South-East Finland - 2021-2027 Programme Document Appendix 03 (Draft July 2021) SWOT ANALYSIS OF THE SOUTH-EAST FINLAND, ST. PETERSBURG AND LENINGRAD REGION

Territory

STRENGHTS WEAKNESSES

Vast forest and water resources. Access to the sea, land border A risky farming zone due to weather conditions. The presence of ice crossings. The Saimaa water system is Lake Saimaa, with a network of cover in coastal waters during winter. Very different and also challenging routes and harbours that have a direct connection to the seasons influencing all activities in the Programme area. A lad on the through the Saimaa Canal, across the Vuoksi River. The Lake Ladoga territory of transport flows between the EU and Russia and at the points water system with a network of routes and harbours that have direct of intersection of the largest volumes of goods. Anthropogenic load on connection to the sea through the Neva river. The main transport links the with direct discharges of industrial and domestic between Finland and Russia pass through the region. A large urban wastewater. agglomeration (St. Petersburg) and urbanized territory of the Leningrad region. Four national parks: Eastern Gulf of Finland National Park, Valkmus National Park, Kolovesi National Park, Linnansaari National Park and Toksovo Nature Park in the Leningrad region. About 50 specially protected areas in the Leningrad region and 15 in St. Peterburg.

OPPORTUNITIES THREATS

Introduction of modern waste disposal technologies. Increasing the Climate change. Deterioration of the environment, water resources, ecological self-awareness of citizens. Stringent requirements of landscapes due to human activities. Possible disasters and hazards, environmental legislation. Cooperation in issues relating to the such as accidents, wildfires and floods that can cause damage to the conservation of the natural heritage in order to maintain the quality of environment, oil and toxic waste spills, and maritime transport accidents. the environment and enhance the knowledge of and responsibility for Pandemics causing restrictions and disruptions in the society. the common environment. Promotion of activities that can lead to reducing greenhouse gas emission by new technologies, such as wind and solar power and carbon capture and sequestration. Cities and settlements can meet their climate targets with circular living and working environments. Universities and high-level educational institutions are of importance when seeking new methods of operating and modern materials. Further development of digital society, increasing opportunities for participation.

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South-East Finland - Russia 2021-2027 Programme Document Appendix 03 (Draft July 2021) Population and labour resources

STRENGHTS WEAKNESSES

Low level of unemployment in the Russian part of the Programme A decrease in the population in the Finnish part. Increased proportion of territory. Presence of educational institutions of primary, secondary and the aged population. Low fertility rate. Imbalance in the labour market, higher professional education in the Programme area. shortage of workers with secondary specialized education. Preservation of social pathologies (stress, depression, disintegration, devaluation of social values).

OPPORTUNITIES THREATS

The national level policies supporting families with children and Increased marginalization and deterioration in the quality of life of the consistent decisions relating to migration. Innovations and new population of single-industry towns. A reduction in economic potential in technologies meeting the needs of an aged population. Improving the a number of areas of the region, the emergence of depopulated, quality and comfort of living in rural settlements of the region (through abandoned areas. A mismatch and inconsistency of demand and supply the development of engineering and social infrastructure). Improving the of labour with migration of the most advanced experts. A spread of welfare of the population due to the opening of new high-tech industries socially significant diseases. Growth in the number of citizens in need of in all districts and urban districts. Implementation of existing and social support. The stagnation of healthcare, the inconsistency of the prospective target programs for the development of the social sphere medical care system with modern quality standards. A deficit of social with an improvement in the quality and diversification of services in the interaction for the aged population. social sphere. An increase in the attractiveness of the social sphere for the application of labour by highly qualified workers due to an increase in funding for industries that are part of the social sphere. Transformations of the healthcare system, social support and disease prevention.

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South-East Finland - Russia 2021-2027 Programme Document Appendix 03 (Draft July 2021) Economy and entrepreneurship

STRENGHTS WEAKNESSES

Sectoral specialization of the economy South-East Finland in several Reduced potential for socio-economic development in the cities with Low sectors requiring higher technology, among others: ICT, agro food, energy efficiency of the economy. The dependence of the development healthcare and wellness, biotech, cleantech, energy (notably of the industrial complex on external factors (the development of crisis renewables), advanced materials, maritime and forest. Finnish expertise phenomena in the world economy, changes in exchange rates, etc.). A and experience in environmental solutions in the renewal of their high share of imported materials and / or components in the production technologies and infrastructure. The diversified economy of St. cost of a significant part of industrial enterprises. Low share of SMEs in Petersburg and the Leningrad region, dynamically developing regions of the regional GDP. Displacement of agro-industrial complex enterprises Russia. Availability of services of the financial and credit institutions from land due to a higher profitability of construction of suburban real (banks, investment funds, insurance companies, etc.). A high share of estate. manufacturing industries in the GRP structure of the city and region and a high attractiveness of the industrial sector for investment. The proximity of the metropolis as the largest market for industrial and agricultural products. Rich raw material base (bauxite, clay, phosphorene, shale, granite, limestone, sand, oil shale, peat, forest). High-skilled workforce. Strong potential for SME cooperation development the sectors like ICT and circular economy, as well as an agile small business sector.

OPPORTUNITIES THREATS

Attraction of investments into urban development and economy. Effects of potential global, national and economic crises. Deficit of skilled Increase in the share of high-tech enterprises, including through small workers, outflow of labour resources. Threat of changes in the external and medium-sized businesses. Mutual learning to utilize the market situation, affecting the main export-import relations of enterprise. opportunities of green economy, digitalization, high-level expertise and Depreciation of fixed assets of communal infrastructure facilities. circular economy. Realization in the medium term of the potential of Accelerated retirement of fixed assets in the manufacturing sector due to industrial enterprises within the framework of the development a decrease in investment activity and the attractiveness of certain processes of the St. Petersburg urban agglomeration (including the industries. Difficulty in access to real estate objects for the development territories and settlements of the region). Construction of industrial and of entrepreneurship; problems of connection to energy resources. Lack logistics parks along the perimeter of the St. Petersburg urban of financial resources. Insufficient rate of innovation implementation. agglomeration in the Leningrad region. Attracting investments regarding High wear and tear of the network facilities, generating capacities; infrastructure (heat, electricity and water supply) in the places of irrational fuel balance. Increase in the cost of energy resources. implementation of integrated development projects. Sustainable Emissions from transportation are a problem due to the increase of in provision of consumers with energy and utilities by attracting traffic.

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South-East Finland - Russia 2021-2027 Programme Document Appendix 03 (Draft July 2021) investments. Development of projects based on the existing structure of the industry for the creation of high-tech enterprises with competitive products for the Russian and world markets. Creation of industrial parks in all municipal districts of the Leningrad region. Shared ambition towards the green economy and digitalization. Development of cross- border entrepreneurship and innovation ecosystems.

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South-East Finland - Russia 2021-2027 Programme Document Appendix 03 (Draft July 2021) Transport and infrastructure

STRENGHTS WEAKNESSES Transit corridors pass through St. Petersburg, including the North-South The heterogeneity of the socio-economic development of the regions of (route between the Baltic countries and India through Iran), pan- the region. A lack of high-speed road and rail links between the western European corridor No. 9 (border with Finland - St. Petersburg - Moscow - and eastern parts of the region. Insufficient financing of the border with Ukraine) and its branches: St. Petersburg - border with maintenance, repair and construction of regional and local roads. Belarus (to Vitebsk) and border with Lithuania – Kaliningrad. The main Deterioration of river transport infrastructure. Limited number of border cargo flows pass through the territory of the Leningrad Region, incl. along crossings with neighbouring EU states. Poor use of waterways and routes the Pan-European transport corridor No. 9 in the main directions "North- for individual and mass tourism. Logistic and spatial problems of the St. South" and "West-East". Developed transport infrastructure of Petersburg seaport. Underdevelopment of the local air communication interregional and international importance (road network, railway system. Lack of the coordination in the development of the public network, pipeline network, port infrastructure) with high potential for transport in the region. further development within the framework of federal target programs. High-speed Allegro train connection between St. Petersburg and Helsinki. The presence of major seaports: The ports of Kotka and Hamina are the largest export and transit ports in Finland; Ust-Luga (a universal port capable of receiving large-tonnage vessels), Primorsk (oil loading); (multidisciplinary); (oil, coal). Sea port “Big port St. Petersburg (Multipurpose Sea Cargo Complex including Port Bonka (the most modern port in the Russia’s North-Western region for containers, project, break bulk and ro-ro cargo) and passenger port “Marine Façade”). The presence of airports in the region. A key role in the transit of oil and gas through the Baltic Pipeline System and Nord Stream. OPPORTUNITIES THREATS Growth and strengthening of the key function of the Leningrad Region in Increased competitive pressure from high-tech port complexes in Finland ensuring the transit of domestic and international transport flows. and the Baltic States. Increased competitive pressure from high-tech Development of high-speed road and rail traffic (high-speed road and rail port complexes in the Baltic. Unresolved logistical problems that lead to routes St. Petersburg-Moscow). Digitalisation may enable the reduction ineffective transportation, stagnation of port trans-shipment volumes. of emissions due to smooth border crossings and fluent and innovative Unresolved issues with railway support of the port in Vysotsk (threat of traffic solutions. The water route Ladoga-Saimaa and the widening of stagnation of the port trans-shipment volumes). Remaining bureaucratic Saimaa Canal enabling increasing cruise tourism and cargo shipping. processes between the actors. Creation of new border crossings. Development of tourism and transport using waterways. Forerunner in cross-border green logistics, as well as green and digital solutions and business models.

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South-East Finland - Russia 2021-2027 Programme Document Appendix 03 (Draft July 2021) Tourism and culture

STRENGHTS WEAKNESSES

St. Petersburg is a treasury of architecture of various styles, a city of An underdeveloped hospitality infrastructure. Some objects of cultural palaces, ensembles, museums and theatres. The Leningrad Region and historical heritage remain in an unsatisfactory condition with preserves many cultural monuments of the fortress, historical insufficient funding for the maintenance and restoration of monuments. settlements, reserves, monuments of history and military glory. In Insufficient transport accessibility of many tourist attractions. An Finland and Russia, high tourist and recreational potential due to clean insufficient number of qualified personnel for the development of environment suitable for organizing recreation (forests, numerous lakes, services in the field of hospitality and organization of tourism (including rivers, hunting grounds, ski resorts, caves and other objects). Saimaa outdoor activities). Lack of entrepreneurs. region on the Finnish side offers lot of potential both for domestic and international tourism. Objects of tourist interest and cultural and historical heritage (including Vyborg, , Oreshek and Koporye fortresses, forts of and Lomonosov district and other objects). Established and secure business environment. Strong recreational, cultural and historical resources of the region on the part of residents of Russia and Finland. Introduction of electronic visas in Russia.

OPPORTUNITIES THREATS

Programmes are wide marketing cooperation, utilization of shared green Insufficient promotion of the tourist products. Degradation of the natural and digital solutions and platforms. Development of a unified marketing heritage of the territory. The remaining visa regime between the policy, while promoting the tourism potential of the entire territory. European Union and the Russian Federation. Possible limitations of Creation of recreational, cultural and historical resources of the region by access due to anti-pandemic measures. residents of Russia and Finland. Increasing global demand on clean and safe environment for tourism. Availability of a functioning network of tourist information centres with a single coordinating body. Creation of direct linkages between the citizens, cities, educational and research institutions, youth and sport organisations, and all kinds of non- governmental organisations in order to advance understanding, share know-how, and develop new solutions to common problems.

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South-East Finland - Russia 2021-2027 Programme Document Appendix 03 (Draft July 2021) Science and innovation

STRENGTHS WEAKNESSES

10% of its scientific potential in Russia in the territory of St. Petersburg Insufficient demand for some existing research capacity and inefficient and the Leningrad region (350 scientific organizations, 170 thousand knowledge of transfer mechanisms from research to enterprises. Limited research workers, including 9 thousand Doctors of Sciences and 26 innovation capability of enterprises (especially SMEs) in the BSR leading thousand candidates of sciences). Techno parks, business incubators, to limited absorption and utilization of new knowledge. Insufficient centres for collective use of high-tech equipment, prototyping centres exploitation of non-technological innovation (domination of the and venture funds are functioning in St. Petersburg. The presence on the technological push) and demand-driven innovation. Language barrier. territory of the region of large scientific institutions, as well as the opening of the North-West nanocenter (together with Rusnano.) and institutes for Arctic Research. On the Finnish side, South-East Finland has one of the strongest hubs of organizations focusing on green and smart solutions and research, as well as on traditional sectors innovations. Long cooperation based on mutual benefit can be built on the capitalization of prior experience, best practices and achievements. A large number of both Finnish and Russian partners have become more familiar with the way of working at programme management, as well as at project implementation, levels. High-level of internationally recognized expertise in green technology.

OPPORTUNITIES THREATS

Development of a scientific cluster in the Leningrad Region, start-up and High risks for science development are an insufficient level of start of operation of the high-flux beam nuclear reactor PIK and international cooperation. Deterioration of the material and technical radiological cluster in . Development of research and base for R&D. Aging, outflow of youth from several programme regions development in the field of ICT based on the project "Baltic Silicon into other regions and abroad. Competition with other cities for Valley". Connection R&D with business life in order to commercialize the specialists capable of conducting research and development in the areas innovations and results of R&D. Development of technology transfer of regional development. based on a network of technology parks and business incubators in the city and region. Joint activities in the field of building infrastructure for innovation, developing skills and competence in accordance with the new challenges to find and strengthen shared academic talent and attract international and young researchers and specialists to the Programme area. Green technology and services, cross-border ecosystems and clusters on research, development and innovations.

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South-East Finland - Russia 2021-2027 Programme Document Appendix 03 (Draft July 2021) Education

STRENGTHS WEAKNESSES

Large education sector: about 400 thousand students, 37 state Insufficient mechanisms for advanced training, retraining and attracting universities and 29 private universities in St. Petersburg, 19 professional young specialists. Weak link with labour market needs. Insufficient educational organizations, as well as 37 colleges as part of higher attractiveness to foreign students, leading world professors and educational institutions, more than 14% of all employed in the city. High scientists. Language barriers. ratings of St. Petersburg universities in Russia and the world. A network of Finnish centres of excellence for solving 21st century IT-related problems. LUT university and two universities of applied sciences support the economy of South East Finland by fostering and developing new business operations and contributing to the culture of technology and economy. University and other higher degree cooperation, student exchange, joint study programs. Spread of new types of teaching and learning give opportunities to widen education in new areas and fields. Internationally certified university education. High level of persons with universities and other higher degrees in the Russian regions.

OPPORTUNITIES THREATS

The presence of large and well-known Russian and Finnish universities Widening the gap in the quality of education and the availability of and other higher educational institutes. Good conditions for the self- additional education services in urban and rural areas. The outflow of realization of youth. Establishing a closer link between vocational young specialists from the education system due to insufficient education and the needs of the labour market. Institutions of higher and measures to retain teachers. Reducing the attractiveness of the social vocational education can activate their cooperation both as an sector for labour. The prevalence of graduates in the humanities with a opportunity to secure additional investments (grants, scholarships, etc.), shortage of young technical specialists. and a source of maintaining competitive strength (through knowledge transfer, exchange of specialists, etc.). Use of electronic communication to facilitate broader access to educational opportunities. Strengthening strategic cooperation with education, civil society, businesses and governance bodies and focusing on sustainable development initiatives.

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