EU regional competitiveness as a vital tool in growth pattern

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The EU economic development system uses “territorial competitiveness” to define regional ability to provide attractive and sustainable environment for businesses and wellbeing for citizens. In the member states’ governance it is regarded as a perfect “tool” for better policy- and decision-making. It also serves as one of the main goals in the European Cohesion Policy.  

New Commission’s Regional Competitiveness Index, RCI is a revised version of the last year index, i.e. the RCI-2022 edition; it is aimed at measuring different competitiveness dimensions for all EU member states’ regions. The RCI’s idea goes back to 2010 and since it is published every three years to provide sufficient information on regional competitiveness and allowing developmental monitoring and assessment through periodic comparisons among regions. Based on 68 indicators, the RCI represents an important tool that provides a European “comparative perspective” on the competitiveness of different regions, underlined the Commission in a press release.
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     A revised RCI-2022 edition uses a modified methodology and recalculates the previous two editions. Thus, the new version is composed of 3 sub-indices (Basic, Efficiency and Innovation) and over ten pillars depicting different competitiveness’ aspects, such as “Institutions”, “Macroeconomic stability”, “Infrastructures”, “Health”, “Basic and higher education, training and lifelong learning”, “Labour-market efficiency”, “Market size”, “Technological readiness”, “Business sophistication” and “Innovation”.
The new RCI is based on the statistical NUTS 2, i.e. Nomenclature of Units for Territorial Statistics for the European regions. All indicators predate the war in Ukraine and do not include the United Kingdom.

     It is important to underline the role of the EU Cohesion Policy in regional competitiveness. New data shows that some regions still need EU support to improve their competitiveness and reduce gaps between them. Cohesion Policy is the EU’s main investment policy to support regions when it comes to job creation, business competitiveness, economic growth, sustainable development, and to improve citizens’ quality of life.

Latest achievements
= All the regions in eastern EU states improved their performance during 2016-19, while the performance in the southern EU regions, which also present relatively low levels of competitiveness, was mixed. Between 2019-22, most eastern EU regions continued to catch up, including in the Baltic States, Croatia, Hungary, Poland, and Slovenia. However, parts of Czechia, Romania, Slovakia, and Bulgaria moved further away from the EU average, noted the new index.

= In the southern EU, the regions in Portugal, Spain and most of Greece improved their performance (albeit the latter from very low levels), but most of the regions in Italy and Cyprus moved away from the EU average.

     = Capital regions are almost always the most competitive, but the gap is lower in more competitive EU states; thus, capital city regions are the most competitive in all EU states except, probably, Germany, Italy, and the Netherlands. The gap with the other regions can be wide and is particularly high in France, Romania and Slovakia.
More competitive countries tend to have a smaller gap between their capital city region and the other regions. This underlines that public policies and investments should promote upward convergence, which help less competitive regions to improve their performance and catch up, while ensuring that the most competitive regions continue to thrive.

     = More competitive regions have significant advantages: e.g. GDP per head in these regions is higher, women have better framework conditions (hence, they can achieve better results and fewer young women are neither in employment, nor in education or training); besides, more competitive regions are particularly attractive for recent graduates, as it is easier to find a job there.
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Because each region is unique, the Commission provides for a tailor-made support to empower regional competences and abilities to “capitalize” on their strengths and assets.
During last six years, the EU regional competitiveness has improved in the less developed regions, while the performance of transition regions has been more mixed; besides, more developed regions continue to be the top performers. E.g. the index shows that the regions of Utrecht, Zuid-Holland and the French capital region of Île-de-France are the most competitive regions in the EU-27.

     More information in the following Commission’s websites: = Regional Competitiveness Index; = Cohesion Policy 2021-2027; = Cohesion Open Data Platform; = Kohesio; = CoR press conference on the RCI.

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