The regional R&D policy and the economical growth in european union
Szajt M. (WZ PCz, c. Częstochowa, Poland)
For the last few years regional policy has been playing an increasingly important role in the process of development of both the policy of individual nations and of the whole European Union. A creation of regional innovation systems seems to be indispensable in order to enable development of countries. The innovation level of the European states depends on many factors. The most important ones are usually expenditure on R&D activity, patent activity, flow of modern technologies and know-how and the activity of the human resources employed in the R&D field. Compared to these fields there is still a gap connected not only with the difference in the wealth of individual societies, but also with actions aimed at the activation of the scientific and enterprise sectors, and this is the topic of presented paper.
1. Introduction
Modern economy increasingly resorts to regional policy in order to manage the national economy. West European countries have been applying that type of management in view of the considerable importance of regional policy. The main advantages are as follows:
- ease of management of smaller administrative units,
- decentralisation of power,
- units of administration are closer to the communities – region inhabitants who are primarily affected by the decisions that are taken,
- closer contact of decision-making institutions and those affected by the decisions.
Inhabitants of regions are supported by regional authorities in their efforts for regional development, such as agriculture, food processing and tourism. In effect of their involvement in developing the region, the inhabitants see effects of their efforts directly and in a short time. In this connection, the number of various analysis has been growing with the aim to assess functioning of regions in economic terms.
2. Characteristics of R&D regional policy
R&D development sector is a lading sector of economic activity ion every country. Authors of many papers stress its stimulating role in economic growth resulting from developing a modern technology economy. In this connection, among the priorities of innovation policy there is the establishment and development of regional innovation systems, including a network of intermediaries between the R&D sector and the economic sphere (promotion, commercialisation, information, consulting, technology transfer), a network of incubators, regional educational centres.
Geopolitical and administrative situation is one of determinants in regional development. In some states, due to their size, it is difficult to make any sub-division; therefore, the entire state is classified as a region – for instance Denmark or Malta. In other instances, there is a clear-cut split into regions – for instance Belgium with its three regions: Walloon, Brussels and Flanders. Another group of countries are those where there are both regions – smaller units, and sub-regions – being larger administrative units. In addition, there may be countries with strong regional tradition where the tradition is well rooted and countries where regional split is a result of artificial central split, frequently without historic reason, based solely on economic or political division. Thus, inhabitants of regions with long and strong tradition have a mental advantage over inhabitants of “newly created” regions.
The role of regional policy is to promote development on the basis of factors generating economic growth. Those factors more frequently embrace finances and the human factor. In a modern approach to economy, also a major role of technological progress is indicated in view of constant development of technology.
There are obvious advantages for economic entities of technological progress based on constant evolution of technical, technological and organisational solutions and applications. The advantages also refer to the regions in their respective territories. Technical or technological progress is closely related to effective management. Each expansion of a technological process results in changes in effects. If the changes coincide with the innovator’s intentions, that is they produce measurable benefits, this means progress. Thus science creates technological progress through innovation and that determines economic development.
3. Economical growth in regions
Socio-economic development is defined as a process of extended reproduction in a national economy, that is changes in production capacity, production and consumption, social relations, natural environment and system of functioning of the economy and the society. (Otrębski T. 1975, s. 1241-1259) The sphere related to production and distribution of goods and services narrows the studied issue to economic development. However, the notion of development covers a broad sphere of various processes. Therefore, there are problems in a precise definition and measurement of the notion. In economy, economic growth is indicated as a fundamental factor affecting socio - economic development. Economic growth in a simplified sense occurs when the gross national or domestic product in year tn is larger than in year t1 with he time period being within the range t1...tn. (Balicki W. 1993, s. 107) The fundamental measures of growth used most frequently are: volume of gross national or domestic product in absolute terms or per capita, dynamics indicators and distribution in regional or nationwide terms. (Marciniak S. 1999, s. 305) Although the measures that are called synthetic measures, are often considered to be the best, they all do not embrace grey economy. However, as of today there are no other that would be free from the inaccuracies. The data on economic categories measured for selected regions are based on the NUTS 2 system (of the older NUTS 1), in accordance with which the European Union is comprised of 209 regions + 41 regions in the new Member States.
The basic measure of economic growth used is gross domestic product, most often per capita for the same of comparison. GDP per capita in EU (15) regions ranges from ˆ 12,308 in the region of Ditika Macedonia in Greece up to ˆ 61,316 in Inner London with the overall average for UE regions of ˆ 23,338. It is easy to se the differences are substantial. The “richest” region has per capita income over four times higher than the poorest region. Only two regions in Central and Eastern Europe have higher income than the EU average - Prague with ˆ 31,639 per capita and Bratislava with ˆ 23,782 per capita. The poorest EU regions are in Romania – on the average ˆ 5,700 per capita with ˆ 4,088 per capita in the North - Eastern region. Among the new Member States, the province of Lublin is the poorest with ˆ 6,758 per capita with Poland’s richest Mazovia province hardly equal to the EU average (EUROSTAT 2004, s.39).
4. R&D sector
A proposal has been made to use innovation determinants as a reference point to the level of economic growth, such as intensity in the area R&D activities, R&D expenditures and employment in the sector and effects in the form of patents pending.
An analysis of involvement intensity in R&D activity, Brunswick is the leader with the intensity of 7.11. Out of Germany, the highest intensity ratio of 4.19 is in Pohjois – Suomi, Finland. As a comparison, the best region in Poland – the Mazovia province has the ratio of 1.25 with 3.49 for Středni Čechy in the Czech Republic with 0.93 in Bratislava's region, Slovakia or 0.32 in Cyprus. It is worrisome that the Świętokorzyskie povince with the ratio of 0.07 is almost the EU weakest region with respect to R&D intensity. Comparing to the weakest regions in all the countries, the lower ratio is only in Notio Aigaio. Greece with 0.05 and the next is Aland. Finland with 0.15.
A better indicator is the value of intensity of sales in the R&D sector as a percentage of GDP. However, this information is available only on the basis of NUTS 1. The intensity is characterised with largest disproportion in Finland, ranging from 3.48 in Manner-Suomi to 0.15% in Aland and in Germany – from 4.21% in Berlin to 1.01 in Saarland.
Table 1- Number of regions above and below the UE average for total R&D expenditure as a % of GDP, EU 15 in 2000 year
|
Country: |
All sectors |
|
|
>UE % <UE% |
Total number of regions |
|
|
Germany |
38 63 |
40 |
|
Greece |
0 100 |
13 |
|
Spain |
0 100 |
17 |
|
France |
27 73 |
22 |
|
Italy |
5 95 |
20 |
|
Netherlands |
33 67 |
12 |
|
Austria |
22 78 |
9 |
|
Portugal |
0 100 |
7 |
|
Finland |
50 50 |
6 |
|
Sweden |
50 50 |
8 |
|
United Kingdom |
25 75 |
12 |
Source: Frank S., 2004 s. 4
Table 1 shows R&D expenditures as a percentage of GDP for EU States. More than one half of regions in Finland and Sweden had R&D expenditures in proportion to their GDP higher than the EU average. In Germany only 38% of the forty regions covered by the report (EUROSTAT) had R&D expenditures above EU average.
Analysing an average intensity for entire
countries, only Cyprus, Latvia and Slovakia have results below Poland’s. and more importantly – the average intensity in the EU States is 1.93 (1.99 for
the group of 15) while in Poland it is only 0.59.
(Frank S., 3/2004 str.3)
All regions in Greece, Spain and Portugal and 95% of Italy’s regions had R&D expenditures in proportion to GDP lower than the EU average. Looking at the economy of other countries, the distribution of expenditures remained identical or almost identical to the pattern of expenditures in Germany, France and Austria. There was a higher proportion in regions in Finland and Belgium (67% each), Sweden (63%) and the UK (42%) that had R&D expenditures in proportion to their GDP higher than the EU average.
With respect to employment in the R&D sector, the best in Poland is the Mazovia province with 1.73% of total employed, being 19% above the EU average. Brunswick again was the best with Molise, Italy being the weakest EU region in this respect with 0.04% of the workforce employed in R&D.
Among the new EU Member States, Poland is among the average countries slightly towards the weaker regions.
5. Summary
The above-mentioned data indicate clear possible and positive, from the point of view of regional development, directions of desirable actions of the regional authorities. Experiences of the West European countries in the field of planning their regional innovation policy confirm beyond doubt the existence of close correlations between investments into the R&D sectors and into the promotion of the innovation culture of enterprises (especially those operating in the region) and an increase in the economic potential. Directing the production into industries of high and very high technologies based on their own base of research and scientific staff together with adequate financial and organizational support provided by local self-governments can considerably improve not only the image of a particular/ region, but also, or perhaps first of all, the living standards and wealth of its inhabitants.
Referneces:
Balicki W. (red.), Makroekonomia, „AND...”sc, Warszawa 1993,
EUROSTAT 2004, Regions: statistical yearbook 2004, EUROSTAT, Luxembourg,
Frank Simona 2004, R&D expenditure in the European regions, Statistics in focus, Science and Technology, Theme 9 – 3/2004, EUROSTAT,
Marciniak S. (red.), Makro i mikro ekonomia. Podstawowe problemy, PWN, Warszawa 1999
Okoń – Horodyńska E., Narodowy System Innowacji w Polsce, Wydawnictwo Uczelniane Akademii Ekonomicznej im. Karola Adamieckiego w Katowicach, Katowice 1998
Otrębski T., O istocie rozwoju społeczno – gospodarczego, Ekonomista, Key Text1975 nr 6