Where investments in people pay off

Local and regional governments are sceptical about a ‘one-size-fits-all’ approach and tying regional policy to the EU’s growth strategy.

When politicians wax lyrical about the knowledge economy, the Helsinki-Uusimaa region on Finland’s southern coast may be what they have in mind. This stretch of land, home to 1.5 million people, nine universities and the Nokia mobile-phone company, is regularly first or second in the EU’s ‘competitiveness index’, a league table rating European regions on creativity, employment, education and infrastructure. 

Next year Uusimaa will glory in the title of European Entrepreneurial Region 2012 after defeating 36 other contenders. Never mind the European Union awards. Finnish schoolchildren are at the top of international education rankings, while Newsweek magazine last year voted Finland the world’s best country.

This collection of accolades may make the EU’s new economic master-plan, known as Europe 2020, seem rather irrelevant to the Uusimaa region. Not so, says Markku Markkula, a member of Espoo city council. The focus in Europe 2020 on innovation, especially the projects on healthcare and the digital economy, are very relevant for the region, he says. “The flagships, especially the ‘innovation union’ and the ‘digital agenda’, are part of our vision for the future.” These projects will help the region to increase productivity and save money as it faces the problem of an ageing population, he says, adding, “I don’t know any city that has enough money for the social, healthcare and education system.”

The Europe 2020 strategy aims to boost employment, education, and spending on research and development, while reducing poverty and greenhouse-gas emissions (see box). Unsurprisingly, Europe’s 271 regions vary hugely in how close they are to achieving these goals. For example, R&D spending is nudging 7% in the German city of Braunschweig (Brunswick), while some Polish, Romania, Bulgarian and Greek regions spend almost nothing on research. The gap on education is also wide. In Malta and large parts of Spain, Portugal, almost a third of schoolchildren leave school without taking final exams – far off the EU target of “less than 10%”.

Ensuring that regional policy spending – worth €64.5 billion a year, or 45% of the EU budget – is tied to Europe’s economic goals sounds like common sense. But some have also questioned whether a one-size-fits-all approach is right for all regions. Earlier this month, the Committee of the Regions, a body representing regional and local politicians in the EU, warned against linking cohesion policy solely to “a small set of imposed priorities”. Cohesion policy should “not serve solely to support the Europe 2020 goals”, they said in a report voted on by 344 regional and local politicians.

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Catiuscia Marini, the president of Italy’s Umbria region, argues that the independence of cohesion policy needs to be maintained. Marini, who recently wrote a report on the future of the European Social Fund for the Committee of the Regions, argues that there should be a strong role for the fund, which is dedicated to promoting employment, because it contributes to three of the Europe 2020 objectives: boosting employment, and reducing poverty and early school-leaving.

The European Commission has been sensitive to criticisms of imposing a unified approach. The latest report on cohesion policy from the Commission argues that regions behind the curve on innovation should focus on trying to spread good ideas from elsewhere, rather than start from scratch. This is an approach that Markkula approves of. “We don’t need every city or region to reinvent the wheel, or use the same demonstrations,” he says.

Of course, the EU has been here before. A decade ago the Lisbon Agenda for jobs and growth was also supposed to boost economic growth in the regions. But the ‘made-in-Brussels’ strategy failed to connect with regional and local government.

Fact File

Europe 2020 goals

Employment: 75% of people aged 20-64 to be in employment

R&D: 3% of the EU’s output spent on research and development

Climate change: reduce EU greenhouse-gas emissions by 20% (compared to 1990), improve energy efficiency by 20% (compared to ‘business as usual’), and get 20% of EU energy needs from renewables

Education: reduce school drop-out rates below 10% and ensure that at least 40% of people aged 30-34 have a degree (third-level education)

Poverty: at least 20 million fewer people in or at risk of poverty and social exclusion

Markkula acknowledges that the implementation of Europe 2020 remains a “big question mark”. He has been asked by the Polish government, which takes over the chair of the EU’s Council of Ministers on 1 July, to report on how regions and national governments can contribute to achieving the 2020 strategy. His report is likely to be adopted by the Committee of the Regions in October.

The Europe 2020 goals can only be achieved, he thinks, if policymakers become more citizen-centred. For him, this means focusing public spending on people rather than institutions and being more alert to social media and how this is changing expectations of public services. The EU and the regions also need to find the right roles. “The regions should be encouraged to take a leading role in pioneering certain things. The Brussels perspective should be how to encourage favourable conditions.”