BUILDING RESILIENT REGIONS FOR STRONGER ECONOMIES OECD

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1 o: o BUILDING RESILIENT REGIONS FOR STRONGER ECONOMIES OECD

2 Table of Contents Acronyms and Abbreviations 11 List of TL2 Regions 13 Preface 16 Executive Summary 17 Parti Key Regional Trends and Policies Chapter 1. Regional Growth: Disparities and Opportunities 29 The OECD growth problem, a new development model and the role of regional policy 30 How regions contribute to national and OECD-wide growth and employment Ageing and migration: Long-term forces that shape regional labour resources Conclusion 56 Notes 57 Bibliography 58 Annex 1.A1. Evidence on Different Regional Growth Regimes 59 Chapter 2. Regional Responses to the Jobs Crisis 61 The employment challenge in regional labour markets 62 Area-based strategies to exit the crisis and create jobs that last 69 Notes 84 Bibliography 84 Chapter 3. Dealing with Sub-National Finances under Strain 87 Increased financial strains on sub-national governments 88 From stimulus to fiscal consolidation at sub-national level 91 Can the debt of sub-national governments be sustained? 95 Fiscal consolidation requires the credible involvement of sub-national governments 97 Changing instruments in fiscal federal relations 102 Summary 104 Notes 104 Bibliography 105

3 Part II Special Focus: Innovation and Green Growth in Regions Chapter 4. Regions Matter for Innovation 109 Regions are competing in a changing and global innovation context 110 Innovation and regional development policies: A double paradigm shift 116 How can regions support innovation-driven development? 117 Notes 125 Bibliography 125 Chapter 5. Green Growth for Regional Development 127 How cities can contribute to a green growth strategy 128 The contribution of rural areas to a green growth regional development strategy 143 An employment strategy for rural areas: Fostering renewable energies 144 Managing water: What multi-level governance arrangements should be put in place? 150 Conclusion 161 Notes 162 Bibliography 162 Part III Policy Forum: Place-Based or Spatially Blind Development Models? Chapter 6. Why Location Matters: The Terms of a Debate 167 Why location matters: The terms of a debate 168 Place-based policies and wider development considerations 170 Advancing the debate 171 Bibliography 174 Chapter 7. Improving Regional Development Policies 175 A polarised policy debate 176 Economic growth will be unbalanced 178 Integrate, integrate, integrate 178 The Italian, Iberian and Irish approaches 180 Conclusion: Follow the Irish 183 Bibliography 184 Chapter 8. Places, in Places, but People Everywhere: The Place for Policy 185 Introduction 186 Finding a new policy balance 191 Bibliography 193

4 Chapter 9. Non-market Effects on Agglomeration and their Policy Responses: Can We Overcome the Mismatch? 195 Why such a difference of views on regional policy? 196 Non-market effects of agglomeration 197 Agglomeration and urban primacy in the world 197 Conclusion 200 Notes 200 Bibliography 200 Chapter 10. Why and When Development Policy Should Be Place-Based 203 Globalisation and development 204 Changes in development policy thinking 205 Space-neutral versus place-based approaches 206 The elements of appropriate regional development policies 209 Conclusion 210 Notes 211 Bibliography 211 Chapter 11. Alternative Approaches to Development Policy: Intersections and Divergences 215 Introduction 216 Five approaches to development policy 216 Identifying intersections and divergences to fashion a way forward 220 Conclusion 223 Notes 224 Bibliography 224 Part IV Country Notes Australia 228 Austria 230 Belgium 232 Brazil 234 Canada 236 Chile 238 Czech Republic 240 Denmark 242 Finland 244 France 246 Germany 248 Greece 250 Hungary 252 Iceland 254 Ireland 256 Italy 258

5 Japan 260 Korea 262 Luxembourg 264 Mexico 266 Netherlands 268 New Zealand 270 Norway 272 Poland 274 Portugal 276 Slovak Republic 278 Slovenia 280 Spain 282 Sweden 284 Switzerland 286 Turkey 288 United Kingdom 290 United States 292 Tables 1.1. Contributions to growth in four groups of OECD TL3 regions Determinants of net-migration among OECD TL3 regions, GDP per capita and net interregional migration, Top 20 TL2 regions of recent immigrants, Objectives and actions within balanced local skills strategies Reduced central government financial support to sub-national government, Changes in regional policy budgets, Regional competences in science, technology and innovation policy Green growth policy synergies: The example of building policies Baseline variables that link to how successful urban green growth initiatives will be Employment multiplier estimates Frequency of multi-level governance gaps in OECD water policies, Description of multi-level governance gaps in OECD countries' water policies A rule of thumb for calibrating regional development policies Calibrating regional development policies Three approaches to regional development in Europe Economic development of Italy's Mezzogiorno 181 Figures 1.1. Labour productivity growth trends in the United States, the euro area and Japan, New development paradigm: A policy complementarity matrix Intensity of dimensions of societal progress and geographic space A large variation of regional growth profiles, Convergence patterns across rural regions, g

6 1.6. Convergence patterns across intermediate regions, Both convergence and divergence patterns for urban regions, Contributions of countries and regions to growth, Contributions of TL2 regions to OECD growth, Comparison of contributions of countries and TL2 regions to OECD growth, Contributions to aggregate OECD growth by TL3 regions, Rank distribution of net employment creation across OECD TL2 regions, ' Rank distribution of net non-farm employment creation across US states, and Elderly dependency rate: Country average and in predominantly urban and predominantly rural regions, Young immigrants in large urban regions as a % of young immigrants by country, 1996 and Regional characteristics by degree of persistent loss of population, A1.1. Log rank and log contributions to growth, TL2 regions 59 1.A1.2. Log rank and log contributions to growth, TL3 regions Countries ranked by size of difference in regional employment growth rates, "Job gaps": Estimated number of jobs needed to restore 2007 employment rates Share of employment growth that occurred in top 10% of OECD TL3 regions, Moving from a low- to high-skills equilibrium Balancing strategic priorities regarding the supply and demand of skills Flexibility in the management of labour-market policy at sub-regional level in 25 OECD countries, Total expenditure by level of government, Sub-national governments as a share of total public investment, Sub-national tax revenues in % of GDP, Education expenditure by level of government, Sub-national government budget balances in OECD countries, 2007 and Sub-national government capital expenditures as a percentage of GDP, 2007 and Sub-national government debt as a share of sub-national government revenues, 2007 and Top four OECD countries in issuing sub-national bonds (excluding the United States), Evolution of prices of top and medium-to-low-rated bonds, Patents per million inhabitants, average Different regional innovation profiles that drive growth Variety and intensity in foreign patent collaboration by region, Number of science, technology and innovation policy instruments used by national and regional governments,

7 5.1. Incremental increases of urban areas, CO 2 emissions per capita in transport and density in predominantly urban areas, Electricity consumption per capita and density in predominantly urban areas, Change in economic attractiveness and growth across OECD metropolitan regions, Change in economic attractiveness and pollution emission across OECD metropolitan regions, Impacts of greening policies on economic growth: The desirable and non-desirable scenarios Number of central government institutions involved in water policy, Type of actors involved in water policy budget Implementation of central government water policies at the sub-national level, Mechanisms for co-ordinating water polices at the central government level, Horizontal co-ordination efforts across water and other policy areas, Vertical mechanisms to co-ordinate water policy in OECD countries, Tools to manage the interface between sub-national actors in water policy, As Ireland converged internationally, domestic concentration increased Population and GDP shares of OECD metropolitan regions, Population of the largest metropolitan regions in the world, is book has... A service that delivers Excel files from the printed page! Look for the StatLinks at the bottom right-hand corner of the tables or graphs in this book. To download the matching Excel spreadsheet, just type the link into your Internet browser, starting with the prefix. If you're reading the PDF e-book edition, and your PC is connected to the Internet, simply click on the link. You'll find StatLinks appearing in more OECD books. 10

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