference?
Percent contribution of each component
Presentation to the OECD Territorial Development Policy Committee, November 27, 2003

22. Benchmark 1: National
Looking at selected regions in Spain
-40% % % % %
Comparing GDP per capita of the region to the national average:
What is the contribution of each component to the percent difference?
Percent contribution of each component
Presentation to the OECD Territorial Development Policy Committee, November 27, 2003

23. Benchmark 1: National

24. Benchmark 2: OECD Average
Regional variables are compared to the OECD Average
Effects of performance factors are measured as US $ PPP
Above average = “Gains”
Below average = “Losses”
OECD Territorial Level 2

25. Regional differences in real GDP per capita, 2000 Europe OECD average = 23,833 US $ (PPP)

26. Gains and losses in GDP per capita due to sectoral specialisation, 2000 - North America

27. Gains and losses in GDP per capita due to average productivity, 2000 - Europe

28. Gains and losses in GDP per capita due to employment rates 2000 - Europe

29. Gains and losses in GDP per capita due to age of population 2000 - Australia

30. Labour market pressure due to ageing, 2000 North America

31. Gains and losses in GDP per capita due to participation rates 2000 – Japan

32. Benchmark 3: Regional Type
OECD Regional Typology
3 criteria:
Population density: a community is rural if density < 150 inhabitants < (500 in Japan)
% of population in rural communities:
> 50%  Predominantly Rural (PR)
< 15 %  Predominantly Urban (PU)
Between 50 and 15 %  Intermediate (IN)
Urban centre:
> 200K Rural  Intermediate
> 500K Intermediate  Urban

33. GDP per capita by regional type
In most OECD countries
PU > IN > National Average > PR
Exceptions:
Canada
Finland
Greece
Ireland
Korea US
IN < NA

34. How much is explained by the Typology ?
GDP per capita
National Average
Rural Average
Regional Type
Rural Region
Regional Type
Region Specific

35. How much is explained by the Typology ? GDP per capita
81%
60%
62%
63%
65%
66%
69%
76%
77%
Japan
Portugal
Hungary
United States
Denmark
Austria
Sweden
Finland
France
Norway
Czech Republic
Slovak Rep.
Ireland
56%
OECD
22%
32%
35%
38%
44%
45%
48%
55%
56%
Korea
Australia (TL2)
Canada (TL2)
U.K.
Netherlands
Germany
Belgium
Italy
Mexico (TL2)
Spain
Greece

36. Impact of Regional Types on GDP per Capita Differences from national averages explained by the OECD Regional Typology
500
1,000
Kilomètres
From 0% to 25%
From 25% to 50%
From 51% to 75%
From 76% to 100%

37. Impact of Regional Types on GDP per Capita Differences from national averages explained by the OECD Regional Typology
250
500
Kilomètres
From 0% to 25%
From 25% to 50%
From 51% to 75%
From 76% to 100%

38. Impact of Regional Types on GDP per Capita Differences from national averages explained by the OECD Regional Typology
500
1,000
Kilomètres
From 0% to 25%
From 25% to 50%
From 51% to 75%
From 76% to 100%

39. Impact of Regional Types on GDP per Capita Differences from national averages explained by the OECD Regional Typology
From 0% to 25%
From 25% to 50%
From 51% to 75%
From 76% to 100%

40. Impact of Regional Types on GDP per Capita Differences from national averages explained by the OECD Regional Typology
From 0% to 25%
From 25% to 50%
From 51% to 75%
From 76% to 100%

41. How much is explained by Regional Type ?
Productivity
60%
Age
57%
Specialisation
54%
Commuting
53%
Activity rate
51%
Employment rate
51%