EU Regional competitiveness
Decima conferenza di statistica – ISTAT Roma 15-16 dicembre 2010
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The European Commission measures
the level of regional competitiveness
Paola Annoni
Unit of Econometrics and Applied Statistics
European Commission, Joint Research Centre – Ispra
http://easu.jrc.ec.europa.eu/
EU Regional competitiveness
Decima conferenza di statistica – ISTAT Roma 15-16 dicembre 2010
Joint project between DG JRC (Ispra)
and DG Regional Policy (Brussels)
Measures the ‘level of competitiveness’
of EU regions at the NUT2 geographical
level
RCI 2010 released in September 2010
and will be updated every 2 years
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EU Regional competitiveness
Decima conferenza di statistica – ISTAT Roma 15-16 dicembre 2010
Territorial competitiveness, what are you?
The concept is still controversial among the experts
Stands between micro (firm) and macro (country) competitiveness
…. many analogies BUT with key differences:
unsuccessful firms can be expunged from business, underperforming
countries cannot
competitions among firms is a zero-sum game (mors tua vita mea), the
success of one country is generally positive for surrounding ones
(spillover effects)
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EU Regional competitiveness
Decima conferenza di statistica – ISTAT Roma 15-16 dicembre 2010
Territorial competitiveness, what are you?
Meyer-Stamer*, 2008, pg.7:
“We can define (systemic) competitiveness of a territory as the ability of a
locality or region to generate high and rising incomes and improve
livelihoods of the people living there”
Social and human aspects
play a key role
* Meyer-Stamer, Jörg, late German Political Scientist
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EU Regional competitiveness
Decima conferenza di statistica – ISTAT Roma 15-16 dicembre 2010
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The RCI framework
rou
rg
Three macro dimensions
Basic
Efficiency
Innovation
ps
Innovation pillars
9. Technological Readiness
illa
my ion p
o
n
t
a
o
10. Business Sophistication
ec ov
al inn
n
o
11. Innovation
i
nd
reg cy a
e
th ien
c
of
al effi
i
t
n
n
o
Efficiency pillars
ote ht
g p we i g
n
i
s
g
6. Higher Education/Training and Lifelong Learning
rea sin
inc crea
7. Labor Market Efficiency
in
8.
Market Size
Basic pillars
11 pillars
69 indicators
(out of 81 candidates)
1.
Institutions
2.
Macroeconomic stability
3.
Infrastructure
4.
Health
5.
Quality of Primary and
Secondary Education
Data sources:
Eurostat
OECD-PISA - OECD-Regional Patent Database
European Cluster Observatory
World Bank Governance Indicators Ease of Doing Business
Flash Eurobarometer
EU Regional competitiveness
Decima conferenza di statistica – ISTAT Roma 15-16 dicembre 2010
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Five Basic Pillars
MacroInstitutions
economic
(country level) stability
(country level)
Corruption
Fraud
Governance
Indicators
Ease of
doing
business
Government
deficit
Saving rate
Inflation
Long term
bond yields
Infrastructure
Health
Road
Rail
Air
Road fatalities
Healthy life
expectancy
Infant Mortality
Cancer and
heart disease
death rate
Suicide death
rates
Primary and
Secondary
Education
(country level)
OECD PISA
for
Reading
Maths
Science
EU Regional competitiveness
Decima conferenza di statistica – ISTAT Roma 15-16 dicembre 2010
Basic Pillars
• Nordic countries score
high
• Macro economic stability
low in the south
• Governance and
corruption problematic
both east and south
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EU Regional competitiveness
Decima conferenza di statistica – ISTAT Roma 15-16 dicembre 2010
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Three Efficiency Pillars
Higher education and
training
Graduates
Lifelong learning
Early school leavers
Accessibility to
universities
Higher education
expenditure
Labour Market Efficiency
Market Size
Labour productivity
Employment rate in
industry and services
Unemployment rate
Long-term unemployment
Gender balance
employment
Gender balance
unemployment
Potential market
size expressed in
GDP
Potential market
size expressed in
population
GDP
Compensation of
employees
Disposable income
EU Regional competitiveness
Decima conferenza di statistica – ISTAT Roma 15-16 dicembre 2010
Efficiency Pillars
• Capital regions
consistently score higher
than surrounding regions
• Northwest scores best
• Southeast scores low
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EU Regional competitiveness
Decima conferenza di statistica – ISTAT Roma 15-16 dicembre 2010
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Three Innovation Pillars
Technological readiness
Household access to
broadband or internet
Individuals who ordered
online for private use
Household with access to
internet
Enterprises use of
computers, access to
internet, website, intranet,
internal networks
Persons employed by
enterprises with an extranet
or internet access
Business
sophistication
Employment and GVA in
Financial and business
services (NACE J_K)
FDI intensity
Aggregate indicator for
strength of regional
clusters (European Cluster
Observatory)
Innovation
Patents
Core Creative Class
Knowledge workers
Scientific publications
R&D
Human Resources in Science
Technology (HRST)
Hight tech and Knowledgeintensive employment
High-tech, ICT, Biotechnology
inventors
EU Regional competitiveness
Decima conferenza di statistica – ISTAT Roma 15-16 dicembre 2010
Innovation Pillars
• Scores are high in the
Nordic countries, Benelux,
Germany and France
• Portugal and Southeastern
EU score low
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EU Regional competitiveness
Decima conferenza di statistica – ISTAT Roma 15-16 dicembre 2010
Steps of the analysis:
Assessment of data quality,
consistency and adequacy to the
final goal (statistical analysis)
Data transformation and
normalization
Data aggregation with different
weights to different groups of
pillars
Robustness analysis
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EU Regional competitiveness
Decima conferenza di statistica – ISTAT Roma 15-16 dicembre 2010
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Weights adjusted according to the level of development of the region
(built on WEF-GCI)
Three classes:
MEDIUM : <75% of EU GDP 2007 (PPP per head)
INTERMEDIATE: between 75% and 100%
HIGH: >100% It’s the threshold defined by
EU Commission for eligibility
for the ‘Convergence’ objective
RCI
2010 competitiveness
EU Regional
Decima conferenza di statistica – ISTAT Roma 15-16 dicembre 2010
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Warsaw
Prague
Paris
Bratislava
Budapest
Madrid
Bucharest
Lisboa
Rhône-Alpes
Vienna
Athens
Sofia
EU Regional competitiveness
Decima conferenza di statistica – ISTAT Roma 15-16 dicembre 2010
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Has the blue banana lost a part?
EU Regional competitiveness
Decima conferenza di statistica – ISTAT Roma 15-16 dicembre 2010
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A focus on the Italian situation
Source: 21.09.2010
REGIONI D'EUROPA: CHI É PIÙ COMPETITIVO?
Paola Annoni , Kornelia Kozovska e Andrea Saltelli
Lavoce.info – www.lavoce.info
EU Regional competitiveness
Decima conferenza di statistica – ISTAT Roma 15-16 dicembre 2010
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A focus on the Italian situation – basic pillars
LOMBARDY ITC4
VALLE D'AOSTA ITC2
RCI 65.3
RCI 35.8
Institutions
Institutions
1.0
1
0.8
0.8
0.6
Primary&Secondary
education
0.6
0.4
Macroeconomic stability
0.2
Primary&Secondary
education
0.4
0.0
Health
Macroeconomic stability
0.2
0
Infrastructure
Health
Infrastructure
LAZIO ITE4
BASILICATA ITF5
RCI 58.5
RCI 27.7C
Institutions
1.0
Institutions
1.0
0.8
0.8
0.6
0.6
Primary&Secondary
education
0.4
Macroeconomic stability
Primary&Secondary
education
0.4
Macroeconomic stability
0.2
0.2
0.0
0.0
Health
Health
Infrastructure
Infrastructure
EU Regional competitiveness
Decima conferenza di statistica – ISTAT Roma 15-16 dicembre 2010
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A focus on the Italian situation – efficiency pillars
LOMBARDY ITC4
VALLE D'AOSTA ITC2
RCI 65.3
RCI 35.8
Higher education and training
Higher education and training
1.0
1.0
0.8
0.8
0.6
0.6
0.4
0.4
0.2
0.2
0.0
Market size
0.0
Labor market efficiency
Market size
LAZIO ITE4
BASILICATA ITF5
RCI 58.5
RCI 27.7C
Higher education and training
Higher education and training
1.0
1.0
0.8
0.8
0.6
0.6
0.4
0.4
0.2
0.2
0.0
0.0
Market size
Labor market efficiency
Labor market efficiency
Market size
Labor market efficiency
EU Regional competitiveness
Decima conferenza di statistica – ISTAT Roma 15-16 dicembre 2010
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A focus on the Italian situation – innovation pillars
LOMBARDY ITC4
VALLE D'AOSTA ITC2
RCI 65.3
RCI 35.8
Technological readiness
Technological readiness
1.0
1.0
0.8
0.8
0.6
0.6
0.4
0.4
0.2
0.2
0.0
0.0
Innovation
Business sophistication
Innovation
Business sophistication
LAZIO ITE4
BASILICATA ITF5
RCI 58.5
RCI 27.7C
Technological readiness
1.0
Technological readiness
1.0
0.8
0.8
0.6
0.6
0.4
0.4
0.2
0.2
0.0
0.0
Innovation
Innovation
Business sophistication
Business sophistication
EU Regional competitiveness
Decima conferenza di statistica – ISTAT Roma 15-16 dicembre 2010
Further analysis (about to be published):
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Relation with exogenous variables
Table 1: Correlation coefficients between RCI scores and exogenous indicators.
Values in red are statistically significant at the level  = 0.05.
all countries sample size N =268
critical value for N> 100 at level 0.05 = 0.195
Spatial autocorrelation analysis
RCI_total
RCI_eff
RCI_inn
population change 01-07
0.11
0.05
0.17
natural population change 01-07
0.11
0.01
0.25
net migration 01-07
0.07
0.06
0.06
share of population in LUZ
0.41
0.44
0.42
GDP growth average 00-07
-0.31
-0.17
-0.36
group A sample size N =128
critical value for N> 100 at level 0.05 = 0.195
RCI_total
RCI_eff
RCI_inn
population change 01-07
0.24
0.29
0.16
natural population change 01-07
0.52
0.50
0.40
net migration 01-07
-0.04
0.04
-0.07
share of population in LUZ
0.21
0.22
0.29
GDP growth average 00-07
-0.21
-0.15
-0.30
group B sample size N = 65
critical value for N = 60 at level 0.05 = 0.25
RCI_total
RCI_eff
RCI_inn
population change 01-07
0.33
0.23
0.39
natural population change 01-07
0.27
0.13
0.26
net migration 01-07
0.26
0.22
0.34
share of population in LUZ
0.76
0.79
0.73
GDP growth average 00-07
0.25
0.46
0.36