Globalisation and the EU regions STEP 1 Definition => STEP 2 Identification of Challenges & => Opportunities STEP 3 Impacts on => Regions and Growth
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)
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.
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.
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.
Employment 2020 Several regions could still be faced with employment rates below 55% for the year 2020. 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 2020. 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.
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 25-64. 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.
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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 2020. 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.
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 http://ec.europa.eu/regional_policy/sources/docoffic/working/regions2020