Globalisation and the EU regions

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1 Globalisation and the EU regions STEP 1 Definition => STEP 2 Identification of Challenges & => Opportunities STEP 3 Impacts on => Regions and Growth

2 Real GDP Growth Real growth in the EU has trended higher over the past decade, notwithstanding periods of weakness. Globalization has been a significant boon to the EU s exports, which have helped drive other elements of growth Dynamic growth has not been evenly distributed. It has been mostly concentrated in regions which can uphold competition and attract new economic activities. Trade Rising trade has helped drive real growth in the EU benefiting various EU companies and industries, and their workers. For some EU regions and low tech sectors growing imports increased competition pressure to levels which are proving to be hard to bear (e.g. textile)

3 Investment Net outflows have been the norm, although Europe remains one of the most attractive destinations in the world for multinationals. FDI inflows have helped create jobs and in some cases boost the incomes of workers. Inflow FDI may create tougher competitive environment for local enterprises and pressure on wages and salaries for unskilled labour. Labour Mobility Greater mobility within Europe and net inflows represent new sources of supply and demand; immigrants have been an offsetting variable to declining populations and EU s aging workforce; firms have benefited from infusion of labour. Poorer regions have experienced outflows of workers which have increased the problems of ageing population and created remarkable gender imbalances.

4 Wages Real wages have increased over the past decade, a trend supported by lower inflation, greater competition, more product choice and availability. The increase is not evenly spread among all sectors, but privileged highly skilled labour in certain sectors and regions. Diffusion of Technology Greater dispersion of technology has allowed for greater trade in services and allowed corporate Europe to access more of the global technology skills. Greater technology to be afforded implies an obligation for a knowledge based economies, higher education and higher skills.

5 Our globalisation index Index results (1) Productivity 2020 A strong dynamic - much higher than the EU average - in the Scandinavian region together with some scattered region of the old EU member states (Ireland, UK, France, Austria, etc.) Member States on the Far East (the Baltic, Romania, Bulgaria Poland and Slovakia) and, to a lesser extent, of Spain and Greece will remain below the EU average.

6 Employment 2020 Several regions could still be faced with employment rates below 55% for the year These are Southern Italy and parts of Romania, Hungary and France. Employment rates would still be relative low in Poland, Romania, Bulgaria, Greece, the Centre of Italy, the South of Spain. Index results (3) Unemployment 2020 Unemployment is expected to decline, but strong regional variation will remain in It may still be close to 10% or higher in Southern Spain, Southern Italy and in most regions of Poland and Eastern Germany. A key qualitative aspect: several regions in the EU still have a high share (more than 15%) of their jobs in low-tech manufacturing sectors which are vulnerable to an increasingly global competition.

7 Index results (4) High Education 2020 Currently only Scandinavian countries and Finland score high on education at the international level. By 2020, regions in the Nordic MS, Benelux, UK, Ireland, France and Northern Spain will mostly have more than 35% of tertiary educated aged However, regions in Portugal, Italy, Romania, Hungary, and the Czech Republic will still have quite low levels, especially outside the capital regions. Low Education 2020 Expected to be very low in the Nordic Member States, the Baltic States, Poland, the Czech Republic and Slovakia. Still quite high in Portugal, Spain, France, Italy, Greece and parts of Romania and Bulgaria. Remark - this may create a double pressure on the regions where a significant share of employment may be lost due to globalisation.

8 SE11 UKJ1 UKI1 UKM1 UKJ2 UKH2 UKK1 UKI2 UKD2 UKM2 BG22 PT11 BG23 RO22 RO21 RO31 ITF4 PT20 ITF3 FR83 ITG1 PT18 PT16 PT15 BG13 GR22 BG12 BG11 RO42 GR25 RO41 RO11 GR42 ITF5 ES64 ITF6 ITG2 MT00 PT30 ITD1 PT17 ITC2 ES62 HU21 ITF2 GR11 ES42 CZ04 ES61 HU32 RO12 GR21 GR23 DE93 GR43 ITD4 ITC1 ES70 ES43 HU31 ES63 GR14 GR13 FR81 GR24 GR41 ES52 ITE3 ITD3 SK04 ITE1 ITF1 HU23 ITD5 HU22 DE50 DEA3 BE32 DEA5 ITC4 ES53 PL62 HU33 FR43 ITE4 GR12 DE94 ITE2 DE92 CZ08 PL63 LV00 UKL1 UKD5 DEA4 ES51 DE91 FR24 ITD2 DEB1 DEC0 ES11 FR82 ES23CZ03 DEB3 FR21 FR26 ES13 FR22 ITC3 FI20 ES41PL52 CZ07 ES12 UKN0 DE13 DE73 BE22 AT11 ES24CZ02 DEA2 FR61 BE34 FR51 DEF0 DE25 LT00 GR30 FR25 PL21 CZ05 PL34 DEB2 CZ06 DE22 DEA1 AT34 NL34 NL12 FR30 DE60 FR53 NL13 PL43 PL41 ES30 FR71 CY00 FR41 DE30 NL22 NL42 SK03 PL42 PL32 PL61 BE33 PL51 FR23 SK02 NL23 FR62 ES22 DE24 PL22 PL33 UKD4 DE11 BE35 DEE0 DE80 NL41 NL21 IE01 PL11 UKE3 DE12 UKK3 DE72 FR63 PL31 DE14 SI00 SI01 DE71 BG21 UKJ4 UKE4 UKE5 UKG3 NL33 PL12 DED3 FR72 UKG2 DE27 EE00 ES21 BE25 UKL2 UKD3 AT32 AT12 FR42 AT31 CZ01 DE26 DE23 HU10 AT21 RO32 NL11 BE21 FR52 UKK4 UKF3 BE23 AT33 UKE2 BE10 DEG0 NL32 DE41 UKM3 SK01 LU00 UKF2 UKD1 UKC1 AT22 DE42 UKC2 UKH3 NL31 UKM4 UKF1 UKK2 DED1 DE21 DED2 DK00 FI13 UKJ3 UKH1 AT13 SE21 SE23 FR10 FI1A FI18 SE12 FI19 BE31 SE22 SE31 UKG1 BE24 SE32 IE02 SE SE11 Globalisation index 2020 Globalisation Index 2005 and 2020 UKI1 UKM1 UKH2 UKK1 UKI2 UKD2 UKM2 Bisecting line ITF3 FR83 ITG1 PT18 PT15 BG13 GR22 BG12 BG11 RO42 lagging today GR25 RO41 GR42 ITF5 ES64 ITF6 ITG2 and tomorrow PT30 ITD1 PT17 ITC2 ES62 HU21 ITF2 GR11 ES42 CZ04 ES61 HU32 RO12 GR21 GR23 DE93 GR43 ITD4 ITC1 ES70 ES43 HU31 ES63 GR14 GR13 FR81 GR24 GR41 ES52 ITE3 ITD3 SK04 ITE1 ITF1 HU23 ITD5 HU22 DE50 DEA3 BE32 DEA5 ITC4 ES53 PL62 HU33 FR43 GR12 leading today but lagging ITE4 DE94 ITE2 DE92 CZ08 PL63 LV00 tomorrow UKL1 UKD5 DEA4 ES51 DE91 FR24 ITD2 DEB1 DEC0 ES11 FR82 ES23CZ03 DEB3 FR21 FR26 ES13 FR22 ITC3 FI20 ES41PL52 CZ07 ES12 UKN0 DE13 DE73 BE22 AT11 ES24CZ02 DEA2 FR61 BE34 FR51 DEF0 DE25 LT00 GR30 FR25 PL21 CZ05 PL34 DEB2 CZ06 DE22 DEA1 AT34 NL34 NL12 FR30 DE60 FR53 NL13 PL43 PL41 ES30 FR71 CY00 FR41 DE30 NL22 NL42 SK03 PL42 PL32 PL61 BE33 PL51 FR23 SK02 NL23 FR62 ES22 DE24 PL22 PL33 UKD4 DE11 BE35 DEE0 DE80 NL41 NL21 PL11 UKE3 IE01 DE12 UKK3 DE72 FR63 PL31 DE14 SI00 SI01 DE71 BG21 UKJ4 UKE4 UKE5 UKG3 NL33 PL12 DED3 FR72 UKG2 DE27 EE00 ES21 BE25 UKL2 UKD3 AT32 AT12 FR42 AT31 DE26 CZ01 DE23 HU10 AT21 RO32 NL11 BE21 FR52 UKK4 UKF3 BE23 AT33 UKE2 BE10 DEG0 NL32 DE41 SK01 UKM3 LU00 UKF2 UKD1 UKC1 AT22 DE42 UKC2 UKH3 NL31 UKM4 UKF1 UKK2 DED1 DE21 DED2 DK00 lagging today but leading FI13 UKJ3 UKH1 AT13 SE21 SE23 FR10 FI1A tomorrow FI18 SE12 FI19 BE31 SE22 SE31 UKG1 BE24 SE32 IE02 SE33 UKJ2 leading today and tomorrow Globalisation Index 2005 UKJ BG23 ITF4 BG22 RO21 PT16 RO11 PT11 RO22 RO31 International benchmark PT20 MT Globalisation index 2020 Globalisation Index 2005 and 2020 leading today but lagging tomorrow leading today and tomorrow lagging today and tomorrow lagging today but leading tomorrow Bisecting line International benchmark Globalisation Index

9 A synthetic view 1. Many regions located in the North-West periphery of the EU appear to be in a rather favourable position. These regions are largely in Finland, Sweden, Denmark, the UK and Ireland. They are expected to benefit from a workforce with a high level of educational attainment, a high level of employment, a high share of employment in advanced sectors and a high level of labour productivity. 2. Most regions located in the Southern and Eastern parts of the Union, stretching from Latvia, Eastern Slovakia, Hungary, Bulgaria and Romania to Greece, Italy, Spain and Portugal, still appear in 2020 to be much more exposed to the challenge of globalisation despite, in some cases, they record a relatively good dynamic of the globalisation index between 2005 and This persistent vulnerability is predominantly due to the relatively large share of low value added activities in these regions and weaknesses in workforce qualifications, which may lead to difficulties in attracting investment and creating or maintaining jobs.

10 A synthetic view 3. No clear pattern emerges in Western and Central Europe, where there are often strong sub-national variations. Some areas are expected to be in a less favourable position (e.g. some regions in the North of Germany) than others projected to achieve higher levels of productivity, employment and educational attainment (e.g. parts of Austria, Germany, France). 4. At the sub-national level, the analysis reveals that, in many Member States, regions with major urban centres and metropolitan areas should be relatively well placed to respond to the challenges linked to globalisation. These areas tend to benefit from a large share of highly educated residents, highly dynamic sectors and leading-edge economic activities. Yet, the concentration of economic activities in agglomerations may also create negative externalities (such as congestion, urban sprawl, drain on natural resources and ecosystem services) and may also lead to underutilised economic potential elsewhere. Globalisation and the EU regions.the END

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