Ex-Post Evaluation of Objective 6 Programmes for the Period 1995-99 Country Report for Sweden

EX-POST EVALUATION OF OBJECTIVE 6 PROGRAMMES FOR THE PERIOD 1995–99

Country Report for Sweden

Ulf Wiberg, Bruno Jansson & Linda Lundmark Department of the Social and Economic Geography Umeå University Sweden December 2002 1

LEGAL NOTICE This study was commissioned by the Directorate-General for Regional Policy of the European Commission. It does not necessarily reflect the official position of the European Commission.

Neither the European Commission nor any person acting on behalf of the Commission is responsible for the use, which might be made of the following information. 2

TABLE OF CONTENTS

SUMMARY (in Swedish)...... 3

1. INTRODUCTION ...... 8

2. METHODOLOGY...... 12 3. RELEVANCE OF THE STRATEGY AND PROGRAMMING CHOICES ...... 15 3.1. Regional analysis of the programme area ...... 15 3.2. Overview of the strategic planning process and the programme structure...... 19 3.3. Assessment of the relevance of the strategy and programming choices...... 20 4. ANALYSIS OF THE DELIVERY AND IMPLEMENTATION SYSTEMS...... 26 4.1. Administrative structure of the programme and the start-up of the programme implementation ...... 26 4.2. Strategic planning capacity of the management ...... 27 4.3. Execution of the project selection procedure ...... 28 4.4. Efficiency of the financial circuits...... 29 4.5. Functioning of the partnership ...... 31 4.6. Performance of the monitoring system and the quality control...... 31 5. EFFECTIVENESS AND FINANCIAL ALLOCATION ANALYSIS...... 33 5.1. Assessment of the financial allocation...... 33 5.2. How did projects contribute to achieve the goals of the programme? ...... 36 6. IMPACT AND EFFICIENCY ANALYSIS...... 42 6.1. Development of population...... 42 6.2. Job creation and employment...... 43 6.3. Promotion of entrepreneurship...... 49 6.4. Meeting the aims and objectives of the Community priorities...... 51 6.5. Insight into the unforeseen impacts of the programme...... 54 6.6. Perspectives concerning the efficiency of the programme...... 56 7. COMMUNITY VALUE ADDED...... 58 7.1. Institutional dimension...... 58 7.2. Policy/priority aspects ...... 59 7.3. Cooperation and networking...... 60 8. LESSONS FOR THE FUTURE ...... 62 9. CONCLUSIONS ...... 67

APPENDIX...... 71 GLOSSARY...... 77 3

SAMMANFATTNING

INTRODUKTION Sverige blev medlem i EU 1995, och strax därefter påbörjades genomförandet av det första struktur- fondsprogrammet, Mål 6; med inriktning mot den nordliga periferin. Programmet som genomfördes i både Sverige och Finland var ett delresultat av medlemskapsförhandlingarna med EU. De om- råden som kom att ingå i Mål 6 området i Sverige hade samma karaktär av glesbygd med låg och minskande befolkning och svagt näringsliv som de tidigare stödområdena inom ramen för den nationella regionalpolitiken. Den geografiska utsträckningen var också ganska lik de traditionella stödområdena.

DG Regio är den avdelning inom EU som handlägger frågor om EU: s regionalpolitik. DG Regio beslutade att en ex-postutvärdering av Mål 6 skulle ske. Efter anbudsupphandling av utvärderingen gavs uppdraget till Levón - institutet vid Vasa Universitet som var koordinator för ett team, som bestod av Kulturgeografiska institutionen vid Umeå Universitet och Bradley and Dunbar Associ- ates; ett skotskt konsultföretag.

Utvärderingen koordinerades från Vasa, men den svenska utvärderingen utfördes av Prof. Ulf Wiberg, FD Bruno Jansson och FK Linda Lundmark vid Kulturgeografiska institutionen, Umeå Universitet.

Utvärderingen bygger på officiella dokument rörande programmet, den nationella databasen för Mål 6, STINS samt data från AMS och Fiskeriverket, Vidare har genomförts 18 längre intervjuer med personer alltifrån ministernivå till beslutsgruppernas kanslier och övervakningskommittén samt 20 projektledare.

STRATEGIER OCH PROGRAMVAL Det dokument som låg till grund för Mål 6 i Sverige var Det Samlade Program Dokumentet för Sverige 1995-99 (SPD). Inledningsvis gjordes en s.k. SWOT - analys för att renodla och synliggöra områdets möjligheter och svagheter. Vid förhandlingarna om Mål 6 områdets geografiska ut- sträckning gjordes valet att utesluta det norra kustområdet för att därigenom kanalisera stödet till de mest behövande områdena.

De faktorer som utgjorde basen för strategivalen i programmet var avfolkningsproblemen, bristen på mindre företag och svag nybildning av småföretag, nedgång i både offentlig och privat service och låg utbildningsnivå. Bland avfolkningsproblemen synliggjordes hög netto -utflyttning, lågt fer- tilitetstal, lågt reproduktionstal och en sned befolkningsstruktur pga en åldrande befolkning.

Bakom de uppenbara avfolkningsproblem fanns andra grundläggande strukturproblem i de lokala och regionala ekonomierna. Under en lång följd av år hade en rationalisering inom skogsbruket skett. Skogsbruket hade tidigare varit den viktigaste näringen i det Norrlands inland men dessa ra- tionaliseringar, som byggde på tekniksprång i skogsbruket, hade lett till minskande sysselsättning. Övriga basnäringar i området hade genomgått liknande strukturförändringar. Övergången till andra näringar hade inte varit framgångsrik för den friställda arbetskraften. Den post-industriella sektorn i näringslivet hade inte växt i samma omfattning som i övriga Sverige. Noteras bör också att offentlig verksamhet utgjorde 40 % av sysselsättningen.

Slutligen kom programmet att innehålla 7 insatsområden; 1. Företagsutveckling 2. Kompetensut- veckling, 3. Jordbruk, fiske och naturresurser, 4. Lokal utveckling, 5. Samisk utveckling och 6. In- 4 frastruktur. Dessutom fanns ett 7:e insatsområde för Tekniskt stöd. Varje insatsområde hade i sin tur olika åtgärder, totalt 29 stycken.

Programmet var avsett att skapa/bevara 9,500 jobb, minska skillnaden i BRP (Brutto- regionalprodukten) mellan Mål 6 området och landet i övrigt, skapa 900 nya företag, öka kompeten- sen särskilt inom IT där också användningen skulle öka. Bland programmets mål ingick också att skapa jämlikhet mellan män och kvinnor samt att bevara natur- och kulturmiljön. Slutligen fanns målet att öka utnyttjandet av områdets komparativa konkurrensfördelar. Tyngdpunkten i programmet kom att ligga på utveckling av företagande och kompetens.

PROGRAMMETS GENOMFÖRANDE Den strategi man valde för genomförandet av programmet kan karakteriseras som mobilisering på kort och medellång sikt. Programmet blev på grund av sin uppbyggnad tämligen efterfrågestyrt. Partnerskapen behöll sitt inflytande genom hela processen vilket medförde att den lokala politiska viljan påverkade genomförandet.

Programmets administrativa struktur blev komplicerad. Fondmedlen förvaltades av olika myndigheter; Regionala fonden (ERUF) hanterades av NUTEK, Sociala fonden (ESF) av AMS, Jord- bruksfonden (EUGFJ) av Jordbruksverket och Fiskerifonden (FFU) av Fiskeriverket. Man kan förenklat säga att dessa myndigheter skötte utbetalningarna. Besluten om vilka projekt som skulle få medel från programmet fattades av de olika beslutsgrupperna, en i varje län samt en regional beslutsgrupp som hanterade länsövergripande projekt. De strategiska riktlinjerna fanns angivna i SPD, och de olika beslutsgruppernas handlingsutrymmen synes i detta avseende ha varit begränsade. Beslutgruppernas sammansättning reflekterade partnerskapet. Beslutsgrupperna hade egna kanslier i anslutning till länsstyrelsernas administration. Sametinget var beslutsmyndighet för insatsområde 5. Även Jordbruksverket och Fiskeriverket beslutade i frågor kring respektive verks område. Kontroll och tillsyn skedde via övervakningskommittén, fondmyndigheterna, statsrevisionen och EU:s revi- sorer. Dessutom förutsattes internkontroll i projekten.

Problem i organisationen uppstod på grund av att förberedelsetiden för programmet hade varit kort. I kombination med att det var det första programmet i sitt slag skapades en stor osäkerhet i organisationen, vilket ledde till en långsam start. Beslutsgruppernas handläggning kom vidare att störas av en upplevd hög arbetsbelastning samt hög personalomsättning på viktiga positioner. Urvalet av projekt skedde inledningsvis ad hoc. Senare under program-perioden när antalet ansökningar ökade kom fastare riktlinjer för urvalsprocessen.

De administrativa procedurerna skiljde sig från vad man tidigare var van vid i det svenska systemet. Detta orsakade problem speciellt när det gällde utbetalningsförfarandet, som innehöll flera steg. De anbefallda procedurerna krävde stor noggrannhet från beslutgruppernas kanslier och fondmedlens förvaltare. Rekvisitioner av medel, som inte till fullo fyllde de uppställda kraven, kunde fastna i systemet i avvaktan på kompletteringar och orsaka dubbelarbete och irritation för dem som väntade på utbetalning. Mycket diskussion förekom kring dessa frågor, men huvudparten av betalningarna flöt bra och inblandade projektledare var i huvudsak nöjda. Dessa problem hade kunnat undvikas om mera resurser avsatts för att inledningsvis utbilda projektledningarna.

Den politiska ambitionen att programmet skulle spegla partnerskapets strävan tillsammans med mobiliseringstanken gjorde att beslutsgrupperna hade att handlägga många små projekt. Beslutsgrupperna hade tre i och för sig oförenliga uppdrag; att sälja programmet till allmänheten, att arbeta med urvalsprocessen och fatta beslut om stöd samt att följa upp kvaliteten i projekten. 5

FINANSIELL FÖRDELNING Fördelningen av medel till de olika åtgärderna skedde inledningsvis genom de riktlinjer som fanns i SPD. Vissa åtgärder kom att få mindre efterfrågan på medel än andra, vilket ledde till att det skedde en viss omfördelning av medel inom programmet genom att vissa åtgärder slogs samman med andra. Vid tiden för utvärderingen hade ca 97 % av den finansiella ramen för fondernas medel tagits i anspråk. Medfinansieringen har huvudsakligen kommit från offentliga källor. Privat medfinansier- ing har varit begränsad och i huvudsak koncentrerad till åtgärderna Utveckling av SMF och Ut- veckling av Turism. Både den offentliga och den privata medfinansieringen hade vid utvärdering- stillfället överskridit sina ramar något.

Den geografiska fördelningen av stöden var med få undantag ganska jämn om man ser till stöd/capita. Endast fyra mindre kommuner har fått ett stöd som väsentligt överskrider medelvärdet. Belopp som till synes utgått till Östersund till exempel, har i viss utsträckning varit avsedda för konsumtion på andra platser i länet, men av praktiska skäl distribuerats via organisationer med säte i Östersund. På samma sätt har tämligen betydande belopp utbetalats till projekt med säte i städer utanför området, vilka var avsedda som finansiering av projekt som respektive mottagare ansvarade för inom Mål 6 området. Slutligen kan noteras att medel utbetalades till ett mycket stort antal små projekt.. Ungefär 75% av projekten fick tillsammans dela på mindre än en tredjedel av pro- jektstöden.

När det gäller den ekonomiska utvecklingen i området kan Brutto Regional Produkten (BRP) vara indikativ. I utvärderingsarbetet kunde dock konstateras att BRP utvecklats sämre i Mål 6-området än i riket som helhet. Många nya företag startades, men det är tveksamt i vilken mån de tillkom på grund av Mål 6 programmet.

Turismen ses ofta som den nya näring, som skall ge ekonomisk tillväxt i Mål 6 området. Då turismen är kraftigt konjunkturberoende kunde inte något tydligt genomslag för turismen observeras under perioden.

En stor del av medlen för kompetensutveckling utnyttjades för IT- utbildning och utveckling av nätverk. Enligt uppgifter som kommit utvärderingsgruppen till del var dessa insatser framgångsrika och utnyttjandet av IT i området ligger numera på en hög nivå, ibland högre än i mera fram- gångsrika regioner i landet.

Samerna hade en egen beslutsgrupp i anslutning till Sametinget, som fattade beslut om ärenden som rörde samer inom hela programområdet. Genom ett internationellt perspektiv fick den samiska be- folkningen ny uppmärksamhet på sina problem. Programmet medförde även en utveckling av småföretagande bland samer med annan inriktning än de traditionella samiska verksamheterna.

PROGRAMMETS EFFEKTER För att se hur området påverkades och hur effektiva insatserna var för att komma till rätta med problemen i området har statistik analyserats. En viktig utgångspunkt för analysen var befolkning- sutvecklingen, eftersom den ger en indikation på balansen i områdets ekonomiska och sociala liv. Statistiken visar att nettoflyttningen efter 1998-99 varit negativ. Om flyttningsnettot kombineras med födelsenettot (födda – avlidna) framstår en entydigt negativ befolkningsutveckling.

Som nämnts tillhörde skapande av ett expansivare näringsliv i området de prioriterade målen. Här stötte utvärderingen på bekymmer eftersom den databas där alla projekt och indikatorernas utfall skulle rapporteras, aldrig blev helt operativ. De data som via olika källor var tillgängliga för ut- värderarna bedömdes som tämligen otillförlitliga. Det hade t.ex. inte funnits några direktiv om hur 6 rapporteringen skulle gå till från början, och hur ett skapat respektive bevarat jobb skulle definieras. Efter intervjuer med ledarna för ett 20-tal projekt, tillsammans med intervjuerna med olika uppgift- slämnare i genomförandeorganisationen, bedömdes att antalet varaktiga bevarade och skapade år- sarbeten vara ca 15 % av de officiella siffrorna (4.093). Detta är betydligt under vad som förutsattes i SPD, men kan ändå beskrivas som en framgång. Kostnaden per skapat jobb (1.617.525 SEK1) var tämligen väl i linje med uppgifter om äldre regionalpolitiska satsningar om hänsyn tas till infla- tionen. En kvarstående fråga för att bedöma programmets effekter är emellertid hur många jobb som skulle ha skapats alternativt räddats om programmet inte hade funnits. En viss del av förän- dringarna i sysselsättningen och arbetslösheten avspeglar sannolikt mera konjunkturförändringarna än effekter av projekten inom Mål 6 programmet.

SAMMANFATTANDE SLUTSATSER Mål 6 programmet innebar förändringar i svensk regionalpolitik med annorlunda former av imple- mentering, uppföljning och kontroll, som varken programansvariga, projektledare eller administra- tiv personal var bekanta med. Genomförandet av programmet innebar även uppbyggnaden av en serie nya statliga myndigheter. Man kan mot bakgrund av detta konstatera att en del av de problem som inledningsvis förekom berodde på att man inte var införstådda med de nya kraven. Den byråk- ratiska strukturen tillsammans med den stora mängden projekt och de upplevda problemen med utbetalningssystemet gjorde programmet svårhanterligt och orsakade problem att genomföra en sammanhållen strategi Mål 6 programperiod var en läroperiod för den svenska administrationen. Under programperiodens senare del verkar dock EU:s och Sveriges två olika administrativa kulturer ha fungerat förhållandevis bra tillsammans.

Programperiodens längd innebar att man i princip skulle kunna få projektfinansiering som löpte under hela programperioden 1995-1999. Från Strukturfondernas sida var detta inget problem. Efter- som medfinansieringen i huvudsak var offentliga medel, och den offentliga sektorns budgetperioder i princip är ettåriga, innebar det att vissa av de längre projekten måste lägga ned stort arbete på att få fram en fortsatt finansiering en bit in i projektperioden. Den längre projektperiodens möjligheter till långsiktigt arbete blev därmed i vissa stycken något skenbar.

Det var en politisk ambition att behålla partnerskapen under genomförandefasen. Detta innebar emellertid att genomförandet framför allt i början var starkt påverkat av starka lokala politiska grupperingar som drev lokala politiska ”hjärtefrågor”.

Organisationer och företag i Mål 6-området var inte riktigt förberedda på programmet, vilket innebar att det fick en långsam start. Beslutsgrupperna hade få projektansökningar. Då man var an- gelägen att komma igång med programmet synes det som att en del tidiga projekt som accepterades, i ett senare skede med bättre konkurrens inte skulle ha beviljats medel.

Utvärderingsgruppen vill framhålla att de strategiska val som gjordes vid utarbetandet av SPD för den aktuella perioden hade en rimlig inriktning för att möta de krav ställs för att hantera områdets problem. De strukturella problem som fanns i området hade emellertid utvecklats under en lång följd av år och de åtgärder som kunde sättas in genom ett förhållandevis litet program var inte till- räckliga för att åstadkomma önskade förändringar. De förväntningar som fanns underförstådda i SPD var därigenom inte alls möjliga att uppnå. Ett tecken på detta är att folkminskningen fortsatt i oförminskad takt under hela programperioden och åren därefter.

1 1 EURO motsvarar dagens kurs på 9 SEK 7

Vi har kunnat konstatera att en del av medlen utbetalats till institutioner med säte utanför projek- tområdet men med verksamhet innanför dess gränser. Detta leder oss till frågan om programom- rådets avgränsning. För att säkerställa att medlen skulle komma de mest behövande områdena till del inriktades stödet på det norrländska inlandets glesbygdskommuner. Detta innebar emellertid att de mest utvecklingsbara områdena, ”motorerna”, i respektive län kom att uteslutas från programmet. Enda undantaget var Jämtlands län där även Östersund ingick i Mål 6- området. En lärdom borde vara att i framtiden inte dela på funktionella regioner, dvs. lokala arbetsmarknadsregioner.

Programmet blev alltför efterfrågestyrt och något splittrat. Det innehöll alltför många små projekt, som ofta inte var koordinerade med övriga projekt. Små och splittrade projekt torde knappast kunna åstadkomma de strukturella förändringar som eftersträvades. Det hade sannolikt varit en fördel om det funnits en större styrning av programmet, vilket skulle ha krävt en mycket mera aktiv roll hos beslutsgrupperna. Beslutsgrupperna och även handläggare borde ha kunnat gå ut och argumentera för vilka projekt som behövs. Utfallet blev, med underbemannade sekretariat och den tydliga gräs- rotsprofilen, att man mer kom att expediera inkommande ärenden istället för att stimulera projekt i viss inriktning. Gräsrotsprofilen måste i fortsättningen balanseras genom aktivt arbete inom administrationen.

En framtida SPD måste bättre definiera de resultatindikatorer, som man väljer att använda. In- vändningen ligger i att indikatorerna inte klart definierades. Detta är synnerligen viktigt då de officiella resultaten som redovisats i några fall synes baseras på väl yviga tolkningar av vad som t.ex. utgör ett jobb.

Ett av de problem som utvärderingsgruppen stött på, är att hanteringen av den stora projektda- tabasen inte var tillräckligt prioriterad och följaktligen kom att utgöra ett bräckligt underlag för analyser av programmets utveckling. Registreringen av projektdata måste förbättras i kommande program.

Vid genomförandet av ett program av det svenska Mål 6 karaktär måste alla aktörer ha en förståelse för att traditionella strukturer måste ifrågasättas. Om programmet i stället i huvudsak skulle inne- bära mera av det gamla, riskerar dess olika projekt att konservera strukturerna så att programmets själva syfte, strukturella förändringar, blir fördröjda, försvårade eller kanske inte alls genomförda.

Avslutningsvis måste noteras att den nya organisationen för Mål 6 under tidspress hade att hantera ett helt nytt programkoncept med många dittills inte kända komponenter. Svårigheter uppkom men löstes efter hand. Projektmedarbetarna var i huvudsak nöjda med organisationen. De i SPD angivna målen för programmet hade emellertid vid värderingstillfället inte uppfyllts. Befolkningsmålen kommer t.ex. sannolikt inte att kunna nås inom överskådlig tid. Den mobilisering som programmet skapat, liksom inriktningen mot IT i en del åtgärder, torde emellertid i ett längre tidsperspektiv kunna visa sig fruktbärande för områdets utveckling. 8

1. INTRODUCTION

Aims and objectives of the evaluation exercise The ex-post evaluation of the Objective 6 programmes for the period 1995-99 was launched by the European Commission with the aim of assessing the programmes' implementation. Geographically, the Objective 6 Programmes were put into practice in the northernmost areas of Sweden and Fin- land. Therefore, the evaluation operation launched concerned the assessment of two country- specific Objective 6 Programmes. This report concerns the findings for Sweden only.

The overall aims and objectives of this evaluation exercise were to establish the accountability to the public in terms of achieving economic and social cohesion and measuring the effects of the programme as a whole. Furthermore, the evaluation has sought to identify findings to improve the current programme period and to give input for the regional policy planned to start after 2006. This evaluation covered the intervention of all the Structural Funds in the Objective 6 area: the European Regional Development Fund (ERDF), the European Social Fund (ESF), the European Agricultural Guidance and Guarantee Fund (EAGGF) and the Guidance Section and the Financial Instrument for Fisheries Guidance (FIFG).

The overall aims and priorities of the Single Programming Documents for the Objective 6 Pro- grammes in Sweden and Finland formed the basis for this evaluation exercise2. In particular, the evaluation aimed to assess to what extent these overall aims and objectives had been achieved by: · Evaluating the impact of the Structural Funds interventions; · Measuring the effectiveness and efficiency of the interventions at regional, national and EU level as well as within the key Priorities; · Identifying the Community Value Added obtained at EU level as a result of the Structural Funds investment; · Recognising findings from this ex-post evaluation that are relevant for improving the quality of the current 2000–2006 programme period.

A synchronised but decentralised operation The ex-post evaluation of the Objective 6 Programmes has been a synchronised, but decentralised operation. The evaluation was carried out by the consortium specialised in regional studies, which was appointed following a call for tender. The consortium carried out two separate but synchronised evaluation operations focusing on the Objective 6 Programme implementation in Sweden and in Finland.

The evaluation teams each produced a Country Report, covering the afore-mentioned aims and objectives. In addition, the key elements of two Country Reports were brought together in a Synthesis and Comparative Report. This report synthesised the main findings of the country reports and identified similarities and differences between the two reports in order to compare the successes and failures of the Objective 6 Programmes’ implementation in Sweden and Finland. Furthermore, the Synthesis and Comparative Report elaborates a comparative analysis behind the apparent successes and failures of the two programmes.

A brief insight into the area covered by the Objective 6 Programmes The Objective 6 Programmes cover the northernmost regions of the European Union – the vast northern regions in both Sweden and Finland (Figure 1)3. The area shares a 1,000 km long border

2 See Chapter 3.2. Overview of the strategic planning process and the programme structure. 9 with Russia in the East and a northern and northwest border with Norway. The Objective 6 area in Sweden consists either fully or partly of the counties of Norrbotten, Jämtland, Västerbotten, Väster- norrland, Värmland, Gävleborg and Dalarna. The Programme area decision was based on the demographic situation, the degree of out-migration and the lagging local economies. It also very much resembles the support areas employed in previous national support programmes.

Figure 1. The area of Sweden covered by the Objective 6 Pro- grammes.

To fully appreciate the problems experienced in the Objective 6 area, the size of the area is an important issue. The municipality of Kiruna for example is the size of half of Switzerland, about 20,000 square kilometres. Kiruna municipality together with Gällivare are bigger than the Nether- lands. To further exemplify the size issue the Objective 6 area consisted of 43 municipalities, most of which are of considerable size. Thirty-seven of those were entirely within the boundaries of Ob- jective 6 (Figure 2).

The main features of the terrain are forest, water and swamp, with mountainous areas in the north and west of Sweden. The average population density has always been very low. Due to the vastness of the Objective 6 area, long internal distances are a major constraint and thus infrastructure plays an important role in the economic and social life. Transport infrastructure, i.e. roads, railways and airports, is of a relatively high standard in the area. There are vast surroundings of pristine natural wilderness in the area. Because of the cold climate, the regeneration of nature is slow. Nature conservation plays an important role in maintaining the biodiversity and the attractiveness of the environment, which is vital for tourism.

3 See the Internet website www.nordregio.se for other maps and further information about Nordic Countries Sweden and Finland. 10

Figure 2. A comparison of the municipalities falling entirely under the Objective 6 area with a part of Western Europe.

Employment in the Objective 6 area has traditionally been heavily dependent on export oriented primary production and public sector employment. Since private sector services need a certain market volume in order to be profitable, this constitutes a problem for these sparsely populated areas. Therefore, the public sector has a significant position in the Objective 6 area in producing services and creating jobs and economic activity. Municipalities are the largest employers. Also the forest sector has been important in the Objective 6 area. In this respect agriculture has always been relying mainly on dairy farming. The climate in the Objective 6 area is cold and harsh and therefore an important factor for agricultural activity. In January the average temperature is between –8°C to -16°C but the temperature can sometimes be as low as –35 to - 40°C in some places. The vegetation period is 150 days a year or less4.

Agriculture in the Objective 6 area is very special. According to Statistics Sweden the agricultural production in 2001 in the four northernmost counties accounted for some 3 % of the total national production of potatoes and Spring Barley respectively. Production of other crops was insignificant apart from mixed crops grown as cattle-feed. Furthermore, one must bear in mind that most of this production took place along the coast outside the programme area border. The arable land in the area is only about 3.9 % of the whole country even as the area is about 50 % of the whole country.

The basic physical infrastructure and education, social and health care services are well maintained. The clean environment and attractive landscape offer outdoor and recreational possibilities for the development of a strong tourism sector.

The area has special expertise in the forestry sector and in the processing of timber. In particular, the special quality of slowly grown timber offers opportunities for more refined production. How- ever, a lack of jobs leads to social problems and migration of young and well-educated people.

4 The vegetation period is the stage of the year when the temperature is higher than +5°C. 11

Long-term unemployment strikes especially middle-aged and less educated people. Due to the low population density, the local markets for private services are very narrow. The Objective 6 area also experiences major constraints due to the remoteness to main markets, not only in relation to the major markets of the two countries which are located in southern parts of the countries but also internally within the Objective 6 area. A lack of entrepreneurial tradition and poor availability of business support services has inhibited the start-up of new enterprises. The number of jobs in primary production and in public services has been decreasing over a long period. Furthermore, the level of networking is limited, constituting a hindrance for an effective regional development work. As the final point, the Objective 6 Region of Sweden and Finland is regarded as an important geo- political area for the European Union since it shares a long external border with Russia. 12

2. METHODOLOGY

Data collection and analysis methods The methodology of this evaluation exercise consisted of, on the one hand, desk studies of the Ob- jective 6 Programme documents supplemented with other relevant literature, and on the other hand, both quantitative and qualitative analysis of the material gathered via public statistics as well as special databases and interviews. In brief, the main data sources for this evaluation operation com- prised: · Quantitative data acquired from the Objective 6 Programmes' administration, i.e. the national databases; · Quantitative data acquired from national statistics; · Quantitative and qualitative data acquired from interviews of key informants at regional and national level. · Literature related to the topic.

Firstly, relevant background information and documents such as Single Programming Documents (from here onwards referred to as SPDs), ex-ante and interim evaluations of the Objective 6 Pro- grammes, the Economic and Social Cohesion Reports of the Commission and other strategy documents and literature related to the topic were reviewed and scrutinised. Secondly, quantitative data was gathered from four types of data sets, the quality of which will be discussed further below. Thirdly, personal interviews of key informants were conducted. These interviewees were selected among the stakeholders who were directly and indirectly involved in the implementation and results of the Objective 6 Programme and who were likely to have an interest in its evaluation.

Fourthly, a group of project leaders was interviewed by telephone. Representatives of this group were randomly chosen using stratified sampling. The group was thus fairly proportional to the projects under each Priority and also to the regional distribution of projects. Topics addressed in the interviews covered various aspects of the project implementation including the effects and impacts of the programme, views on the overall programme administration and efficiency and views on how the project in question had benefited society.

The interviewees were granted anonymity. The list of stakeholders interviewed can be summarised as follows: · Policy-makers and decision-makers at ministry level (4); · Persons in central civil service departments with insights into the planning and implementation of the Objective 6 Programme (3) · Programme managers and administrators at regional levels and the monitoring committee (7); · Project leaders in the Objective 6 Region (20); · Other individuals and groups with a legitimate interest in the programme (4).

The data gathered in these various stages was analysed by applying both quantitative data analysis methods and a qualitative approach. In detail, the tasks of this evaluation exercise were divided into the following six specific assignments: 1. Relevance of the strategy and programming choices; 2. Effectiveness and financial allocation analysis; 3. Impact and efficiency analysis; 4. Analysis of the delivery and implementation systems; 5. Community value-added; 6. Lessons for the future. 13

Under each assignment different combinations of interview material, programme statistics and public statistics were used. Although the interviews were aimed at different problem areas, information gained from all interviews provided insights into the analysis of all six assignments. However, assignment 6 “Lessons for the future” was built on the ad-hoc analysis of assignments 1–5, and hence aimed to provide insights into successes and failures experienced in the planning, functioning and implementation of the programme.

Problems encountered with the reliability of the national databases for programme monitoring The reliability of the national databases built for the specific purpose of collecting data on projects within Objective 6 Programmes caused a huge concern for this evaluation exercise both in Sweden and in Finland. In the course of this evaluation exercise, the evaluators had access to these databases in order to perform certain analyses. However, the evaluation showed that these databases are not – even yet – fully operative.

The introduction of data into the system has been delayed. This situation appears to have been caused by the severely understaffed secretariats, insufficient instructions from ministries responsible for the data gathering and questions of prioritisation. In brief, there has not been enough time and energy for recording the monitoring data into the databases in the course of the programme implementation.

The monitoring data of the Objective 6 Programmes was stored in several locations, which caused constraints for this evaluation exercise. However, the financial part of the data collection and stor- ing was skilfully performed, unlike the data on indicators for each project which seems unreliable. The important indicators, such as new jobs created or jobs maintained, are completely unreliable in many cases. The indicators relating to jobs were not defined in the same way throughout the programme and hence this data is open to various interpretations. Data on indicators allowing analysis of the effects of the programme have thus not been readily available. To check accuracy and reliability of data on the important indicators it has been necessary to gather data directly from a number of project leaders.

Overview of the key evaluation concepts and issues For the purpose of reader-friendliness, a brief overview of the key evaluation concepts and issues is provided below. In the course of this evaluation exercise, the following key evaluation issues were addressed and interpreted as follows: · Relevance – to what extent are the programme’s objectives pertinent in relation to the evolving needs and priorities at regional, national and EU levels? · Effectiveness – how far have the programme’s activities contributed to achieving its objectives? · Impacts – what are the effects on society brought about by the programme? Furthermore, the impacts were considered at two levels (Figure 3): · The initial impacts of the programme (results); · The longer-term socio-economic impacts of the programme (outcomes). · Efficiency – how well, economically, have the various inputs been converted into outputs, results and outcomes? 14

Figure 3. The key evaluation concepts. 15

3. RELEVANCE OF THE STRATEGY AND PROGRAMMING CHOICES

The Objective 6 Programme was part of the Swedish “negotiation package” when joining the Euro- pean Union. Consequently, the programme was the first of its kind in Sweden. The SPD was formulated with the Swedish and EU regulation as a backdrop as well as the SWOT analysis of the Swedish conditions. It was also the first example in Sweden when partnerships had been part of the strategic planning of a regional policy programme. Thus municipalities and other interested parties in the area had the opportunity to present their ideas. Furthermore the SPDs of other countries were studied for ideas and an excursion to Scotland with leading officials was undertaken to study earlier programmes. This introductory part of the evaluation is mainly an enlarged and further detailed version of the SWOT analysis that serves as a foundation for our analysis.

3.1. Regional analysis of the programme area

The Objective 6 area is an extremely peripheral and sparsely populated area that is becoming increasingly depopulated. In summary the concept of depopulation includes a combination of the following structural demographic imbalances: · Net out migration especially of young people. · Low fertility rate5. · Negative natural reproduction rate. · Ageing population.

With only 2 inhabitants per km² the Objective 6 area is sparsely populated. There are only three towns of significant size in the area: the Jämtland county centre of Östersund, Lycksele and the mining town Kiruna in the far north. Most of the area has however been “urbanised“ in the sense that most of the inhabitants live in municipality centres and other smaller agglomerations. Outside the municipality centres the population density was considerably lower, often less than 1 per km². The population density for the rural parts of respective municipality has been calculated and compared with the density in the municipal centres (Appendix, Table 1). Among the depopulating municipalities there was in general a dual development between the central and peripheral areas. In the main centres and the immediate surroundings the population change has been more positive than in the more peripheral parts. Furthermore, it could be noticed that the “thinning out” process seemed to accelerate in the peripheral parts.

Depopulation has successively become a serious and complicated problem in the whole of northern Sweden during the recent decades (Figure 4). This has happened in spite of heavy national investments in a great variety of sector policy and regional policy measures. A consequence of this process was that the Objective 6 area has a weakened greater regional milieu to rely on in terms of markets and supporting development strategies.

The greatest problem in the region was identified as the depopulation in combination with an imbalanced age structure. Depopulation has been a much more complicated process than just decrease of population in a time perspective of a few years. The distorted population structure and ageing population is a result of imbalanced in-and out-migration patterns over a period of 40 to 50 years. Furthermore the simultaneous drop in births nationwide since the 1990s this situation.

5 The average no. of children born per woman in childbearing age. 16

The ongoing process could only be stopped via (1) a vigorous immigration wave to the region and (2) counteracting out-migration of young people. To be efficient, any regional support programme should target measures to accomplish this.

1970-1975 1975-1980 1980-1985

1985-1990 1990-1995 1995-2000

Figure 4. Population change in municipalities in northern Sweden 1970–2000. Remark: growth above national average in black, growth below national average in darker grey, decrease in light grey. Source: statistics Sweden.

The population in Sweden as a whole has been on the increase over the last 20 years. The increase in the country’s population has been about 7 % over this time. The Objective 6 area differs in a significant way from this picture. The population has decreased by about 7 % during the period 1980- 2001. Since 1995 an accelerated depopulation has taken place.

Continued out-migration and reduced in-migration in combination with an increasing life expec- tancy rate and low birth rates have created a regressive mushroom-like population pyramid (Appen- dix, figure 1). Depopulation had in this sense already reached an almost irreparable stage in some parts of the area before the Objective 6 Programme started. Calculations show that even with a 17 modest in-migration to the region the distorted population structure will prevail for more than a hundred years.

Figure 5. Population change in Sweden 1980–2001. It should be noted that there are more men than women in the region but the number of men decreases more rapidly. Source: Statistics Sweden.

Depopulation is not only the sign of a demographic imbalance but it also entails a negative structural socio-economic change. Reduction of certain segments of the workforce and inhabitants in terms of age, sex and education have a negative impact on the conditions for economic activities, the balance between supply and demand in the local labour market and the quality of welfare services. More precise indicators are: 1. Declining quality of service infrastructure and provision. 2. Poor accessibility to services. 3. High cost and price levels. 4. Weak economic performance measured in GRP or wage sum per capita. 5. Lagging investments in infrastructure for transport and communication.

The negative net birth rates can in a longer perspective be considered as more devastating than the recent out-migration. Decreasing numbers of young people threatens the whole fabric of social services by causing school closures, post office closures and lack of manpower in caring for the elderly, to give only a few examples of factors perpetuating a downward spiral. This process cur- tails the demand for manpower, which was disastrous to a local labour market that is small to begin with.

The “thinning out” process in the settlement system is causing strong pressure for adjustments of institutional and organisational structures in order to maintain infrastructural qualities and welfare services for the remaining population at reasonable costs for the public as well as for the households. In addition, there are corresponding needs for strategies to handle structural change within the private sector – especially the retail services.

The population development in a selection of municipalities in the Objective 6 area over the last 20 years shows an overall decrease (Appendix, Figure 2). It should be noted that the development in the early 1990s to a great extent was due to two factors. Firstly, a temporary influx of foreign refu- 18 gees that after a period, when immigration authorities had handled their cases, moved to other parts of Sweden and secondly, in the early 1990s Sweden experienced a deep recession counteracting out-migration. There were in fact very few jobs available in the economy as a whole, which prompted potential migrants to stay.

Figure 6. Open unemployment in the counties in the Objective 6 area and Sweden as a whole. Some unemployment is also “hidden” in that many persons are offered vocational training and other measures instead of just being unemployed. Source: AMS

Many jobs within the private and public sector have over the years been created as a result of public, state or municipality, interventions. Moreover the social services were expanded due to the ageing population. Since the early 1990s however, national economic decline in combination with deregulations have caused a dramatic reduction in the number of jobs in the public sector.

In 1995 71.5 % of the work force between 20-64 years of age had employment compared with just over 72 % in 1999. On the other hand the number of people between 20-64 years of age had decreased by approximately 4 % in the Objective 6 area.

The peripheral position of the region means high transport and other communication costs. The region also has experienced a weakening public transport system. SMEs engaged in processing raw material in the area experience high raw-material transport-costs as well as difficulties in bringing their production to markets outside the local community.

The structure of the industry was recognized as being too dependent on a few big export oriented companies and in some cases the main centres may be labelled as single industry towns. The big companies, on which the area traditionally has been heavily reliant, have greatly reduced their operations in the area. Their head offices with the strategic departments like R&D and administration are, however, most often located outside the Objective 6 area. Furthermore, the importance of these bigger operations has diminished over the past decades due to rationalisation and the introduction of new technology causing downsizing.

Connected to the problems of the low number of SMEs and the dependency on very few large companies is that the public sector dominates the labour market in the region. About 40% of all employed are in the public sector compared to 34% in Sweden as a whole. This is the background for the low level of entrepreneurship. 19

The transition of the business profile towards the “new economy” with more service and high-tech lines of enterprises has been slow, and high-tech enterprises had not to any significant degree been established in the region. Some enterprises found in the area were in the low-tech end of the alleged high-tech branches, such as Internet customer support and the like.

The Objective 6 area was characterised by a low level of education compared with Sweden as a whole (Appendix, table 2). In many cases the percentage of the population with higher education was less than half the figures for the country as a whole. This was combined with a weak demand from local enterprises for personnel with higher education. Furthermore, those who had temporarily left the area for higher education had serious problems finding adequate jobs to return to that equalled their competence and consequently were moving to more expansive parts of the country. In case of expansion in the private service sector as well as the high tech industry outside the region, many highly educated persons will probably out-migrate.

The demand for labour in the local economies, especially in agriculture and forestry as well as the public sector had lessened due to: overall changes where marginal farmland had been taken out of production; (1) technological development in forestry which had more than halved the labour force in the sector; and (2) the fact that in the 1990s there was a significant withdrawal of public services, mostly due to the changed over-all economic situation. Transitions from a forestry/agriculture based economy to industrial or post-industrial sectors have not been successful. Unemployment was higher than in the country as a whole.

3.2. Overview of the strategic planning process and the programme structure

The Commission had not given any specific guidelines as to how the SPD should be formulated or what it should contain. This allowed the Swedish team to have their own opinion of how the programme should look when it came to the strategic choices. The feeling expressed by the interviewees however, was that the Commission wanted to have most influence over the measures concerning agriculture.

In the national negotiations with the Commission regarding the Swedish geographical area there were serious doubts on the part of the Commission that the proposed Objective 6 area really was relevant. This was because the GRP (´Gross Regional Product´) of the proposed area was high and thus indicated that the region was too rich to get support with the exception of the northernmost parts. The solution to this problem was to disregard the hydroelectric power production, which con- tributes to a very high extent to the region’s GRP although only a very minor part of the profit actually stays in the region.

In the national debate about the SPD the main question was who would be in charge of the funds. The tensions between the municipality representatives and the county councils on the one hand and the government on the other were evident. The municipalities and the county councils thought that the money should be in their control but the government believed that the money belonged to the state and therefore had to be controlled by government authorities. This meant that the question of "who?" instead of "how?" dominated the SPD debate. Ultimately the Swedish government became in charge of the programme funding through the authorities that were created, the Decision Groups. 20

The SPD as it was approved had six Priorities and 29 measures. One third of the proposed 50 measures were removed in the negotiations and the final SPD was further revised during the programme period. Some of the measures received few applications and in order to better use the resources five measures were joined. Furthermore one new measure, 3.4, was introduced. The funding allocated to each Priority and measure gives an indication of the importance given to different parts of the Ob- jective 6 package (Appendix, Table 3). In addition to these Priorities there was also a 7th Priority for Technical assistance of the Objective 6 Programme.

3.3. Assessment of the relevance of the strategy and programming choices

During the mid 1990s Sweden was suffering a deep recession. As in many other European countries unemployment rates had risen severely creating an unsustainable situation both economically and socially. In the Union these matters were discussed in, for example, the European Commission’s White Paper on Growth, Competitiveness and Employment. This situation came through in the creation of the Swedish Objective 6 Programme.

3.3.1. Priority 1 Development of enterprise

The limited local market put special pressure on the businesses in the region. Factors like entrepreneurship, networking and setting-up new businesses are imperative to use the competitive advantages in the region. Parts of the region have been in decline due to the rapidly downward development spiral. More entrepreneurship and new enterprises was thus seen as a means to inject belief in the future. Future decreasing employment opportunities in the public sector was foreseen in the SPD as seriously aggravating the situation for those who want to live and work in the region, especially women and young people. Diversification of the economy was considered to be crucial for further development. Setting up a market for more Small and Medium sized Enterprises (SMEs) was especially important. The changed structure that was expected from this was also believed to create a new labour market, very much needed when the traditional labour market gets smaller.

Some of the focus of this Priority also encompassed the tourism sector. The measures 1.4 Develop- ment of tourism and 1.5 Elevation of competence level in the tourism sector were especially developed to stimulate this so-called “future industry”. Also the measure 4.1 Measures within tourism and culture was directed towards attracting tourists.

3.3.2. Priority 2 Increased competence

The basic physical infrastructure, educational system, medical and social care was of high quality in the region. This was considered to be crucial for further development in any sector. Telemedicine is, especially in Västerbotten County, a growing practice to provide qualified health care to remote parts of the region. A massive expansion of Internet connections and other IT solutions will to some extent counteract the problems with long distances both within the region and to external markets. The SPD stressed the necessity to overcome the distance disadvantage. The physical distance cannot be changed, but the measures regarding the IT-structure in the area intended to give better and more widespread access to Internet connections. Measures 2.3 IT-implementation and 2.4 IT- knowledge intended to increase the use of IT technology. 21

Support was also needed to (1) overcome existing lack of qualified manpower and (2) overcome the problems due to small local markets and long distances to other markets. Weaknesses in the region like the low educational level, vulnerable economic structures and negative attitudes towards entrepreneurs and long distances to major market areas can be overcome with appropriate support. Measures 2.5 Infrastructure for education and 2.6 New education programmes were developed for this purpose.

Experience from successful regional development in other parts of the developed world showed that more resources for R&D in a region could be expected to enhance the potential for economic growth. Even though there were a number of universities and university colleges’ just outside the region there was only one University College within the whole Objective 6 area. The R&D infrastructure was targeted directly by measures 2.1 Strengthening of R&D and 2.2 Knowledge in R&D.

3.3.3. Priority 3 Agriculture, Fishery and Natural Resources

The Objective 6 area in Sweden has abundant natural resources that give possibilities for further processing of raw materials. Especially, there is a potential for further development of wood processing and mining industries. The measures in Priority 3 Agriculture, Fishery and Natural Re- sources encompassed the natural resources in the region and the environment. Further processing of high quality timber and minerals might be achieved by tighter collaboration between research and production. In the Objective 6 area professional fishery was first and foremost situated in the municipalities of Kalix and Haparanda. Fishing in the area was small-scale and only a handful of the licensed fishermen did fish on a full time basis.

In order to become competitive the agricultural sector had to be adapted to changing market conditions and support systems as a consequence of Sweden joining the EU. This especially involved further processing because most of the agricultural turnout was located outside the region. Further prospecting and development of mineral processing and increased specialist knowledge was considered in Priority 3 as well as the water resources and fish breeding. Finding new ore deposits of profitable size was of the utmost importance in parts of the region.

3.3.4. Priority 4 Rural and Community Development

The views on measures to achieve development in the region were somewhat dualistic. There was a long experience of big companies and government interventions. More state interventions or big company investments were also expected and asked for by people to help developing the "lagging" Objective 6 area. Capital accumulation was weak in the region and capital for investments scarce. On the other hand there was also a widespread recognition among both households and local politicians that development of local initiatives was a major factor bringing economic growth. Existing local initiatives can, if supported, contribute to economic growth. By creating Priority 4 Local De- velopment the local resources and other advantages would be utilised, developed and safeguarded. In the SPD discussions not only the statistically evident problems with economy and population development were considered. Social problems emanating from shrinking economy and unemployment were also taken into account. High unemployment rates were not only an economic issue but also entailed social concerns like bringing down self-esteem and creating a breeding ground for negative attitudes among the population. The measures in Priority 4 were thus created to mobilise local initiatives and to promote vitality to the local community. 22

3.3.5. Priority 5 Sami Development

The region is also home for the Sami population who suffered from the same social, economic and population problems. Since they are even fewer in number, about 20,000 in Sweden as a whole, the consequences are even greater for them and their culture. In order for them to maintain and develop their traditional economy, especially reindeer herding, handicrafts and culture, Priority 5 Sami De- velopment was introduced in the SPD. From an economic point of view the Sami activities are ar- ranged in so-called Sami villages. A Sami village is organised as an economic association constituted by the reindeer herding Sami population. A Sami village is also a geographical area covering the grazing boundaries of the Sami village. There are 51 Sami villages in Sweden today.

3.3.6. Priority 6 Infrastructure

Infrastructure came in late in the programme period and was, with a total of only 70 MEURO, a small programme for infrastructure. The aims were to provide for more efficient transportation for bulk transport in and out of the region. Enhancement of carrying capacity means that the region’s economy should be provided with cheaper and better transportation, thus enhancing the competitiveness of saw mills, pulp and paper as well as the mining industry.

Horizontal aims The horizontal aim to give special attention to women and to promote equal opportunities for men and women was chosen to counteract the further out-migration of women. Young people have also moved out for new jobs after being made redundant in the basic sectors of the economy. Young people were therefore given special attention especially in measures 3.2a) Start up support for younger farmers and 1.1d) Loans to young entrepreneurs.

Beautiful unspoilt environment in large areas gives possibilities for further growth. Following this idea one of the five horizontal goals stated in the SPD was the environment. Together with good environment the natural resources give opportunities for the future, especially for the expansion of the tourism sector. The introduction and increased knowledge and competence in the IT sector were also stated as an important horizontal goal, as well as the preservation of cultural heritage.

The European Union policies stated that the purpose of support programmes specifically was to help regions in the European Union that are backward and peripheral come closer to the average situation in the Union. These fields are expressed in the first and second Social and Economic Co- hesion Reports. Community Objectives and the national policies are compared with the SPD and the factual situation in the region (Table 1).

The agricultural situation in the Objective 6 area was rather special compared to the South of Swe- den and the rest of Europe. In the evaluators’ opinion the relevance of some of the measures might be questioned on the grounds of the factual situation. Historically, agriculture in the Objective 6 area was established in marginal land areas and therefore has been abandoned already. The soil in large parts of the inland is of poor quality, which had led the farmers to concentrate on animal breeding instead of cultivating crops. The climate is also very tough and not many crops can be cul- tivated for that reason. However farms where regular farming had ceased still played an important role as suppliers of raw material to the wood-processing industry. 23

Furthermore Measure 3.6 The fisheries contained aims for the fishing fleet. The support for the very small fishing fleet seems to the evaluators as having been somewhat exaggerated since the coastal strip of the Swedish Objective 6 area is very short, comprising only 37 licensed fishermen of which only a handful fish throughout the year. Others fished only parts of the year. Most licensed fishermen had other means of living and were only partly dependent on fishing. Nevertheless, the situation for the fishing industry in the region was further worsened because of over-fishing. There was an immediate risk of extinction of the salmon stock. National government regulations prohibited the important salmon fishing during the programme period. What was most important in this measure therefore were the fish breeding projects.

Table 1. Comparison between the Objective 6 programme, Community Objectives and circumstances in the Objec- tive 6 area in the mid 1990s. Basic elements by Priorities Single Programming Community Objectives Circumstances in the of the SPD Document (Sweden) (1994/1995) Objective 6 area in 1994

Unemployment One of the most urgent problems Seen as the most important High and rising unemployment. problem at Community level Lay offs in most sectors. Few new jobs. Out-migration of younger age groups

Priority 1. Development of Enterprise Growth by improving competitive- The most important way of The most important way of Very important aspect; jobs lost ness reducing unemployment reducing unemployment in primary sector and public services Diversification of the economy-the Promotion of the creation of Encouraging small businesses Weak tradition of entrepreneur- development of SMEs small local businesses are im- was seen as an important way of ship in the area; changing atti- portant for structural change affecting unemployment tudes and increased knowledge necessary Stimulation of tourism related Tourism was seen as an industry Important to reduce unemploy- Relatively unexploited with activities through education for the future ment great potential

Priority 2. Increased competence Increase the competence level of This was intended as an indirect Important to have a workforce Relatively low levels of educa- education and RTD support for SMEs and to increase that was employable tion and RTD in the region the competitiveness of businesses

Information technologies Utilisation, transfer and devel- Utilisation and transfer in an Important to overcome the long opment in an important role: The important role: The goal was the distances within the area goal was the information society information society Equal opportunities Special attention to opportunities Equal opportunities was one of Balance in the population was for women and youth. the main principles of the Com- important; the loss of youth and mission women deteriorates development opportunities

Priority 3. Agriculture, fisheries and Natural Resources Small businesses and training for Diversification into rural tourism Encouraging small businesses Small farms, old farmers, often farmers, fishermen and others etc. Micro-businesses to be run was seen as an important way of work off farm. Extensive pro- alongside with traditional activi- affecting unemployment and low duction, long distances to food ties income levels industry. Small share of farms diversified.

Promote the small agricultural areas Prevent the open landscape Encouraging small farms as a Many of the small farm holdings in peripheral localities becoming forested means to improve employment are abandoned and preserve the open landscape.

Increase efficiency and income level Diversification of agriculture, Improving efficiency was one of Important to maintain and wood industry, mining and the main targets develop the activity that exists fisheries was important

Processing of raw material Keeping and developing the Improving competitiveness was Small-scale farming was de- processing business within the one of the main targets creasing because of low-income area was important levels. Low levels of export and competitiveness 24

Priority 4. Rural and community development Diversification of the economy-the Small local businesses and Development of SMEs was Weak tradition of entrepreneur- development of SMEs industrial clusters with potential important for the diversification ship in the area; changing atti- of exploiting local business of the economy tudes and increased knowledge opportunities necessary Mobilise local initiatives-the build- Elevation of social and economic Transfer of technology and Low degree of local initiatives ing of networks and the use of new status in rural society was im- information was important and network-building. Slowly technologies portant emerging use of new technologies where infrastructure permits

The care of the environment and the A step in the promotion of Taken into consideration, not There are vast areas of landscape landscape tourism and culture highly prioritised which could attract tourists Maintaining public and private Important condition for people to To hinder depopulation it was Many private and public serv- services in sparsely populated areas live in the region important to provide local services are closing down ices

Priority 5. Sami development Promotion of new technologies in New methods are important to Minorities need to be brought to Fear among Sami people, and reindeer herding increase efficiency and the attention and taken into consid- others, to lose traditional Sami longevity of the industry eration economy because of economic difficulties in reindeer herding

Small businesses and training for Diversification into rural tourism Encouraging small businesses Only a minority was directly Sami people etc. Micro-businesses to be run was seen as an important way of involved in traditional reindeer alongside with traditional activi- affecting unemployment herding. Problems with over- ties grazing and land-conflicts. Traditional Sami trades must be complemented by other activities, i.e. Micro-businesses

Development of culture Important to preserve, document Minorities need to be brought to Fear among Sami people, and and spread information about the attention and taken into consid- others, to lose Sami cultural Sami eration traditions due to an ever smaller Sami population Source: Swedish SPD, First and second Report on Social and Economic Cohesion and personal interviews of informants on national and regional level.

3.3.7. Key findings

Taking all Priorities and measures into account there seemed to be agreement amongst the informants, which was accepted by the evaluation team, that the strategy chosen for the Swedish part of the Objective 6 Programme had a short-term mobilisation profile, rather than a long-term strategy profile stressing infrastructure and other tangible results. This was also an intention at ministerial level when planning the programme. Thus, the overall strategy for the whole Objective 6 Pro- gramme from the beginning was to enhance the educational level and to give the inhabitants in the region better qualifications to engage in the development of their region - an aid to self help!

It was a political ambition for the acting minister for Industry and Employment to keep the partnerships formed during the programme planning not only during the programme preparation period but also during the implementation process in order to have some local control over the programme. One particular effect that came to influence the programme and its administration was that these strategies encouraged a great number of smaller projects, which created a burden on the Decision Groups. Having a large number of small projects made the evaluation more difficult since the over all impact of each project as well as the programme was minor and difficult to see in the short run. Projects must therefore be allowed some operational time before impacts can be tangible.

In the interviews the general opinion was that the overall strategies as expressed in the choice of Priorities and measures were appropriate and in a good relation to the region’s problems as can be 25 seen in the statistics on population development, employment, new enterprises, educational level and so forth.

The strategic choices of the SPD were discussed in depth with the interviewees. Some respondents argued that, although most resources were allocated to Priority 1 Development of Enterprise, the programme did not have sufficient emphasis on enhancing the spirit of enterprise giving a basis for development of new SMEs in the region.

Some respondents have also put forward that more funding should have been allocated to infrastructural investments like better road quality etc. Their argument was that the maintenance of roads in some parts of the region was neglected. If it is desirable that people live in sparsely populated areas the community must provide them with transportation possibilities like roads of good quality.

Although the SPD was considered a Swedish product some voices suggest that the SPD was in fact a very streamlined proposal, very much in line with SPDs in other countries of the EU. It might be argued that most areas supported by Structural Funds across Europe were quite similar in their overall outline and therefore naturally would follow the same outline.

Strong political forces created a very diverse programme resulting in the structure of the new SPD of Objective 1 being the same as in Objective 6. This has also been criticized in the interviews as bringing a lack of focus to the Programme, risking to “miss the point”. The perceived lack of focus in the programme mirrors the new partnership idea where many actors needed to come together and elaborate on how to join efforts. Although each actor wanted to get the most out of the programme the strategies of the local Decision Groups also had to be in accordance with the national agenda.

As a response to criticism on some of the measures, all of the interviewees made it clear that the development of the SPD is to be regarded as a learning process and that the most important factor was the search for balance between the Priorities and measures.

The evaluation team want to put forward that although there have been different opinions voiced on parts of the programme the strategic choices in the programming were well in line with the problems in the area. Although the programme was too small to really solve any of the structural weaknesses in the region the concentration on mobilisation and training must be seen as a relevant attempt to give the population in the region the means to help themselves. 26

4. ANALYSIS OF THE DELIVERY AND IMPLEMENTATION SYSTEMS

4.1. Administrative structure of the programme and the start-up of the programme implementation

The decision-making in the programme was divided into different Decision Groups within every County Administrative Board in the region. The total EU programme funding was then divided between them depending on the size of population. Some of the measures could not easily be divided in such a way. Therefore the Regional Decision Group was created to handle projects of a “cross-border nature”. The Sami Council became its own decision body handling the Sami issues in the whole region. Only government authorities are allowed to manage government funding and it was therefore decided that the groups would be given the status of public authorities. Each one of the Decision Groups had a secretariat, which was part of the County Administrative Board’s administration (Figure 7). In addition to the work in the Decision Groups some decisions on very large projects were also made in the Monitoring Committee.

The administrative structure was complex and complicated since different authorities handled the decisions on project applications and funding of the projects involved. The National Labour Market Board (AMS) administered payments from The Social Fund (ESF), NUTEK administered the funding from the Regional Fund (ERDF), the National Agency of Agriculture handled the Agricul- tural fund, (EAGGF) and the National Agency of Fisheries handled payments from the Fishery fund (FIFG), whereas the projects themselves were handled by the respective secretariat of the Decision Groups. A number of authorities at different levels were thus involved in the projects. Four administrative levels including the individual projects were involved in the delivery system. In the case of the so-called frame programmes there were in fact four different administrative levels on top of the individual project. In addition to these levels there was also auditing both at a national and EU level.

Because of the many Decision Groups there was a need for the Monitoring Committee to coordinate the process. The over-all strategies for the whole programme were indicated in the SPD and were formulated in order to achieve the goals of the programme. There were only a few directives for the local Decision Groups in the beginning. The groups themselves developed over time their own strategies adapted to the specific situation in each area. More definite rules of how to handle the project applications and funding accounts were given to the projects later in the process.

The new elaborate accounting of economic expenses was received with mixed emotions according to the interviews. The control and verification demands were much more advanced than in the traditional Swedish administration. This was not necessarily a bad thing; it was very much needed, although many perceived it as very frustrating in the beginning. In general people wish to know where the tax revenue goes, but the system has also been perceived as controlling and distrusting of people. 27

Figure 7: Overview of the decision making structure.

The project leaders’ point of view on the administration was in most cases positive. The majority of the projects have considered the administration of project approvals and funding as being good to very good. No one thought that the administration had been very bad. This shows that although the administrative personnel experienced their work load as very stressful this did not affect the quality of their work. This also indicates that much of the talk about malpractices in handling of applications and the like was merely talk.

4.2. Strategic planning capacity of the management

The SPD and the main strategic planning were produced by NUTEK with inputs from the partnerships. The capacity of the Decision Groups and the secretariats were discussed in the interviews. Although the interviewees had a strong belief in the capacity of the administrative staff planning, especially in the Decision Groups, understaffing and discontinuity due to high personnel turnover hampered it.

The economic budgetary and thus planning period in Sweden is normally one year. Project planning longer than the budgetary periods has therefore in the past been made under certain risk. The longer planning period 1995-1999 was positive in that it was known how much funding was available during a longer period. The perspective was longer and the measures were also flexible. Ideas are allowed to mature among the presumptive projects in a long programme period. Even so there were some doubts about the long term financing since most of national co-financing comes from sources that employ one-year-budgets. The long-term economic planning for the projects were for that reason in some cases illusory. The flow of requisitions with an accumulation towards the very end of the programme period may also raise some doubts about the planning in the projects. 28

Although it was known in the central administration what would happen after Sweden’s member- ship to the European Union there seems to have been an understanding that any overly obvious programme preparations anticipating the outcome of the referendum should not be carried out, since it might disturb the referendum. Thus, actual work with the programme did not really start until after the referendum in 1994. In comparison to the Finnish programme this situation and the mobilisation (bottom to top) strategy delayed the start of the programme considerably. Initially this meant that the preparation in the Swedish Decision Groups and financing authorities constituted of deskwork only. This also slowed down the process of preparing the potential projects for what was about to happen. In the beginning of the programme period very few project applications were filed and that was directly related to these circumstances. In the Sami council (decision makers for the measures 5.1 and 5.2) the first decisions were not made until the turn of the month May/June 1996. The start of the measure 3.6 Fisheries was also delayed and by the end of 1998 less than 50% of the available funding had been distributed. The start of the programme was not significantly different in other Priorities and measures.

Regular employees in the County Administrations became engaged in the work with Objective 6 in addition to more experienced project leaders. However, the capacity of the secretariats was inade- quate for the task. This caused stress and pressure on the personnel. Another problem mentioned in the interviews was that the European Commission and the national administrative bodies were perceived to increase the demands on the administration gradually. The reason for this was that no one had full overview of the system that Swedish EU administration was entering at the time.

There were, for obvious reasons, no personnel at any level of the administration who had experience of this new type of programme work represented by Objective 6. The competence also varied between the Decision Groups. It seems to have been the problem with understaffing that was most prominent. Additionally, in some parts of the delivery system there was high mobility amongst key persons severely affecting the capacity in the Decision Group secretariats. If there are problems in the reporting at the first stage in the administration, specifically between the project contractor and the Decision Groups the consequences will follow at each step in the administration. The personnel resources in the national system were used as a model to calculate how the administration resources should be allocated. This turned out to be a mistake since the new way of working was completely different from that which had been practised previously, and resulted in an overstretched apparatus. The new demands on the administration were not really met until the very end of the Objective 6 period.

4.3. Execution of the project selection procedure

The selection criteria for projects were developed after the programme had started. A manual of cost eligibility called the SEM2000 came into use in 1997.

In the beginning there was a system of drop-in applications but in the latter part of the programme period applications were gathered for deadlines. At first almost all applications were funded. One of the reasons for this was that both the Commission and the Swedish authorities wanted to see results. Results meant that money was withdrawn from the fund accounts. Funding withdrawals have thus been an indicator of the accomplishments in the programme. No money could be withdrawn without a requisition and since there were no early requisitions no money was withdrawn. This meant that projects were approved in the early stages of the programme that later on would not have been approved, due to a lack of applications and consequently lack of competition. However, when the quality of the projects was discussed in the interviews the overall impression was that only a minor- 29 ity of the projects were badly handled and estimations of the interviewees suggest that only a tiny fraction (>1%) failed.

There was also a great deal of antagonism between the municipalities as well as between the different County Administrative Boards - everyone wanted their share of the money and for political reasons the money had to be distributed equally. There was a difference though between the work in the Decision Groups and the secretariats. In the Decision Groups the local political forces had plenty of room for manoeuvres whereas in the secretariats they had not. Needless to say, this raised some questions about how the political issues affected the quality of the projects since the even distribution of money between the municipalities seems to have been somewhat more important to members of the groups than the quality of the projects in some cases.

4.4. Efficiency of the financial circuits

A programme with over 705 MEURO to spend must build a practice for the administrative systems. Many different authorities were involved in the process and the list below shows the minimum steps a project had to pass on its way through the system. 1. The Decision Group decided in favour of the project. 2. The corresponding financing authorities of NUTEK, National Agency of Agriculture, Na- tional Agency of Fisheries or AMS were notified. AMS and the National Agency of Fisher- ies sent a requisition form to the project contractor. NUTEK used the existing system within the County Administrative Boards. The National Agency of Agriculture did not send a form, it was taken care of by secretariats instead. 3. The requisition from the project along with the project report was sent to the Decision Group concerned. 4. The Decision Group secretariat reviewed the requisition and made sure that there was a report at hand and that the costs were legitimate. 5. The requisitions were submitted to the funding authority, where a second control took place. 6. The project received funding.

At a first glance, this system seems to be quite inefficient and complicated. However, there was a reason for this according to interviews. For example it was not easy for the Decision Groups to have an overview of all the rules and regulations while deciding to which project to grant money. There- fore, without this procedure, there was a risk that projects were granted funding even though they were not entitled to any. Hence in the best interest of the project itself the project needed to be as- sured that the money would arrive as promised. This system was more reliable and created a sense of security for the applicants.

The requisition of funding was seen as a problem by the projects and municipalities involved. There had been no practice of this in the Swedish administration before entering the EU and therefore people had difficulties in filling in the forms necessary to get the funding. When the forms were filled in and sent to the Decision Group secretariat they were in many cases sent back because they needed to be supplemented with additional information. The straightforwardness of the five steps above was therefore in a number of cases an illusion. A fear of the auditors was also manifested as time went on. This was because the person who approved a project could be held personally responsible for the decision and also be forced to pay back the money from his/hers own pocket if the project did not meet the prerequisites. In reality however, this method was not employed. 30

Very few people had access to the data on payments made to the projects. Therefore the registration of the payments was lagging behind for some years. Some of the projects had to wait for up to 14 months for their payments. According to NUTEK their handling time was under 30 days but occasionally it could take up to 2 months. This indicates that the problem was to be found somewhere else. AMS economy service handling time, as stated by them, was also no more than 2-3 weeks. The Decision Groups, where an application could be held for up to 8 months, have been pointed out as those responsible. The secretariats on their hand have found this long handling time unaccept- able. Reasons for this has been mentioned as (1) there was something unclear in the requisition or (2) many projects waited too long before they actually made a requisition thus creating a backlog at the end of the period. The adopted strategy of mobilisation sometimes led to smaller projects and it seems that smaller projects sometimes did not have the necessary qualifications for carrying out the accountancy work in the projects.

One problem for the Decision Groups was the fact that they had three quite incompatible roles: 1. To “sell” the programme to the public. 2. To be active in the decision making process. 3. To make quality check ups.

In the beginning of the programme period no one had any experience of these types of procedures. This created quite a lot of extra work since the process had to be “learning by doing” or “trial and error”. It was long after the programme had started that NUTEK began to organise introductions and training for new employees but that was far too late to be of any real use according to the interviews. The training that was given to the staff working with Objective 6 was largely based on the experience gained "hands-on" as the period went on. Internal training was also given regarding definitions, revision, implementation and computing. Training that was offered from NUTEK was mostly to do with more general questions and not the practical handling of projects. Considering the problem with understaffed secretariats one interviewee said that it had been more or less impossible for him to attend these seminars because if he had gone the work would immediately have piled up in enormous quantities at the office. Also because of the circulation of personnel and understaffing there were difficulties in developing the competence needed for the task. There were however two different views on the personnel issues: one strand suggests that because of the administration culture clash between EU and the national administration, the problems in the beginning could not have been helped with additional personnel. The other view was that more personnel would have helped considerably.

Although the first years of the period seems to have been a tough learning period one of the interviewees said that the two administrative systems seemed to be working together well at the end.

The majority of the project leaders thought that the funding they received was enough and four stated that there was money left after the project ended. Due to late payments projects had additional costs in the form of interest costs. This became a problem for some according to the Decision Groups. In the handling period the interest grew but because these costs were not entitled to be covered some projects experienced a difficult time.

Seven of the interviewed project leaders stated that there had been problems of liquidity during the project duration. Two of these had problems during the whole period; three had problems in the middle of the project and two at the end of the period. 13 had no problems at all with the liquidity. Not surprisingly those who did not have any problems stated that the handling time, the follow-up, economy issues and administration were good to very good while the others were somewhat more uncertain about the efficiency of the co-operation with the secretariats. 31

4.5. Functioning of the partnership

The partnership included a set of new institutions, which were created in order to manage the Structural Fund support of the programme. Politicians from the local municipalities filled the majority of the seats in the Decision Groups. The regional policy departments at the County Adminis- trative Boards handled management of the secretarial services regionally. This part of the State administration was also the main contributor of co-financing. The procedure for the applicants was 1) to make arrangements for the co-financing and 2) to apply for the European funding. This means that the implementation of the Objective 6 Programme involved the establishment of new organisations in addition to the national ones, giving further opportunities for funding but also additional paper work.

Regarding the partnership and implementation there was a wide representation of interests in the Monitoring Committee and also in the Decision Groups. Although the majority in the Decision Groups were representatives from municipalities, the County Administration Boards, the County Labour Board, the County Council and other regional actors also participated. It was the wish expressed by the acting minister at the time that the regional partnerships should be present in the regional groups to take part in the implementation of the programme. Regional and local partners could in this way participate in the decisions. This however opened up for strong local interests in the Decision Groups. In the Regional Decision Group strong special local or regional interests were voiced sometimes creating antagonistic feelings contributing to difficulties at the start of the programme.

Weak information networks have been traceable at every level in the application/ decision/payment chain. Personnel interviewed at AMS economy service for example thought that the hierarchical structure of the information process i.e. who got the information, did not work. Few highly posi- tioned people attended meetings and received first hand information. They were then supposed to pass on this information to those who were in fact working with the decisions and payments, but this was not perceived as well- functioning. The information chain was not as efficient as expected and personnel felt they sometimes did not get the information they needed. The shortcomings in the information chain seriously affected the efficiency of the system as a whole since people were un- familiar with the new administrative routines.

4.6. Performance of the monitoring system and the quality control

The quality control was carried out through four different channels: 1. Evaluation teams. 2. Auditing. 3. State control. 4. Self evaluation.

The organisation of the control of the ERDF was divided into different stages. NUTEK used two separate control teams who made on-the-spot checks and reviewed the structural fund ERDF (regional fund) projects. One of these teams was also in charge of seminars, lectures and information to the Decision Groups.

The Decision Group secretariats were in charge of the control of the activity and economic circumstances of the supported projects. Furthermore the Decision Groups had responsibility to make sure that the projects and their activity were in accordance with the SPD and what was promised in the 32 applications.. A system of checklists was developed for this purpose and has been used in both the secretariats for the Decision Groups and at NUTEK. Checklists were used in order to ensure that the horizontal goals were considered in the applications and projects. However, some of the interviewees articulated that these themes would have been better considered if they had been integrated in each measure as an indicator.

Certification of Decision Group secretariats regarding the review of requisitions was applied. The certification was based on risk and quality analysis of the economic administration at the secretariats. The certified secretariats could hand in a less detailed basis for the requisition of funding from ERDF. In the interviews a strong emphasis was put on the fact that this certification was a quality sign, a statement that came both from interviews at NUTEK and from the Decision Groups. In general the Decision Group secretariats maintained high quality of their economic administration and only two secretariats did not get certified. It seems to have been the mobility of key personnel and the consecutive discontinuity in the operation that mainly prevented all from being certified.

The quality control from the Decision Groups was not satisfactory during the period. This critique mainly comes from the secretariats themselves. Lack of time and personnel was the main reason stated by the interviewees who had the opinion that more contacts “in the field” in fact also should have helped to make the administrative processes run more smoothly. Some of the problems were directly identified. The geographical area for the Sami measures, and for the Regional Decision Group was too vast for travel and it would have consumed too much time to visit a significant number of projects. This “unreasonable situation” still prevails in the new programme period one interviewee remarked.

The auditors at the funding authorities worked according to the rules 2064/1997 using the “5% rule”. This means that at least 5% of the total costs of the projects in each fund were audited. Fur- thermore, the Commission was active very early in the process of auditing even though the Swedish programme was relatively small compared to other programmes in the Union.

Although the Monitoring Committee was not as active as many of the secretariats would have wanted, both NUTEK and the Monitoring Committee have been very easy to deal with according to the Decision Groups. Even so some doubts about the efficiency of a monitoring committee comprising a total of about 30 people have been voiced. In the committee many issues were discussed but the critique has been that there was little or no room for personal engagement or to really impel a certain question.

Project leader interviews suggest that the quality control at project level was rudimentary. Many of the projects have not made a final report including impacts. Half of the interviewed project leaders said that the quality control consisted of an economic account of their expenses while four had made questionnaires or interviews. The remaining interviewees had attended meetings with different groups. The overall impression given by project leaders was that the control of the projects by the projects themselves had not been satisfactory, apart from the financial reporting. 33

5. EFFECTIVENESS AND FINANCIAL ALLOCATION ANALYSIS

The concept of effectiveness was defined in this evaluation as how far the programme’s activities have contributed to achieve its objectives. In this Chapter the effectiveness of the Objective 6 Pro- gramme is assessed from the following two perspectives: · The analysis of the financial allocation of the programme between Priorities. · The evaluation of the effects of the programme activities on three central objective areas of the programme – diversification of the regional economy and enhanced competitiveness, human resource development and rural development.

5.1. Assessment of the financial allocation

The allocation of funding was rather detailed in the SPD. The total funding from all the Funds together accounts for 291 MEURO. This is 97 % of the EU frame, which was 300 MEURO in the SPD. However, there is a possibility that these figures might change slightly when all projects have handed in their final report. There might be cases when projects are asked to pay money back for different reasons but this should make no major difference to the overall result.

60 MEURO of the funds available from the Fisheries fund (FIFG) had been withdrawn by the end of 2001. From the Social fund (ESF) 3.4 MEURO of the frame had been paid to projects. That means that for FIFG 90 % and for ESF 83 % of the Structural Funds‘ frame had been used.

From the financial allocation from ERDF and EAGGF it may be concluded that of the total EU frame 94% was paid to different measures (Table 2). Meanwhile national public co-financing contributed with 115% of the frame and private co-financing with 102%. Only one measure, measure 1.4 Development of Tourism (Table 2), exceeded the EU funding frame by purpose. Funding could be redistributed from other measures in the priority. At the same time projects in this measure had difficulties in finding private co-funding. Measure 4.6 Local strategies for increased employment rates almost distributed all the funding. The measure 4.1 Measures within tourism and culture managed to get the most private co-financing. Measure 2.3 IT implementation did not manage so well with only 24% private co-financing.

As discussed in chapter 3 most enterprises are small in northern Sweden. As a consequence, rather few private enterprises have resources to be a co-financer of projects. Most of the interviewees suggested that because of the time-consuming handling of project applications and the slow payment of funding, the small businesses that did exist could not risk entering a project that might lead to economic failure. When private actors did contribute to the projects it was mostly with working agreements and not so much with financial aid. The dominating co-financer therefore became the County Administrative Boards. The County Labour Board was the dominating co-financer to Social fund (ESF) projects. Also the municipalities and the County Councils contributed to some extent.

There was a change in the co-financing of measure 3.6. During the first two years of the programme projects had to receive funding both from the National Agency of Fisheries and the County Admin- istrative Boards. From 1997 onwards, national co-financing was granted from the National Agency of Fisheries. 34

Table 2. The financial allocation to Priorities and measures in Objective 6 (ERDF, EAGGF). National Private Priorities and EU funding % of funding % of funding % of Total cost % of measures (MEURO) frame (MEURO) frame (MEURO) frame (MEURO) frame 1. Development of Enterprise 69.45 94% 76.73 104% 90.31 107% 236.48 102% 1.1 Development of SMEs 51.98 92% 57.38 102% 78.85 117% 188.21 104% 1.4 Development of tourism 17.47 102% 19.34 113% 11.46 67% 48.27 94% 2. Increased competence 39.42 97% 47.10 146% 8.14 55% 94.67 108% 2.1 Strengthening of R&D 22.33 97% 25.38 176% 6.61 66% 54.32 114% 2.3 IT- implementation 13.25 97% 16.72 122% 1.11 24% 31.09 97% 2.5 Infrastructure for education 3.85 94% 4.99 123% 0.42 18.67 229% 4. Rural and Community De- velopment 16.27 93% 20.63 141% 4.18 346% 41.08 123% 4.1 Measures within tourism and culture 15.38 93% 20.20 141% 4.14 343% 39.72 124% 4.6 Local strategies for increased employment rates 0.89 99% 0.43 144% 0.04 1.36 114% 6. Infrastructure 28.15 97% 40.08 98% 68.22 97% 6.1 Investments in the railroad 28.15 97% 40.08 98% 68.22 97% 7. Technical assistance 3.38 88% 3.97 133% 7.34 108% 7.1 Technical assistance ERDF 3.38 88% 3.97 133% 7.34 108% Total 156.66 94% 188.51 115% 102.63 102% 457.20 106% Source: Final Report Regarding Closure of Objective 6 Sweden, 1995-1999.

The Technical Assistance (TA) was intended to support the implementation of the programme, including information about and stimulation to involve people in the programme. In total it represented 3.38 MEURO or 3 % of the programme budget. The Monitoring Committee was in charge of the Priority. The TA funding could be used for activities like control, monitoring and evaluation but also to cover some of the salary expenses. In total 108 % of TA funding was used when including the national funding. However, only 88 % of the EU frame was used. One reason for this could be that it took almost two years to clarify with the Commission that administration costs for the secretariats could be covered partially by measure 7. Technical Assistance. Since the administrative system was new and costly to establish it could be argued that this was a problem that should have been solved earlier. 5 % of the funding was used for the administration of the Programme. At NUTEK the interviewees believe that about 0.3 MEURO from Technical Assistance went to cover administration costs. The problem was that this only covered one third of the total costs and the rest had to be paid by other means. In summary it is clear that the budget for administrative costs was significantly underestimated and that the collaboration regarding administrative issues was not per- fectly handled. 35

Most projects were small (Figure 8) and approximately three quarters of the projects shared one third of the funding.

Figure 8. The size of the payments from the EAGGF and ERDF. Source: STINS.

Figure 9. Distribution of EU funding per capita to municipalities entirely within the Objective 6 area. The population per municipality 1998 has been divided by the sum of EU funding. Unfortunately STINS only contains information from ERDF and EAGGF and the figures only are for the projects that have submitted their final reports. Source: STINS.

There is with few exceptions a rather even spatial distribution of the programme funding measured as per capita support (Figure 9). However, a couple of problems with the data make the figures not entirely reliable. Firstly, some municipalities that do not entirely lie within the supported region are omitted. Secondly, a problem in calculating the distribution was that some bodies located outside the region administered projects within the area. One example is MRI in Kiruna where the funding went through FRN in Stockholm. These externally operated projects often covered more than one municipality (Table 3). 36

Table 3. Funding from ERDF and EAGGF that was paid to municipalities that partly or entirely lie outside the Objective 6 area.

Total Total Total Municipality (EURO) Municipality (EURO) Municipality (EURO) Borlänge 5913358 Karlstad 889855 Söderhamn 45520 Luleå 4236354 Mora 432397 Sandviken 29062 Umeå 3226281 Örnsköldsvik 417530 Rättvik 22380 Norrköping 2450252 Skellefteå 369915 Kil 18353 Härnösand 2414351 Göteborg 213850 Skinnskatteberg 14236 Stockholm 2119100 Uppsala 135795 Nordmaling 4050 Boden 1862284 Sundsvall 103477 Jönköping 2430 Falun 1595846 Piteå 92986 Gävle 1528210 Kramfors 90334 Source: STINS. These figures only include the projects that have handed in their final reports.

With the exception of MRI these “external” projects are left out of the calculations (Figure 9). It should also be noted that municipalities that seem to have received less support in the Figure often have had projects administered from a neighbouring community inside the Objective 6 Region. Ex- amples are Östersund and Strömsund.

5.2. How did projects contribute to achieve the goals of the programme?

The Objective 6 Programme aimed to create advantageous living conditions and prosperity in the region for businesses and people. In the SPD quantitative as well as qualitative targets were articulated in order for these aims to be reached. In the SPD the following overall quantitative and qualitative targets were set: · 9,500 new/maintained jobs to decrease unemployment. · Decrease the difference between GNP per capita in the region compared to the national average (excluding the energy production). · The creation of 900 new businesses. · Increased usage of IT and an increase in the competence in the field. · Equality of men and women. · Preservation of natural and cultural environments. · Enhanced exploitation of the regional competitive advantages. · Overall elevation of competence.

In the following the achievement of the goals of the programme are reviewed from the perspectives of the diversification of regional economy and enhanced competitiveness, development of human resources and rural development.

5.2.1. Diversification of the regional economy and enhanced competitiveness

The diversification of the economy and enhanced competitiveness was a main goal for the programme. Not only in Priority 1. Development of Enterprise, but throughout the Priorities and measures this was taken into consideration. The increased number of new firms, development of networks and services for existing companies, and an increase in the competence and know-how, especially in computer related areas of expertise, was important. Diversification of the economy was 37 promoted through measures thought to stimulate entrepreneurship in an area with limited entrepreneurial traditions. Alongside traditional means of support like agriculture and reindeer herding, other economic activities were supported to improve the situation in the area. Small-scale tourism enterprises are an example of the sort of diversification envisaged in the SPD.

Figure 10. The GRP in the Swedish counties that partly or as a whole were within the Objective 6 area. Stockholm county is shown as comparison. Source: Statistics Sweden.

How effective this strategy was in terms of economic development is hard to determine. However, the regional economic development may be illustrated by the development in GRP (Figure 10). The figures for some counties may be highly influenced by industrial areas outside the Objective 6 area. This is the case, for example, for Västernorrland County, which has a strongly industrialised area along the coast. The tendency was however clear. The “Objective 6 counties” had a downward trend.

How well has the diversification strategy managed? Again, an isolation of the effects of the programme is not possible. Nevertheless, there was a change in the labour market structure between 1994 and 1999 (Table 4). The number of people employed in the primary sector decreased dramatically while business services increased in the region, as predicted in the SPD.

Table 4. Labour market change 1994-1999 Primary sec- Industry sec- Business tor tor services Rural areas -9,9 0,3 28,3 close to urban centre Urban centres -21,7 -6,4 21,5 Rural areas -17,0 -1,6 20,4 Source: Glesbygdsverket fickfakta 2002.

Considering the number of new businesses there is nothing that suggests that more small-scale enterprises started during the programme period than before. Five out of seven of the counties had a peak in 1998 in the number of new registration of businesses (Figure 11). 38

In other evaluations of the programme it has been suggested that 20% of the projects covered 80% of the target. However, one interviewee at a secretariat commented that this was not true. Rather it was that the 20% had been able to “adjust” their output figures to seem extraordinary.

Figure 11. Registration of new businesses. Only municipalities entirely within the Objec- tive 6 area are accounted for. Source: Nyföretagarbarometern Jobs and Society.

In the fishery sector the programme was actively promoting competitiveness. About 70% of the FIFG funding was used for water resources development within existing enterprises. It is, according to the National Agency of Fisheries, within this category that the Objective 6 Programme contributed to most new jobs. A total of 11 new jobs have been reported. Large parts of the FIFG funding were used for improvement of harbour capacity and other means that did not create any jobs in the short-term.

The processing of fish products is relatively small scale. Just over 5% of the funding was used for investments in processing enterprises to increase the production capacity and to adjust the industry to EU standards. The number of modernised companies was 17, and thus higher than the 12 expected.

The demand for support to the fishing fleet was limited. Support was granted to five ships as op- posed to the estimated 20 ships. Some of the support has gone to ships that have been forced to dock for a period of time due to unforeseen biological reasons. This support was seen by the Na- tional Agency of Fisheries as important to secure opportunities for the professional fishing in the region (Appendix, Table 4).

5.2.2 Human resource development

Problems in the Objective 6 area were twofold; in the first place, the out-migration had drained the area of qualified persons who could easily get jobs elsewhere. The low educational level in the population had also proved to be a problem in view of the fact that even if jobs were created there was a lack of employable persons. An increased educational level was therefore an important factor for regional development. This led to the creation of Priority 2. Increased Competence. 39

The largest part of the Priority was used to increase the R&D in the area through E-tour and MRI in Östersund and Kiruna respectively. It should be noted that these organisations were pure research organisations even if E-tour was expected to create secondary employment after tourism had taken up the research results disseminated to the industry.

Information Technology Ø In previous evaluations and in the interviews the development of the so-called Information society has been mentioned as a positive effect of the programme.

Ø This development has been made possible through the many measures that directly targeted training in computer usage and knowledge (Priority 2. Increased competence). The increased IT competence was a horizontal goal of the programme as well as directly incorporated in some measures.

Ø Many of the IT projects were part of frame programmes or other larger projects. This made the effects far-reaching geographically and also encompassed a wider group of people. Often they were better handled owing to more experienced project leaders, project co-ordinators and other administrative personnel. The horizontal aspect gave the opportunity to promote IT usage in all of the measures. This was appreciated especially among projects promoting development of new businesses and projects involved in training business owners and staff.

Ø One project that might provide us with further information on this matter was found in the interviews. The aim was to stimulate the usage of IT among business entrepreneurs as well as training in the field of IT. The success and effectiveness of the project was directly dependent on the build up of large contact networks where information about the value of the project was spread. The networks were of a “cross-border” nature, both geographically and secto- rally.

In order to overcome the physical distances in the region, IT infrastructure and communication skills are important for the development of both business and public services. Learning centres with high capacity IT connections to universities were created in different places. There are also projects in telemedicine which give better opportunities for qualified medical care in areas far from hospi- tals.

Building of IT infrastructure was important but so was training in IT-knowledge (Measure 2.3). Under measure 2.5 a number of investments in IT for schools and decentralized higher education were made as well as projects directed to enhance women’s competence in using modern communication techniques. Today approximately 60% per cent of all households with children in Sweden have access to the Internet in their home. Furthermore everyone can get access to Internet at the local library for example. This access was made possible in part because of the fast development of what was called the IT society. During the programme period 685 schools in the Objective 6 area were provided with the latest technology to connect the schools to the Internet. Apart from the IT society in general, more specifically the maturity of IT usage was promoted for business development. 40

5.2.3. Rural development

Development in rural areas can build on different trades. Traditionally agriculture and forestry has been the backbone of the economy together with mining in some locations. Apart from regular project funding the National Agency of Agriculture has had the option to grant EU compensation subsi- dies, investment support and start-up support to farmers in the region. The compensation subsidy was meant to compensate for the relatively adverse conditions in the Objective 6 area. Two thirds of the farms supported were animal farms and the remaining potato and grain producers. The number of farms that received subsidy was around 3,000 annually. During the programme period the number of farmers entitled to subsidy rose by 3% from 2,960 to 3,050.

Investment support was given for constructions of infrastructure in terms of buildings and machines (Table 5). This support was granted to 526 farmers and to a grand total of 13,882,353 EURO. In the SPD the number of farmers was expected to be around 300 sharing 13,294,118 EURO. Compared to what was expected the measure had been successful in informing the farmers about the possibilities of support and subsidy. The effect on number of jobs had also been successful compared to what was expected in the SPD. However, the expected number of new farm activities had not been reached.

Table 5. Indicator output from the investment support. Expected number accord- Output according to Na- ing to the SPD tional Agency of Agricul- ture New jobs 50 76 Maintained jobs 100 232 New farm activities 50 14 Number of investment sup- 300 525 port Source: Final Report on the Closure of Objective 6 Sweden, 1995-1999.

The start-up support for young farmers was granted to 66 farmers during the period 1995-1999. Three were double supports with two farmers in the same business adding up to 63 new businesses. The support was estimated in the SPD to help start 25 new farms a year, a total of 125 over the programme period. The number of new/maintained jobs was 118 but not quantified in the SPD. 12,470,588 EURO was granted to start-up support.

All traditional trades are losing importance as employers in the rural areas. Farmers give up agriculture. In order to maintain possibilities for the households to stay at the farms a need to diversify the source of income developed. Development must thus be looked for elsewhere. In addition ra- tionalisations in forestry meant diminishing opportunities for employment in this field.

Tourism was seen as an increasingly important agent for future development. To accomplish development in rural areas it was therefore necessary to invest in activities that can form a basis for tourism and other (small-scale) activities. For smaller farms still in business, development of small- scale food production was an alternative way to diversify. Priority 4 in the Objective 6 Programme was developed in order to start building a basis for development along these lines. Some support for these activities was also part of Priority 3. A large part of the projects under measure 4.1 concern means for development by renovating or developing historical sites as tourism attractions based on the cultural heritage. Elaboration of rural development programmes, programmes for better com- munications and public services, investments in IT structure and network building are examples of 41 projects. The variation of projects in Priority 4 was as a result manifold and especially 4.1 consisted of a great variety of smaller projects.

Table 6. Priority 5. Sami development and the indicators reported. Expected Outputs in project applications, indicators compared to final reports for Priority 5. Sami development. Expected no. Sami Expected Expected no. of partici- No. of par- Expected no. No. of par- no. of new New of main- Maintained pants in ticipants in of new No. of new ticipants in Development jobs jobs tained jobs jobs education education enterprises enterprises measures Measure 5.1 Sami culture 94 31 43 41 409 427 19 1 111 Measure 5.2 Rein- deer herding and combination economies 204 30 131 90 994 1146 47 17 539 Source: The Sami Council.

The measures within Sami Development have also been intended for rural development. The idea was very similar to the aims in measures targeting farmers and the diversification of their economy. It was absolutely crucial to develop skills and know-how to be flexible and to take advantage of the possibilities that did exist. At the same time as the preservation and development of traditional economic and cultural activities had to be safeguarded. The indicators for measures 5.1 Sami culture and 5.2 Reindeer herding and combination economies have been separately accounted for by the Sami Council (Table 6).

The structure of these Priorities was very much in conjunction with the mobilisation profile of the whole programme. Many have been engaged in various smaller projects. Even if there could be doubts about the sustainable impacts of all smaller tourism-directed projects, the activities had in many cases given new knowledge and a better self-esteem.

Most of the projects have employed people during the project period. Long-term sustainable employment has however been difficult to evaluate. To get full value of the support other actors with commercial interests must start to exploit what was created in the programme.

There was some kind of effectiveness in the system, but for the most part the interviewees thought that too elaborate accounting had been demanded from the projects. A typical comment from interviewees was that the handling and payment routines were organised in a way that at every stage of the handling, time and effort was wasted for nothing. 42

6. IMPACT AND EFFICIENCY ANALYSIS

In this evaluation exercise, the impacts were considered as having a dual scope: · The initial impact of the programme (results). · The longer-term socio-economic impacts of the programmes (outcomes).

Efficiency was defined as how well, economically, the various human and financial resources of the Objective 6 Programmes were converted into outputs, results and outcomes. Both the impacts and the efficiency of the Objective 6 Programme are analysed in the following chapter.

6.1. Development of population

One of the aims of regional policy and also for the Objective 6 Programme has been to counteract the ongoing changes in the population structure. One strategy to prevent out-migration was to increase the activity in the local economy in order to provide jobs for the young inhabitants (aged around 20) who were about to enter the workforce. Another strategy would have been to attract the young persons who had left for higher education to come back to the home community. Given the situation in the area neither of these approaches seems realistic. In the first place there was an overall ambition in society to have larger parts of each cohort going to higher education, and that can in most cases not be achieved locally, even with an expansion of decentralised university courses. Secondly, the local labour markets are too small to absorb people in their twenties with an academic degree. An alternative in-migration policy might be to direct measures towards attracting middle- aged and old people. The population structure would of course still be distorted but the communities should at least in a shorter perspective get a purchasing power to keep service supply at a decent level, thus being more attractive as a place to settle in.

Nothing much had happened to the population structure or to migration flows during or just after the programme period (Figures 4 and 5). It is impossible to know what would have happened if there had been no Objective 6 Programme, but the trends are the same as before. Even though the programme period meant investments in the information sector, RTD and tourism, the population structure does not seem to have been altered. Still the comprehension that the Objective 6 Pro- gramme slowed down the negative flows of out migration was widespread among the interviewees at national and regional level.

The age distribution of those employed in the farming and forestry sector clearly indicates that the structural change of the employment from primary sector production to a more service related economy took place. Any transfer from an older to a younger farming generation is not obvious in the statistics. All the age groups had fewer farm holdings in 1999 than 1981. Between 1996 and 2000 the decrease of farm holdings in Sweden was 15 % for all age groups and under the age of 35 there was a 19.5 % decrease.

The impact of the programme on the migration flows, in and out, was hard to measure. The net migration varied throughout the region. A more detailed analysis of what happened in three municipalities shows the following results. Bjurholm was one of the municipalities that received most funding per capita from the Regional fund (ERDF) and the Agricultural fund (EAGGF). During the programme period the in-migration was increasing but so was the out-migration. Another municipality with high per capita funding was Arjeplog. Although the out-migration had been higher than the in-migration the particularly negative net migration levels of 1986 and 1996 did not occur. 43

Berg is one of the micro-regions mentioned by Swedish National Rural Development Agency as being one of the most in-migration rich sparsely populated areas in Sweden. Furthermore it may be noticed that Berg was one of the municipalities who received the smallest amount of Objective 6 funding in the region (bearing in mind that only two funds are analysed). During the programme period the net migration was positive except for the year 1998.

Figure 12. In- and out-migration from the Objective 6 area 1980-2001. The out-migration had with one single exception been greater than in-migration during the period. The negative net-migration increased over the period and grew bigger as time went by. Source. Statistics Sweden.

The project leader interviews also brought forward the issue of migration. Half of the interviewed project leaders thought that they had helped reduce the out-migration; meanwhile, only three out of 20 project leaders thought that they had increased the in-migration.

6.2. Job creation and employment

All Priorities in the SPD include the specific indicators of created and maintained jobs in the region. The programme aimed at reduction of out-migration, increased in-migration, attraction or promotion of business development and reduction of unemployment. The number of people getting employment through the programme has been accounted for in the national report (NUTEK) 2002. In contrast, the interviews with regional and national authorities put forward that the impact was less than these figures suggest.

According to information available from the various databases the quantitative targets have been reached. According to other reports the number of new/maintained jobs exceeded the target of 9,500 by remarkable amounts. Excluding the ESF and FIFG along with the indicators for the Sami Coun- cil projects, the figure was 25,951 new/maintained jobs. When it comes to the start-up of new businesses the figure was 2,696 according to the reported indicators, compared to the 900 which was the target set in the SPD (Table 7). The reliability of the figures reported is discussed in connection with Table 8. 44

The reason for setting certain indicators was motivated by the fact that the measures must be in accordance with the targets set in the SPD. Compared, for example, to the German programme little was quantified in the Swedish one. There was no quantification of the horizontal aims.

One interviewee claims that the quantitative goals have been easily reached according to the reported indicators, but because of the difficulties both in the definitions and the reporting of the data the interviewee said that these results must be considered only as an estimate of the output. The numbers are in many cases exaggerated although the reporting was scrutinised by the secretariats. Unfortunately there was not enough time or resources for the Decision Groups to visit all the projects so it had for the most part been a question of estimating what was reasonable. The reporting of the indicators did therefore not function the way it should in the Decision Groups.

One of the most important and yet difficult indicators to evaluate was the number of maintained jobs. There was no official definition of this indicator. Some of the interviewees mentioned that this was an indicator set because the Commission thought that it would be impossible to create new jobs to the extent stated in the proposed SPD. This indicator was unfortunately also interpreted differ- ently between Decision Groups and even project leaders, making it even more difficult to evaluate. All of the interviewees said that the reason for this confusion in the reporting stemmed from the lack of experience in this way of reporting and the lack of insight into the regulations and definitions of the Commission. The only way to get this information was to conduct personal visits to the projects but, as mentioned above, there was not enough time nor personnel to do that to an accept- able extent.

Table 7. Output indicators compared to the expected results in the SPD and the applications. The funds represented are the Regional fund, ERDF and the Agriculture fund, EAGGF.

Expected Output according Objective 6 Expected no. In the SPD to application Output New jobs 9 500 16334 14128 Maintained jobs 6882 11825 Temporary jobs 611 10 New businesses 900 3372 2696 Source: The progress report on all Structural Fund programmes and funds, the programme period 1995-1999.

When analysing job creation there are two substantial problems that have previously been touched upon: 1. Projects were supposed to report the output of the project and it was supposed to be entered in the national database. There were however situations when the created jobs had not been registered, although that seems to be a minor problem. 2. The most important problem seems to be that figures in the database underlying the national report figures are quite unreliable.

In our 20 projects chosen randomly for interviews, the database data indicates the creation of 852 new jobs. In the interviews the project leaders declared 65 created jobs. There are good reasons to believe that the information gained through interviews is more in line with reality. The job creation effect for these randomly chosen projects was only 7.6% of what was reported in the database. This was also fully in accordance with the estimates given by interviewees at national and regional level. Thus all use of the database figures on indicators should be carefully scrutinized. 45

We must also keep in mind that many of the measures were not intended to create that many jobs directly, like for instance Priority 6. Infrastructure, measure 3.6 (FIFG) and the measures aimed at increasing competence and know-how.

It is important to realise that there are two methods of job-counting. One is to count all activities and jobs during the life of a project. The other is to estimate the lasting effects of the programme. The evaluators believe that the evaluation of the programme should concentrate on the lasting sustainable effects because those are the main purpose of the programme. Thus, calculations in table 8, columns 7-8 (Table 8) are based on estimations of the number of lasting new jobs (man-years).

Table 8. Cost per created and maintained job in EURO (ERDF and EAGGF). The number of jobs created and maintained according to the figures accounted for in the Final Report of the programme. 1 2 3 4 5 6 7 8 Maintained New jobs jobs ac- Cost per new Estimated Total fund- according to Cost per cording to or main- no. of new Estimated cost ing database job database tained job jobs per new job ERDF 313,388,235 13,228 23,691 11,423 12,713 1,984 157,958 EAGGF 71,223,529 1,043 68,287 1,593 27,020 156 180,313 Source: Final report regarding Closure of Objective 6 Sweden, 1995-1999 and STINS. The funding in the table includes only the funding paid out to projects.

Following the interviews of project leaders and other regional development experts, the evaluation team settled with a 15 % estimate for the official database figures concerning jobs created and safeguarded (see Table 8 columns 7 and 8; the figures are converted to man-years). As there were no general definitions of a new job or a saved job to be used in the reporting the reported jobs include both part-time and very short-term engagements and not man-years. Thus it had not really been meaningful to use the official figures in the analysis. One must also realise that creating a new job should be demanding more resources than maintaining one so the cost/job estimate in column 6 is the absolute minimum figure. On the other hand, the calculated cost for a job is probably too high as it is shown in the table since the gross sum of payments to projects also include payments to activities that were not meant to create jobs in the shorter perspective. People who indirectly benefited from the programme have not been reported into the databases. Job creation must be seen over a prolonged period when effects of training and other means have had a full effect. The question of how to evaluate such impact remains.

Earlier experiences from national regional policy programmes in Sweden have given estimations of about 117,000 EURO for the creation of a job. Since these estimations were about 25 years old the cost should be higher today. The calculations based on the database is in this perspective too low, but the 157,958 EURO and 180,313 EURO arrived at in column 8 is probably too high. A qualified guess would be that the cost of a job should be somewhere between 120,000 and 150,000 EURO. Calculations are however only indicative since there are no means to know the exact number of new and saved jobs as a result of the Objective 6 programme.

The estimation of the remaining number of jobs varies between 0–15% of the official figures. Dur- ing the programme period the effect was higher since the project leaders and others were employed but as soon as the project ended there was often nothing left. This means that the projects did not become self sufficient in the way they were supposed to. The impression given in the interviews with regional and national authorities suggests that the effects that still exist are because the projects are getting support from the new programme period. Thus, there is no doubt that the projects created work during the programme period, but few seem to have led to a sustainable impact. 46

The interviews at project leader level give another picture than that offered by national and regional officials. Approximately one third of the projects in the interviews did not continue after the project time ended. The other two thirds continued in different forms. Four projects out of 20 continued as Objective 1 projects and 2 projects became public service activities. One project developed into an enterprise and the rest continue in other organisational forms.

There are 33.5 employees still working in the remaining activity of the 20 projects. This is about 44% of the number that were working in the projects when the project time ended. Sixteen of these jobs are in projects continuing in the Objective 1 Programme. More than half of the project leaders thought that more than half of the activity still remains and only three said that nothing remained after the EU funding ceased.

There are, as shown, differing opinions about the continuing impact of the projects. It is clear however that the long-term impact is important and that it exists. To what extent the impact is in con- cordance with the SPD and the Community priorities still remains to be seen. According to official figures from AMS the employment development has however been better for the rest of the country than for the Objective 6 area (Figure 13).

Figure 13. Employment development in Sweden and the Objective 6 area.

In 1995 the unemployment among the young population between 18-24 years of age in Sweden was 15.3 %. During the programme period this figure was heavily reduced partly due to an increase in the number of young people who went on to further studies at university level (AMS). Unemploy- ment among young people was not significantly affected by the project activities in the long term. One employee at a Decision Group secretariat said that it was difficult to get young people to engage themselves in a project.

Long-term unemployment had changed dramatically both in the Objective 6 area and in general in Sweden (Figure 14). The change from 1995 to 2000 shows that there were 50% less long-term unemployed when the programme period ended than when it started. Unfortunately the statistics do not allow an analysis of the participation of long-term unemployed in training and education. 47

Figure 14. The change in the long-term unemployment in the Objective 6 area compared with Sweden as a whole. Source: AMS

The number of farm holdings has decreased from 1981 to 1999. This can be explained by two major changes: Firstly, many small farm holdings have been abandoned or converted to second homes. The decreased profitability of small farm holdings has meant that farmers have been forced to find other sources of income. Secondly, no new farms are set up but as an effect of the former, other farm holdings have been able to expand by increasing the area of the farm and thereby also got opportunities to increase productivity. Consequently the number of farms decreased.

Jämtland county had the highest rate of employment in farming and forestry in the Objective 6 area, 7.3 % of which one fifth were women. Norrbotten County had the lowest employment rate in this sector with 3 % total of which one third were women (Swedish Yearbook for Agricultural Statis- tics).

The development of wage sums in each municipality of the region varied (Figure 15). The beginning of the period was characterized by recession while the second half was dominated by a slow recovery. Most municipalities had not by the year 2000 come back to the 1990 level. The downturn for the whole country during the first period was minor (index 97.5) and the recovery much more significant (index 121.5). 48

Figure 15. Changes in the sum of wages per municipality 1990-2000. Source: Affärsvärlden.

The change in the sum of wages from 1990 to 1996 was negative for all the municipalities concerned. Kiruna, Jokkmokk and Gällivare in Norrbotten County are the only ones that also show a negative trend between 1996 and 2000. The population had decreased by 7 %, 11 % and 11% respectively. However, a diminishing population does not necessarily mean an economic down turn. Nine municipalities are today characterised by a higher wage sum than in the year 1990. Ljusdal, Krokom and Sorsele have had the best wage sum development although the population in Sorsele had decreased by 10 %. Ljusdal had lost 5 % of its population and Krokom 2 % compared to 1990.

These figures do not suggest that there was any immediate connection between the Objective 6 Pro- gramme and the general wealth of the people in the region. The most important factor was suggested to be the boom and bust cycle. As mentioned, there was a very deep recession in Sweden in the beginning of the 1990s. Depending on the economic structure and the ability to adapt to new situations in the municipalities the recovery had been different between them. Another explanation for the increased wage sum in a shrinking society could be that elderly people with small pensions have passed away and been replaced by the newly retired with higher pensions.

The total income of employment among farmers had increased from 1991 to 1998. However the income of farm activities had decreased for most farm holdings. Farms with an area of 2.1-50.0 hectares had experienced a decrease in profitability. Farms of 50.1 hectares and larger had increased their profitability. In total the profitability of the farm holdings had decreased. 49

6.3. Promotion of entrepreneurship

Some of the interviewees mentioned that the Priority they perceived as most successful was Priority 1. Development of enterprises. New businesses were created through the financial aid from the Structural Funds (Table 7). Some indicated though that very few were directly created as a result of Objective 6 funding. Instead the funding can be seen as a helping hand and these businesses would probably have been created anyway.

There was also another problem in the development of enterprises in general mentioned in the interviews. Young people and women who did not have business experience were “tricked” into bor- rowing money to start their own business. They had then committed themselves to a debt. It was therefore a long-term obligation towards these people to be professional in the way their applications were considered. There is no evidence suggesting that the chance for survival of businesses under Objective 6 projects have been smaller than for other businesses. Moreover the interviews with authorities and others involved in the process show that several parties would have wanted more financial resources for this Priority.

When it comes to measures within Priority 5. Sami development, the number of Sami tourism businesses increased in the period. Yet again the questions whether it was because of the Objective 6 funding or because of an economic bust affecting the reindeer herding have been difficult to judge. Interviews suggest that because of the negative economic situation in Sami businesses like reindeer herding people shifted from or complemented the meat production with service sector activities, for example tourism. The same was the case for other industries as well. There was a peak in the starting of new businesses in 1997.

The conclusion is that other external factors affected the competitiveness of the businesses more. The programme in itself was not faulty rather it was the business cycle, both the national and the international boom and bust, that influenced the economic situation.

Investments in education, both physical structures and training, has not yet given any substantial spin off effects although in some places it had proven important for both public and private operations. Even so, in some places entrepreneurs have experienced superiority over competitors in other parts of the country due to their ability to use the Internet in business. The ability to develop had been enhanced. 50

Entrepreneurship

Ø Entrepreneurship has been a main theme for the programme in Sweden, in order to change the traditional view on employment. Priority 1. Development of Enterprise, was the main contributor to entrepreneurship but the other Priorities also promoted new businesses in one way or another. Only Priority 6. Infrastructure did not aim to increase the competence or number of new firms directly.

Ø In general, both interviewees and previous evaluations deemed Priority 1. as the most successful. This has also attracted an important part of the funding from private investors, especially in measure 1.1 Development of SMEs.

Ø The support from other projects, organisations, and forums has been important for the success of projects. Colleagues, the County Administration Boards, and other officials have been mentioned as most important. The public support to the project leaders has also been important.

Ø One of the projects in the interviews, situated in the south of the area, was middle- sized with a budget about 118,000 EURO. The activity was directed towards the development of a processed wood product. During the running of the project there was a lot of work after hours but in turn the project leader was able to increase his contact network and his skills. The positive outcome of this project was a new inde- pendent business.

Under Priority 5, Sami Issues, training to develop the ability to use traditional handicraft techniques have been pursued. In all, the activities to train the Sami population have given the women in particular a better situation. They have become more accepted in the traditional reindeer herding, and they have also created small enterprises in tourism or have found other ways to make use of the Sami Cultural heritage.

Any visible effects of the investments in the research units ETOUR and MRI are difficult to ob- serve. The period from start until today has been too short to produce any significant long-term sustainable effects. Building new research units takes time. Furthermore, these units will be heavily dependent on national public funding even after the Objective 6 / Objective 1 periods to maintain operations.

The compensation subsidy to farms probably helped to reduce the number of farm closures. The subsidy may also have helped to increase the number of jobs in the sector since the number of animal farms and the harvest area with support had increased. The investment support had also contributed to reduce the closure rate of farms consequently helping farmers to keep their source of income. Estimations suggest that about 800 jobs have been maintained in the Objective 6 area but this figure had to be regarded as an absolute maximum. The start-up support for young farmers must be considered to have been of less importance to decrease the average age of farmers because of the small number, 13 a year, of new businesses in the sector started by people younger than 35 years. 51

According to the report from the fisheries the Structural Funds have been important for the water resources industry when it comes to increasing the production capacity, the modernisation of the facilities and the fish breeding activity. Regional support for expansion and positive natural conditions together contributed to a positive development.

A diversification of the economy took place according to the interviews. Furthermore, the project leader interviews suggest that the comparative advantages have been better utilised through the Objective 6 Programme. It seems to have been beneficial too for businesses to cooperate with projects in the same branch, as well as for newly set- up businesses. Moreover the projects made it possible for businesses to gain competitive advantages over businesses outside the Objective 6 area. This was extremely important in order for the region to continue to develop.

6.4. Meeting the aims and objectives of the Community priorities

In chapter 3 the relevance of the SPD structure was discussed and compared to the Community Objectives. The impact of the Community priorities sustainable development, information society, promotion of RTD, equal opportunities and promotion of entrepreneurship and how these were adopted in the region is commented on in the following paragraphs.

Sustainable development had been one important target of the Community priorities. The environment, as well as the equality aspect, was always considered in the applications at the end of the period because of the checklist system developed during the final years. The environment was considered in almost 60% of the projects. There was however a feeling that the checklists were filled in because it was an obligation to do so, and not because of a sincere good will towards the environment. All of the interviewees at regional level stated that not one single project was rejected because it was regarded as being damaging to the environment. The environmental issues are considered important in providing means for a sustainable development. Furthermore the environment is one of the foremost attractions for tourism in the Objective 6 area. As far as the evaluation team have found there has been no trade-off in the programme between projects and environment. Ac- cording to Swedish legislation every establishment of a business, an increase in business scale or any activity that could disturb the environment, must be thoroughly scrutinized by the local authorities to avoid any unsustainable effects on nature. This applies to all activities from hairdress- ers to mining. Dissatisfied citizens also have the possibility to appeal against decisions they think is harmful to nature. Environmental issues are thus handled nationally and are not really EU matters.

According to the interviews there was also a positive outcome from the work for equal opportunities. During the programme period equality issues have been acknowledged and discussed. The de- sire to meet the aims for equality at the Decision Groups sometimes favoured projects with this ori- entation even though the quality might have been somewhat lower than desired. Just over 50% of the project leaders considered equality to be an aim for the project. However, the local resource centres set up for women were very appreciated and functioned well. It also helped mobilise the women in the region. For example, in the Sami measures women have been included in reindeer herding in a very positive and somewhat unforeseen way. Still, these are effects that are impossible to analyse statistically and it is possible that the long-term impact have not yet been manifested. Participation of young people was favoured in about 60 % of the projects.

During the programme period the Information society was prioritised by the Community as well as by national policies. Promoting the knowledge and the IT infrastructure in the region was, in addition to being a horizontal aim, also explicitly promoted in some measures. The long-term impact of 52

IT oriented projects has been mentioned in the interviews as being one of the most positive of all. A “computer maturity” was created through the education offered. Although it is not certain that this led to any more opportunities to get work or start new businesses, it only indicates that the competence among the inhabitants of the region had risen in the IT sector. The extensive demand on this type of project meant that there was a problem to get qualified teachers for the projects.

Because of the importance of the increased competitiveness expressed in the SPD many projects aimed to develop new methods and/or techniques. Two thirds of the projects in the interviews were involved in developing new products, services or techniques. Although RTD was especially important in Priority 1. Business Development and Priority 2. Increased Competence all of the other Pri- orities also had elements of RTD in some of the projects. The biggest research and development projects through Objective 6 funding (ETOUR- European Tourism Institute) and MRI- Environ- ment and Space Research Institute) were located in the university college town of Östersund and in the mining town of Kiruna. These very large projects aimed at tourism development in the region and the strengthening of smaller branches for research already in place in Kiruna. It is, however, difficult to draw any conclusions from this other than it might be a while before the real impact of these development strategies can be seen.

Further considering the Community priorities in the programme it was evident from the project leader interviews that the development of SMEs had been prioritised. Measures like taking advantage of the comparative advantages and to increase competence and know-how among existing and new SMEs had been executed most successfully. Furthermore the development of new products, services and techniques was taken into account in almost 70% of the projects. However, these figures can only be seen as indicative and should not be considered as final bearing in mind the relatively small number of interviews made.

Further implications of the programme The Programme contributed in a positive way by helping people to cooperate in networks. This happened for example between the Sami villages. Without the Structural Funds, there would not have been so much money, or the same type or number of projects, for the Sami development. The start of cooperation was one of the most important positive contributions stated by most interviewees. Other industries have also had positive experiences regarding the networking and co-operation idea. One example is the wood industry. Although the municipalities and other authorities started the process, the industry itself seems to have developed a networking capacity of its own.

The networking and cooperation between the studied projects and other local projects had not been extensive. One third of the projects had cooperated with other projects in the local area but half of those only to a very small extent. Only one interviewee stated that the degree of cooperation had been high. The networking between geographically spread partners was somewhat better. Half of the projects have had some sort of contact and cooperation with others outside the immediate geographical area. Four had cross-border and even overseas cooperation, and four cooperation across administrative borders.

The involvement in new networks had also varied. One third of the interviewees stated that they had extensive exchange through these networks while others took part to a very limited degree or not at all.

A majority of the project leaders thought that their project would not have been realised without the Objective 6 Programme. This also meant that the activities carried out in the projects would not have existed without Objective 6. 53

The interviewees thought that the projects had reached their targets to a high or to a very high degree. No one thought that the project did not reach the goals. Two thirds of the project leaders thought that they to a great, or even very great, extent contributed to the long-term development in their municipality. Three quarters accredited this effect to be an outcome of a mixture of Objective 6 measures and other factors.

The contact between the projects and local enterprises had been positive for many although some felt that the enterprises did not have time to cooperate as much as they wanted.

Although overall positive in many regards the cooperation could have been more far-reaching. There was no networking among the projects that were in the process of starting. That means that several projects in a municipality could have the same target group and the same purpose. Net- working developed later in the process when the projects had already started.

The experiences, expressed in the interviews with project leaders, which have had a great signifi- cance to the project leaders, are both on a personal level and at a community level. The positive personal experiences mentioned are first and foremost the feeling of accomplishment and the social involvement the projects have brought. Many said that the positive response from the local population had been imperative as well as the experience of the networking. However, there had also been a feeling that other people have spread a negative attitude among the population, by criticising and suggesting that the money should have gone to other activities. It had been hard for many of the projects to get the population to engage in activities possibly in part because of this.

Some negative economic experiences were also mentioned. The most alarming was that one interviewee had been forced to take a loan from the bank because the personal economy had been affected. Others have mentioned that the project led to too much non-paid work after working hours. As in the interviews with the authorities at different levels the project leaders thought that the administration of the projects had been far too elaborate. This had not affected the interviewees’ positive experience of cooperation with different authorities like the County Administration Boards and different municipality officials.

The infrastructure was one of the most important factors for even development and the welfare of all regions as stated in the Cohesion reports. Priority 6. Infrastructure was especially focused on the railway system. The planning of a new railway from Boden to Haparanda aimed at enhancing possibilities to provide an efficient transport structure between Sweden and Finland.

Increasing the carrying capacity on the railway between Boden and Gällivare provided higher efficiency, foremost in the iron ore shipping from Kiruna/Gällivare. The maximum load was increased to 30 metric tons per axle, which is well above the national standard. This will bring cheaper iron ore transportation possibilities. The Objective 6 funding accounted for approximately one third of the costs in this specific project.

The inland railway line between Ulriksfors and Hoting was upgraded although the carrying capacity was not increased.

The railway between Lycksele and Storuman was upgraded to a bearing capacity of national standard which means cheaper transportation of round-wood and timber products from the area. 54

The railway line Krokom - Storlien developed centralized traffic control which means that transportation became cheaper and more efficient due to possibilities to run more trains during the same unit of time with less personnel.

The investments have just finished. Any figures on increased traffic or better economy are not yet available. Investments have, however, increased the possibilities for a more rational and economic fulfilment of transportation needs. To get the full capacity out of these investments further investments are required from the railway and transportation companies using the railway lines in question.

6.5. Insight into the unforeseen impacts of the programme

As far as the involvement of the public in the programme and regional issues was concerned the reaction had been positive. There is now a wider spectrum of people engaging themselves in concerns regarding regional development. This can generally be referred to as a form of mobilisation in many of the interviews.

In the beginning of the programme the competence among the project leaders was limited but one positive effect that came from the project experience was that after the programme many project leaders were very competent. Project leader training often led to an increase in the number of project applications and possibly also an increase of self-esteem among the participants.

For the measures managed by the Sami council there had been a special positive effect through the international perspective. More attention had been given to the Sami situation and the Sami culture just because of the new “outside” perspective. In a bigger picture the funding directed especially toward the Sami people was very positive and contributed in a distinctly different way to the region compared to national regional policies according to the interviews. The Sami villages’ projects have been the most successful in creating networks and cooperation among the Sami projects. The knowledge about the Sami cultural heritage had increased in a very positive way. The information had reached very far and the books and brochures written remain even after the programme period. Also measure 4.1 Measures within tourism and culture was mentioned as being successful in this regard.

A new business sector was also developed. The so-called "project hunters" who were consultants and gave advice or wrote whole project applications. Whether this was good or bad is debatable. The project hunters became very skilled at filling in forms and articulate applications in a way that was in accordance with the SPD, thus making it very hard for the Decision Groups to turn their applications down. These project hunters were often well known by the Decision Groups’ secretariats. Interviews have indicated that projects run by these people were not as good as their applications would lead to believe. Another problem was that they became very good at disguising one activity as another to be able to get funding from measures that had more money left to distribute, well knowing that the chance for approval was greater.

There are some doubts about the efficiency of the programme. In some cases the funding went to projects that could well have been regular work within municipalities or organisations. This happened for the most part in counselling and educational projects. The programme funding did in fact double the economy of many regular activities according to some of the interviewees. This might also explain why the measures that in general have attracted the smallest amounts of private co- funding (Priority 2. Increased competence, Table 2 p. 33) are also the ones that interviewees stated 55 to be conducting the most ordinary activity in project form. No private co-funding was available for doing what is considered to be an ordinary activity in a municipality for instance. This had raised the question about what was a project and what was regular activity? The need for the money and the activity had been there even though it had been realised in project form. Individuals who received funding for their projects sometimes seem to have got direct support for their private businesses.

Ordinary activity carried out through projects

Ø Ordinary activity at the municipality level and county level has been carried out through programme funding. The problem has not been easily dealt with according to interviews at the national and regional levels. Many of these projects, with exceptions, have had relatively large funding.

Ø The problem has been identified as being most severe in the measures where the main target was to increase knowledge through information and/or training. This is, for example, the case for Priority 2. Increased Competence, and the individual measures in other Priorities concerning competence elevation. From looking at the funding from different stakeholders it is also obvious that the national funding for Priority 2 is three times the private funding which is not the case for other Priorities.

Ø The success has varied among these projects. According to the interviews some project leaders thought that the project and also the activity in the project would have existed without Objective 6 funding. Both the aims of the projects and the programme were reached and a plausible reason might be because the activity was carried out through the traditional channels.

Ø A project leader interview offers some insight into the specifics of the issue. The budget of the project was large, about 2,650,000 EURO for the whole programme period (four years) and 50% came from EU funding. The balance came from other national public sources. The project had problems with liquidity during the whole project period but did get money in advance from the co-financers. When the Objective 6 Programme period ended the project changed name and continues under Objective 1.

The mobilisation idea in the programme was to enhance the region qualitatively. Projects should in principle be started locally without interference from the state administration. This strategy brought about a programme, which was actually changing its focus over time since the local demand for support did not always coincide with the strategies implicit in the SPD and the initial allocation of funds. In all, the number of measures and the mobilisation strategy adopted seems to some extent to have made the delivery organization a passive receiver of applications. The public was informed about the possibilities to get project funding but there does not seem to have been a strategy to guide the applicants to develop certain types of projects. It must therefore be questioned if this allowed people to continue with traditional business, which had been changed in organisation to a project form, instead of letting the programme reconstruct the socio-economic development in the desired direction. 56

6.6. Perspectives concerning the efficiency of the programme

The view expressed by some representatives for authorities was that the same amount of money from national regional policies would have given approximately the same impact and that there, in such a case, should have been a stronger focus on development of enterprises and on social capital building in general. Considering job creation some of the interviewees commented that Priority 1. Development of Enterprise should have had more funding. However, the conclusion made from the official figures on the programme shows that there have not been enough initiatives and too few applications to exhaust the funding frame (Table 2). Therefore there is no evidence that more money to this Priority would have made any difference for the success of the programme.

The creation of jobs and the cost of jobs created have been in focus for this analysis. There are several factors that might influence the calculations on programme efficiency. Firstly it must be noted that the creation of jobs might have been greatly influenced by the boom in the economy that started about the same time as the programme. Changes in employment may have occurred due to these circumstances and not as an effect of the programme. The boom and bust cycle have even greater influence on the so-called “saved jobs”.

It has previously been noted that there are severe difficulties to analyse the outcome of the programme since the indicators were not unambiguously defined. Official database figures on job creation are unclear. Are the jobs reported full time, part time or seasonal jobs? Questions like these cannot be answered by the official figures. After the evaluation exercise the team of evaluators have estimated the number of sustainable jobs to be about 15 % of the official figures (Table 8). This does not mean that the official figures are totally wrong; merely that the evaluators’ focus is on the remaining and thus sustainable jobs. It has been impossible to account for jobs created secondary to the projects, although some jobs have been created elsewhere in the society due to the programme activities.

In analysing the programmes efficiency in creating new jobs one must make a difference between measures. There were measures in the programme that did not aim at job creation as such but merely at increasing people’s ability to get jobs in the market. Priority 6. Infrastructure is a typical example. Jobs were created during the railway building, but the outcome of the investment was in principle fewer jobs. However there were greater possibilities for industries in the area to compete in the market. Impact on job creation may occur in the future, but no immediate job creation was expected.

The cost of sustainable jobs is only calculated for the parts of the programme immediately directed towards job creation. The cost per new job is calculated to be approximately 158,000 EURO for ERDF projects and 180,000 EURO for EAGGF projects. In Sweden there are not many figures on cost of jobs from previous studies, but figures from the end of the 1970s indicated that the cost of a job should be around 115,000 EURO. Given the inflation the figure reached in our evaluation exercise is quite reasonable. In that sense the programme has been as efficient as the national regional policy programmes have been. If all spending in the programme should be taken into account the cost of a job would be some 50 % higher. This would however give a false impression on the efficiency of different parts of the programme.

There was also the indicator called "maintained jobs". Did the programme ‘save’ jobs? There is no prospect of analysing this since there is absolutely no possibility to know what would have happened to enterprises and public services without the programme. 57

Effects of vocational training and other educational efforts cannot be measured. The over-all impression of these parts of the programme is that it has been quite efficient and increased the em- ployability of the manpower in the region.

The educational level was low in the area before the programme period, and the programme has not been efficient in raising the over-all measurable educational level. Even though the vocational training programs were successful, it is still difficult for people to find suitable jobs in the area. Those with a degree still have severe difficulties to find an appropriate job in the area that is fits with their qualifications. The area's capacity to absorb well-educated persons in the local labour markets has not been increased by the Objective 6 Programme. This hampers the possibilities to attract immigrants to the area.

Thus, the labour market needs are relatively unchanged after the programme period. The agriculture and forestry sectors are declining but the service sector has been able to absorb at least a part of those becoming redundant in other trades. These changes are however part of a prolonged process that has not been notably affected by the Objective 6 Programme.

Another purpose of the programme was to enhance RTD in the area and this has been as successful as could be expected with two large projects ETOUR (European Tourism Research Centre) and MRI (The Environment and Space Research Institute in Kiruna), and a number of smaller projects more directed towards technical development. Whether the programme has been efficient in promoting RTD however remains to be seen. The project period was too short to produce any readily visible results. RTD is often a longer and more trying process that cannot be expected to show results in such relatively short project periods. RTD has not significantly increased further processing of raw materials in the area.

Further, the out-migration was one of the major problems to be handled by the programme. As is previously shown, the out-migration continued and still continues with an unbroken trend. The statistics show no effects of the programme on this problem. There are however difficulties with con- tra-factual reasoning since no one knows what would have happened if the programme had not existed. However a qualified guess from the evaluators is that the programme has had a very limited effect on the out-migration from the area. In this sense the programme cannot be seen as efficient.

The conclusion about the impact of the inflow of EU funding to the region is that although some sustainable effects can be traced there are other, both internal and external, economic and social factors that have a greater impact on households, enterprises and institutions. 58

7. COMMUNITY VALUE ADDED

In this discussion we will focus on the institutional, policy and regional co-operation aspect.

7.1. Institutional dimension

Multi-annual programming The Objective 6 Programme as the first EU regional policy programme in Sweden was different from previous national programmes in that a longer planning period was introduced. National regional policies programmes have also had longer perspectives in principal but contrary to Objective 6 they were more restricted by the shorter (one year) budgetary periods employed in the Swedish system. The longer programme period gave better possibilities for long term planning and realiza- tion of programme measures. In reality, however, the benefits of longer planning periods were in many cases not experienced in full by the projects. They were still greatly dependent on the one- year budgetary periods employed by the co-financers. Even if, in most cases, co-financing was unchanged during project periods, these reconsiderations caused some insecurity in the projects, for example staff in some areas even had to be given notice of dismissal due to late decisions on further financing. When the longer programme period worked well it gave the project activities chances to mature and settle in the local arena.

Introduction of Community methods The principle of longer programme periods had become adopted in new national programmes. In the aftermath of Objective 6 the Swedish government introduced Regional Growth Agreements which is a national programme covering the whole of Sweden. This programme is based on partnerships of very much the same structure as the Objective 6 Programme and the financing structure also resembles the Objective 6 Programme. A different principle for funding was introduced in that funding was paid in arrears based on actual costs. In the national programmes financing had mostly been in advance.

Introduction of new evaluation culture for regional development The Objective 6 Programme introduced an evaluation culture new to the Swedish administration and other parties involved in the project. This new principle was valid for all parts of the programme with project evaluations and part-time programme evaluations by external evaluators etc. The scrutinizing of project performance in combination with auditing both at a national and EU level was new to regional development programmes in Sweden. These new practices brought more pressure on projects to manage accounting in a satisfactory manner and did cause some concern at first, but in all it was an improvement of practices.

Introduction of new working practices In Sweden the Objective 6 Programme had a decentralised structure, which was new. The regional policies programmes in Sweden had previously been driven by a more centralised decision structure. A project driven decentralised programme of the present character calls for more cooperation between central and regional/local authorities and more developed monitoring practices than before in order to keep the programme’s focus. 59

7.2. Policy/priority aspects

Integration of Community priorities The community priorities at the time were sustainable development, information society, equal opportunities, promotion of RTD and promotion of entrepreneurship. These priorities were all well integrated in the programme, and they were also very much in line with over-all policies in Sweden.

Sustainable development. Apart from being an important Priority in general, it was considered to be a backbone for the development of tourism in the area. Swedish authorities have pushed very hard to get people to work for sustainable development in all business sectors as well as at an individual level.

Information society. This Priority coincided with the national policy of enhancing the IT-knowledge to bring Sweden to a forefront position in the development of the ‘Information society’. Training in IT and investment in IT-communication structures have placed the Objective 6 area in the forefront of propagation of IT-use, and projects under this Priority have also in general been quite successful.

Promotion of RTD. Although promotion of RTD was important the Objective 6 area must be considered to be lagging in a national context. Within the programme two important RTD projects were implemented, ETOUR in Östersund and MRI in Kiruna. Development issues have also been addressed in other projects but only the two towns mentioned had what could be considered structural prerequisites for further development of RTD. It must also be stressed that it takes more than one project period to build a sustainable RTD activity level in an area with weak structures and a low educational level in general.

Equal opportunities. The programme had a strong equal opportunities profile especially in measures under Priorities 1, 2, 4 and 5. Many projects under Priority 1, Measure 1.1 were aimed at new enterprises led by women. In the measures under Priority 5 Sami women were especially targeted for development of new enterprises based on traditional crafts and/or tourism. Information had also been given that the Sami population feels more visible in the community due to the effects of the Objective 6 projects.

Promotion of entrepreneurship. Promotion of entrepreneurship was an important part of the SPD and the Objective 6 Programme as part of the overall mobilisation strategy. Development of SMEs (1.1) was the most important and well-financed measure.

In all it is the evaluators opinion that the Community Priorities were well integrated in the Swedish SPD and the programme implementation.

Introduction of new areas of policy programming There were no areas in the programme that had not been addressed in previous national regional policy programmes. The Objective 6 Programme did however in many cases put another emphasis on the different issues than had been done before. The bottom-to-top mobilisation perspective left much initiative to the local inhabitants to give direction to the project portfolio of the different Pri- orities (1-5). The national programmes were pursued as before in parallel to the Objective 6 Pro- gramme. Although there was a severe economic crisis ongoing during the programme implementation period the national regional policy programmes went on almost untouched by the budgetary squeeze that affected most of the Swedish economy at the time. One area that received more attention in Objective 6 than before was the fishery sector. 60

7.3. Cooperation and networking

Animation of partnerships internally Initially the Objective 6 area showed low networking capacity. This may be the result of the geographically widespread enterprises and economic structure in the area. There are however good examples that Objective 6 projects have brought new insights into the importance of network building. This was one of the lessons learned from project interviews. The vast geographical area to overcome in network building between enterprises in the same or related trades made networking difficult even within the region not to mention links to other countries. Networking should however be directed to other regions in order to enhance the competitiveness of enterprises in the region.

Enhanced learning capacity of regional and local organisations in terms of European Com- munity issues As our analysis in previous chapters has shown, there was advancement in terms of economic and social cohesion. The number of people trained in projects under the Objective 6 Programme measures increased the possibilities for later development. The results remaining after the project period are, however, small. Manpower, especially young persons, is still migrating out of the area. Com- mercial and public services are still in a process of contraction. The programme in Sweden was quite open with many measures. It might have been feasible and showed more short-term visible results if it had been more concentrated on fewer issues.

The Irish programme, which was seen as an overall positive experience and an example of ‘good practice’, did not repeat itself in the Swedish context. In Ireland a rethink of policy and a move towards budgetary consolidation together with the EU programme led to improvement in competitiveness and growth that was export-led from the beginning. The Structural Funds not only increased the net capital inflow into the economy but more importantly co-financed structural measures for regional development, expansion of infrastructure and increased training of the work force. Ireland demonstrates what can be achieved if Structural Funds are incorporated into a consistent policy maintaining strong macroeconomic circumstances supported by social consensus. It is also noteworthy that in many programme regions this extremely positive development has not been possible because of structural hindrance, as was the case in the Swedish Objective 6.

Northern Dimension The concept Northern dimension concerns the creation of security, stability, economic growth and a reduction of east-west barriers. Thus the northern dimension has strategic effects on Europe and the need to satisfy mutual political and economical interests through concerted actions by countries and institutions in the region is imperative. The Objective 6 Programme was an important step towards strengthening the area's economic development in the region as a basis for cross-border regional cooperation. The programme’s measure to strengthen development of SMEs and information technology in the region has also been a step towards a stronger region in a European and global perspective. Important projects in the Swedish part of the Objective 6 Programme in the east-west perspective are the infrastructure investments made to facilitate improved railway transport through the region.

European partnerships European partnerships at a project level were only occasionally developed since most of the projects were quite small and directed to the local scene. 61

Value-added from external partnerships/exchange of best practice Little experience was brought from external partnerships and there was no immediate exchange of best practice. Even though Finland and Sweden were parts of the same programme not much experience was transferred. In the interviews the Finnish experiences as a contrast to Sweden’s more decentralised handling of the programme were sometimes discussed by the interviewees, but the evaluation team has found no real signs of exchange of best practices.

The political dimension The Objective 6 area was the region where the population was most negative about Sweden entering the European Union. The interviewees have the impression that the attitude towards the Union is very much the same today as it was in the middle of the 1990s. Among the farmers the optimism about the European Union grew to some extent during the period, mostly because of an increased ability to use the EU funding and the system that came along with it.

The enlargement process The enlargement process had some influence on the programme implementation since it was a common belief that the enlargement process will demand so many resources from the EU that regional policy programmes following enlargement would be directed mainly to the new member states. This brought about a “now or never” feeling producing projects that might have benefited from further analysis and preparation before launch. 62

8. LESSONS FOR THE FUTURE

Programme area The Objective 6 area is in the north-western part of the country (Figure 1). It encompasses most of the problem areas in the north. The delineation of the area must however be questioned. One must first look at the regional organisation of Northern Sweden.

Due to historical reasons and natural conditions most of the existing spatial structures of economic activities and settlements are located either along the coast or along the river valleys. Important key actors responsibilities and initiatives across northern Sweden are located in the main nodes along the coast. Towns like Umeå, Luleå, Härnösand and Sundsvall are, while not centrally placed in the region, the central places in their counties. When the Objective 6 area was decided upon it seems to have been the foremost interest to bring as much of the funding as possible to the most sparsely and marginal areas. The somewhat, and in some cases much, stronger coastal communities were left to cope on their own. However this also meant that the Objective 6 Programme area in some ways cut off the functional relationships between regional centres with their important development potential from their hinterlands. Out of the seven counties that were part of the Objective 6 area only Jämtland with its regional centre Östersund was completely included.

The delineation of the present Objective 1 programme seems to have considered these spatial inter- dependencies by also including the areas with the main central places in the northernmost counties. Further, it may be stressed that this delineation facilitates the practical implementation of ESDP in Northern Sweden. In recent years efforts have been launched to activate cross-municipal collaboration and planning strategies along main transport corridors. For example the E12 alliance between municipalities Umeå-Vännäs-Vindeln-Lycksle- Storuman may be mentioned. This initiative is also supported by the INTERREG programme Kvarken-Mittskandia, which started in parallel with the launch of the Objective 6 Programme. Another example is the Bothnian Arc along the coast from Piteå to Haparanda with a Finnish part extended to Oulu. Also in this case an INTERREG programme is supporting cross-border efforts. Different programmes should be given possibilities to strengthen each other.

Thus, it is the evaluators’ opinion that the functional relationships between central places and hinterlands must be considered when setting the borders for regional policy programmes. Dividing a node from its hinterland creates weaknesses for programme implementation and interplay in general at the regional level.

Focus of programme The SPD must be seen as the strategic guidelines for the whole programme. The strategic choices of the programme were implemented in the SPD by the allocation of funds to the Priorities and measures chosen. The programme had six Priorities apart from Technical Assistance. Each Priority had a number of measures, in all 29. The allocation of funding was changed during the latter part of the programme period and some of the measures were merged with others. The obvious reason for this was that some measures did not attract enough project applications to make use of the resources whereas some measures ran out of financing.

One of the policy goals was that the programme should have a mobilisation effect in the programme area. The inhabitants in the area should, according to this view, to some extent be able to take their destiny in their own hands. Thus, the programme was highly demand-driven, and opened up for "grassroots" to steer the programme. This also meant that additional funding was allocated to some measures during the course of the programme while some measures disappeared or decreased in 63 funding size. Consequently this caused a change in the focus during the programme period. These changes were especially valid for ERDF. Our interpretation is that in the initial analysis the situation in the area may have been misinterpreted and/or the project applicants had other perceptions of the problems to solve than reflected in the SPD. Priority 6, Infrastructure is in this respect an exception since the projects in this Priority were developed within the state agency for the railway lines (Banverket).

Another result of this “grassroots” influence over the programme is that there was a relatively high- share of quite small projects. It is the opinion of the evaluators that a project in most cases must have a significant size to bring about structural change to the area. It seems to the evaluator group that the “grassroots” influence also brought forward a number of projects with little connection between them. The ideal would have been if the projects pursued had been linked together to increase the effects of the whole programme. In the present Objective 1 strategies we find much more of cluster-building efforts. This could perhaps have been achieved through a more outspoken top- down strategy. It is the evaluators’ opinion that a top-down strategy could have been pursued in parallel to the mobilisation strategy represented by the grassroots initiatives.

The Decision Groups and other authorities that handled the programme locally and regionally provided information about the programme to the public and to different stakeholders. The regional groups could however have been more proactive in the implementation process. It seems that most of the Decision Groups after the initial phase acted as receivers of applications instead of promoting structural changes on different levels by pointing out what was expected to happen in the area under the programme in a more outspoken manner.

An important lesson for the future is therefore the importance to "sell" the programme and the different measures to the stakeholders and other groups expected to engage in the work. This also entails a more proactive stance and a will to push for projects needed to reach the goals of the programme, not only in the short-term but also in the long-term.

Some of our sources have hinted that it would have been an advantage to have had fewer but wider Priorities and measures. They argued that the SPD tied the financing too strictly to the Priorities and measures. Fewer and less detailed Priorities and measures would, according to this view, have made the programme easier to administrate. The evaluators cannot, however, agree with this because it would mean that the floating focus would have been built into the programme structure but hidden within the measures.

In connection to this many municipalities exerted pressure to get their "fair share" of the programme funding rather than looking at where projects would have been most beneficial for the whole Objective 6 area. It is thus an important lesson for the future that the grassroots perspective must be balanced by the authorities in order to reach the goals set up for the programme.

Programme strategy From a sustainability point of view policies and plans, preferences among various actors and financial resources or risk-willing capital have to be better co-ordinated in a certain sparse and fragile spatial context. This calls for an active effort to redefine the spatial arena and to create a consensus- oriented strategic behaviour among politicians and administrators across municipal and other administrative borders. It may be of importance to introduce new trans-sectoral and trans-national perspectives as tools for renewal, more efficient solutions, higher or broader capacity, and more economic strength. 64

The area has experienced several decades with ongoing depopulation. This indicates that successful political measures to reverse the trend all over the sparse territory are very hard to find. In turn, this calls for a future support system more integrated with local and regional spatial planning within different sectors, and across municipal borders, than at present. With such a policy approach, the remedies could and should be different.

The old strategy to solve development problems in the Objective 6 area was to argue for inhabitants not to move and to try to support new jobs in the communities for those who have become redundant in trades with a downward spiral- a process triggered by technological innovations.

As part of this there has also been a political pressure in marginal regions to safeguard the present settlement structure. Thus, the local and regional political systems have had problems to cope with policymaking towards needs for restructured spatial structures of service supply. Many policies have focused on counteracting out-migration instead of really promoting in-migration. Actions taken have often been to “demand” more jobs, instead of promoting the advantages in small-scale living close to nature. In that sense the area has been promoted poorly. Local initiatives have aimed at preserving local structures instead of developing new strategies for sustaining local livelihoods.

A new strategy would acknowledge the necessity to strengthen the parts of the area that have the strongest potential for development. This calls for more concentration based on a cluster-building concept of economic activities and service supply. Strengthened urban centres should get resources to become stronger development engines in the area. The vast Objective 6 area should also have benefited from concentration along the main transport routes, where most of the significant central places are to be found. Hence a new strategy should also focus more on sustainable structural results - sustainable after the end of the programme period and after the projects have ended. It is imperative to realise that it takes time to change deeply imbedded structures that have developed over decades. Consequently it is important to promote long-term development through activities in the form of projects.

The evaluators argue for a new strategy with a mix of open space for bottom-up initiatives and top- down actions to secure the fulfilment of the original aims of the programme. Implementation should not only be based on whether projects are good in some sense but whether they also really fit into the over-all aim of the programme strategy as it is expressed in the basic documents. An example hereof could be vocational training. It must be possible to turn down a well-planned training project for the benefit of training projects with a direct bearing on programme objectives. If project propos- als of good quality are missing, the implementation organisation must be free to publicly ask for projects of a specific character fitting into the specific programme strategy.

Although sparsely populated and peripheral there are significant differences within the Objective 6 area regarding the origin of the problems as well as their magnitude. Some sort of ‘a la Carte principle’ should therefore be considered. This means a programme giving options for different strategies in different places depending on the character of the problems. In some places vocational training would be an appropriate strategy whereas in other places RTD or new IT-structures would be most appropriate. In other words in framing and designing a reformed strategy, it should be regarded as important to use flexible measures within different mixes of policy areas. More efficient transfer of knowledge from experiences of various types of best practices across Europe is also strongly recommended. 65

Programme implementation It is the evaluators’ firm opinion that the preparation of a programme must include a strong emphasis on the administrative requirements. An effective monitoring of the whole programme is not really possible without a fully operative database where data on all projects in the programme are entered on a more or less daily basis.

One example of the consequences of the implementation of the programme is the funding of projects. The contact between the funding authorities and the Decision Groups was not regular. Be- cause, as experienced by some interviewees, the feedback from the funding authorities on the check balance was poor the secretariats could never be sure how much money there was left to distribute. The in and out payments from the funding authorities did not match the account at the secretariat for two reasons: 1. The funding authorities were understaffed and therefore did not have time to enter the withdrawals immediately into the system. It could take up to six months to register a withdrawal. 2. Even though the secretariats had their own bookkeeping within their part of the system, the money actually paid out was not always equal to the amount originally decided. Furthermore some projects had to pay back some of the money granted for different reasons.

Many of the Decision Groups therefore kept their own track of the decisions and payments to prevent this from happening. Another financial problem was that some projects were granted money for several years and therefore some of the secretariats found themselves without funding for some measures after the initial part of the programme period.

These circumstances resulted in trouble at the end of the programme period. Some Decision Groups found out that there was a lot of money left to be distributed too late to grant any projects funding. In one Decision Group the reverse happened; because of the lagging bookkeeping at the funding authority they thought that they had a lot more money left than they actually had. More projects were granted money than they had funding for and the County Administration Board had to cover the overdraft. This would have been easily avoided by using a simpler computer administrative system and by employing a few more people.

The Objective 6 Programme has to some extent been a trial and error experience. This is to be expected when new routines and principles are introduced in a country. Administrative routines must therefore be clarified to everyone involved in the programme at the very beginning. A lot of the trouble experienced at all levels in the organisation down to individual projects emanated from misinterpretation of the rules. The payment system was difficult for many project leaders. People have been discouraged to apply for funding because of the perceived elaborate administration. This is the case both with potential projects and potential co-financers. The lesson here is to put even more effort into explaining to potential project coordinators the administrative demands on projects.

It is imperative when projects are discussed not only to evaluate the project per se but also to scruti- nise the administrative skills in individual projects. The Decision Groups and their secretariats felt understaffed and over-worked and admitted that they had not been able to visit the projects as much as they should have. Resources must be set aside for better introductions and closer monitoring of the running projects.

Another lesson to learn regarding the implementation of the programme is that co-ordination between projects must be better. The evaluating team has found that projects with very much the same contents and goals located in the vicinity of each other have been financed without co-ordination 66 between them. This is surely an effect of the pressure on the Decision Groups. However a better co- ordination between projects in general is desirable since it facilitates better possibilities to reach the programme's general goals.

The indicators must be clearly defined and understood before the programme starts in order for monitoring and evaluation to be efficient and reliable. Connected to this is the discussion about what a valid indicator is. Baseline indicators should have been determined already when the programme started. The business cycle is important for the out-come of a programme which aims at enhancing the economic capacity of a region and should have been discussed when the programme was designed. The guidelines on how to calculate indicators must be clearly defined and communicated. This makes it easier to evaluate the effects of the programme. 67

9. CONCLUSIONS

The aims and objectives for this Ex-post evaluation has been to assess the impact of the Structural Funds interventions in Sweden, measuring effectiveness and efficiency of the interventions at different administrative levels, identifying community value-added obtained by Structural Fund investment, and to suggest ways to improve the quality of future programme periods. This report is the Swedish part of two separate but synchronised evaluation operations focusing on the Objective 6 programme implementation in Sweden and in Finland.

The evaluation exercise is based on documents such as the SPD, interim evaluations, final reports, the First and Second Report on Social and Economic Cohesion and other relevant documents. Fur- thermore, quantitative data from various databases built by the programme administration and material produced by Statistics Sweden has been used. A third category of sources consists of interviews with project leaders, policy-makers and decision-makers at ministry level, programme managers and administrators at the regional level and other individuals and groups with a legitimate interest in the programme.

The Swedish programme area is vast and contains 43 municipalities or parts thereof. Just to illus- trate the size of the area, two of the municipalities alone equal the size of the Netherlands. The main features of the terrain are forest, water and swamp, with mountainous areas in the north and west of Sweden. The climate is harsh with a short vegetation period. Agriculture is as a consequence of the cold climate and terrain of minor importance. Transport infrastructure, i.e. roads, railways and airports, is of a relatively high standard in the area but the long internal distances are a major constraint and thus infrastructure plays an important role in economic and social life.

The programme area is peripheral and with only an average of 2 people per square kilometre the area must be considered to be very sparsely populated. Furthermore the area is being increasingly depopulated. The population problem is identified as one of the most important, encompassing high net out-migration, low fertility rate, negative natural reproduction rate and an ageing population. In the period 1995-2000 all municipalities in the area had a decreasing population. Traditionally the area has been heavily dependent on large enterprises, most often situated outside the area. In recent decades the public sector has become a major employer. Since internal markets are small and expe- riencing depopulation, provision of services and public transport has become a problem. Service infrastructure quality has been declining resulting in poor accessibility to services and high costs and price levels. The low rate of starting new enterprises means that the area is lagging behind the general national process of structural changes towards the ‘new economy’. The economic performance measured in GRP or wage sum per capita has been weak and investments in infrastructure for transport and communication and lagging.

The demand for labour in the local economies, especially in agriculture and forestry as well as the public sector had lessened due to (1) overall changes where marginal farmland had been taken out of production, (2) technological development in forestry which had more than halved the labour force in the sector, (3) a significant withdrawal of public services that occurred in the area in the 1990s, mostly due to the changed over-all economic situation. Transitions from a forestry/agriculture-based economy to post-industrial sectors have not been successful. Unemployment has been higher than in the country as a whole. Together with an educational level lower than for the country on average the labour market situation was not good in the middle of the 1990s.

The Swedish SPD was developed by a working group chaired by the County Governor of Gävle- borg, Lars-Eric Ericsson. NUTEK was the secretariat to this group doing much of the practical 68 work and the analyses. The problems noted above was the background for the development of the SPD. It consisted of six priorities and 29 measures, which gave rather specified directions for the process. The main foci were job creation and increased competence in the workforce; implementation of IT together with development of SMEs. Development of tourism was also an important part of both competence enhancement and building of SMEs. It should also be noted that one of priorities was directed to the Sami community alone. Although only directed towards Sami issues it had the same profile as the programme in general. The strategic planning choices were mirrored in the funding allocation to the priorities and measures.

The evaluators are of the opinion that the strategic choices of the programme as far as the SPD structure goes were appropriate for tackling some of the identified problems in the area. A more diverse labour market was needed to meet the new challenges of the economic transformation. Em- phasis was on giving possibilities for employment in the area, counteracting the out-migration and increasing the competence of the workforce to become and stay employable. The structural problems built into the area over previous periods were however of such a magnitude that a programme of the size of the Objective 6 programme could not really be expected to solve those deeply rooted problems. Although of an unprecedented size the programme was too small to bring about the cohesion that was the main goal of the programme. The concentration on training and mobilisation of the population must however be seen as a relevant attempt to give the population in the region means to help themselves.

The objective 6 Programme structure and implementation system was new in Sweden. Nobody seems to have had full control over the venture, and routines previously not used in national regional policy programmes had to be implemented. Due to the lack of experience the process was to some extent of a trial and error character. The implementation of the programme meant the building of a number of new regional Government authorities. These authorities handled the decisions on funding but other government authorities administered the funds. The decision-making and payment organisation structures in combination with the many different measures made the bureaucratic structure complicated and in the beginning this caused trouble for the projects and made the whole programme difficult to handle and a coherent strategy difficult to pursue.

The SPD was formed by NUTEK in close cooperation with different actors, the so-called partnerships, and it was a political ambition to keep the partnerships active during the implementation of the programme. Especially in the beginning of the programme period the Decision Groups were highly influenced by special (local/political) interests.

The Objective 6 activities were based on the SPD and the allocation of resources. However, it developed into a demand-driven programme with a strong grassroots perspective. Applications were handled on a "first come first served" basis and thus the strategy was steered by the applications. This structure of the implementation produced a programme with a somewhat changing focus, where projects were not conducted towards the main goals of the programme. However, praxis changed to the better in later stages of the period.

Two administrative cultures, national and EU, had to be amalgamated in the implementation of the programme. This meant introduction of new administrative routines. New demands on accounting and a more complex monitoring system caused particular concern. The payment system was also different and did not work well in the initial phases.

The programme also allowed for a longer planning period than was usually applied in the national implementation systems. This was good for the development of projects. The longer planning peri- 69 ods were, however, to some extent illusory since most of the co-funding came from public sources where a principle of one-year budgets was employed. This meant that the funding situation still could change at least once during the project's lifetime.

The programmes foremost quantitative aim was to give more jobs to the area. According to official counts there were 13,228 jobs created. There have been a number of problems in analysing the outcome of the programme. The indicators of new/maintained jobs were not unambiguously defined. Therefore it would be difficult to accept the official figures as being defined as man-years because the duration of the reported jobs is not known. The evaluating team has concentrated on estimating the creation of sustainable jobs, that is, the jobs still there when the projects finished. The estimate is that the programme activity may have created as much as 2000 new sustainable jobs in the area. If accounting only for the ERDF and EAGGF a created job has cost approximately 150,000 EURO, which is quite in line with earlier experiences in national programmes.

The number of maintained jobs was reported to have been just over 11,423. The ‘saved’ jobs are however even more difficult to assess. There is no definition in the programme as to what constitutes a ‘saved’ job. The reported figures must therefore be seen as estimates. Furthermore, the economy during the programme period was recovering from a deep recession. Therefore it is difficult to decide what was an effect of the programme or of the economic boom. The general impression is that other forces besides the Objective 6 Programme triggered the development. Macroeconomic processes of change and consolidated trends are most powerful. The population development trends remain unbroken with continuing out-migration and population decline.

There were five special community priorities addressed by the programme. The enhancement of IT- knowledge was successful in reaching its goal. Sustainable development cannot be measured but environmental issues were carefully handled according to Swedish legislation. RTD has been promoted by the two projects E-tour and MRI that have both continued in revised form as Objective 1 projects. Building a research structure takes more time than normally estimated. The strong equal opportunities profile of the Programme has been met with the promotion of entrepreneurship where there has been a significant increase in woman–led new enterprises.

· The Objective 6 Programme, as the first of its kind in Sweden, may offer some lessons for the future some of which are presented below: · The Programme was grassroots dominated and demand-driven, which brought a floating focus with too many small projects that did not directly address the structural problems. A programme must have sufficient monitoring resources to keep it in line with the SPD inten- tions. The grassroots must be balanced by the implementation organisation to keep the focus of the programme. On the other hand, the evaluators point at the potential to have a more open programme with possibilities to choose more freely between measures of the programme. · The implementation of a support programme must have a strong emphasis on the administrative requirements to avoid introducing delays. Under this point it must also be mentioned that early preparations must be made for database registrations in order to have these registrations systems operative and reliable early in the process. Administrative routines must be clarified to all involved at the very beginning. · The Programme area differed from the regional structure with the central places cut off from the hinterlands that constituted the programme area. Sometimes only parts of municipalities were included in the area. It is the evaluators’ opinion that the programme would have worked better within the framework of existing functional regional structures. 70

· The longer budgetary periods must be acknowledged in the co-financing in order to give the projects financial security during the programme/project period. · Guidelines on how to calculate indicators must be clearly defined and communicated before the programme starts. · The implementation administration should promote structural changes by outspokenly pointing out what is expected to happen in the area under the programme period and by promoting projects accordingly. Projects in the programme should be larger and better coor- dinated towards the goals of the programme. · There must be a wide comprehension, among decision makers at all levels, that for structural change to be accomplished the conservation of traditional structures must be questioned. By allowing conservative forces to dictate the agenda for future development, inevitable structural change becomes delayed and difficult.

Finally, the Objective 6 Programme for Sweden has, the administrative implementation problems set aside, had an impact on the problems targeted. The Programme was however too small and /or the problems too deeply rooted to be cured during one single programme period. The trends in population development are still negative and enterprises are still affected by the geographical conditions and vulnerable to changes in the macroeconomic factors. The programme brought means to self-help through increased possibilities for funding of education and business development as well as bringing a spirit of mobilisation. 71

APPENDIX

Table 1. Population density in the Objective 6 area.

Population Ind/km2 Ind/km2 in outside the outside Population Individuals Municipality municipality municipality municipality Region Area km2 1998 per km2 center center center center Torsby 4186,78 14142 3,4 Torsby 828 9 795 2,3 Vansbro 1550,51 7476 4,8 Vansbro 692 5 184 3,4 Malung 4106,53 10972 2,7 Malung 589 5 462 1,3 Orsa 1743,49 7150 4,1 Orsa 445 1 594 0,9 Älvdalen 6913,68 7932 1,1 Älvdalen 665 5 952 0,9 Ljusdal 5294,54 20167 3,8 Ljusdal 1 201 13 820 2,6 Ånge 3065,2 11497 3,8 Ånge 914 8 196 2,7 Sollefteå 5433,68 22854 4,2 Sollefteå 998 13 571 2,5 Ragunda 2527,19 6540 2,6 Hammarstrand 572 5 273 2,1 Bräcke 3453,77 7864 2,3 Bräcke 930 6 028 1,7 Krokom 6210,81 14279 2,3 Krokom 887 11 982 1,9 Strömsund 10545,47 14575 1,4 Strömsund 1 110 10 485 1,0 Åre 7330,84 9838 1,3 Åre 779 8 760 1,2 Berg 5748,45 8274 1,4 Svenstavik 682 7 250 1,3 Härjedalen 11404,7 11723 1,0 Sveg 983 8 911 0,8 Östersund 2222,18 58673 26,4 Östersund 1 683 14 283 6,5 Bjurholm 1316,87 2786 2,1 Bjurholm 623 1 710 1,3 Vindeln 2648,31 6245 2,4 Vindeln 904 3 732 1,4 Norsjö 1753,03 4850 2,8 Norsjö 1 004 2 561 1,5 Malå 1607,54 3821 2,4 Malå 977 1 415 0,9 Storuman 7485,19 7177 1,0 Storuman 799 4 607 0,6 Sorsele 7493,2 3281 0,4 Sorsele 769 1 889 0,3 Dorotea 2802,51 3441 1,2 Dorotea 759 1 637 0,6 Vilhelmina 8120,4 8125 1,0 Vilhelmina 1 265 4 020 0,5 Åsele 4315,14 3789 0,9 Åsele 669 1 578 0,4 Lycksele 5638,78 13386 2,4 Lycksele 1 109 4 146 0,7 Arvidsjaur 5708,24 7401 1,3 Arvidsjaur 1 128 2 314 0,4 Arjeplog 12944,96 3517 0,3 Arjeplog 865 1 382 0,1 Jokkmokk 18143,44 6305 0,3 Jokkmokk 976 2 940 0,2 Överkalix 2786,78 4366 1,6 Överkalix 1 049 3 294 1,2 Kalix 1799,13 18408 10,2 Kalix 1 040 10 738 6,0 Övertorneå 2374 5868 2,5 Övertorneå 813 3 689 1,6 Pajala 7886,11 7779 1,0 Pajala 588 5 622 0,7 Gällivare 15999,95 20987 1,3 Gällivare 1 238 11 808 0,7 Älvsbyn 1713,19 9101 5,3 Älvsbyn 841 3 736 2,2 Haparanda 918,29 10580 11,5 Haparanda 1 258 5 621 6,1 Kiruna 19446,78 25148 1,3 Kiruna 1 275 4 849 0,2 Source: Sweden statistics. 72

Figure 1. This population pyramid of Malå municipality illustrates the typical “mushroom” form of a distorted age structure. Comparison with the average for Sweden. Source: Statistics Sweden.

Figure 2: Population changes in a selection of municipalities in the Objective 6 area. Source: Statistics Sweden. 73

Figure 3: Number of SMEs in different size groups for Sweden as a whole. Basis for the diagram is a register of companies in the VAT register. The sudden increase in numbers between 1996 and 1997 is due to changes in taxation principles. In the first period the companies were not eligible to declare VAT if the turnover was lower than 200,000 SEK From 1997 all registered enterprises had to declare VAT. This had the effect of a sudden increase of about 190,000 enterprises, mostly very small. About 50% of the increase is very small farms. Source: Statistics Sweden

A look at the size profile of SMEs in the whole of Sweden and changes during the period 1993- 2001 illustrates the structure of enterprises. Enterprises with more than 50 employees are rare. The major change over the period has been an increase in the number of very small enterprises in the late 1990s. However, most of it was an effect of different methods in collecting the statistics. The statistics for Sweden as a whole give a good impression of the enterprise structure also for the Ob- jective 6 area. 74

Table 2. Level of education per municipality in the Objective 6 Region. Only municipalities that lie entirely inside the area are shown. It is interesting that the whole area has such low level of education. Only one municipality reaches the country average, whereas most municipalities show half the nation average. Population: 2000-01-01, 25-64 years of age

Post secondary Post secondary Compulsory Secondary Secondary school school educa- school school school education tion 3 Municipality education <2 years 3 years <3 years years or more

Sweden 20% 33% 16% 14% 17%

Torsby 23% 43% 15% 9% 8% Vansbro 31% 43% 12% 8% 6% Malung 27% 41% 15% 9% 7% Orsa 20% 44% 14% 11% 10% Älvdalen 25% 47% 12% 9% 6% Ljusdal 24% 45% 14% 9% 8% Ånge 25% 44% 15% 9% 7% Sollefteå 22% 42% 13% 11% 11% Ragunda 23% 46% 14% 10% 7% Bräcke 22% 48% 12% 9% 8% Krokom 18% 41% 15% 13% 13% Strömsund 22% 48% 13% 9% 8% Åre 21% 38% 15% 13% 11% Berg 23% 45% 12% 10% 9% Härjedalen 24% 44% 14% 9% 7% Östersund 15% 35% 15% 17% 18% Bjurholm 25% 44% 13% 8% 10% Vindeln 20% 47% 12% 11% 9% Norsjö 24% 47% 14% 9% 6% Malå 22% 45% 13% 10% 9% Storuman 23% 46% 12% 11% 8% Sorsele 23% 45% 14% 9% 8% Dorotea 20% 50% 13% 9% 7% Vilhelmina 19% 45% 16% 10% 8% Åsele 20% 49% 15% 9% 7% Lycksele 17% 44% 14% 13% 12% Arvidsjaur 17% 44% 17% 11% 10% Arjeplog 21% 44% 14% 11% 8% Jokkmokk 21% 44% 14% 11% 10% Överkalix 22% 50% 12% 9% 7% Kalix 17% 47% 13% 12% 10% Övertorneå 16% 52% 12% 11% 8% Pajala 20% 46% 15% 10% 8% Gällivare 19% 46% 15% 11% 9% Älvsbyn 17% 50% 15% 9% 8% Haparanda 23% 45% 14% 8% 8% Kiruna 17% 42% 18% 12% 10%

Source: Statistics Sweden befolkningens utbildning version 2002-01-01 75

Table 3. The priorities, measures and total funding and co-financing allocated in the Objective 6 Single Program- ming Document for Sweden. Priorities Measures (*) Funding MEURO 1. Development of enterprises · 1.1 Development of SMEs 180.42 · 1.2 Increased competence in the SMEs 62.38 · 1.4 Development of tourism . 51.51 · 1.5 Elevation of competence level in tourismsecto 0.77

2. Increased competence · 2.1 Strengthening of R&D. 47.49 · 2.2 Knowledge in R&D 25.71 · 2.3 IT- implementation 32.03 · 2.4 IT-knowledge 2.49 · 2.5 Infrastructure for education 8.14 · 2.6 New educational programs 3.59

3. Agriculture, fisheries and natural · 3.1 Compensation for farming in remote areas 64.32 resources · 3.2 Start up support for new young farmers 35.70 · 3.5 Increased competence in forestry 0.25 · 3.6 Fisheries 7.61 · 3.7 Increased competence in Fishery 0.25 · 3.8 Environment control and landscape architecture. 7.61 0.02 · 3.9 Proficiency in ecology 3.76 · 3.11 Proficiency in mining and mineral extraction 0.125

4. Rural and Community Development · 4.1 Measures within tourism and culture 32.10 · 4.2 Increased competence in local development issues 28.71 · 4.4 Measures to increase the occupancy · 4.5 Development of rural areas 8.15 · 4.6 Local strategies for increased employment rates 43.38 1.19

5. Sami development · 5.1 Sami culture 5.52 · 5.2 Reindeer herding and other trades 8.88

6. Infrastructure · 6.1 Investment in the railway net 70

*Later on in the process some measures were merged. Measures 1.5, 3,5, 3.7 and 3.11 were integrated in measure 1.2. For forestry a measure 3.4 was inaugurated as the process went on. 76

Table 4. Summary of indicators for completed projects in measure 3.6 Fisheries. These are based on final reports from the projects. Final reports have been handed in by 58 of the 90 projects. Since not all the projects have handed in their final report the number is expected to increase. Indicator Out-put New jobs Number: 11 Increased production capacity (tons) in production site Tons/year: char Rainbow trout 480 Other 90 13

Increased production capacity in processing Kilos/year:

Fresh or cooled products 3 500 Frozen products 2 000 Other processed products 1 000

Studies carried out and pilot projects Number: 8

Modernised fishing fleet Number: Adjustment of working environment 3 Safety adjustment 1 Hygiene and quality improvements 2 Source: The National Agency of Fishery 77

GLOSSARY

Abbrevation Explanation AMS Labour Market Board EAGGF European Agricultural Guidance and Guarantee Fund ERDF European Regional Development Fund ESDP European Spatial Development Perspective ESF European Social Fund ETOUR European Tourism Research Institute FIFG Financial Instrument for Fisheries Guidance MRI The Environment and Service Research Institute in Kiruna NUTEK Swedish Business Development Agency RTD Research, Technology and Development SME Small- and Middle sized Enterprise