Territorial and Socio-Economic Analysis Interreg Programme Slovenia-Austria 2021-2027

Consortium ÖAR GmbH Manfred KOJAN (Project Manager) Lindengasse 56, 1070 Wien/Vienna, Austria

ZaVita svetovanje, d.o.o. Tominškova 40, 1000 Ljubljana, Slovenia

Vienna/Ljubljana; October 12, 2020

Territorial and Socio-economic Analysis, Interreg SI-AT 2021-2027

Contracting Authority:

Kotnikova 5 1000 Ljubljana Contracting Authority’s representative: Mojca Muršec

Service Provider: OeAR GmbH Lindengasse 56 1070 Vienna, Austria Tel.: +43 664 502 6897 email: [email protected] www.oear.at

ZaVita, svetovanje, d.o.o. Tominškova 40 1000 Ljubljana, Slovenia

Project Manager: Manfred KOJAN, ÖAR GmbH

Deputy Project Manager: Matevž Premelč, ZaVita, d.o.o.

Key and additional experts: Karl Reiner, OeAR GmbH Herwig Langthaler, OeAR GmbH Michael Weber, OeAR GmbH Matjaž Harmel, ZaVita, d.o.o. Klemen Strmšnik, ZaVita, d.o.o. Sabina Cepuš, ZaVita, d.o.o. Julija Marošek, Nov’na razvoj, d.o.o. Aleksandra Krajnc, ZaVita, d.o.o.

Project: Programming of the Interreg Programme Slovenia-Austria 2021-2027

Contract number: C1541-20P410001

Date: 12 October 2020

Territorial and Socio-economic Analysis, Interreg SI-AT 2021-2027

Table of Contents

Executive Summary ...... 7 PO1 – A more competitive and smarter Europe ...... 9 PO2 – A greener, low carbon Europe ...... 10 PO3 – A more connected Europe ...... 10 PO4 – A more social and inclusive Europe ...... 10 PO5 – A Europe closer to citizens ...... 11 ISO1 – A better cooperation governance ...... 11

1. Introduction ...... 12 1.1. Background information...... 12 1.2. Purpose and objectives of the analysis ...... 12 1.3. Methodology ...... 13

2. Territorial and socio-economic analysis ...... 16 2.1. General territorial characteristics ...... 16 2.2. Demographic structure and social environment ...... 20 2.3 Economic situation, competitiveness, entrepreneurship ...... 27 2.4 Natural and cultural heritage and tourism ...... 32 2.5 Labour market ...... 35 2.6 Knowledge society, digitalisation ...... 41 2.7 Environment and nature ...... 49 2.8 Mobility and Accessibility ...... 55 2.9 Territorial governance and institutional cooperation ...... 58 2.10 Links with macroregional strategies ...... 61 2.11 Lessons learnt from past experience ...... 61

3. SWOT, challenges, needs and development potentials ...... 64 ERDF Policy Objective 1: A smarter Europe by promoting innovative and smart economic transformation ...... 64 ERDF Policy Objective 2: A greener, low carbon Europe by promoting clean and fair energy transition, green and blue investment, the circular economy, climate adaptation and risk prevention and management ...... 69 ERDF Policy Objective 3: A more connected Europe by enhancing mobility and regional ICT connectivity ...... 74 ERDF Policy Objective 4: A more social Europe by implementing the European Pillar of Social Rights ...... 77 ERDF Policy Objective 5: A Europe closer to citizens by fostering the sustainable and integrated development of urban, rural and coastal areas and local initiatives...... 83 ISO 1: Interreg-specific Objective: A better cooperation governance ...... 86

4. Summary of main findings based on Territorial and Socio-Economic analysis structured per specific Policy Objective ...... 89 ERDF Policy Objective 1: A smarter Europe by promoting innovative and smart economic transformation ...... 89

Territorial and Socio-economic Analysis, Interreg SI-AT 2021-2027

ERDF Policy Objective 2: A greener, low carbon Europe by promoting clean and fair energy transition, green and blue investment, the circular economy, climate adaptation and risk prevention and management ...... 91 ERDF Policy Objective 3: A more connected Europe by enhancing mobility and regional ICT connectivity ...... 93 ERDF Policy Objective 4: A more social Europe by implementing the European Pillar of Social Rights ...... 94 ERDF Policy Objective 5: A Europe closer to citizens by fostering the sustainable and integrated development of urban, rural and coastal areas and local initiatives...... 96 ISO 1: Interreg-specific Objective: A better cooperation governance ...... 97

5. Literature...... 98

List of Tables

Table 1: Area and population of NUTS III regions analysed in the Territorial and socio-economic analysis . 17 Table 3: Population in the period 2014 - 2019 ...... 21 Table 4: Population change and age structure ...... 22 Table 5: Gross Domestic Product (GDP) per capita (p.c.) on NUTS 3 level ...... 28 Table 6: Employment rate of population aged 20-64 ...... 36 Table 7: Number of employed per sector of economy, 2018 ...... 37 Table 8: Unemployment rate ...... 40 Table 9: Education structure levels ...... 41 Table 10: Municipalities – number and population size, 2019 ...... 58 List of Figures

Figure 1: NUTS III regions analysed in the Territorial and socio-economic analysis ...... 16 Figure 2: Territorial disparities in GDP p.c. for the year 2017 ...... 28 Figure 3: Overview of the economic area of Styria and bordering areas ...... 31 Figure 4: Innovation index ...... 45 Figure 5: Map of NATURA 2000 areas in the observed NUTS 3 regions ...... 50 Figure 6: Average annual daily traffic at the border crossings between Slovenia and Austria ...... 57

Territorial and Socio-economic Analysis, Interreg SI-AT 2021-2027

List of Abbreviations AT Austria AMS Austrian Employment Service CB Cross-border CBC Cross-border cooperation CCA Climate Change Adoption CC Climate Change CLLD Community Led Local Development CP SI–AT Cooperation Programme Interreg V–A Slovenia–Austria 2014–2020 DMO Destination Management Organisation ECP Energy and Climate Plan EEA European Environment Agency EGTC European Grouping of Territorial Cooperation EGN European Geoparks Networks EMFF European Maritime and Fisheries Fund ERDF European Regional Development Fund ESF European Social Fund EU European Union EUR Euro EUSALP EU Strategy for the Alpine region EUSDR EU Strategy for the Danube region FTE Full Time Employment GDP Gross Domestic Product GGN Global Geoparks Network GHG Greenhouse Gas (emissions) GODC Government Office for Development and European Cohesion Policy ICT Information and Communication Technology IP Interreg Programme JS Joint Secretariat KLAR Climate Change Adoption Model Region KEM Climate and energy model regions LAG Local Action Group LEADER Liaison Entre Actions de Développement de l'Économie Rurale MA Managing Authority NA National Authority NECP National Energy and Climate Plan NUTS Nomenclature of Territorial Units for Statistics OECD Organisation for Economic Cooperation and Development PTF Programming Task Force RA Regional Authority RDA Regional Development Agency R&D Research and Development RES Renewable Energy Sources R&I Research and Innovation

Territorial and Socio-economic Analysis, Interreg SI-AT 2021-2027

SDG Sustainable Development Goals SF Structural Funds SHI Social Health Insurance SMEs Small and Medium-sized Enterprises SI Slovenia SWOT Strengths, Weaknesses, Opportunities, Threats TA Technical Assistance TEN-T Trans-European Transport Networks ToR Terms of Reference UNESCO United Nations Educational, Scientific and Cultural Organisation VHI Voluntary Health Insurance

Territorial and Socio-economic Analysis, Interreg SI-AT 2021-2027

Executive Summary

This Territorial and Socio-economic Analysis of the Slovenian-Austrian border region has been elaborated in spring 2020 within the frame of the programming of the Interreg Programme Slovenia-Austria 2021-2027. It is based on the analysis of available secondary data and documents as well as on interviews held with regional stakeholders and an online survey. The aim of this Territorial and Socio-economic Analysis is to create a sound information base for the bilateral Interreg Programming Task Force to focus the future IP SI-AT 2021-2027 on the thematic fields (Policy Objectives) where cross-border cooperation may contribute most to overcome border obstacles and regional disparities and taking opportunities of new development trends to better prepare for the future. The first part of the document is providing general territorial characteristics of the (potential) Programme area describing both similarities and regional disparities. The second part is identifying challenges, needs and potential areas for cross-border interventions in the potential policy objectives that may be selected for the future Interreg Programme. Territorial and Socio-economic Analysis The analysis of the territory focuses on the 10 directly bordering Slovenian and Austrian NUTS 3 regions and considers where necessary also further regions with relevance for the socio-economic development in these directly bordering regions (functional areas).

The 10 directly bordering NUTS 3 regions cover a territory of 21,458 km2 with 435 municipalities and 1.9 million people. The larger territory consists of 17 NUTS 3 regions with 38,217 km2, 633 municipalities, and 3.5 million people. The population numbers on the Slovenian and Austrian sides are very similar, however, the territory on the Austrian side is about 30% larger. The area along the 330 km border between Slovenia and Austria comprises a variety of landscapes, of which the most characteristic are Alpine mountainous areas in the West, a hilly

Territorial and Socio-economic Analysis, Interreg SI-AT 2021-2027

countryside in central parts, and the Pannonian Plain in the East. It is characterised by a few larger and densely populated urban agglomerations and larger rural areas with challenging population trends, especially for smaller municipalities. Demographic changes in the region reflect EU and global trends. Growth of population is recorded in regions with larger urban agglomerations, depopulation is evident primarily in rural areas, where also ageing and an increase in the share of inhabitants aged 65+ is stronger. The population ageing brings challenges for the future economic and social development of the area, including health and social care. Both sides are facing a shortage of health workers, particularly in rural areas. Favourable economic trends affected positively the social situation of households. The region is economically well positioned. However, disparities in the GDP p.c. between countries and regions in the area are considerable. For Slovenian regions, except for Osrednjeslovenska, the processing industry is still the most important sector in the structure of regional value added. The SME sector plays an important role for the regions’ economy both in terms of employment and value added. The business support environment is relatively well developed. Rich natural and cultural heritage and diversity of landscapes of the area are one of its key features and potentials. Parts of the territory are under special protection regimes (natural parks, regional parks, national parks, biosphere reserves, protected cultural heritage) and are important elements of the areas’ cultural identity and tourism. The area has some distinct tourism destinations and products (mountain/alpine, cities, wellness/gastronomy, rural tourism). Sustainable tourism has already been recognised as one of the key themes in the previous CBC programmes and contributed to development of some CB offers. Tourism in both Alpine and Pannonian parts of the territory faces a range of common challenges on both sides. Recent economic growth resulted in positive employment trends and reduced unemployment. Some sectors suffer from a shortage of skilled workers (e.g. processing industry, tourism, construction, health, and social care). Long-term unemployed, low-skilled, and older workers prevail in the structure of unemployed. The shortage of jobs for a highly educated workforce in rural areas contributes to migration to big employment centres. Significant gaps in the net earnings of the labour are drivers of asymmetric trends and cross-border commuting from Slovenia to Austria. Needs for improved exchange of labour market data and trends and skills needs were identified. COVID-19 pandemics already increased the number of unemployed and the medium and long-term perspective is difficult to predict. Although the involved regions are generally in a favourable economic situation, the investments into research and innovation are lagging behind and they are further declining. Overlapping themes of regional and national smart specialisation strategies offer the potential for cross-border cooperation. Digitalisation is recognised as a horizontal theme for the development of all sectors. Environment is recognized as one of the most important factors of quality of life and a strong value. All regions that were taken into analysis have designated nature protection sites. Although Slovenian regions indicate higher shares of protected areas than Austrian, their management remains a challenge.

Territorial and Socio-economic Analysis, Interreg SI-AT 2021-2027

The area is affected by the climate change and in the future, more effort will be needed for adapting to its consequences and developing preventive actions, which are already envisaged in strategic documents and plans on both sides. The circular economy as a concept is still underdeveloped, notably at the level of local governments, who would have the biggest potential for fostering its benefits. The area is characterised by dynamic transport flows. Two major investments in infrastructure are taking place (Karawanke/n, Koralmbahn). Challenges in the development of sustainable mobility solutions remain particularly within rural areas and are also linked with tourism travels. Cross-border mobility is quite intense due to daily commuting and mainly includes private car travels due to unfavourable public transport connections. The administrative structures in Slovenia and Austria are different (Austria 3 administrative levels, Slovenia 2 levels), thus creating difficulties for coordination and cooperation across the border. Small size municipalities (up to 5.000 inhabitants) are by far dominant in the region. These municipalities have very limited resources (financial, personnel) for getting involved in cross- border activities. On the other hand, very well developed intermunicipal (e.g. LAGs), regional (like RDAs) and thematic (like KLAR1s) cooperation and organisation structures exist, especially on Austrian side. Geopark Karavanke/Karawanken is a recent and the first EGTC established within the SI-AT area. It involves 14 municipalities and is developing very much appreciated cross-border activities in several thematic fields. The analysed territory is also part of two macroregional strategies, the EU Strategy for the Alpine Region (EUSALP) and the EU Strategy for the Danube Region (EUSDR). Challenges and cooperation potentials The ERDF regulation states that future Interreg Programmes should focus their interventions on 2-3 policy objectives where cross-border cooperation might create the highest value-added. The challenges, needs, and cooperation potentials for the various policy objectives (POs) have been carefully analysed by the expert team and discussed with the Programming Task Force on a meeting held on 22 July 2020. The following preliminary observations have been drawn.

PO1 – A more competitive and smarter Europe R&D, Smart Specialisation and SME development are quite important for the area and there are many cross-border cooperation potentials. Supporting R&D and innovation is important and should be undertaken in strong partnerships with regional SMEs. However, R&D should not be selected as a standalone priority, since other funding opportunities are available and more appropriate. Nevertheless, these topics should be integrated (cross-cutting) into other POs (e.g. PO2). Cooperation activities in Smart Specialisation (e.g. fields of circular economy, green mobility, metal and wood processing, mechatronics) may trigger value added for the area. Support for strengthening SMEs and intensifying their cross-border activities is very important for the all bordering regions. However, such support is only relevant in a framework with very low

1 KLAR – Klimawandel Anpassungs-Modellregion

Territorial and Socio-economic Analysis, Interreg SI-AT 2021-2027

administrative requirements. In case that this PO is not selected, the possibilities for small scale SME support for CBC should be examined under ISO1.

PO2 – A greener, low carbon Europe This PO covers several specific objectives with partly high relevance for cross-border cooperation. a) Energy topics are important for the region, however the potential for activities with real CBC value added is low. Actions are also frequently connected with high financial budgets are involved. b) Climate change: Activities in the fields of disaster response, risk prevention, sustainable mobility and awareness raising among the population is suitable for CBC. The topic is of high relevance for the analysed area as it is highly sensitive to climate changes. c) Water management did not have many CBC projects in the past, but there are needs and good potentials for activities with strong CBC value added (e.g. management of joint water bodies). d) Circular economy provides a wide field of cooperation opportunities and this could also be an area for interlinking with R&D, innovation, and SME support. The topic is of high relevance for all regions and concrete steps are already defined on both sides. e) Biodiversity is an important area, but in the past not so many CBC projects as envisaged have been implemented. One of the obstacles is seen in a relatively small number of potential beneficiaries with relevant expertise that could take part in the programme due to weak financial capacities, especially on the part of NGOs.

PO3 – A more connected Europe PO3 covers some interesting thematic fields both for local population and tourists in the area such as reducing CO2 emissions in transport, enhancement of (cross-border) public transport and e- mobility, coordination of public transport, etc. Thus, many of the potential CBC activities do not requiresupport for investments and might be integrated into PO2 and/or ISO1, while for substantial investments this programme may not be suitable.

PO4 – A more social and inclusive Europe Differences in economic development and wages are one of the main drivers for asymmetric labour mobility, which is most sensitive in the sectors where needs on both sides are similar. This is also seen as one of the key obstacles for labour market integration. Mutual learning, social innovation and social economy, piloting of new (CB) services have a rather high cooperation potential in terms of addressing challenges linked to the care of the elderly. Education, LLL and trainings should complement concrete/specific needs of the cooperating regions, linked to specific policy objectives (e.g. smart specialisation, circular economy, digital skills, … ). However, national competences both for labour market and education limit CBC potentials and there is sectoral national and EU funding available. To some extent, cooperation potentials could be addressed through ISO1, in particular regarding the skills intelligence, data exchange, exchange of approaches/methods and addressing of future skills needs.

Territorial and Socio-economic Analysis, Interreg SI-AT 2021-2027

PO5 – A Europe closer to citizens EGTC Geopark Karavanke/Karawanken (SI-AT) and Euregio Senza Confini (AT-IT) are good practice examples of CB-territorial development. Potential territorial cooperation could focus on sustainable development of communities in the western mountainous and in the eastern part (Alpine, Pannonian – Mura/Drava nature areas). These regions share similar challenges and development potential linked to specifics of the territory (preservation of nature and cultural landscapes, economic revitalisation of rural areas, tourism, culture and cultural heritage, climate change and risk management, mobility challenges). However, due to the existing preselection criteria (common strategies and structures in place) there is limited potential for choosing this PO.

ISO1 – A better cooperation governance The Interreg-specific Objective is very relevant to the region. Within ISO1 it would be beneficial to support administrative and institutional structures for jointly developing (formalized) structures, strategies, frameworks and procedures for addressing a wide range of joint challenges. Within ISO1 also a wide spectrum of low-threshold people-to-people activities (from schools, civil society organisations and local initiatives, …) with very simplified procedures should be supported for intensifying cross-border contacts and awareness. It should also be investigated how far important topics (activities with non-investment character) from other POs could be integrated under ISO1 (like small-scale support for CBC of SME or CBC mobility).

Territorial and Socio-economic Analysis, Interreg SI-AT 2021-2027

1. Introduction

1.1. Background information The cross-border cooperation between Slovenia and Austria began in 1995. The cooperation was established within the framework of the programme of the Community Initiative Interreg IIIA Austria – Slovenia 2000–2006 and continued in the frame of the Operational Programme Slovenia – Austria 2007–2013 and the current Cooperation programme Interreg V-A Slovenia – Austria (SI- AT) 2014–2020. The vision of the current programme for the 2014-2020 programme period underlines the general focus on sustainable development.

The programme area of the Cooperation Programme Interreg V-A SI-AT 2014-2020 covers 8 Slovenian NUTS 3 regions Gorenjska, Koroška, Savinjska, Podravska, Pomurska, Osrednje- slovenska, Goriška and Zasavska and 9 Austrian NUTS 3 regions Oststeiermark, West- and Südsteiermark, Graz, Östliche Obersteiermark, Westliche Obersteiermark, Unterkärnten, Klagenfurt-Villach, Oberkärnten and Südburgenland. The overall objective of the current Cooperation Programme (CP) is to ensure the harmonious development of participating cross-border regions and to enable all citizens to make the best use of given natural conditions and opportunities, taking into account the specifics of each part of the programme area. Being consistent with the national Partnership Agreement of Austria and Slovenia, the CP Interreg V-A SI-AT promotes smart, sustainable and inclusive growth through an integrated approach combining thematic and territorial dimensions in the design of the priority axes. This territorial and socio-economic analysis has been undertaken for the programming of the new Interreg Programme Slovenia-Austria 2021-2027. It shall serve as a basis for identifying the main challenges, needs and development potentials of the (future) programme area. Special focus shall be on those aspects than can be addressed most efficiently with cross-border cooperation.

1.2. Purpose and objectives of the analysis The purpose of this territorial and socio-economic analysis of the cross-border area between Slovenia and Austria according to the legal requirements and guidelines of the Programming Task Force (PTF) is to prepare a sound basis for the programming process of the Interreg Programme SI-AT 2021-2027. For this analysis the main strategic goals of the Interreg Slovenia-Austria programme for the period 2021-2027 need to be considered which are: - Reducing territorial disparities in the cross-border area; - Driving change and taking opportunities of new development trends by pooling resources across national borders in order to better prepare for the future and the associated challenges; - Alleviating border obstacles to cross-border cooperation in specific areas; - Development of a more user-friendly operational framework.

Territorial and Socio-economic Analysis, Interreg SI-AT 2021-2027

The objective of this Territorial and socio-economic analysis is to prepare a territorial and socio- economic analysis of the Slovene-Austria cross-border area. The analysis should identify the main joint challenges, needs and potentials of the area as well as strategically relevant fields of actions for cross-border cooperation with the potential to overcome border obstacles and territorial disparities, taking into account economic, social, environmental and other relevant aspects. Emphasis should be put on issues where cross-border cooperation has a high potential to promote better integration across regions and which are of strategic relevance for regional development. The territorial analysis based on 5 policy objectives identified by the Commission and the Interreg- specific objective “A better cooperation governance” should cover the following aspects: 1. Challenges: the analysis shall identify the main issues and challenges for the cooperation area, with general regard to the economic, social, environmental and governance challenges the area is facing and with specific regard to relevant policy objectives outlined in the EC proposal for the 2021-2027 legislative package, highlighting also the links between the challenges and the likely future trends for the area. Special attention should be paid to the identification of cross-border obstacles and enablers/drivers 2. Needs: the analysis shall describe the needs addressing the challenges identified in the area as well as the holders of such needs, especially with regard to those target groups and stakeholders which can participate in and/or can benefit of cross-border cooperation projects (private partners as well as non-private partners). 3. Potentials: the analysis shall identify the potentials existing in the area in relation to the capacity of the regions to face the identified challenges and needs, highlighting those endogenous resources most suitable of being strengthened by cross-border cooperation projects also in synergy with other initiatives/funds (taking into account also experiences and lessons learnt from the previous and current SI-AT programme). 4. The analysis should contain preliminary conclusions and recommendations regarding themes to be tackled by cooperation in the Slovenia-Austria programme area. The interactions among different challenges, needs and potentials shall also be investigated. The above elements should be linked with the relevant funding instruments, policies, initiatives expected to be available in the period 2021-2027.

1.3. Methodology The methodology for the preparation of the territorial and socio-economic analyses is based on the following methodological steps: 1) Definition of the territory to be analysed In view of the programme area of the current CP Interreg V-A SI-AT 2014-2020 and the tasks related to the examination of potential functional areas, the expert team included in the analysis directly bordering NUTS 3 regions as well as other regions comprising the programme area in the current programme. 2) Collection of data from primary and secondary sources - Based on the selection of key indicators covering the various aspects of the socio-economic analysis data was collected from national/regional public databases and Eurostat;

Territorial and Socio-economic Analysis, Interreg SI-AT 2021-2027

- The expert team screened national and regional strategies (listed in chapter 4 of this document) and plans as well as various studies and reports in the themes covered by the Policy Objectives; - A draft questionnaire for structured interviews with national and regional stakeholders was prepared and harmonised with the core Programming Task Force members. A series of interviews was conducted in May and June 2020, in person and on-line. As the coming IP shall put strong emphasis on the territorial dimension of its interventions rather than on sectoral aspects, the primary focus was on interviewing structures with a territorial approach involved in territorial development at national/regional level in those specifically involved in the implementation of the current CP (National and Regional Authorities, Regional and Local Development Agencies, Regional Managements, representatives of the Cohesion regions Western and Eastern Slovenia, Joint Secretariat of the current CP SI-AT 2014-2020) as well as organisations in specific thematic fields. In the selection of interviewees, the team consulted the National/Regional authorities and tried to include primarily organisations from directly bordering regions, including those who already had experience in the current or previous Interreg programmes; - In addition to interviews, a short survey was launched to collect additional data from thematic experts. 3) Analysis of collected data and preparation of the document Collected data and information were analysed and structured in the common document. As much as possible, the team sought to balance the presentation of the socio-economic situation and to provide a holistic overview of the territory. The main approach was to collect and analyse data at NUTS 3 level, where this was not possible (e.g. data not available for both sides), the higher administrative or statistical units were taken into consideration (NUTS 2) or even the country level. 4) Preparation of the SWOT analysis and identification of needs, challenges and cross-border cooperation potentials. Based on the analysis of the territory and socio-economic data, for each of the policy objectives as defined in the Art. 4 of the Common Provisions Regulation COM/2018/375, policy specific objectives as defined in Art. 2 of the ERDF and Cohesion Fund Regulation COM (2018) 372 and the Interreg-specific objective “a better cooperation governance” of the Art. 14 of the Interreg Regulation COM(2018)374, a SWOT analysis was prepared. Based on the SWOT analysis, challenges and needs and preliminary cross-border cooperation potentials were identified. Limitations Due to COVID-19 pandemic, it has not yet been possible to implement workshops with the regional stakeholders to allow joint discussions on the preliminary findings presented in this document. Next steps This draft Territorial Analysis will be circulated among the members of the PTF for their feedback and it will be presented and discussed at the PTF meeting in July. On this basis the Territorial Analysis will be revised and also a chapter on Executive Summary will be integrated for producing the final stand-alone document.

Territorial and Socio-economic Analysis, Interreg SI-AT 2021-2027

On the basis of the selected Policy Objectives for the new Interreg Programme the expert team will deepen where necessary the analysis for these areas and prepare information according to the programme template.

Territorial and Socio-economic Analysis, Interreg SI-AT 2021-2027

2. Territorial and socio-economic analysis

2.1. General territorial characteristics

Territory and landscape Population of 1.9 million lives in 10 directly bordering NUTS 3 regions. The border between Slovenia and Austria stretches over 330 km and separates the countries from east to west, lying mostly in the Alps2. The western part of the border (starting at the tripoint formed by the Austrian, Slovenian and Italian borders at the summit of the Ofen/Peč mountain at 1500 metres above sea level in the region of Arnoldstein (AT) and Kranjska Gora (SI) crosses sparsely inhabited high mountainous alpine territory, that further towards the east changes into more hilly landscapes, following for about 30 km the river Mur/Mura and ending at the tripoint marking the crossing of the Austrian, Hungarian and Slovenian borders. In terms of nature of physical obstacles, both the high alpine mountain range of Karavanke/Karawanken and the river Mur/Mura represent natural barriers between the Slovenian and Austrian territories with only few mountain passes, tunnels and bridges (mostly road) connecting both countries.

Figure 1: NUTS III regions analysed in the Territorial and socio-economic analysis

2 Border Orientation Paper Slovenia-Austria; EU DG REGIO 2019

Territorial and Socio-economic Analysis, Interreg SI-AT 2021-2027

There are 10 directly bordering NUTS 3 regions, five Slovenian (Gorenjska, Koroška, Savinjska, Podravska, Pomurska) and five Austrian (Oststeiermark, West- and Südsteiermark, Unterkärnten, Klagenfurt-Villach and Südburgenland). These cover an area of 21,458 km² and have a population of 1,965 million inhabitants. Apart from these directly bordering regions, 7 more NUTS 3 regions are included in the analysis, based on the geography of the current Interreg programme 2014- 2020 due to existing cross-border interrelations and in order to better identify potential functional areas of the future cooperation area. These include Graz, Östliche Obersteiermark, Westliche Obersteiermark and Oberkärnten on Austrian and Osrednjeslovenska, Goriška and Zasavska on Slovene side, covering 38,217 km2 and population of 3.5 million. Bordering regions, including Graz and Osrednjeslovenska, cover 25,004 km2 (with 11,320 km² on Slovenian side and 13,684 km² on Austrian side) with 3 million inhabitants (1.52 million on Slovenian and 1.45 million on Austrian side).

Table 1: Area and population of NUTS III regions analysed in the Territorial and socio-economic analysisPo p ulation density Area (km²) Population (inhabitants/(km²) NUTS ID NUTS 3 region 2016 2019 2019 AT113 Südburgenland 1.471 96.939 66 AT224 Oststeiermark 3.329 266.912 80 AT225 West- und Südsteiermark 2.267 194.466 86 AT213 Unterkärnten 3.375 149.159 44 AT211 Klagenfurt-Villach 2.030 287.528 142 AT221 Graz 1.212 443.066 366 AT223 Östliche Obersteiermark 3.210 159.044 50 AT226 Westliche Obersteiermark 3.061 99.663 33 AT212 Oberkärnten 4.132 124.252 30 AT Border NUTS III 12.472 995.004 80 AT Border NUTS III + Graz 13.684 1.438.070 105 AT CP 2014-2020 24.087 1.821.029 76 Austria total 83.882 8.858.775 106 SI031 Pomurska 1.337 114.287 85 SI032 Podravska 2.170 324.104 149 SI033 Koroška 1.041 70.588 68 SI034 Savinjska 2.301 256.359 111 SI042 Gorenjska 2.137 204.670 96 SI041 Osrednjeslovenska 2.334 549.171 235 SI035 Zasavska 485 56.962 117 SI043 Goriška 2.325 117.616 51 SI Border NUTS III 8.986 970.008 108 SI Border NUTS III + Osrednjeslovenska 11.320 1.519.179 134 SI CP 2014-2020 14.130 1.693.757 120 Slovenia total 20.273 2.080.908 103

EU 28 4.469.508 513.471.676 115 Source: SI-STAT, Statistik Austria, Eurostat; own calculation of population density.

Territorial and Socio-economic Analysis, Interreg SI-AT 2021-2027

The territory connects mountainous Alpine landscapes in the West with the Pannonian plain in the East The analysed area offers a variety of very different landscapes. It stretches from the Alpine mountain regions in the West and North to the hilly countryside with chains of long-drawn hills in the Burgenland-Styrian-Slovenian border in the East. Most parts of the region Pomurska, a part of Podravska, and the region of Südburgenland form the Pannonian plain. The area encompasses two cross-border river systems, the Mura (Mur) and Drava (Drau). Among other major rivers there are Sava, Savinja, Dravinja, Ljubljanica, Sora, Kamniška Bistrica, Ledava, Soča, Vipava, Raab, Lavant, Gail and Glan. Most of the territory is part of the Danube river basin, while the western part, with the Soča valley, is part of the Adriatic river basin. In lower Soča valley and Vipava valley (part of the Goriška region), the Alpine region meets the influence of Mediterranean climate. The area, in particular the Alpine regions, is also characterised by numerous lakes. The eastern part of the area is rich with thermal springs and the land is most intensively cultivated. There is a high density of woods, in particular in the western part, with the forest-overgrown territory even increasing due to the decrease in agricultural production. The wood coverage in the eastern part is much lower and the share of agricultural land is higher. Modest changes in land use According to the European Environmental Agency, Slovenia is a country with one of the lowest land cover change dynamics in Europe. Major drivers of land cover development are connected to overgrowth and sprawl of economic sites and infrastructures, which was significantly slowed down in the period 2006 - 2012. From the year 2006 on, some amount of urban land management and change in land use occurred due to infrastructure development related to the construction of highways and roads (EEA, 2012). Similar to Slovenian trends, Austrian land cover flows are among the lowest in Europe. The most intensive changes are connected to the forest creation, followed by the sprawl of economic sites and infrastructures. Among these, the extension of sport and leisure facilities that usually cover large areas are one of the important factors. In addition, climate change is becoming increasingly important driver of changes due to melting of glaciers in the Alps (EEA, 2012). In general, Europe’s land use is relatively stable since 2000. However, long-term changes show that land take in Europe continues, as artificial surfaces increased by 7% in the period 2000-2018. This change occurred mostly at the expense of agricultural areas. Although the yearly rate shows a tendency to slow down, net land take in EU-28 still amounted to 440km2/year between 2012-2018 (Table 2). The main drivers of land take during 2000-2018 period were expansion of urban areas (especially industrial and commercial land use, as well as extension of residential areas and construction sites), unsustainable agricultural and forestry practices and climate change (EEA, 2020).

In Slovenia and Austria, a slightly less intensive land take is observed. Considering the land take and its share regarding the total area, we can conclude that the trend is notably slower than EU- 28 average. In addition, land take is concentrated mainly around larger urban agglomerations,

Territorial and Socio-economic Analysis, Interreg SI-AT 2021-2027

more densely populated alpine valleys and as consequences of the development of new transport infrastructure.

Table 2: Net land take – trends in Slovenia and Austria (EEA, 2020)

2000-2006 2006-2012 2012-2018 2000-2018

% of total % of total % of total % of total km2 km2 km2 km2 area area area area

Slovenia 10,65 0,05 5,26 0,03 6,06 0,03 21,97 0,11

Austria 76,21 0,09 53,09 0,06 66,72 0,08 196,02 0,23

EU-28 5.530,26 0,13 4.609,32 0,10 2.639,64 0,06 12.779,22 0,29

Source: EEA, 2020. Rural areas versus urban agglomerations In the area there are two cities with agglomerations – i. e. Graz (291.000 inhabitants3, metropolitan area with 420.000 inhabitants)4 and Ljubljana (292,988 inhabitants - capital city/metropolitan area with 555.000 inhabitants), small and medium sized cities such as Maribor (112,088 inhabitants, medium-sized urban area agglomeration with 230.000 inhabitants), Kranj (55,623) and Celje (48,868) in Slovenia, Kapfenberg (21,586) and Leoben (24,345) in Obersteiermark and Klagenfurt (101.000 inhabitants, medium-sized urban area agglomeration with 220.000 inhabitants) and Villach (59,646) in Carinthia. These core areas account for the majority of population, representing centres of administration, education, research and knowledge, and economic activity. The other towns and municipalities in the area are generally much smaller (the majority between 2,000 and 10,000 inhabitants with few towns up to 15,000 inhabitants). The concentration of inhabitants in large cities also affects differences in the population density across regions. The most densely populated Graz region has a population density 12 times higher than Westliche Obersteiermark and Oberkärnten, which are most sparsely populated among all analysed regions. In Slovenia, Osrednjeslovenska is the most densely populated region, with density more than double of the average of the directly bordering regions and 4.6 times higher than Goriška, the most sparsely populated region on Slovene side. Within these regions, those areas in the western part closest to the border are the most sparsely populated ones. Population trends are challenging economic capacities especially in smaller rural municipalities The population development in the territory shows, that there is a continuous increase of disparities between the central towns and the smaller municipalities. The central agglomerations and larger towns are reporting an increase in population, whereas most of the smaller municipalities, especially those closer to the border, show a decreasing number of inhabitants. This results in declining socio-economic capacities of the smaller rural municipalities as especially younger and better qualified people are leaving due to a lack of job opportunities. This loss of

3 ÖSTAT (2019), Statistical Office of the Republic of Slovenia (2019). 4 OECD functional urban areas, OECD 2019.

Territorial and Socio-economic Analysis, Interreg SI-AT 2021-2027

population and jobs puts further pressure on municipal budgets and reduces their capabilities for pro-active policies aiming at strengthening the local socio-economic environment. Further envisaged trends are a decrease in the economically active population (especially Carinthia and Südburgenland), ageing of the population (especially in the remote and rural areas, about 30% will be 65 years and above), a negative birth record (being mainly compensated by international migration, predominantly to the urban agglomerates), internal migration (especially of young people towards urban agglomerations leading to suburbanisation tendencies in towns and additional problems in rural areas for maintaining social and technical infrastructures and local supply). Two different languages and bi-lingualism Both sides of the border use two different languages, which belong to Slavic and Germanic language families. Bi-lingualism is not widely spread among the Austrian population (exception is southern Carinthia). Many Slovenians learn German at school and German is traditionally widely spoken in the Slovenian region of Pomurje. The cross-border region of Carinthia symbolises the development of cooperation between these two countries. In certain towns on the Austrian side, nearly 25% of the population speaks Slovenian.5 Summary: The analysed area along the 330 km border between Slovenia and Austria comprises a variety of landscapes, of which the most characteristic are Alpine mountainous areas in the West, a hilly countryside in central parts and the Pannonian plain in the East. It is characterised by a few larger and densely populated urban agglomerations and larger rural areas with the population trends challenging especially smaller municipalities.

2.2. Demographic structure and social environment

Demography Demographic changes reflect the EU and global trends. In the period 2014-2019, the total change in population in directly bordering regions remained stable (+ 0.3%), with an 1.1% increase on the Austrian and a decrease of 0.6% on the Slovene side. Population increases in regions with larger urban agglomerations Regions with bigger urban agglomerations, Graz (+ 6.6%), Klagenfurt-Villach (+ 2.9%), West-und Südsteiermark (+ 2.4%) experienced the highest population growth, in Osrednjeslovenska, Podravska and Gorenjska the growth is moderate ranging between 0.2% and 0.5%.6 Depopulation is stronger in remote and less developed regions, such as Pomurska (- 2.4%), Östliche Obersteiermark (- 2.2%), Westliche Obersteiermark (- 2.1%), Koroška (- 1.3%), Unterkärnten (- 1.2%). In 2018, natural change of population was negative in Slovenia (- 0.6/1000 inhabitants), however Osrednjeslovenska and Gorenjska maintained positive rates for several years. The birth-rate in

5 Border Orientation Paper Slovenia-Austria; EU DG REGIO 2019 6 Increase of population in Zasavska in 2015 (and decline in Osrednjeslovenska) is due to an administrative change in which Municipality Litija became part of Zasavska region.

Territorial and Socio-economic Analysis, Interreg SI-AT 2021-2027

Burgenland was 7.6/1000 inhabitants, in Carinthia 8.27/1000 inhabitants and in Styria 8.9/1000 inhabitants. The birth record until 2030 will only be positive in Graz. All other regions in Austria will have significant negative natural birth records, strongest in Östliche Obersteiermark, Südburgenland and Oststeiermark. The mortality rate in 2018 was the highest in Pomurska (12.2/1000 inhabitants) and lowest in Osrednjeslovenska (8.2/1000 inhabitants). In Austria, the data at Land level show that mortality rate was above national average of 9.5/1000 inhabitants in all three Länder – 11.31/1000 inhabitants in Burgenland, 10.93/1000 inhabitants in Carinthia and 10.15 /1000 inhabitants in Styria.

Table 3: Population in the period 2014 - 2019 Population NUTS ID NUTS 3 region 2014 2015 2016 2017 2018 2019 AT113 Südburgenland 97.343 97.097 97.510 97.455 97.174 96.939 AT224 Oststeiermark 266.450 264.950 265.794 266.343 266.518 266.912 AT225 West- und Südsteiermark 189.839 192.555 193.823 194.192 194.100 194.466 AT213 Unterkärnten 150.934 150.908 151.067 150.579 149.930 149.159 AT211 Klagenfurt-Villach 279.347 281.395 283.941 285.523 286.579 287.528 AT221 Graz 415.657 421.304 429.088 434.969 439.236 443.066 AT223 Östliche Obersteiermark 162.626 161.767 161.907 160.777 159.888 159.044 AT226 Westliche Obersteiermark 101.781 101.420 101.540 101.006 100.390 99.663 AT212 Oberkärnten 125.600 125.338 125.474 124.975 124.389 124.252 AT Border NUTS III 983.913 986.905 992.135 994.092 994.301 995.004 AT Border NUTS III + Graz 1.399.570 1.408.209 1.421.223 1.429.061 1.433.537 1.438.070 AT CP 2014-2020 1.789.577 1.796.734 1.810.144 1.815.819 1.818.204 1.821.029 Austria total 8.507.786 8.584.926 8.700.471 8.772.865 8.822.267 8.858.775 SI031 Pomurska 117.133 116.670 116.078 115.477 114.776 114.287 SI032 Podravska 323.328 323.356 322.553 322.043 322.058 324.104 SI033 Koroška 71.546 71.303 71.040 70.761 70.550 70.588 SI034 Savinjska 259.853 253.975 254.318 254.761 254.760 256.359 SI042 Gorenjska 203.894 203.850 203.838 203.800 203.636 204.670 SI041 Osrednjeslovenska 546.314 534.518 537.023 539.672 542.306 549.171 SI035 Zasavska 42.983 57.711 57.404 57.280 57.061 56.962 SI043 Goriška 118.374 118.188 118.064 117.747 117.260 117.616 SI Border NUTS III 975.754 969.154 967.827 966.842 965.780 970.008 SI Border NUTS III + Osrednjeslovenska 1.522.068 1.503.672 1.504.850 1.506.514 1.508.086 1.519.179 SI CP 2014-2020 1.683.425 1.679.571 1.680.318 1.681.541 1.682.407 1.693.757 Slovenia total 2.061.085 2.062.874 2.064.188 2.065.895 2.066.880 2.080.908 EU 28 507.235.091 508.520.205 510.181.874 511.378.572 512.372.000 512.471.676 Source: SI-STAT, Eurostat, Statistik Austria. In the period 2014-2018, the population gain per 1,000 inhabitants was constantly positive in Osrednjeslovenska, Graz, Klagenfurt-Villach, and West-und Südsteiermark, and negative in Pomurska, Koroška, Zasavska and Goriška. With the exception of year 2015, rather negative trend is also observed in Östliche Obersteiermark, Westliche Obersteiermark and Oberkärnten. In 2018, the highest population gain was recorded in Osrednjeslovenska (12/1000 inhabitants and Graz (9/1000 inhabitants), while Pomurska and Westliche Obersteiermark faced the highest decrease (both – 7/1000 inhabitants). Above indicated short-term trends are also observed over a longer period. Compared to 2009, the population in 2019 increased most in Graz (+ 12.6%), Osrednjeslovenska (+ 5.2%), Klagenfurt- Villach (+ 4.4%), Gorenjska (+ 1.4%) and Podravska (+ 0.4%). All other analysed regions face decline, the highest in Östliche Obersteiermark (- 5.3%), Westliche Obersteiermark (- 4.9%), Pomurska (- 4.4%), Oberkärnten (- 3.8%), Koroška (- 2.6%).

Territorial and Socio-economic Analysis, Interreg SI-AT 2021-2027

Population changes result also from migrations out of and into the country. Net migration with abroad in a period 2009 – 2018 showed some peaks. In 2009, except in Pomurska, more people moved to the regions from abroad than left it, the highest gain is observed in Osrednjeslovenska (+ 4762). In the following years net migration values were relatively low, most regions had negative outcomes during 2013 – 2015, while in 2018 all regions noted substantially larger net migration with abroad, especially Osrednjeslovenska (+13,141), Podravska (+ 5,706) and Savinjska (+ 4,802). Data for Austria are available at Land level. In 2019, net migration with abroad was positive in all three Länder; + 617 in Burgenland, + 2,138 in Kärnten and the highest, +4,446 in Steiermark. The highest proportion was on the part of persons migrating from Bosnia and Herzegovina.

Table 4: Population change and age structure

Population Age structure Women 2019, Change 2009- ageing NUTS ID NUTS 3 region Total 2009 Total 2019 % 2019 Under 15 years* 15-24 25-64 65 and more index* average age AT113 Südburgenland 97.671 96.939 50,9% - 732 12.027 9.261 5 3.315 2 2.336 185,7 48,6 AT224 Oststeiermark 267.583 266.912 50,3% - 671 37.522 26.756 1 49.114 5 3.520 142,6 45,7 AT225 West- und Südsteiermark 192.656 194.466 50,6% 1 .810 25.765 18.948 1 09.743 4 0.010 155,3 46,6 AT213 Unterkärnten 154.870 149.159 50,6% - 5 .711 20.371 15.258 8 1.201 3 2.329 158,7 47,0 AT211 Klagenfurt-Villach 275.475 287.528 51,8% 1 2.053 38.442 27.816 1 60.305 6 0.965 158,6 46,5 AT221 Graz 393.586 443.066 50,6% 4 9.480 60.909 53.393 2 51.380 7 7.384 127,0 40,7 AT223 Östliche Obersteiermark 167.991 159.044 50,9% - 8 .947 18.956 15.188 8 5.218 3 9.682 209,3 49,0 AT226 Westliche Obersteiermark 104.750 99.663 50,7% - 5 .087 12.818 9.905 5 3.915 2 3.025 179,6 48,0 AT212 Oberkärnten 129.117 124.252 50,8% - 4 .865 16.321 12.572 6 6.862 2 8.497 174,6 47,7 AT Border NUTS III 988.255 995.004 50,8% 6 .749 134.127 98.039 5 53.678 2 09.160 155,9 AT Border NUTS III + Graz 1 .381.841 1 .438.070 50,8% 5 6.229 195.036 151.432 8 05.058 2 86.544 146,9 AT CP 2014-2020 1 .783.699 1 .821.029 50,8% 3 7.330 243.131 189.097 1.011.053 3 77.748 155,4 Austria total 8 .335.003 8 .858.775 50,8% 5 23.772 1 .278.692 969.767 4.941.757 1.668.559 130,5 43,3 SI031 Pomurska 119.537 114.287 50,6% - 5 .250 15.204 9.047 6 4.681 2 5.355 169,1 45,5 SI032 Podravska 322.900 324.104 49,9% 1 .204 44.751 30.797 1 81.922 6 6.634 149,5 44,2 SI033 Koroška 72.481 70.588 49,5% - 1 .893 10.218 6.050 3 9.945 1 4.375 143,5 44,3 SI034 Savinjska 258.845 256.359 49,5% - 2 .486 38.771 22.335 1 45.890 4 9.363 128,3 43,4 SI042 Gorenjska 201.779 204.670 50,2% 2 .891 32.678 19.450 1 11.563 4 0.979 127,1 43,1 SI041 Osrednjeslovenska 521.965 549.171 50,8% 2 7.206 87.718 59.649 3 00.848 1 00.956 116,1 42,0 SI035 Zasavska 44.750 56.962 50,5% 1 2.212 8.207 4.765 3 2.184 1 1.806 145,3 44,5 SI043 Goriška 118.533 117.616 49,7% - 917 17.441 9.238 6 4.575 2 6.362 152,7 44,9 SI Border NUTS III 975.542 970.008 50,0% - 5 .534 141.622 87.679 5 44.001 1 96.706 138,9 SI Border NUTS III + Osrednjeslovenska 1 .497.507 1 .519.179 50,1% 2 1.672 229.340 147.328 8 44.849 2 97.662 129,8 SI CP 2014-2020 1 .660.790 1 .693.757 50,1% 3 2.967 254.988 161.331 9 41.608 3 35.830 131,7 Slovenia total 2 .032.362 2 .080.908 50,1% 4 8.546 313.706 194.795 1.159.353 4 13.054 132,9 43,4 EU 28 513.471.676 51,1% 79.747.760 55.182.710 275.779.610 102.761.596 128,9 Source: SI-STAT, Statistik Austria. *own calculation for AT- regions, EU level and groups of border territories. Method: population aged 65+ divided by population under 15 years.

For Austria a detailed population prognosis for all regions was prepared by ÖROK.7 In the period 2018 to 2040 three regions will have negative net migration. These are Westliche Obersteiermark (-29.2 persons/1.000 inhabitants), Unterkärnten (-26.0/1.000 inhabitants) and Oberkärnten (- 24.9/1.000 inhabitants). The other regions will have positive net migration: Südburgenland (66.7/1.000 inhabitants), Klagenfurt-Villach (70,3), Graz (135,0), Östliche Obersteiermark (20,8), Oststeiermark (19.2/1.000 inhabitants) and West- und Südsteiermark (35.6/1.000 inhabitants). Depopulation trends in remote and predominantly rural regions are affected by negative natural change of population and by outmigration of mainly young and highly educated people to more dynamic regions with greater employment possibilities. In remote areas, such as Koroška, poor connectivity also adds to the issue.

7 Kleinräumige Bevölkerungsprognose für Österreich 2018 bis 2040 (ÖROK-Prognose), (2019)

Territorial and Socio-economic Analysis, Interreg SI-AT 2021-2027

Ageing trend stronger in Austria, Graz region with the lowest average age Ageing and increasing proportion of people aged 65+ is a common characteristic of the border area, however with substantial regional differences. The ageing index for Pomurska (169.1), Goriška (152.7) and Podravska (149.5) is much above the SI-national average of 132.9, while Gorenjska (127.1), Savinjska (129.3) and Osrednjeslovenska (116.1) are below average. According to own calculation, the ageing is the highest in Südburgenland (185.7) and the lowest in Oststeiermark (142.6). Östliche Obersteiermark, where the population aged 65+ is more than twice the number of population under 15 years (209.3), has the highest ageing index among analysed regions and the highest average age of 49 years. The most dynamic regions Graz and Osrednjeslovenska have the most favourable age structure, in particular Graz with the lowest average age of 40.7 years. Depopulation and ageing bring new challenges, especially to rural and remote areas Demographic projections for Slovenia until 2050 indicate that an increase in population is expected only in three regions; Osrednjeslovenska, Gorenjska and Obalno-kraška (the later not part of this analysis).8 In the Austrian regions the prognosis for population development until 2030 is negative, except the regions Graz and Klagenfurt-Villach where the total population is prognosed to increase to 116% and respectively 105% compared to 2014 (=100%). Südburgenland will remain almost stable. The highest population losses (- 7%) are predicted for Östliche Obersteiermark, Oberkärnten and Unterkärnten (93% of the 2014 value). However, the net migration of the regions by 2030 will be positive in Graz, Klagenfurt-Villach and Südburgenland, whereas strong deficits are envisaged for Oberkärnten, Unterkärnten and Westliche Obersteiermark.9 Concentration of population in urban agglomerations and differences in ageing trends between rural and urban regions are likely to increase even more in the future. Ageing of the population will affect the analysed regions in many ways. Shrinking of the active population may limit productive potential, there will be an increasing need for lifelong learning measures, social and health care needs will increase, including new services. In order to create age friendly cities and communities, age friendly housing, transport, green spaces as well as social services will need to improve, including smart technologies for independent living.

Health and health care Increased life expectancy, regional inequalities still exist. Life expectancy in Austria and Slovenia has increased since 2000. In Slovenia, life expectancy at birth was 81.2 years in 2017, increased for 5 years since 2000, which is one of the highest increases in the EU. Life expectancy gains are mainly the result of a consistent reduction in premature deaths from cardiovascular diseases and cancer although these continue to be the leading causes

8 Demografske spremembe in regionalni razvoj, ZRC SAZU, Geografski inštitut Antona Melika, page 64. 9 ÖROK-Regionalprognosen 2014 - Bevölkerung

Territorial and Socio-economic Analysis, Interreg SI-AT 2021-2027

of death. In Austria, in 2017 life expectancy at birth was 81.7 years, 3.4 years higher than in 2000. In both countries, life expectancy is above the EU average of 80.9 years, however healthy life years are below the EU average. The gender gap in life expectancy is higher in Slovenia - 5.8 years (78.2 years for men and 84 years for women) than in Austria - 4.6 years (79.4 years for men and 84.0 years for women). In 2017, Slovenians aged 65 could expect to live an additional 19.8 and Austrians 20 years, both close to EU average of 19.9 years. However, more than 12 of these years are lived with disabilities, which is above EU average of 9.9 years.10 In Slovenia, regional inequalities regarding life expectancy of men and women are most evident in Koroška and Pomurska regions. In Koroška men are expected to live 2.4 and women 1.1 year shorter than average Slovene citizen, while in Pomurska lives of men will be shorter 2.3 and of women 1.4 years than of the average Slovene citizen. Men living in Osrednjeslovenska and Gorenjska are expected live 1.1 year and women 0.6/0.7 year longer. In Austria, there are no substantial differences between regions. Health inequalities in general not only exist by region or gender, but also by socio-economic status, such as education, differences in income and living standards of inhabitants. In both countries behavioural risk factors, including dietary risks, tobacco smoking, alcohol consumption and low physical activity are major drivers of mortality. Estimates show that around 37% of all deaths in Slovenia and 40% in Austria can be attributed to these factors. One of key challenges in public health is to empower inhabitants to take over responsibility for own health and to strengthen preventive activities and to prolongate the years of healthy life. Disparities in the access to health care services. Density of doctors and hospital beds more favourable and balanced on the Austrian side. Reported unmet medical needs due to costs, distance to travel or waiting times by Austrians are close to zero, while in Slovenia the shares are above EU average and mainly driven by long waiting times. The density of primary care health centres is relatively good on both sides. Geographic disparity concerns mainly tertiary level, as hospitals are usually concentrated in urban centres (Klagenfurt, Villach, Graz, Maribor, Ljubljana), where also access to specialist services is more concentrated. Substantial differences exist when comparing the density of medical doctors per 100,000 inhabitants. Data for Austria is available at Länder level. Density of doctors in Burgenland (523), Carinthia (481) and Styria (518) are below national average of 523 (2018), however still well above the average of Slovenia (318). Osrednjeslovenska (465) is comparable to Austrian Länder, while Zasavska (187), Pomurska (252), Savinjska (264) and Goriška (272) share the lowest density rates. Within the regions, certain inner peripheries have poor access to doctors (e.g. Koroška, Goriška, Oberkärnten). The situation is similar regarding the tertiary level health care. According to density of hospital beds per 100,000 inhabitants in 2018, the average for Slovenia was 443.6 and 727 for Austria, the latter being 64% higher. According to own calculation, the highest density of hospital beds was in Graz (1302), Klagenfurt-Villach (996) and Unterkärnten (761). Density in other regions is below

10 State of health in the EU, Country Health Profile 2019 for Austria and Slovenia, European Commission.

Territorial and Socio-economic Analysis, Interreg SI-AT 2021-2027

average, the weakest in West- und Südsteiermark (336). Osrednjeslovenska (582), Podravska (532) and Goriška (530) share above average capacities in Slovenia, while the availability of hospital beds is low in Zasavska (228). Shortage of health workers at primary level affects more rural areas The shortage of health care workers is in particular problematic in primary care in rural areas and less developed parts on both sides. In Austria service availability may also decrease due to increasing numbers of physicians without SHI contracts and by a wave of retirement expected in the next 10-15 years. In Slovenia, the shortage of health workers is additionally affected by their migration to other EU countries, including Austria, where differences in the economic development and salaries make cross-border labour migrations asymmetric. Long-term care challenges The shortage of health workers may become even more critical as the ageing of population will put more pressure on health and social care services and systems. In Slovenia, comprehensive systemic solutions for long-term care are underway. Pilot projects have been initiated to test new tools, mechanisms and integrated services. Some of pilots are taking place in Koroška, Podravska and Gorenjska regions. In Austria the ageing of population, changes in the living types of the elderly population (increasing number of elderly people live in one-person households), high costs per hospitalized person make it necessary to expand substantially the home care offer for elderly people and to strengthen secondary health services (Niedergelassene Ärzte) for reducing pressure on hospitals. One of the key strategies is to enable the elderly to stay at home and live an independent and qualitative life as long as possible. Mobile home care services are provided to the elderly, e.g. assistance in daily routines of the person, help in the household, socialising. In Slovenia these services are organised by municipalities and mainly provided by social work centres and elderly homes, in Austria, mainly by social care institutions and homes for elderly. The national target in Slovenia is to provide home care to 3.5% of the population aged 65+. According to own calculation for observed regions, in 2018 home care services were most developed in Goriška (728 persons, 2.8% of target population), Zasavska (257, 2.2%), Savinjska (1,064, 2.1%) and Osrednjeslovenska (1,064, 2.1%). Podravska (976, 1.5%) and Gorenjska (646, 1.6%) are on the way to reach half of the target, while the lowest rates are achieved in Koroška (152, 1.1%) and Pomurska (280, 1.1%). Data for Austria is available at NUTS2 level.11 In 2018, mobile care services in Burgenland were provided to 6,151 users (35% increase compared to 2013), 11.597 in Carinthia (+ 4%) and 25,234 in Styria (+ 17%). In Austria, there are also increasing numbers of privately organized personal care services (24-Stunden Pflege). These services are frequently provided by non-Austrian service

11 https://www.statistik.at/web_de/statistiken/menschen_und_gesellschaft/soziales/sozialleistungen_auf_landesebene /betreuungs_und_pflegedienste/061950.html

Territorial and Socio-economic Analysis, Interreg SI-AT 2021-2027

personal, including from Slovenia. However, there is no reliable data available on this specific sector. Differences in health care systems Hindrances to health care cooperation are often caused by differences between national health care systems. The obstacles for cooperation emerge from national health care planning approaches, from an asymmetric cooperation constellation, from dysfunctions of the mandatory prior authorisation mechanism (dealing with reimbursement of costs) and from procedural problems of health insurances. At the planning level also, public health care does not incorporate a cross-border dimension sufficiently. A further issue is the difference in governance between the countries, creating asymmetric systems. Furthermore, there is relatively low awareness of public services across the border in general. This is due, at least in part, to the lack of information provided to the cross-border population, which reduces the opportunity to access to existing health care services in the neighbouring country.12 Slovenia has a mandatory social health insurance (SHI) and virtually every resident is covered under the single compulsory insurance scheme. About 95% of the population also purchase complementary Voluntary Health Insurance (VHI), mainly to cover co-payments. During economic crisis, the number of persons without health insurance increased in Slovenia for various reasons so they only became entitled to emergency medical support.13 In Austria SHI is mandatory for everyone in formal employment and self-employed. Coverage also extends to dependent family members and children up to the age of 18 or up to 27 if in full-time education. People without mandatory coverage may enrol voluntarily with one of SHI funds. In the CP SI-AT 2014-2020 programme, institutional cooperation in health sector was to some extent addressed and enhanced sharing and learning between different institutions, focusing on digitalisation, knowledge excellence and cooperation models. Further needs, which were identified through interviews, relate to the development of e-services and assisted technologies, further use and promotion of telemedicine, improving access to emergency and health services across the border, comparison of quality systems in long-term care, capacity building for informal/family carers, and other activities that can improve the quality of life of the elderly and ease the burden of family carers and education and labour market initiatives for assuring sufficient personnel in this sector and reducing disparities /imbalances leading to unintended work- migration flows.

Social inclusion Relative favourable economic developments in the years following the economic crisis resulted in the improvement of the social situation in all Slovenian regions, whereas on the Austrian side the situation has been relatively stable.

12 Border Orientation Paper Slovenia-Austria; EU DG REGIO 2019. 13 Skupaj za družbo zdravja, Resolucija o nacionalnem planu zdravstvenega varstva 2016-2025, Ministrstvo za zdravje, 2018.

Territorial and Socio-economic Analysis, Interreg SI-AT 2021-2027

Decrease of at-risk-of-poverty or social exclusion rate in Slovene regions According to Eurostat, at-risk-of-poverty or social exclusion rate14 in Styria (17.6 %) and Carinthia (17.4%) were around national level (17.5%), in Burgenland the situation was even better (14.6%). SI-STAT data show, that in Slovenia the rate dropped from 20.4% in 2014 to 16.2% in 2018. Regional disparities however still remain, with below average rates in Gorenjska (12.2%) and Osrednjeslovenska (13.4%) and above average rates in the rest of observed regions. The situation in Pomurska is most challenging (21.6%). The social situation of a person or household depends on several factors. Households with low education level, low work intensity are usually more vulnerable to the risk of poverty and exclusion as well as single parents (mainly female) with kids and elderly (especially female). In Slovenia, high risk was also identified for self-employed persons working in precarious jobs, however the highest risk among all is among the unemployed.15 Summary: Demographic changes reflect the EU and global trends. A growth of population is recorded in regions with larger urban agglomerations, depopulation is evident primarily in rural areas, where also ageing and an increase in the share of inhabitants aged 65+ is stronger. On average, people live longer than in 2000. The population ageing brings challenges for the future economic and social development of the area, including health and social care. Both sides are facing a shortage of health workers, in particular in rural areas. Favourable economic trends affected positively the social situation of households; disparities are bigger on the Slovene side.

2.3 Economic situation, competitiveness, entrepreneurship

Overall economic situation Growth of GPD p.c. with substantial disparities between countries Both countries and all observed NUTS 3 regions have been enjoying a very favourable economic environment in recent years. At the national level, Austria is still considered to be one of the richest EU Member States with Gross Domestic Product (GDP) per capita (p.c.) of EUR 43,600 in 2018, thus generating 154% of the EU average, whereas Slovenia’s GDP p.c. was EUR 22,083 in 2018, reaching 78% of the EU average. Throughout the current EU financial perspective, both countries indicate constant economic development since both recorded substantial growth in relation to the EU average (in 2013, Austria indicated 144% and Slovenia 67% of the EU average). Significant regional disparities in GDP p.c. As seen in the Table 4 and Figure 2, regions with larger urban agglomerations indicate higher levels of GDP p.c. These include especially the Austrian regions Graz (177% of the EU average in 2017), Klagenfurt-Villach (147% of the EU average in 2017) and Östliche Obersteiermark (139% of the EU average in 2017). Among the analysed Slovenian regions, only the Osrednjeslovenska region is

14 The percentage of persons who are at risk of poverty or severely materially deprived or living in households with very low work intensity. 15 Socialni položaj v Sloveniji 2018 – 2019, Inštitut RS za socialno varstvo

Territorial and Socio-economic Analysis, Interreg SI-AT 2021-2027

exceeding the EU average (110% in 2018), whereas all others remain below the EU average of GDP p.c. although they are economically stronger than in previous years.

Table 5: Gross Domestic Product (GDP) per capita (p.c.) on NUTS 3 level Gross Domestic Product (GDP) per capita (p.c.) NUTS ID NUTS 3 region 2014 2015 2016 2017 2018 AT113 Südburgenland 24.100 24.900 25.700 26.800 n.a. AT224 Oststeiermark 27.600 28.200 28.700 30.700 n.a. AT225 West- und Südsteiermark 26.800 26.900 28.100 29.000 n.a. AT213 Unterkärnten 28.900 30.000 30.600 31.500 n.a. AT211 Klagenfurt-Villach 38.400 38.700 39.100 40.800 n.a. AT221 Graz 45.500 46.100 47.700 49.300 n.a. AT223 Östliche Obersteiermark 35.300 36.700 36.100 38.500 n.a. AT226 Westliche Obersteiermark 27.900 28.000 29.700 30.900 n.a. AT212 Oberkärnten 26.300 26.000 26.800 28.000 n.a. AT Border NUTS III 30.365 30.891 31.554 33.008 n.a. AT Border NUTS III + Graz 34.860 35.441 36.428 37.967 n.a. AT CP 2014-2020 33.903 34.476 35.354 36.935 n.a. Austria total 39.000 39.900 40.900 42.100 43.600 SI031 Pomurska 12.489 12.667 13.296 14.062 14.937 SI032 Podravska 15.229 15.549 16.038 16.880 17.838 SI033 Koroška 14.631 15.319 15.866 16.681 17.885 SI034 Savinjska 16.673 17.405 17.973 19.062 19.987 SI042 Gorenjska 16.026 16.630 17.151 18.579 19.833 SI041 Osrednjeslovenska 25.940 26.540 27.681 29.273 31.169 SI035 Zasavska 10.358 10.213 10.448 10.948 11.574 SI043 Goriška 16.545 17.276 18.021 19.930 19.930 SI Border NUTS III SI Border NUTS III + Osrednjeslovenska SI CP 2014-2020 Slovenia total 18.253 18.830 19.551 20.809 22.083 EU28 avarage 26.140 26.680 27.140 27.780 28.280 Source: SI-STAT, statcube, Eurostat 2020.

Figure 2: Territorial disparities in GDP p.c. for the year 2017

Territorial and Socio-economic Analysis, Interreg SI-AT 2021-2027

Most important sectors in the creation of regional value added The processing industry is the most important sector in the creation of regional value added in all Slovenian regions is reaching 71% in Koroška and 52% in Gorenjska. Other regions have a share between 40% - 50%. In Osrednjeslovenska, the most important sectors are trade (27%), processing industry (21%) and ICT (11%).16 Austrian regions present a very diverse picture regarding the sectors generating regional value added. The production of goods is strongest in Östliche Obersteiermark (39.1%), Unterkärnten (32,9%), West- und Südsteiermark (29,6%), Westliche Obersteiermark (27.9%) and Oststeiermark (22,2%) where it is also much above the Austrian average (18.9%). In Oberkärnten Trade, Transport and Tourism is strongest (28.0%), well above national average (26%). The public administration and service sector is particularly strong in Graz (25,2%), Klagenfurt-Villach (24.9%) and Südburgenland (24.9%) where it is also well above national average (20.3%). In Oberkärnten (11.5%), Südburgenland (10.4%) and Oststeiermark (10.4%) the share of construction industry is also much above the national average (6.5%). Agriculture, forestry and fishery is present in most of the territory, but especially in Westliche Obersteiermark (4.6%), Oststeiermark (4.6%), Unterkärnten (3.7%)17, Oberkärnten (3.6%) West- und Südsteiermark (3.3%) and Südburgenland (3.2%) it is much above the Austrian average (1.3%).

SME development According to the annual reports of European SMEs, provided by the SBA Fact Sheet & Scoreboard18, SMEs make a significant contribution to the ‘non-financial business economy’ across the EU-28 Member States. In 2018, 99.8 % of all EU-28 firms were SMEs, which generated EUR 4.357 billion of added value and employed 97.7 million people. SMEs thus accounted for two thirds of the overall employment and 56.4 % of the overall value added in the ‘non-financial business economy’. Micro firms were the most common size of firm, accounting for 93.0 % of all firms in the ‘non-financial business economy’. In the period from 2014 to 2017, a steady growth in the number of persons employed in SMEs and value added by SMEs can be observed. The outlook for the EU-28 SMEs continues to be positive. In particular, growth of value added by SMEs is expected to rise by 8.5 % in 2018‒2020. SMEs in both countries are an important generator of added value and employment In Slovenia’s ‘non-financial business economy’, SMEs account for 64.5 % of added value and 72.0 % of employment, thus exceeding the EU averages of 56.4 % and 66.6 %, respectively. In 2014‒2018, the value added by Slovenian SMEs rose by 33.5 %, which is slightly more than the 30.8 % growth of large firms. In 2018‒2020, the value added by SMEs is projected to grow by 10.5 % and SMEs employment by 3.6 %, creating around 16,600 new jobs19.

16 https://www.gzs.si/Portals/SN-informacije-Pomoc/Vsebine/GG/2019/2019-september/46.pdf 17 ÖSTAT, Bruttowertschöpfung zu Herstellungspreisen nach Wirtschaftsbereichen und NUTS 3-Regionen 18 https://ec.europa.eu/growth/smes/business-friendly-environment/performance-review_sl 19 https://ec.europa.eu/docsroom/documents/38662/attachments/26/translations/en/renditions/native

Territorial and Socio-economic Analysis, Interreg SI-AT 2021-2027

SMEs also play a major role in the Austrian ‘non-financial business economy’, generating 62 % of overall value added, 5.6 % above the EU average. SMEs in the Austrian ‘non-financial business economy’ have achieved a healthy growth in terms of added value in recent years. It is expected that the growth of the Austrian SMEs will continue in 2019 and 202020. More businesses closed than newly established The observed regions in the timeframe from 2014 to 2017 on average record a slight decrease (−1 %) in the number of newly established enterprises. The greatest rise in the number of newly established enterprises is recorded in the regions of Zasavje (+24 %), West- und Südsteiermark (+15 %) and Östliche Obersteiermark (+12.4 %). On the other hand, the regions with the greatest decrease of newly established enterprises are Südburgenland (−18.7 %), Klagenfurt-Villach (−12.5 %) and Pomurje (−8.6 %). Looking at the number of enterprises that ceased to exist, the situation is less favourable. All Austrian regions are recording an increase of enterprises that ceased to exist in the period of 2014‒2018, with the highest increase recorded by Westliche Obersteiermark (+50 %), Unterkärnten and Oststeiermark (both +40 %). All Slovenian regions (with the exception of Zasavje, which is recording a slight increase, below 1 %), are recording a decrease of enterprises that ceased to exist, among which 5 regions by 30 % (Pomurje, Podravje, Koroška, Savinjska and Osrednjeslovenska). The number of newly established enterprises that survive the fifth year of operation is generally decreasing. Only 2 regions are recording an increase, namely Savinjska (+15 %) and Goriška (+1.7 %). All other regions are indicating a decrease, the highest being in Südburgenland (−32.8 %), Östliche Obersteiermark (−25.8 %) and Zasavje (−24.8 %). The growth of the number of SMEs, persons employed and added value results from a steady and favourable economic climate in the EU. This also corresponds with the financial perspective of 2014−2020, which envisaged and implemented funding opportunities for SMEs through centralised (i.e. HORIZON), decentralised (i.e. cohesion funds) and INTERREG programmes of shared management. In the first years of being on the market, SMEs face a lack of own financial resources for innovation and enhancing their presence on foreign (and global) markets. Business support environment and clusters Business support environment is relatively well developed. Business zones of regional importance are well spread over the territory. On Slovene side, there are 25 business zones of regional importance, of which 5 in Savinjska, Gorenjska and Osrednjeslovenska each with 4 and Koroška, Podravska and Pomurska each have 3, there are 2 in Goriška and 1 in Zasavska. Beside these business zones, many smaller ones of local character exist in the area. Business parks operate in many Austrian municipalities, many of them also through intermunicipal cooperation. The economic development agencies in Carinthia, Styria and Burgenland support such intermunicipal cooperation in these fields. New initiatives are also now being developed related to the new Koralmbahn such as in St. Paul im Lavanttal and in Lassnitztal at the future Bahnhof Weststeiermark.

20 https://ec.europa.eu/docsroom/documents/38662/attachments/2/translations/en/renditions/native

Territorial and Socio-economic Analysis, Interreg SI-AT 2021-2027

Figure 3: Overview of the economic area of Styria and bordering areas

Source: ÖIR, Die Steiermark im internationalen Kontext (Graz 2018) On Slovene side, the area has 4 technology parks in Goriška, Osrednjeslovenska, Podravska and Pomurska regions, incubators are available in Osrednjeslovenska, Savinjska, Koroška and Podravska, an accelerator operates in Osrednjeslovenska.21 There are several clusters active in the area. In Slovenia, the construction, wood industry, and mobility clusters are located in Osrednjeslovenska, electronics and electro industry, energy cluster has a seat in Podravska, while the toolmakers and plastics clusters are located in Savinjska. On the Austrian side clusters are in the field of automotive, wood, mechatronic, new materials and life science. Summary: Regional differences in the GDP p.c. between countries and regions in the area are considerable. For Slovenian regions, except for Osrednjeslovenska, the processing industry is still the most important sector in the structure of regional value added. The SME sector plays an important role for the regions’ economy both in terms of employment and value added. Business support environment is relatively well developed. Some sectors have clusters developed on both sides.

21 https://poslovnecone.uirs.si/sl-si/

Territorial and Socio-economic Analysis, Interreg SI-AT 2021-2027

2.4 Natural and cultural heritage and tourism Richness of natural and cultural heritage and landscapes The cross-border territory is rich in natural heritage and variety of landscape. Triglav National Park covers almost the entire Slovenian part of the Julian Alps and is the only national park in Slovenia. The biodiversity is among the highest in the Alps due to the geological composition of the soil and the mixing of the impacts of the climate between the Alps and the Mediterranean. There is the European watershed in the park running between the Adriatic and the Black Sea.22 Raab – Őrség – Goričko is a trilateral nature park managed by Slovenia, Austria and Hungary. Initiatives for the establishment of regional parks in the border area are linked to the Mura regional park, Kamniško- Savinjske Alps and Pohorje. In Austria, parts of the National Park Hohe Tauern are located in the analysed territory. NP Hohe Tauern is the largest National Park in Austria (185.600 ha) and is especially valuable for high Alpine and glacial habitats and landscapes (peaks reaching up to 3.800m altitude) and the embedded mountain pastures and valleys.23 The Biosphere Reserve Nockberge (since 2012) is the biggest in Austria covering an area of 150.000 ha, spread over the provinces of Salzburg and Carinthia. The site is extremely diverse: from marsh areas and alluvial forests in the valleys to cultivated meadows and woodland areas at intermediate altitudes, extending up to the glaciers of the alpine summit regions. A large proportion of the different types of vegetation native to both federal provinces can be found here. Cross-border areas with UNESCO designation Some areas are designated UNESCO Biosphere Reserves, being a learning places for sustainable development, sites aimed at testing interdisciplinary approaches to understanding and managing changes and interactions between social and ecological systems, including conflict prevention and management of biodiversity.24 In Austria, the lower Mura Valley was designated in 2019, the area is Austria’s second largest alluvial forest on a large river. The river landscapes and the accompanying floodplain forests are not yet represented among the ecosystem types in Austria’s biosphere reserves. The Mura River biosphere reserve in Slovenia was designated a year before and includes the largest preserved complex of floodplains in Slovenia. The Julian Alps were designated in 2003, the core and the buffer areas are determined by the Triglav National Park Act. There is a strong bottom-up initiative of municipalities within the reserve to foster sustainable development of this protected area. The Geopark Karavanke/Karawanken is the only cross border UNESCO Global Geopark in the border region, which plays an important and active role in the economic development of its territory through enhancement of a general image linked to the geological heritage and the development of geotourism. This area also established the first EGTC within the Slovenian- Austrian border area.

22 https://www.naravniparkislovenije.si/en/nature-parks/triglav-national-park 23 Nationalparks Austria (www.nationalparksaustria.at) 24 https://en.unesco.org/biosphere/about

Territorial and Socio-economic Analysis, Interreg SI-AT 2021-2027

Common cultural heritage Both sides of the border region share a common historical and cultural heritage – largely linked to their long common history over the centuries. The regions share relatively well preserved immovable cultural heritage, such as old town centres, (Ptuj, Škofja Loka, Radovljica, Kamnik, Kranj, Maribor, Celje, Ormož, Slovenska Bistrica, Slovenj Gradec, Ljubljana, Klagenfurt, Graz, Bad Radkersburg, Friesach and others), castles and mansions (Ptuj, Bled, Ljubljana, Celje, Deutschlandsberg, Eggenburg (UNESCO), Riegersburg, Hochosterwitz, Landskron …), religious heritage. An important part of the heritage is linked to traditional crafts (shoemaking, blacksmithing, pottery, lace making, …), industrial heritage (e.g. ironworks), traditional rural architecture, customs, and others. Both types of heritage are also an inspiration to various tourist products. Both sides have some of the intangible cultural heritage also listed in the UNESCO register, such as bobin lacemaking in Idrija, door-to-door rounds of Kurenti, Škofja Loka passion play, whereas regional centres of craftsmanship, Schemenlaufen and others are listed in Austria. Cultural heritage is an important element of the identity of the area. Slovenian register of cultural heritage includes 22,449 units from the analysed area, which represents 77% of all registered units in the country. Cultural heritage has potential to contribute to the sustainable development of the area. The immovable heritage however often requires substantial investments and is faced with scarcity of available funding, what increases the threat for its loss. The area is known for its local/regional food products, many of them are branded. The network of cultural institutions, organisations and associations is strong in the area, and they provide rich cultural life. Regions host a range of different cultural events and festivals celebrating music, regional gastronomy, ethnology, performance and visual arts, etc. Many of them are recognised internationally. Graz (2003) and Maribor (2012) were nominated for European Cultural Capitals, among shortlisted cities from the border regions for the year 2025 are Ljubljana, Nova Gorica and Ptuj. The area also has a good density of museums and libraries, as well as community and cultural centres, the concentration is higher in urban centres, however, rural areas are not neglected. Growing tourism trends within distinct destinations Tourism is an important economic activity in the border area, stretching from Alpine mountain regions in the west and north to the hilly countryside with chains of long-drawn hills in the Burgenland-Styrian-Slovenian border in the east. Most part of Pomurska, part of Podravska and Südburgenland form the Pannonian plain. The variety of landscapes is reflected also in main tourism products. Growth in the overnight stays has been recorded for about a decade on both sides. In Austria, mountain tourism, lakes, winter and rural tourism are key tourist products in the western, mountainous part of the area, which is also one of the main tourist destinations in Austria. In 2017, the largest number of overnight stays was generated in Oberkärnten (6.6 million), of which Spittal and der Drau had 3.9 million. Klagenfurt-Villach area recorded 4.4 million overnights, of which 1.9 million were in Villach-Land. In the eastern part, Oststeiermark is generating 3 million overnight stays, followed by Graz with 1.8 million and Westliche

Territorial and Socio-economic Analysis, Interreg SI-AT 2021-2027

Obersteiermark with 1.5 million overnight stays. In Südburgenland, (1 million overnight stays) almost 0.6 million were generated in Oberwart. Main tourist products in the eastern part are linked to wellness (thermal spas), wine, food and rural tourism, cycling, city and culture. 25 Slovenia comprises four macro destinations with distinct tourist products, of which the observed regions include three:26, 27 - Alpine Slovenia, which in 2019 generated 2.2 million arrivals and 5.4 million overnight stays, of which 1.8 million in Bled, builds on mountain holidays, sport tourism, outdoor and business events. Lead destinations include Bled, Kranjska Gora, Soča valley, Maribor (Pohorje), Koroška ... - Thermal Pannonian Slovenia with 1.2 million arrivals and 3.7 million overnight stays builds on wellness, gastronomy and rural tourism, its leading destinations include Pomurje, Ptuj, Šaleška dolina …. - Ljubljana and Central Slovenia generated 1.4 million arrivals and 2.8 million overnight stays, of which 2.2 million in Ljubljana, its main products include business tourism, city & culture, circular tours and gastronomy. Sustainable tourism is an important CBC theme Tourism has already been recognised as one of the key cooperation areas in the previous cross- border cooperation programmes, with a range of common tourist products supported linked to valorisation of natural and cultural heritage. As learned from interviews, many of these products are rather fragmented. The Drava cycling route is an example of cross-border tourism infrastructure, which connects five countries. The route starts at Dobbiaco/Toblach in South Tirol, near the spring of Drava in Italy and follows the river across Austria to Slovenia, connects there Drauradweg and Dravska kolesarska pot and continues to Croatia. Another cross-border tourist product is Geopark Karavanke/Karawanken. Since March 2013 the Geopark has been a member of the European (EGN) and since 2015 of the Global (GGN) Geoparks Network supported by UNESCO. Its thematic expertise relates to development of sustainable tourism that conserves and additionally strengthens the geological and geographical character of the area, integrates its natural and cultural heritage and the well-being of the local population. The Geopark has been supported in the development of tourist offers also by the current Interreg programme SI-AT 2014-2020. The actors in the territory are aware of the importance of balancing the protection of the natural and cultural heritage and providing sustainable job opportunities for local businesses and farmers. Sustainable tourism is an important driver for promotion of diverse regional and local products and thus preserving and maintain the cultural identity and landscapes of the area as well as preservation of agriculture, especially in high mountain areas. In terms of cross-border tourism,

25 Source: Statistik Austria, 2017. 26 Slovenian sustainable tourism growth strategy 2017- 2021. 27 Tourism in numbers 2019, STO.

Territorial and Socio-economic Analysis, Interreg SI-AT 2021-2027

sustainable regional mobility is another important aspect (harmonised timetables for rail and bus connections, adapting to the needs of bikers, linking of the cycling and walking routes). Themes for sustainable tourism development considered for cross-border cooperation relate to nature and culture based sustainable tourism products, the creation of multi-facetted mountain and lake experiences, wellness, culture and culinary as well as active nature/outdoor experiences. Global trends affecting tourism in the area Tourism is a global phenomenon and there are many factors affecting its development. Europe has been the most visited destination in the world in 2015, there are growing trends of specific tourist segments of which population born between 1984 and 2000 are to comprise 50% of all passengers travelling to explore, interact and experience by 2025; “golden oldies” are estimated to represent 20% of the world population. On the other hand, there are growing challenges for tourism. Climate changes in the tourism sector are showing its effects in particular in winter tourism and ski centres. Recent COVID-19 pandemics has already largely affected the sector in its entire value chain (travels, accommodation, entertainment, ...). Effects of health measures have strongly hit also the analysed territory with closing of borders, limiting capacities in accommodation, gastronomy, etc. Summary: Rich natural and cultural heritage and diversity of landscapes of the analysed area are one of its key features and potentials. Parts of the territory are under special protection regimes (natural parks, regional parks, biosphere reserves, protected cultural heritage) and are important elements of the areas’ cultural identity and tourism. The area has some distinct tourism destinations and products (mountain/alpine, cities, wellness/gastronomy, rural tourism). Sustainable tourism has already been recognised as one of key themes in the previous CBC programmes and contributed to development of some CB offers. Tourism in both Alpine and Pannonian parts of the analysed territory faces several common challenges on both sides.

2.5 Labour market EU 2020 Strategy employment targets not yet met in all regions One of the main targets of the EU 2020 strategy is to raise, by the year 2020, the employment rate of the population aged 20-64 to at least 75 %. Slovenia and Austria already achieved the target. Since 2014, employment in Slovenia was increasing in all regions. In 2019, the highest employments rates were recorded in Goriška (78.8%), Gorenjska (78.6) and Osrednjeslovenska (78.3%). Four regions, Pomurska, Koroška, Savinjska and Zasavska have not reached the EU target yet. In Austria, the regions Burgenland (75.2 %) and Carinthia (75%) reached the objective, while Styria (74.4%) was slightly lagging behind in 2018. In general, the employment rate among women is about 10-15 % lower for women then for men (Austria: 81.8% men, 72.3% women).

Territorial and Socio-economic Analysis, Interreg SI-AT 2021-2027

Table 6: Employment rate of population aged 20-64 Employment rate of population aged 20-64* NUTS ID NUTS 3 region 2014 2015 2016 2017 2018 2019 AT113 Südburgenland AT224 Oststeiermark 67,4 67,2 66,9 66,6 66,2 n.a. AT225 West- und Südsteiermark 67,4 67,2 67,0 66,7 66,5 n.a. AT213 Unterkärnten 65,9 65,7 65,5 65,2 64,9 n.a. AT211 Klagenfurt-Villach 66,7 66,5 66,3 66,0 65,7 n.a. AT221 Graz 69,2 69,2 69,2 69,1 68,9 n.a. AT223 Östliche Obersteiermark 64,1 64,0 63,8 63,6 63,3 n.a. AT226 Westliche Obersteiermark 65,1 64,9 64,8 64,5 64,3 n.a. AT212 Oberkärnten 65,4 65,1 64,9 64,6 64,3 n.a. Austria total 74,2 74,3 74,8 75,4 76,2 77,1 SI031 Pomurje 63,9 65,6 67,6 69,9 70,6 72,7 SI032 Podravje 65,8 67,6 68,3 71,8 73,5 75,6 SI033 Koroška 65,4 67,5 70,2 75,1 74,8 73,5 SI034 Savinjska 66,8 68,0 67,8 73,4 75,2 74,9 SI042 Gorenjska 71,9 72,3 71,7 74,2 78,7 78,6 SI041 Osrednjeslovenska 70,1 71,4 72,6 75,2 77,3 78,3 SI035 Zasavje 60,7 62,9 64,9 70,8 73,7 74,1 SI043 Goriška 71,3 71,3 72,5 73,3 77,0 78,8 Slovenia total 6 7,7 6 9,1 70,1 73,4 75,4 76,4 EU28 avarage 69,2 70,1 71,1 72,2 73,2 Data sources: SI-STAT, WIBIS, ZRSZ, Eurostat, own calculation for groups of border territories. Data for Styria and Carinthia include population aged 15-64.

In most Slovenian regions, the largest proportion of jobs generated in processing industry Table 7 indicates the employment per sector of economy in observed regions in 2018 according the NACE28 classification. In Austrian regions, sectors of public administration, defence, education, human health and social work, art, entertainment, recreation and other services and activities of households (OPQRT) employ the biggest share of employees. On the second place are (apart of the region of Östliche Obersteiermark) sectors of trade, transport, accommodation, food service, information and communication (GHIJ). In Slovenia, in all regions apart from Osrednjeslovenska most employees work in manufacturing, mining and other industries (BCDE). This sector is of particular importance for Koroška as it creates 47% of all employments, followed by Savinjska and Gorenjska (37%), Goriška and Zasavska (34%) and Podravska and Östliche Obersteiermark (28%). In this aspect, the region of Östliche Obersteiermark has the structure more similar to Slovenian regions, while region of Osrednjeslovenska indicates a structure closer to Austrian regions, in which services (including tourism) and public administration generate around 50% of employment. The largest share of employments in service sector within a region is generated in Klagenfurt-Villach (29%) and Östliche Obersteiermark (28%). There is significant difference in the importance of agriculture, forestry and fishery for employment in directly

28 NACE is the statistical classification of economic activities in the European Community (Nomenclature statistique des des activités économiques dans la Communauté européenne

Territorial and Socio-economic Analysis, Interreg SI-AT 2021-2027

bordering regions; in Austria this sector contributes 10% of all employments, whereas in Slovenia less than 1%. Recent positive economic trends however also indicate shortage of skilled workers on both sides of the border, in particular in the processing industry, tourism, health and social care.

Table 7: Number of employed per sector of economy, 2018

Number of employed per sector of economy (NACE classification), 2018

KLMN - Financial and insurance OPQRT - public activites, real administration, estate, defence, education, professional, human health and GHIJ - Trade, scientific, social work, art, BCDE - transport, technical, entertainment, A - Agriculture Manufacturing, accomodation, food administrative recreation, other and forestry and mining and other service, information and support services and activities NUTS ID NUTS 3 region Total fishery industtries and communication service activities of households AT113 Südburgenland 42.100 3.400 5 .900 1 1.500 4.500 12.700 AT224 Oststeiermark 130.600 20.000 2 5.100 3 3.000 13.600 27.500 AT225 West- und Südsteiermark 82.500 10.600 1 7.800 1 9.900 8.300 19.000 AT213 Unterkärnten 68.300 9.200 1 5.700 1 5.900 7.500 15.100 AT211 Klagenfurt-Villach 157.500 5.600 1 9.600 4 5.200 27.800 50.500 AT221 Graz 282.400 6.200 3 7.500 7 1.000 60.200 92.400 AT223 Östliche Obersteiermark 75.000 3.600 2 1.000 1 7.700 8.100 20.600 AT226 Westliche Obersteiermark 46.100 4.900 1 0.000 1 1.300 4.000 13.000 AT212 Oberkärnten 53.700 6.500 7 .100 1 6.800 5.500 12.700 AT Border NUTS III 481.000 48.800 8 4.100 1 25.500 61.700 124.800 AT Border NUTS III + Graz 763.400 55.000 1 21.600 1 96.500 121.900 217.200 AT CP 2014-2020 938.200 70.000 1 59.700 2 42.300 139.500 263.500 Austria total 4 .668.000 218.200 7 01.300 1.351.300 779.700 1 .314.200 SI031 Pomurska 33.349 805 1 0.198 7 .420 2.205 9.246 SI032 Podravska 116.252 868 3 2.139 2 7.600 18.050 28.967 SI033 Koroška 23.255 171 1 0.980 4 .190 1.543 5.203 SI034 Savinjska 98.200 502 3 6.542 2 4.930 9.012 19.111 SI042 Gorenjska 70.524 416 2 6.198 1 8.877 5.951 14.540 SI041 Osrednjeslovenska 293.647 566 4 4.788 8 6.144 64.979 80.857 SI035 Zasavska 12.946 15 4 .413 2 .513 1.515 3.358 SI043 Goriška 42.057 455 1 4.096 9 .148 3.746 11.755 SI Border NUTS III 341.580 2.762 1 16.057 8 3.017 36.761 77.067 SI Border NUTS III + Osrednjeslovenska 635.227 3.328 1 60.845 1 69.161 101.740 157.924 SI CP 2014-2020 690.230 3.798 1 79.354 1 80.822 107.001 173.037 Slovenia total 826.060 5.090 2 22.583 2 15.583 123.342 204.349 Source: Statistik Austria, SI-STAT, June 2020.

Interregional mobility of workers towards larger employment centres There is a common trend of labour mobility towards larger employment centres. Osrednjeslovenska is one of the main employment centres in Slovenia and is also the only region with more workplaces than active working population. In 2019, the labour mobility index for Osrednjeslovenska was 127.9; it was relatively high in Podravska (96.9), Savinjska (95.6) and Goriška (95.3), moderate in Pomurska (91.0), Koroška (87.8) and Gorenjska (85.6) and the lowest in Zasavska (59.0). More than half of the working population in Zasavska work outside the region (52.5%). This share is high also for Gorenjska (27.4%), which is well connected to Osrednjeslovenska; in other regions the share ranges between 16% and 20%. In 2018, Osrednjeslovenska attracted over 62,000 commuters from analysed regions, the larger number from Gorenjska (21,352). Despite remoteness, 1,700 commuters were from Koroška region. In Austria the main employment centres with the highest commuter quota (share of commuters

Territorial and Socio-economic Analysis, Interreg SI-AT 2021-2027

commuting into active employment at the place of work) in Styria at the district level in 2016 was Graz Umgebung, (with 74.4%), followed by Weiz (61.7%) and Leibnitz (61.5%). The lowest was Murau with 46.2%. Regarding municipalities these were in Styria besides Graz with 83,496 commuters, Leoben (9,821), Weiz (8,322), Kapfenberg (7,708), Seiersberg-Pirka (6,208) and Bruck an der Mur (5,470).29 Graz, attracts workers not only from the Land Steiermark, but also from Podravska and Pomurska regions in Slovenia. In the western part, the main employment centres are Klagenfurt and Villach. Asymmetric cross-border labour mobility, lack of data Data for Slovenia shows that about 4,100 workers from abroad worked in Slovenia in 2019, mainly from Croatia and Italy. The Slovenian labour market is less attractive for Austrian citizens, only 65 were commuting to Slovenia in the same year.30 According to an estimate of the Union of migrant workers of Slovenia, around 25,000 Slovene citizens work in Austria, mainly in the processing industry, construction and tourism sector.31 Commuting to Austria is by estimates most present in Pomurska, Podravska and Koroška.32 Data on cross-border mobility is not easily accessible and is not systematically analysed. High wage differences are estimated to be one of the main drivers of labour commuting from Slovenia to Austria. There are many administrative issues linked to working abroad that affect commuters and their families, such as taxation, health insurance and access to reliable information for commuters is of great importance. Additional obstacles emerge from different education systems and recognition of the level of skills attained. As there is no automatic data exchange between employment offices across the border, it may take a while for a person ending employment in Austria before he/she can actually claim the unemployment benefits in Slovenia. A need for more frequent exchange on the situation and forecasts on the labour market was identified in interviews. Substantial gaps in net earnings between countries In the period 2014-2018, net earnings increased on both sides. The increase in Burgenland was 12% and 13% in Carinthia and Styria, all above the national average of 11%. In 2018, the yearly net income in Carinthia reached 98% (22,825 Euro) of the national average (23,309 Euro), in Styria 99% (23,025 Euro), in Burgenland it was above average by 4.7% (24,417 Euro). Differentiated by Bezirke in Carinthia, Klagenfurt Land (24,167 Euro), Klagenfurt Stadt (23,552 Euro) and Villach (23,324 Euro are above average whereas Hermagor (21,056 Euro) and Spittal/Drau (21,376 Euro) are lagging behind. In Styria, Graz Umgebung (25,239 Euro), Bruck-Mürzzuschlag (24,333 Euro) and Leoben (24,152 Euro) are above average and all other districts are around or only slightly below average. District Jennersdorf (22,609 Euro) in Burgenland is most lagging behind the county average.

29 Landesstatistik Steiermark (2016) 30 https://www.stat.si/StatWeb/News/Index/8726 31 https://vestnik.si/clanek/aktualno/pomurci-na-delu-v-avstriji-kaj-jih-caka-767010 32 Recent study carried out under Interreg Central Europe Transborders project estimated that around 2,000 workers from Koroška commute to Austria, mainly to Carinthia, in 2017.

Territorial and Socio-economic Analysis, Interreg SI-AT 2021-2027

In the same period, monthly net earnings in Slovenia increased by 9%, with above average growth in Koroška (11%) and Pomurska (10%). In 2018, monthly net earnings were above average only in Osrednjeslovenska by 8.4% (1,185 Euro), whereas in Zasavska and Pomurska they lag behind the average by 10% and 9% respectively, indicating relatively large regional disparities. In the industry, construction and services sector the wages and salaries are 75% higher in Austria than in Slovenia, and the labour cost are around twice as high.33 The growth rates in the observed period are smaller in Slovenia, which does not lead to the closing of the gap in net earnings, which are one of the important factors for asymmetric cross-border labour mobility. Most noticeable is the gender pay gap in incomes. E.g. men in Steiermark have 118% (27,263 Euro) of the average net income whereas women only 79% (18,165 Euro). Approximately the same ration applies to all regions. This difference has strong reasons in lower salaries in the sectors with predominant female workforce and a much higher percentage of part time employment. However, when comparing salaries on full time employment base this difference is still 26% men earning more than women.34 A period of decrease in unemployment in 2014-2019 With the increased employment in the period 2014-2019, the unemployment rates have decreased in both countries. Below national average unemployment rates were recorded in Oststeiermark, West- und Südsteiermark and Westliche Obersteiermark, Gorenjska, Osrednjeslovenska and Goriška. Decrease was more significant on the Slovene side, with unemployment rates being higher than in Austria in 2014 and lower in 2019; e.g. Koroška recorded one of the largest decreases, from 12.2% to only 3.2%, however the rate in 2019 increased again to 5.4%. Looking at some structural characteristics of unemployment, the main findings are:35 - Long-term unemployment – the share of persons who are unemployed for 12 months or more, is around 40%, with the highest rates recorded in Pomurska (48%) and Osrednjeslovenska (47%) and the lowest in Gorenjska (27%). Being away from the labour market for a longer time is a particular challenge and often requires additional motivation and activation measures. - Higher shares of unemployed with lowest levels of education attainment – the share of persons with completed primary school or less is in many regions double the share of persons with high school education levels; this gap is the largest in Pomurska (36%, 13%) and smallest in Osrednjeslovenska (28%, 20%). The share of low employed with the lowest education levels is decreasing the employment structures, and lifelong learning measures are becoming even more important for this target group.

- Young up to 29 years and persons aged 55+ account for close to half of all unemployed, young unemployed account between 18% (Osrednjeslovenska) and 24% (Koroška); the

33 Border Orientation Paper Slovenia-Austria; EU DG REGIO 2019. 34 AMS, 2020 35 Data for May 2020, Employment service of Slovenia

Territorial and Socio-economic Analysis, Interreg SI-AT 2021-2027

share of unemployed aged 55+ is the highest in Pomurska (27%) and lowest in Koroška and Podravska (23%).

Table 8: Unemployment rate Unemployment rate NUTS ID NUTS 3 Region 2014 2015 2016 2017 2018 2019 AT113 Südburgenland 9,5 10,1 10,2 9,2 8,1 7,7 AT224 Oststeiermark 6,6 6,7 6,7 5,9 5,1 4,8 AT225 West- und Südsteiermark 7,9 8,4 8,0 6,9 5,8 5,6 AT213 Unterkärnten 9,6 9,6 9,5 8,8 7,8 7,4 AT211 Klagenfurt-Villach 10,9 11,6 11,5 10,8 9,8 9,4 AT221 Graz 9,5 10,1 10,1 9,2 7,8 7,5 AT223 Östliche Obersteiermark 7,4 7,7 7,8 6,9 6,1 6,0 AT226 Westliche Obersteiermark 7,7 8,0 7,9 7,2 6,4 6,1 AT212 Oberkärnten 11,0 11,1 10,6 9,8 9,0 8,6 AT Border NUTS III 8,8 9,2 9,1 8,3 7,3 7,0 AT Border NUTS III + Graz 9,0 9,5 9,4 8,5 7,4 7,1 AT CP 2014-2020 8,9 9,3 9,3 8,4 7,4 7,1 Austria total 8,4 9,1 9,1 8,5 7,7 7,4 SI031 Pomurje 13,1 12,5 10,8 9,6 9,2 7,1 SI032 Podravje 12,0 11,0 9,0 7,2 5,8 5,1 SI033 Koroška 12,2 9,7 7,4 4,3 3,2 5,4 SI034 Savinjska 11,0 10,4 9,3 6,8 5,5 4,4 SI042 Gorenjska 6,4 6,9 6,1 5,7 3,9 3,1 SI041 Osrednjeslovenska 7 ,7 7 ,3 6,5 6,2 4,9 4,5 SI035 Zasavje 1 1,5 1 0,8 10,8 6,7 4,8 6,0 SI043 Goriška 8 ,5 7 ,7 7,1 6,4 4,1 3,5 SI Border NUTS III 10,9 10,1 8,5 6,7 5,5 5,0 SI Border NUTS III + Osrednjeslovenska 1 0,4 9 ,6 8,2 6,6 5,4 4,9 SI CP 2014-2020 1 0,3 9 ,5 8,4 6,6 5,2 4,9 Slovenia total 9 ,7 9 ,0 8,0 6,6 5,1 4,5 EU28 avarage 10,2 9,4 8,6 7,6 6,8 n.a. Sources: SI-STAT, AMS, ZRSZ, Eurostat, own calculation for groups of border territories.

COVID-19 pandemic changed favourable employment trends The COVID-19 pandemic is likely to affect several-year trend in falling unemployment figures. The Slovenian Employment Service reported increasing numbers of unemployed already in March 2020, in April 2020 the unemployment increased for 20% compared to April 2019. The highest increase of unemployed persons compared to the previous year was recorded in regional offices in Kranj (37.3%) and Ptuj (33.5%).36 Recent data shows some improvement of the situation in May 2020. The labour market in the Austrian part is also severely affected with unemployment figures more than doubling. Most affected are regions in Carinthia with an increase of the unemployment average and scores almost tripled (unemployment in e.g. districts Spittal/Drau 18,5%, Villach and Völkermarkt 16,1% Klagenfurt, Hermagor and Feldkirchen was over 14%). Also, in Styria and Burgenland figures rose to over 11% - 12%, which was higher than the average of the Länder and also the national average. Generally rural areas were most affected and tourism and hospitality

36 Source: https://www.ess.gov.si/_files/13290/Trg_dela_april_%202020.pdf

Territorial and Socio-economic Analysis, Interreg SI-AT 2021-2027

sector. Both countries introduced preventive measures, however, actual effects of the COVID will be visible in a longer term. Summary: Recent economic growth resulted in positive employment trends and reduced unemployment. Some sectors suffer from shortage of skilled workers (e.g. processing industry, tourism, construction, health and social care). Long-term unemployed, low-skilled and older workers prevail in the structure of unemployed. Shortage of jobs for highly educated workforce in rural areas contributes to migration to big employment centres. Significant gaps in the net earnings of the labour are drivers of asymmetric trends and cross-border commuting from Slovenia to Austria. Needs for improved exchange of labour market data and trends were identified. COVID-19 pandemics already resulted in the increase of the number of unemployed, however the effects supported by preventive measures will be seen.

2.6 Knowledge society, digitalisation

Education The level of education in the border region in general is high, although there are distinct disparities between the countries, showing a more favourable education structure on Austrian side.

Table 9: Education structure levels Education level, 2019 ALL LEVELS Primary education Secondary education Tertiary education Basic education/ Technical and general incomplete basic Vocational upper upper secondary Higher education Higher education Total education secondary education education 1st level 2nd and 3rd level NUTS ID NUTS 3 region ISCED 0-2 ISCED 34 ISCED 35+45 ISCED 5 ISCED 6-8 AT113 Südburgenland 53.533 20% 4% 52% 16% 8% AT224 Oststeiermark 148.909 18% 3% 58% 15% 7% AT225 West- und Südsteiermark 109.472 17% 3% 57% 15% 7% AT213 Unterkärnten 81.780 15% 3% 56% 17% 8% AT211 Klagenfurt-Villach 159.730 15% 5% 47% 16% 16%

AT221 Graz 247.077 16% 8% 37% 14% 25%

AT223 Östliche Obersteiermark 85.499 17% 4% 56% 15% 9% AT226 Westliche Obersteiermark 54.405 17% 3% 59% 15% 7% AT212 Oberkärnten 67.077 13% 3% 59% 16% 8% AT Border NUTS III 553.424 17% 4% 54% 16% 10% AT Border NUTS III + Graz 800.501 16% 5% 49% 15% 15% AT CP 2014-2020 1.007.482 16% 5% 50% 15% 13% Austria total 4.903.139 19% 6% 46% 15% 15% SI031 Pomurska 99.083 31% 24% 28% 9% 8% SI032 Podravska 279.353 22% 24% 32% 11% 11% SI033 Koroška 60.370 25% 28% 28% 10% 9% SI034 Savinjska 217.588 25% 26% 28% 11% 10% SI042 Gorenjska 171.992 22% 22% 31% 12% 13% SI041 Osrednjeslovenska 461.453 19% 18% 32% 13% 19% SI035 Zasavska 48.755 26% 24% 30% 11% 9% SI043 Goriška 100.175 26% 23% 28% 11% 12% SI Border NUTS III 828.386 24% 25% 30% 11% 11% SI Border NUTS III + Osrednjeslovenska 1.289.839 22% 22% 31% 11% 14% SI CP 2014-2020 1.438.769 23% 22% 30% 11% 13% Slovenia total 1.767.202 23% 23% 30% 11% 13% Source: SI-STAT, ÖSTAT37

37 Statistik Austria „Bildungsstand (ISCED 2011) der Bevölkerung im Alter von 25 bis 64 Jahren 2017 nach politischem Bezirk“

Territorial and Socio-economic Analysis, Interreg SI-AT 2021-2027

The share of population with basic or incomplete education in Slovenia is higher than the EU average and the Austrian regions perform around EU average levels. The share of people with tertiary education level as well as with technical and general upper secondary education in Austria is higher than in Slovenia. However, the region of South Austria is lagging behind both Austrian and EU average in the field of tertiary education. Tertiary educational attainment in Slovenia is high, but the difference between men and women and the native-born and foreign-born population are large. The difference between the tertiary attainment of women and men is the largest in the EU (56.3% as compared to 31.6%). There is also a very big difference between the native-born (45.3%) and foreign-born population (22.1%), and even more so for foreign-born people from non-EU countries (only 12.9%).38 Tertiary educational attainment above country levels in urban agglomerations Differentiating this picture by regions it shows, that the regions with urban agglomerations (Graz, Ljubljana and Klagenfurt-Villach) have a high share of people with tertiary level education, much higher than the rest of the regions and also compared with the national averages. It has to be noted as well that in the Austrian regions (apart from Graz), there is a high number of people with technical and general upper secondary education. The scores for Higher Education and Lifelong Learning show that the two Slovenian NUTS 2 regions surpass the EU average value, Burgenland is below the EU average, Carinthia is around the EU average, and Styria is slightly higher than the EU average. In this relatively small area, there is a good offer of higher education and universities. There are 9 Universities and 5 Universities of Applied Sciences in the area offering a wide range of programmes. The universities are located in Graz (4 universities), Klagenfurt (2 universities), Leoben, Ljubljana, Maribor.39 The 5 Universities of applied science have decentralized faculties in 11 towns in the area.40 Tertiary education programmes support smart specialisation Special focus on the Austrian side is on studies and educational courses in technical sciences, thus being in line with the thematic competences of the region and the strategic orientation of this part of the region seeking to be among the European leaders in the area of materials technologies, mechanical engineering, digital technologies, mechatronic and life sciences. The Universities of Ljubljana, Maribor and Nova Gorica offer a wide range of studies, from life sciences, engineering (electrical, mechanical, wood science …) manufacturing, construction,

https://www.statistik.at/web_de/statistiken/menschen_und_gesellschaft/bildung/bildungsstand_der_bevoelkerung/ 121197.html 38 Education and training monitor 2019, Country Analysis, EC. 39 Universities: Gustav Mahler Privatuniversität für Musik (Klagenfurt), Alpen-Adria-Universität Klagenfurt, Universität für Musik und darstellende Kunst Graz, Medizinische Universität Graz, Technische Universität Graz, Karl-Franzens- Universität Graz, Montanuniversität Leoben, Univerza v Ljubljani (with locations in Ljubljana and Portorož), Univerza v Mariboru. 40 Universities of Applied Sciences: Fachhochschule Burgenland (with locations in Eisenstadt and Pinkafeld), Fachhochschule Joanneum (with locations in Graz, Kapfenberg, Bad Gleichenberg), Campus 02 -Fachhochschule der Wirtschaft (Graz), Fachhochschule Kärnten (with locations in Spittal, Villach, Klagenfurt and Feldkirchen), University of Nova Goricia (with locations in Nova Gorica, Gorizia (Italy), Vipava and Ajdovščina).

Territorial and Socio-economic Analysis, Interreg SI-AT 2021-2027

logistics, tourism, business, agriculture and forestry, health and welfare, education and services, arts and humanities. Besides public, there are also private educational institutions, of which the Faculty of Polymer Technology in Koroška region is an important partner in the field of new materials and technologies. Importance of matching education with the needs of the regional labour markets Some regions in Slovenia have a less favourable educational structure. This is partly due to their economies focused on agriculture (Pomurska) and traditional industries (Koroška, partly Savinjska). The highest share of population with completed only basic education or less is recorded in Pomurska region (31%). There is also a substantial difference in the vocational education levels; in Slovenia the share of persons with completed short-term vocational education is relatively high compared to Austria. In 2019, Slovenia received from the Council of the EU a country-specific recommendation to ‘Increase the employability of low-skilled and older workers by improving labour market relevance of education and training, lifelong learning and activation measures, including through better digital literacy.’ (Council of the EU, 2019). The quality of the education sector and its interaction with the needs of the labour market and business sector is essential. The qualification structure indicates a high potential in population and employees in the core areas on both sides of the border. There is a key potential of human resources for joint strategies to increase the quality of vocational training in cooperation with employers and for the integration of rural and industrial areas in the development of the cross- border region. In Austria, secondary education is parallel to the ordinary secondary school system also a dual education system for young people that seek to start working after the 9th year of elementary school education. This combines theoretical vocational teaching at schools with practical teaching and experiences in their competences within the companies. Following the adoption of Apprenticeship Act in 2017, Slovenia continues strengthening apprenticeships and increased their number in 2018-2019. Vocational upper secondary education projects were supported by the current Operational Programme 2014-2020. Austria is internationally leading with students in vocational training41. However, in terms of vocational qualifications, women in Austria attend shorter and cheaper programmes than their male colleagues. Companies mainly invest in highly qualified male employees and workers. Women have fewer opportunities for vocational qualification due to less working time, horizontal segregation and less flexibility and mobility. In spite of this favourable framework a skills gap remains between the skills attained at schools and the needs of the Austrian Business sector and there is a substantial lack of skilled local workforce especially in the Styrian and Carinthian technical production-oriented companies.

41 OECD: Education at a glance, 2019

Territorial and Socio-economic Analysis, Interreg SI-AT 2021-2027

Continuous need for lifelong learning and improving of digital skills Developing relevant skills and using them more effectively will be essential as productivity and innovation become the primary drivers of higher living standards in the future. Certain jobs will require upskilling and re-training in the future, in particular regarding new green technologies and the development of digital society. Digital skills are below the EU-average in Slovenia. Digital skills of employed people aged 25-64 years are slightly below the EU average, as are the percentages of individuals aged 16-74 who regularly use the internet (79% compared to 83%) or have basic or above basic digital skills. According to the Education and training monitor 2019, improving of digital competencies is also priority in the Austrian education and training systems. Participation in adult learning in Austria is slightly above EU-average, however the need for upskilling remains. European skills agenda42 emphasises that the EU needs a paradigm-shift on skills that drive green and digital transitions and ensure recovery from the socio-economic impact of the COVID-19 pandemic. In this respect, LLL must become a reality for all; learning throughout life and skilling for a job should be the guiding principles. Suitable density of educational institutions across the area, needs for further investments Both countries have well developed primary level educational networks. The secondary school system is well developed in both countries; the density of schools in the area is also adequate. The majority of the secondary schools are located in bigger urban centres where the offer of programmes is usually wider than in smaller towns, where these programmes mainly focus on the needs of local/regional economies. Several schools (Bad Radkersburg, Völkermarkt, Klagenfurt) on the Austrian side are offering bilingual classes and also students from Slovenia are attending these schools. Some schools already got experience in cross-border cooperation, either within Erasmus or Interreg programmes. There are strong cooperation ties between agricultural schools, as well as between general upper secondary education schools. Due to migration the school population is becoming increasingly heterogeneous in Austria, challenges are identified also in Slovenian schools, due to work migration of families from the Western Balkan countries. Slovenia invests more in education and training than the EU-average, even though spending was cut during economic downturn. In 2017, Slovenia spent 5.4% of is GDP on education, compared to the EU average of 4.6%. Education sector suffered the largest public spending cuts, from which it has still not recovered, with decreases falling most heavily on the secondary and tertiary education sectors, though tertiary education spending has started to recover in the last 3 years. In Austria, more investment is required in all-day schools, digitalisation and to meet the challenges of a more complex teaching environment.43

42 European skills agenda for sustainable competitiveness, social fairness and resilience, EC, June 2020. 43 Education and training monitor 2019, Country Analysis, EC.

Territorial and Socio-economic Analysis, Interreg SI-AT 2021-2027

Innovation Austria, including the bordering NUTS 3 regions are considered strong innovators (Innovation index 128) whereas Slovenia and its border regions are among the group of moderate innovators (Innovation index 92) in their overall performance according to European Innovation Scoreboard 2020. Austria ranked as top performer in innovation linkages and collaboration and 3rd in Innovation in small and medium-sized enterprises. Slovenia has shown a decline in innovation performance since 2012.44

Figure 4: Innovation index

According to the Regional Innovation Scorecard (RIS), all border regions in Austria and the region of West Slovenia have an innovation performance above the EU average (East Slovenia being moderate innovator). In terms of the proportion of GDP in gross expenditure on research and development, the regions of East and West Slovenia and Carinthia a mid- level of R&D intensity (1%-3% of GDP), while Burgenland has a low share with only 0.5-1% of GDP. Only Styria is above the EU target of 3% of GDP (4,3%). The ESPON Territorial Review has qualified the border regions as follows: East Slovenia is categorised as ‘Less competitive with low incidence of Knowledge Economy (KE)’, while West Slovenia is categorised as ‘Less competitive with potential in KE’; Carinthia and Styria are both ‘Competitive and KE related economies’; Burgenland is a ‘Less competitive economy with potential in KE’.

44 Source: European Innovation Scoreboard 2020 (https://interactivetool.eu/EIS/EIS_2.html#b)

Territorial and Socio-economic Analysis, Interreg SI-AT 2021-2027

In Slovenia, there is a high concentration of R&D capacities in Osrednjeslovenska region, in particular in Ljubljana, which is the seat of almost all public research institutes and centres of excellence. Framework conditions for cooperation on innovation are mixed but generally present, with some regional differences. In terms of human resources, the indicators (e.g. share of human resources employed in science and technology, RCI basic education indicator, RCI higher education and lifelong learning indicator) are generally favourable in West Slovenia and the Austrian Länder Carinthia and Styria. Investments in R&D are lagging behind the favourable economic development The intensity of research and development (R&D), measuring R&D expenditure as a percentage of the regional GDP, indicates that the Austrian regions (with the exception of Burgenland) are performing better than the EU average. R&D expenditure as a percentage of the regional GDP is declining in all analysed regions, with an average value of 2.1 %; the Austrian part indicated an average of 3.08 % and the Slovenian part 1.75 %, while the EU average was 2.03 %. In Slovenia, a notable discrepancy is evident between cohesion regions Eastern Slovenia and Western Slovenia, the latter recording significantly higher expenses for R&D. Austrian regions indicate a higher share of investments in R&D according to the regional GDP in comparison to 2011, while all Slovenian regions indicate lower shares of investments in R&D of the regional GDP in 2017. Taking into consideration also the steady growth of the regional GDP in this period, the investments in R&D do not coincide and are lagging behind the favourable economic situation. The dynamics of investments in R&D is reflected also by the human resources employed, measured by full-time equivalent (FTE). While the number of FTEs increased in all Austrian regions in 2017, compared with data for 2011 (Burgenland +34.8 %, Carinthia +19.35 %, and Styria +28.2 %), the situation is more diverse in Slovenia. The number of FTEs increased in Goriška (+36.2 %), Zasavje (+21.6 %) and Pomurje (+8.1 %), and decreased in Podravje (−34.5 %), Koroška (−9.3 %), Gorenjska (−8.8 %), Osrednjeslovenska (−5.2 %) and Savinjska (−0.7 %). In terms of the current innovation performance of the border regions, the number of international patent applications is in the average-below average range in Slovenia and higher than average in Austria.45 In relation to the current outbreak of the COVID-19 pandemic, its consequences may lead to a further decline of resources for research and innovation in the enterprises as these departments may be the first to face the consequences of financial crisis.

Smart specialisation In December 2017, the Republic of Slovenia adopted the national Strategy of smart specialization (S4), setting among other goals to improve competitiveness on global markets with enhanced knowledge and technologies in export, as well as to enhance the raising of entrepreneurial

45 Border Orientation Paper Slovenia-Austria; EU DG REGIO 2019

Territorial and Socio-economic Analysis, Interreg SI-AT 2021-2027

activity. Thus, implementing the quadruple helix development model and enhancing the partnership between the economy, knowledge institutions, other stakeholders and the national institutions. The strategy is implemented through networks of development partnerships in various thematic fields (i.e. circular economy, sustainable tourism, mobility, etc. The strategy focuses on Smart Cities and Communities, Smart buildings and homes, SI Industry 4.0 (fourth industrial revolution - the cyber-physical transformation of manufacturing) - Smart Factories, Health/Medicine, Networks for the Transition to Circular Economy, Sustainable Food Production, Sustainable Tourism and Creative Cultural and Heritage based Services, Development of Materials as Products and Smart Mobility.46 Smart Specialisation strategies in Austria exist at national and regional levels. The regional focus in Styria is on (Green) Mobility, Green Technology and Health and Food Technology.47 These are supported by the technological core competencies: materials technologies, production technologies, machinery and plant engineering, digital technologies and microelectronics. Carinthia has a good specialization base in traditional production sectors with low to medium technical level but with high manufacturing competence like wood and metal processing industries, paper and ceramics industry and the automotive production. High-tech specialization exists especially in microelectronic, and parts of ICT. Thus, the S3 policy focusses on microelectronic, ICT, traditionally grown production of goods (wood and metal processing) and tourism48. Burgenland focuses on Sustainable Energy (e.g. renewable energy, smart grids, new construction materials, energy efficiency in buildings and transport), Sustainable quality of life with areas from life sciences (health and wellness, pharma, medical technology, food and beverages, hospitality services), Intelligent processes, technologies and products. Fields with a special potential for collaboration are (optical-) electronics, mechatronics, materials (plastics, wood, metal) and their intelligent application; Carinthia focuses on Information and communication technologies (niche: self-controlled, networked systems), Sustainability technologies and materials (renewable resources, with ICT synergy priorities to be developed: smart energy, control technology, energy efficiency), Production technologies at the interfaces between IT, control technology, module switching technology (Industry 4.0). Common themes of smart specialisation By sectors, priority might be given to common areas in the regional Smart Specialisation Strategies and more concretely to those that have particular relevance for the border area. In this respect, the following sectors included in the smart specialisation strategies of all regions can be highlighted: Smart Mobility, health/medicine (particularly focus on social care and demographic

46 ÖROK: Policy framework for smart specialisation in Austria, 2016 47 Economic Strategy Styria 2025 and Grünbuch Steiermark 2030+ 48 KWF strategy 2030 ÖROK 2016: Carinthia is working on the creation of a regional, thematically specialised innovation system. With the expansion of the institutional innovation system, especially the research activities of leading companies, the regional R&D ratio was lifted from below 1% to 2.83%. In this context, a strategy is being pursued of embedding the Carinthian system of innovation into the Alpe Adria region (cooperation projects). The RTI strategy “Kärnten 2020 - Zukunft durch Innovation” adopted already in 2009 and complemented by the economic strategy for Carinthia 2013 to 2020, addresses the three areas of the knowledge triangle: education (strengthen Carinthian universities), research (intensify cooperation between science and business) and innovation (broaden the innovation base in Carinthian).

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changes), sustainable food production / food technology (in order to strengthen innovation and the use of technologies), wood- and metal processing, sustainable tourism (tourism innovation, experimentation, demonstration and technology transfer projects in the field of the tourism industry; cultural heritage management) and development of new materials and technologies, also in relation to circular economy. Overall, the analysis shows that there is some scope for cooperation on innovation in the border region. Cooperation could build on complementarities (e.g. generally higher levels of highly educated people in Slovenia, Austrian technical vocational training and higher education system, combined with some higher overall innovation performance in Austria). If innovation is pursued, activities should focus on these complementarities, as well as on building critical mass in areas where cognitive proximity exists.49 Another important aspect is to engage strongly the local/regional businesses in the innovation processes and support new product/service development.

Digitalisation Digitalisation is a megatrend and it is considered important by all administrations and stakeholders in the region that an adequate response in infrastructure connectivity and utilisation is crucial for a beneficial socio-economic development in the region. The backbone for digitalisation is the availability of high capacity broadband internet connectivity in the region. With national support these infrastructures are being systematically developed in the entire region having already achieved a high percentage of population with adequate connections. This internet connectivity is slightly higher on Austrian side (>75% in 2019). Full coverage should be achieved by 2021.50 However, when it comes to high speed internet beyond 30Mbit/sec it becomes evident that less households in more rural regions and notably the bordering regions are provided with such fast internet. At national level, regarding ‘digital in the private sector’, Austria and Slovenia are both in the medium range in relation to the EU average. The values for both the ‘penetration’ and the ‘digital in the private sector’ dimensions, are in the mid-range in both countries in comparison to the rest of the EU. Slovenia performs below the EU average with respect to both the ‘Digital Technology Integration Index’ as well as the ‘Digital Transformation Enablers’ Index’. Austria performs higher than the EU average with respect to both indicators. In terms of the ‘e-commerce’ index Slovenia ranks 8th highest and Austria ranks 9th among EU countries. Both Slovenia and Austria perform well in relation to sales to other EU countries compared with the EU average. With respect to R&D expenditure in the ICT sector (2015 figures) Austria is 2nd in the EU and Slovenia ranks above the EU average. The ICT sector share of GDP is lower than the EU average for the both countries.51 Digitalisation is a cross-cutting development need Important for the effective utilisation of the internet are the related services and operations based on those infrastructures. The Austrian Digital Agenda distinguishes for the most relevant development areas: economy (more growth and jobs through better utilisation of data),

49 Border Orientation Paper Slovenia-Austria; EU DG REGIO 2019. 50 Breitbandstrategie Steiermark 2030 51 Border Orientation Paper Slovenia-Austria; EU DG REGIO 2019.

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government (more digital services and lower costs for companies and citizen), education (research and innovation), health and social services (better health and quality of life) and Security and infrastructure (data security and resilience52). These fields are also relevant in the policies of the regions. Digitalisation is one of the cross-cutting development needs (besides climate change adaptation) that should be reflected in all spheres of interventions. Areas are education (utilisation of digital tools in education, development of digital skills), R&D (new applications for smart specialisation, development of electronic based systems (EBS), automatization, microelectronic), businesses (development of new digital solutions, utilisation of new digital tools in production and logistics, e-commerce), government (e-government, digital services, data and internet security), citizen (digital skills). Summary: Although the regions taken into analysis are enjoying a favourable economic situation, the investments into research and innovation lag behind and are further declining. With the situation of the global pandemic of COVID-19 outbreak, further decline in investments in R&I are expected, as well as the deterioration of economic conditions. Overlapping themes of regional and national smart specialisation strategies offer potential for cross-border cooperation. Digitalisation is recognised as a horizontal theme for development of all sectors.

2.7 Environment and nature

Nature protected areas and biodiversity The analysed territory is characterised by a high diversity of landscapes ranging from Pannonian plains to mountainous Alpine regions, from wetlands, grasslands to forests areas with important habitats. Increase in the surface of NATURA 2000 in Austrian regions The analysed areas indicate high importance of natural heritage sites protected under different categories (NATURA 2000 sites, National and Nature Parks, Natural Values, etc.). In Slovenia, the number of NATURA 2000 sites and their area has not changed since 2013. In Austria, changes are substantial. There were no NATURA 2000 areas in region of Graz and since 2018 there are five with a combined surface of 0.9 km2. The number of sites increased for three times in Östliche Obersteiermark and more than twice in West- und Südsteiermark and in the entire Land Carinthia.53 Despite the changes, the Slovenian side reflects a higher share of Natura 2000 surface (as of the Slovenian part of the analysed area), than the Austrian part. While Slovenia is indicating a relatively high proportion of NATURA 2000 sites at national level (37% of the entire country), in Austria 15.1 % of the national territory are Natura 2000 areas (EU average 18.1%). The map below indicates the spatial contribution of the Natura 2000 areas in the observed NUTS 3 regions. Several NATURA 2000 sites exist within the border area. Of these the Raab – Őrség – Goričko is a trilateral nature park managed by Slovenia, Austria and Hungary. Other protected areas adjacent

52 Digitaler Aktionsplan Austria, 2020 53 Evaluation of Impact, Evaluation of CP Interreg V-A SI-AT, february 2020.

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to each other include Košenjak and Kobansko on the Slovenian and Südsteirisches Weinland, Soboth Radlpass on the Austrian side. Besides Goričko landscape park in Pomurska, many others are located in Savinjska, Koroška, Podravska, Osrednjeslovenska. Most of them do not have own management structures.

Figure 5: Map of NATURA 2000 areas in the observed NUTS 3 regions

Source: EEA, June 2020. Threats to biodiversity According to the Convention on Biological Diversity54, the main threats to biodiversity in Slovenia are driven by anthropogenic activities which result in habitat fragmentation and ecosystem degradation. Most threats are caused by urbanization and the non-sustainable use of ecosystems, extensively cultivated cultural landscapes, however also due to the spread of invasive species, new diseases and climate change. The main cause of a relatively poor status of many species in Slovenia is habitat loss due to human activity (fish, reptiles, and some arthropods are of greatest concern). The conservation status of more than 40% of vascular plants and more than 30% of mammals is favourable. Biodiversity in Austria has also been shaped by human intervention through ages, especially through agriculture, forestry, hunting and fishing. Among the main causes of biodiversity loss are habitat destruction, degradation and fragmentation. Additional threats are the abandoning of traditional forms of land use and land use intensification. In terms of species loss, on the Red List

54 https://www.cbd.int/countries/profile/?country=si#facts

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of Threatened Biotope Types, around three-quarters of the evaluated 488 biotope types have been assigned to a threat category.55

Environment and climate change

Insufficient progress in reducing CO2 emission In 2015, all United Nations Member States (including Slovenia and Austria) adopted the 2030 Agenda for Sustainable Development. The Agenda defines 17 Sustainable Development Goals (SDGs). Both countries rank high on the SDG Global; Austria ranks 5th with a global index score of 81.1 and Slovenia is 12th with a global index score of 79.4 out of 162. Both countries are thus well above the region’s average. Out of 17 SDGs, 3 are strongly linked to the environment – climate action, life below water and life on land. Data is available only at national level.56 In the SDG relating to climate action, the situation in Slovenia is increasing moderately, but this growth is insufficient to attain the goal, especially due to CO2 emissions from energy (tco2 per capita).

Indicators for Austria are improving at an even slower rate, also due to CO2 emissions from energy. Indicators for the SDG pertaining to life on land are exhibiting more optimistic developments. Here, Slovenia is 10 index points ahead of Austria and is well on track to achieve the goal by 2030. The score for Austria is increasing moderately, but this growth is insufficient to attain the goal, mainly due to the indicator related to the red list index of species’ survival. In 2017, the transport sector contributed the largest proportion of greenhouse gas (GHG) emissions (32%) in Slovenia, followed by transformation sector (31%), industry (17%), agriculture (19%). Road traffic emission represented 99.3% of all transport emissions. According to Eurostat 2018 data, renewable energy sources represented 25% in Slovenian Gross Final Energy Consumption, which is above EU-28 average (20%) but far less than in Austria (34 %).57 Improvement of targets on the use of RES are challenging for Slovenia. National and regional ECP and CCA strategies developed For addressing the challenges of climate change, strategies and measures are needed both for reducing CO2 emissions (Energy and Climate Plans – (ECP)) and for adapting economic and social processes in the regions to better cope with the effects of climate change (Climate Change Adaptation Strategies). Following the UN agreements on climate change and EU strategies, all EU countries have to prepare and adopt a 10-year integrated National Energy and Climate Plan (NECP). The document outlines a national agenda of each EU Member State in addressing energy efficiency, renewable energy, reduction of emissions, interconnections and research and innovation. These plans have been developed in consultations with citizens, businesses and regional authorities. Both states submitted the final versions of NECP and also the regions have adopted their Energy and Climate Plans (ECPs) as well as their Climate Change Adaptation (CCA) Strategies.58

55 https://www.cbd.int/countries/profile/?country=si#facts 56 https://dashboards.sdgindex.org/#/ 57 http://ec.europa.eu/eurostat/tgm/table.do?tab=table&init=1&language=en&pcode=t2020_31&plugin=1 58 E.g. KWA-Klimawandel Anpassungsstrategie Steiermark 2050 (Graz 2017), Klimastrategie Kärnten (Klagenfurt 2018)

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For both, CO2 reduction and for coping with the effects of climate change measures on regional and local level are of highest importance. In Austria a total of 39 Climate Chance Adaptation Model Regions (KLAR) have been established that seek to operationalize and implement the national and Landes strategies on local and small-regional level. 20 of these KLAR are in the cross-border region.59 Austria has also introduced the model of Climate and energy model regions (KEMs) with 96 such KEMs in the country and 45 in the programme area, covering a large part of the territory.60 The objective of these regions is to completely achieve clean energy generation from the sun, wind, water and bioenergy from the region. They implement projects in the areas of renewable energy generation, reduction of energy consumption, sustainable buildings, mobility, agriculture and awareness raising. Slovenia adopted the National Energy and Climate Plan in February 2020. The implementation of the NECP leads to the reduction of the dependency on fossil fuels and supports, among other, sustainable solutions in transport, in buildings and in industry. In transport, the main directions in reducing GHG emissions in Slovenia relate to modernisation of rail infrastructure and development of integrated public transport, promotion of sustainable mobility choices. The Strategic Framework for Climate Change Adaptation for Slovenia was adopted in 2016. The area is very sensitive to climate change Considering the landscape of the area, recent events and the data related to the change of climate (precipitations, temperatures, river flows, snow cover, etc.), it shows that the area, especially the western parts, is very sensitive to climate change. This rises important challenges that have to be addressed horizontally. There are common challenges in the area; increase of visitors in mountains and consequences of fragile mountain paths creates challenges for management of visitors, paths and even higher burden to rescue services. A greater number of natural disasters (i.e. storms, landslides, floods, droughts, etc.), rise important questions in fields of spatial planning, development of infrastructure and joint management. These common challenges can be addressed on wider (cross-border) regional level, also seeking linkages with other programmes (national and transnational). Measures for sustainable mobility, renewable energy and green construction

are important for CO2 reduction / climate protection The average temperatures in the Alps have risen 1.8 °C in the last 150 years, which is much higher than the global average of 0.85 °. Climate models predict for the Alps and for the programme region a rise of temperature of 1.4 °C until 2050 in the best case and 2,5 °C - 4 °C until the year 2100. Especially during winter season, the temperatures in the region will be higher and draughts during summer season and an increase in precipitation during autumn and spring seasons (+5% to +10% for most areas) are predicted61. For limiting the temperature increase to 1.4 °C the

59 In the programme region are 2 KLARs in Burgenland, 11 in Styria and 7 in Carinthia. https://klar-anpassungsregionen.at/ 60 16 KEMs in Carinthia, 25 KEMs in Styria and 4 KEMs in Burgenland. https://www.klimaundenergiemodellregionen.at/ 61 See „Klimaszenarien für die Steiermark 2050“, Gobiet et al., 2012 in KWA Steiermark 2050 (http://www.technik.steiermark.at/cms/ziel/95576483/DE/)

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national and regional governments in Slovenia and Austria have adapted plans for reducing CO2 emissions. Main elements of these climate plans envisage the reduction of fossil energy sources in traffic, industry, households and agriculture (e.g. thermic renovation of buildings, strengthening environmental friendly production processes, increasing the attractiveness and thus the share of public transport systems, sustainable forestry), the promotion of renewable energy (solar, geothermal, wind, biomass) and the protection of biodiversity and habitats. Important in all CO2 reduction plans are also measures for increasing the awareness about these thematic in the population and R&D activities. In Austria, the energy production consists 58% of fossil sources, 21% electricity, 15% biomass and 6% district heating. Within electricity production 76% come from renewable energy sources (61% hydroelectric, 15% other renewable energy sources like biomass, wind and photovoltaic).62 Burgenland has already in 2016 achieved 100% of electricity production from renewable energy sources, mainly from wind and biomass. Styria´s share of renewable energy sources is 30%, of which 13% come from renewable heat (biomass, district heating, etc.), some 11% from renewable electricity (mainly water) and 1,5% from biofuels. On top of the agenda for the Austrian regions are to eliminate fossil energy in household heating and the increase of renewable energy share mainly by wind (especially Burgenland), photovoltaic, district heating and also the development and integration of local energy communities and their integration into the energy networks.63 In 2017, Slovenia achieved a 21.04% share of renewable energy sources (RES) and in 2018 a 21.14% share RES, thus lagging behind its goal.64 A wide range of measures in all spheres have been identified for climate change adaptation Strategies are also dealing with actions that are helping to better adapt the various sectors of society and economy to the undergoing and upcoming to the inevitable effects of climate change. Main focusses that are also relevant for the region are e.g. regarding the management of surface and underground waters, flood risk prevention, measures for improving biodiversity, adaptation of agricultural crops and forest management, disaster prevention and response measures and support of sustainable tourism and diversification in tourism. In general, good water quality in lakes and streams Slovenia and Austria share river systems Mura/Mur, Drava/Drau and the stream of Kučnica/Kutscheniza. In the years from 2014 to 2018, the average run-off of those water bodies was below average, with a strong peak in 2014. It is important to note that the outflow of river Mura (taking into consideration the monitoring point in the border town of Gornja Radgona/Bad Radkersburg) is heavily influenced by the upstream dams in Austria, since the river is one of the major sources of electricity in Styria.

62 Source: Energie in Österreich 2019 (BMNT) 63 Source: Klima- und Energiestrategie Burgenland 2050 (Amt der Bgld. LR 2019) 64 NECP for Slovenia, February 2020.

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The chemical condition of both water bodies was estimated as good in 2014 and 2015. The situation is different when it comes to ecological characteristics, since both rivers indicate increased values of organic pollutants and composition of biomass in the water body at their respective measuring points on the border sections. However, the situation improved in 2015 and ecological quality was assessed as good.65 In 2016 the assessment of both water bodies was good with the exception of one measuring point (Ceršak on the Mura river) where the values for the presence of mercury and brominated diphenylethr were exceeded. The same situation was in 2017. In 2018 and 2019 the values were not exceeded anymore, and the ecological quality was assessed as good.66 The Drava has its source in South Tirol, its main tributaries in Austria are rivers Gail, Gurk and Lavant, and Meža and Dravinja in Slovenia. Following the EU Water Directive, the Drava is subdivided in 29 water bodies, of which 12 in Austria and 7 in Slovenia. The Drava action plan report67 identified several management challenges, such as flood risk, habitat changes and loss, river regulations, riverbed erosion. The Drava is one of the most exploited rivers for the energy production on both sides of the border. In general, the water quality in lakes and streams is good. App. 41 % of the water flowing through Slovenia comes from Austria. Most of the surface water is of good quality, only 10% of rivers and streams are in poor state according to the parameters of the Water Framework Directive. Ground- waters too are generally of good quality and are crucial for the water supply. The utilization of nitrate and plant protection products continues to decline due to effective implementation of the Water Framework Directive and changes in the field of agriculture under the Common Agricultural Policy. Both countries implemented several measures and actions for improving the quality of water, but there is still a lack of coordination of actions and policies between them.68 High potential to advance circular economy Circular economy is a welcomed approach on tackling important regional (and cross-regional) challenges. This is still an important topic that needs to be more embedded in national and regional development strategies69 and also afterwards, effort should be put into the implementation of the envisaged actions. For doing so, emphasis should be given to raising awareness and capacities on regional and especially local administration on the importance of such an approach. Especially here, the gap is considerable. Circular economy has potential in supporting bottom up approaches in designing and implementing material flow in loops that are terminating at local or regional level (i.e. waste of one industry is material for another, leading in reduced pressure on natural resources, etc.). The Government has declared circular economy and green development as Slovenia’s strategic objectives and adopted the Framework Programme for the Transition to a Green Economy in

65https://www.arso.gov.si/vode/poro%C4%8Dila%20in%20publikacije/kakovost%20voda/Kakovost%20voda-SLO.pdf 66 https://www.arso.gov.si/vode/reke/ 67 Joint Drava river corridor analysis report, SEE River project, South East Europe programme, 2014. 68 Cooperation programme Interreg V-A Slovenia-Austria 2014-2020 69 Actually, on Austrian side regional development strategies are being elaborated that envisage to break down strategic orientation of the national and Länder strategies to the operational regional level and elaborating specific activities.

Territorial and Socio-economic Analysis, Interreg SI-AT 2021-2027

201670. A Roadmap towards Circular Economy in Slovenia was prepared in 2018. In Slovenia, Strategic Research and Innovation Partnership Circular economy connects business sector, educational and research institutions, NGOs and other partners into new value chains. The partnership focuses on sustainable energy, biomass and alternative raw materials, secondary row materials, functional materials, processes and technologies, and circular business models. One of currently undertaken projects is CELCYCLE, addressing the potential of biomass for development of advanced materials and bio-based products. An important project is also the InnoRenew, which aims at the development of new Centre of Excellence related to renewable materials utilisation (wood modification and restorative environmental design and ergonomic design. In Austria71 the Federal Waste Management Plan from 2017 defines very detailed strategies and measures for reducing waste in Austria. Regarding waste there is the hierarchy of measures 1. Waste prevention 2. Preparation for reuse 3. Recycling 4. Other recycling, e.g. energy recovery 5. Disposal. In order for reducing waste of all categories it is also necessary to promote new technologies, to create regional cycles in production and processing of materials and assure that all processes related to waste management are with minimized impacts on environment and climate. There have also provincial waste management plans been developed with similar focus. (Provincial waste management plan for Burgenland – updated 2013, Carinthian waste report and waste management concept – 3rd update 2012, Styrian provincial waste management plan 2019)

Summary: Environment is recognized as one of the most important factors of quality of life and a strong value. All regions that were taken into analysis have designated nature protection sites. Although Slovenian regions indicate higher shares of protected areas than Austrian, their management remains a challenge. The area is affected by the consequences of climate change and in the future more effort will have to be put in adapting to its consequences and developing preventive actions, which are already envisaged in strategic documents and plans. Circular economy as a concept is still very much unknown, notably at the level of local governments, who in fact have the biggest potential for fostering its benefits.

2.8 Mobility and Accessibility The observed area is characterized by a dynamic transport and mobility flows. As the area on the transition between the Alpine and Pannonian macro regions, it is located on the junction of transport routes of European importance. Two branches of Baltic-Adriatic TEN-t corridor cross the area The region is crossed by the two branches of the Baltic-Adriatic TEN-t corridor. The northern branch (highway and railway) is leading from Graz to Klagenfurt, Villach and then through Italy via Udine to Palmanova. The second branch stretches from Graz to Maribor, Celje, Ljubljana, Divača

70https://www.greencycle.si/wp-content/uploads/2018/01/opzg_akcijski_nacrt_in_nacrt_aktivnosti.pdf 71 Federal Waste Management Plan, Austria 2017, and provincial waste management plans

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(with a sub-section to Koper) and then to Italy via Trieste to Palmanova where it joins with the northern branch and continues westwards. This corridor represents a main transit line through the area from west to east. On both branches of the corridor, a major investment in railway network is underway. On the northern branch, the Koralmbahn highspeed railway will significantly shorten the distance and time necessary to travel between Klagenfurt and Graz and also better connect the region with Vienna and Ljubljana and Koper. On the southern branch, a new railway line is being built between Koper and Divača, thus coping with increasing cargo that is handled in the port of Koper. This investment is, although outside the observed area, of significant importance not only for the Slovenian economy and transport sector, but also for Austria and other landlocked countries in the region. Apart from the western-eastern transit route, transit through the area in north-south direction (and vice versa) is also important. In this direction, Tauern and Phyrn highways are the backbone of transit, crossing national border at Karavanke / Karawanken highway tunnel and Šentilj / Spielfield. At the time, a major investment is being undertaken by both countries in building a new tube of the current single tube of the Karavanke / Karawanken tunnel in order to cope with the increasing traffic. In Slovenia, there are still areas where road (namely highway and motorway) and railway network is not adequately developed. This especially hinders the regional development of the regions of Koroška, Zasavska and parts of Goriška. Koroška is still not linked to the Slovenian highway infrastructure, which prolongs travel times and hinders it from realizing its full economic potentials. Public transport is more accessible on the Austrian side The landscape of the area is characterized by the alpine and sub-alpine valleys. Together with the dynamic development of settlements, urbanization and polycentric development represent a challenge for public transport. County mobility plans have been elaborated on Austrian side72 and generally the public transport is more developed in Austrian regions. However, there are gaps in public transport services especially in rural regions. Thus, new mobility solutions such as micro- public transport services, new last mile solutions commuters’ associations, development of e- mobility and the development and promotion of bicycle mobility both for everyday use and touristic purposes are envisaged to promote in the future. In Slovenia, a considerate step forward to sustainable mobility was made in recent years in presenting public network of shared bicycles, while efficient public transport that would efficiently cope with daily migrations remains a challenge, in particular in rural areas. Many municipalities have developed integrated transport strategies, which represent a basis for the development of sustainable mobility. There are four international airports in the area. Two in Austria (Graz and Klagenfurt) and two in Slovenia (Ljubljana and Maribor). In Slovenia, Maribor is yet struggling to acquire regular route, Ljubljana is becoming an important regional hub, notably for cargo with implementing investments in logistic centre.

72 Mobility plans like Momak2035 for Carinthia, Mikro ÖV Strategy Styria (2016), etc.

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An increasing number of daily commuters crosses the border to travel to work or school. Despite the needs, cross-border public transport is underdeveloped so far and requires considerable efforts to answer both, national policy requirements and local citizens’ needs. Public transport relies solely on railway, whereby the connections are via other regions with unrealistic travel times.73

Figure 6: Average annual daily traffic at the border crossings between Slovenia and Austria

Vicinity of border and major employment hubs in Austria create an economic opportunity for many Slovenians living close to the border. Their movement is presented in Figure 5, which indicates the average annual daily traffic at the border crossings between Slovenia and Austria. Cross-border mobility is important for tourism Ensuring cross-border mobility is of great importance also for tourism and yet there are still many challenges in ensuring public transport linking the areas along the border and allowing for solutions on how to get from the main regional transport hubs into tourist areas. Another challenge is linked with ensuring more sustainable transport solutions in the tourist destinations and around nature park areas. Summary: The area is characterised by dynamic transport flows. Two major investments in infrastructure are taking place (Karavanke / Karawanken, Koralmbahn). Challenges in development of sustainable mobility solutions remain in particular within rural areas and are also linked with tourism travels.

73 Border Orientation Paper Slovenia-Austria; EU DG REGIO 2019

Territorial and Socio-economic Analysis, Interreg SI-AT 2021-2027

Cross-border mobility is quite intense due to daily commuting and mainly includes private car travels due to unfavourable public transport connections.

2.9 Territorial governance and institutional cooperation Slovenia and Austria have different administrative structures. In Austria, there are three main levels – at central government level the federal government, at federal state level the federal administration of the States and at local level the municipal administration. In Slovenia there are only two levels of administration, central government and local self-governments at local level. 76% of municipalities in the area have less than 5,000 inhabitants There are 435 municipalities in the directly bordering NUTS 3 regions and 633 in the entire territory which has been analysed. Municipalities in the observed Austrian territory represent 22% and in Slovenia 80% of municipalities in respective countries. Looking at the size of population per municipality, the average municipality on the Austrian has less than half of population of an average municipality on the Slovene side. 76% of all observed municipalities are considered small with a population below 5,000 and 20% medium-sized with a population of up to 20,000 inhabitants.

Table 10: Municipalities – number and population size, 2019 Population Number average <= 5.000 5.001-20.000 20.001-100.000 >100.000 NUTS ID NUTS 3 region AT113 Südburgenland 72 1.346 70 2 0 0 AT224 Oststeiermark 93 2.870 83 10 0 0 AT225 West- und Südsteiermark 59 3.296 50 9 0 0 AT213 Unterkärnten 42 3.551 37 4 1 0 AT211 Klagenfurt-Villach 40 7.188 31 7 1 1 AT221 Graz 37 11.975 25 11 0 1 AT223 Östliche Obersteiermark 35 4.544 27 6 2 0 AT226 Westliche Obersteiermark 34 2.931 29 5 0 0 AT212 Oberkärnten 50 2.485 45 5 0 0 AT Border NUTS III 306 3.252 271 32 2 1 AT Border NUTS III + Graz 343 4.193 296 43 2 2 AT CP 2014-2020 462 3.942 397 59 4 2 Austria total 2.096 4.227 1.842 228 20 6 SI031 Pomurska 27 4.233 19 8 0 0 SI032 Podravska 41 7.905 27 11 2 1 SI033 Koroška 12 5.882 7 5 0 0 SI034 Savinjska 31 8.270 17 11 3 0 SI042 Gorenjska 18 11.371 5 10 3 0 SI041 Osrednjeslovenska 25 21.967 7 14 3 1 SI035 Zasavska 4 14.241 0 1 3 0 SI043 Goriška 13 9.047 5 7 1 0 SI Border NUTS III 129 7.519 75 45 8 1 SI Border NUTS III + Osrednjeslovenska 154 9.865 82 59 11 2 SI CP 2014-2020 171 9.905 87 67 15 2 Slovenia total 212 9.816 110 81 19 2 Source: SI-STAT, Statistik Austria In Slovenia, the trend of establishing new municipalities was the strongest in the period 1994- 1998-2002, when the number increased from 62 to 147 and 193 respectively and finally to 212 in 2011. In 2015, a municipality reform in Styria took place that merged many small municipalities

Territorial and Socio-economic Analysis, Interreg SI-AT 2021-2027

to larger units. Thus, the number of municipalities in Austria substantially decreased (233 less), resulting in increased administrative capacities. Eleven local self-governments in Slovenia have the status of city municipality, of which nine are located in the observed territory (Kranj, Celje, Slovenj Gradec, Velenje, Maribor, Ptuj, Murska Sobota, Nova Gorica and Ljubljana). These municipalities have relatively strong capacities and are usually engaged in international cooperation projects. Smaller municipal administrations have rather limited human and financial resources, although interest for cross-border cooperation exist. On Austrian side there are many more city municipalities in the region (21 in Carinthia, 49 in Styria, 5 in Burgenland). However, only the District Towns may provide over sufficient resources for autonomously engaging into larger cross-border cooperation activities. Regional development structures As there is no intermediate administrative level between the local self-governments and the central government in Slovenia, the Promotion of the balanced regional development Act creates and important basis for the coordinated development at NUTS 3 level in Slovenia. In each region, regional development agencies are responsible for the development of regional development plans and thus important actors of coordination among municipalities. In all Austrian regions, Regional Management structures are established. They have a strong role in intercommunal cooperation and provide strong human capacities for addressing challenges that are beyond the mere local level. These Regional Management structures also have developed regional development strategies for their territories and actually many of them are also developing regional strategies to address climate change adaptation issues to the regional level. In Styria, these structures now also provide over good access to finances for regional activities due to the Styrian Landesentwicklungsgesetz 2018 that provides funding for regionally decided projects. These regional development structures played an important role in the cross-border cooperation between Slovenia and Austria, however in the recent period the stakeholders expressed the need to intensify exchange and to create more stable cooperation platforms/structures bringing together relevant actors across the border. Topics include all policy objectives. Experience in territorial cooperation approaches Territorial cooperation is also supported with EU instruments. In the period 2014-2020, city municipalities in Slovenia prepared bottom-up sustainable urban development strategies for the implementation of integrated territorial investments in urban areas. Despite certain limitations in the implementation of projects, the experience was good and showed some good municipal approaches. LEADER/CLLD instrument is still relatively new to Slovenia as it has only been implemented since 2007, however the instrument in Austrian regions goes back to the year 1995. In the period 2014- 2020, CLLD/LEADER is supported by ERDF, ESF and EMFF in Slovenia, the latter only in few LAGs. In the observed territory, there are 29 LAGs operating in Slovenia and 20 in Austria (Burgenland 1, Styria 13, Carinthia 6), covering almost the entire territory. They have developed own territorial local development strategies. However, the focus of these structures and strategies is predominantly on issues of the local and small-regional level and usually does not include cross-

Territorial and Socio-economic Analysis, Interreg SI-AT 2021-2027

border initiatives. LAGs focus on economic development, nature and the environment, services in rural areas and inclusion of vulnerable groups. Some of these Slovene LAGs are managed by regional development agencies (e.g. in Gorenjska and Podravska region). Experience in bottom-up territorial approaches are also evident among municipalities gathered around the UNESCO Biosphere Reserve Julian Alps, where municipalities established a formal partnership and are preparing a common development strategy. EGTC Geopark Karavanke/Karawanken connecting municipalities within bordering regions Geopark Karavanke/Karawanken is recent and the first EGTC established within the SI-AT area, which brings together 14 municipalities, 9 on the Austrian (Zell/Sele, Gallizien, Bad Eisenkappel- Vellach/Železna Kapla-Bela, Sittersdorf, Globasnitz/Globasnica, Feistritz ob Bleiburg/Bistrica nad Pliberkom, Bleiburg/Pliberk, Neuhaus, Lavamünd) and 5 on the Slovenian side (Črna na Koroškem, Mežica, Prevalje, Ravne na Koroškem, Dravograd) and extends over an area of 1,067 km2 with a population of 53,000 residents. Its main objectives are linked to the conservation of geological and natural resources, and the cultural and natural heritage in the territory of its members, fostering of awareness, information and education about the Geopark, its economic development, including through sustainable tourism and general cross-border cooperation, development and local political coordination, representation of interests of the territory in terms of sustainable regional policy. The Land Carinthia is a partner in the EGTC Euregio Senza Confini with Italy, which was established in 2012 and focuses on 10 thematic fields ranging from energy, culture, social-health, civil protection, research and innovation, agriculture, tourism, infrastructure, education. Another EGTC with partners from the analysed territory is the EURO-GO established in 2011 between municipalities of Gorica (IT) and Nova Gorica and Šempeter Vrtojba (SI), which is supported also by the current Interreg IT-SI 2014-2020 programme. There was a recent initiative to establish the EGTC Alpine Pearls among municipalities in Italy, Slovenia, Austria, Germany, Switzerland and France. In 2017, an application was submitted by EGTC David connecting territories of Austria and Slovenia (Cankova, Bad Radkersburg and Klöch). According to 2019 status, the application is pending.74 In the eastern part, a few municipalities from Slovenia are partners in EGTCs established in Hungary (MURABA, PANNON, MASH), however there is little available information on their activities. Summary: The administrative structures in Slovenia and Austria differ (Austria 3 and Slovenia 2 administrative levels), thus creating difficulties for coordination and cooperation across the border. Small size municipalities (up to 5,000 inhabitants) are by far dominant in the region. These municipalities have very limited resources (financial, personnel) for getting involved in cross- border activities. On the other hand, a very well developed intermunicipal (e.g. LAGs), regional (like RDAs) and thematic (like KLARs) cooperation exists and organisation structures, especially on

74 EGTC Monitoring report 2018-2019, European Committee of Regions, EU 2020.

Territorial and Socio-economic Analysis, Interreg SI-AT 2021-2027

Austrian side. The Geopark Karavanke/Karawanken is a recent and the first EGTC established within the SI-AT area. It involves 14 municipalities and is developing very much appreciated cross- border activities in several thematic fields.

2.10 Links with macroregional strategies The area is embedded in two macroregional strategies75 The most important macro-regional strategies covering the analysed territories are the EU Strategy for the Alpine Region (EUSALP76) and the EU Strategy for the Danube Region (EUSDR). EUSALP involves 7 countries – Austria, France, Germany, Italy, Lichtenstein, Slovenia and Switzerland. The Alpine region is one of the largest economic and productive regions in Europe and faces several challenges – economic globalisation requires the territory to distinguish itself as competitive and innovative, demographic trends, climate change and its effect on biodiversity and living conditions of the inhabitants, and energy challenges. The strategy focuses on competitiveness and innovation, environmentally friendly mobility and sustainable management of energy, natural and cultural resources, and a cross cutting policy area – governance, including institutional capacity. EUSDR77 covers territories of 14 countries in the basin of the Danube river, of which 9 EU Member States, 3 Accession Countries and two Neighbouring countries and is home to around 115 inhabitants. The territory shares several challenges, comprising environmental threats, untapped shipping potential, insufficient energy connections, uneven socio-economic development, uncoordinated education, R&I systems, shortcomings in safety and security. The strategy and its action plan focus on 4 pillars – Connect the region, Protecting the Environment, Building prosperity and Strengthen the Region, each of them with several key themes. Territorial cooperation is one of the important funding mechanisms for the implementation of the macroregional strategies. Besides Interreg Alpine Space and Danube Transnational programmes, cross-border cooperation contributes in connecting bordering regions within the macroregional strategies and can better address specific challenges, also with tangible investments.

2.11 Lessons learnt from past experience Looking at the current Cooperation Programme between Slovenia and Austria, the analysis carried out within the Impact evaluation78 shows that the highest number of partners, lead partners, allocated funds and participating projects is in regions of Graz (Austria) and Osrednjeslovenska (Slovenia), thus reflecting the absorption capacity of both regions. Also, a certain dominance of project activities is found in the more eastern part of the Programme area (especially South-East Styria, Podravska, Pomurska) and around the central towns of the cross-border region (Ljubljana,

75 At a later stage of the programming process the matching of Programme interventions with Macro Regional strategies will be undertaken 76 Source EUSALP Strategy 2016 77 EU Strategy for the Danube region Action Plan, EC 2020. 78 Evaluation of the CP Interreg V-A Slovenia-Austria 2014 – 2020, Impact evaluation I, draft report, February 2020.

Territorial and Socio-economic Analysis, Interreg SI-AT 2021-2027

Graz, Klagenfurt, Villach, Maribor, Murska Sobota, etc.). On the other hand, smaller municipalities on Slovenian side and those at a larger distance from the border on both sides tend to have little impact from cross-border cooperation. Interviews with stakeholders highlighted some cooperation experiences and future needs: - Existing cross-border cooperation arrangements are more suitable for organisations with sufficient organisational, financial and management capacities who have experience and resources to cope with the programme requirements; - There is a need to better engage in cross-border cooperation actions within the bordering regions, in particular along the border. In the current period 2014-2020, it was evident that the highest concentration of ERDF funds was allocated to Osrednjeslovenska and Graz, adjacent regions with the highest absorption capacity. However, looking at the density of project activities, the evaluation showed more dynamic cooperation in the eastern part of the programme area, Ljubljana and region Klagenfurt-Villach. Activities were relatively less dense in central Slovenia and on the outskirts of the programme area79; - There is a common interest for finding arrangements to foster cooperation of actors with small-size projects primarily focusing on building trust and cooperation among people living in the area. Topics for cooperation include culture, school initiatives and sustainable tourism but also nature conservation initiatives and disaster response. Such projects are believed to have an important contribution to the outreach and visibility of the programme among the general public; - Further efforts should be made to strive for better sustainability of projects and enhancing their networking, thus contributing to better use of available funds and avoiding duplication of common activities. Also, in interlinking with other (notably Interreg) programmes. - There are sometimes deficits of strategic and/or organisational interlinking of projects with regional strategies and formal regional structures (e.g. tourism). Thus, more intense involvement of regional structures/experts into project selection procedures might be helpful. - More effort should be made in fostering the results of previous projects. Entering in third programme period, capitalisation activities should be more encouraged. - Some cooperation potentials have not yet been sufficiently seized; e.g. regarding civil protection, nature management, there is interest for exchange in spatial planning; due to lack of regular exchanges between the regional structures some of the potentials for cooperation have not yet been analysed and discussed; - RDAs and Regional Managements expressed interest in providing a common platform for strengthening of the cross-border cooperation in field of common interest and establishing of common structures (e.g. following good practices of EGTC); - There is a need to radically simplify implementation arrangements. Good practices from transnational programmes could be taken into account; e.g. simplifying the application and

79 Evaluation of the CP Interreg V-A Slovenia-Austria 2014-2020, Impact evaluation I, draft report, February 2020

Territorial and Socio-economic Analysis, Interreg SI-AT 2021-2027

reporting forms; one should explore the possibilities of using one language (English). A two- step application approach should be taken into consideration; - Project partners have found themselves in different positions regarding co-financing (some were able to secure additional national co-financing, Slovene partners were not in this position); a further increase of requested co-financing in the period 2021-2027 may additionally affect the capacities of potential beneficiaries; for the smaller ones one needs to explore possibilities of pre-financing arrangements. This further deepens the differences between the beneficiaries and puts them in an unequal position. - Visibility of projects could be enhanced by using good practices of other programmes, e.g. providing access to all outputs and key deliverables of implemented projects, joint social media campaigns, introduction of joint communication contents following the practices of the Interreg Central Europe. On the other hand, visibility can be increased by more involvement of the local population in the projects. - The large number of project websites that are mostly abandoned after the project finished are not effective and a pooling of information (info-hub) on Program level should be more effective than individual project solutions.

Territorial and Socio-economic Analysis, Interreg SI-AT 2021-2027

3. SWOT, challenges, needs and development potentials

ERDF Policy Objective 1: A smarter Europe by promoting innovative and smart economic transformation

Strengths Weaknesses Opportunities Threats a) Enhancing Research &Innovation capacities + uptake of advanced technologies b) Developing skills for smart specialisation, industrial transition and entrepreneurship (cluster development) • Good regional endowment (in • Heterogeneous levels of R&D and • Better CB coordination of • Parallel activities (of isolated urban centres) with R&D innovation intensity – R&D innovation and R&D policies could clusters, R&D infrastructure infrastructures, innovation activities are concentrated in lead to a coherent synergistical systems) could lead to infrastructures and research and regional centres and do not reach development and thus form the fragmented competition, thus technology organizations out into periphery and bordering basis for an interregional weakening the position on a • Regional universities and high areas homogenic science and broader EU-level schools are integrated into the • R&D and innovation is supported technology space such as the • Mismatch between SME’s European research networks and by a very strong, but narrow peak Rhine-Maas triangle innovation needs and the offers have a high potential in areas of of large leading enterprises – • Further fostering of CB of universities and R&D technological, natural and social SMEs are lagging behind networking and cooperation institutions. (resulting in a low sciences • Lack of industry science between R&D institutions and number of cooperations) • Initial experience in co-operation cooperation across the border enterprises could help the • Growing international between R&D institutions, • Low knowledge regarding the programming area to increase its orientation of excellent R&D universities and enterprises in availability of scientific and regional innovation capacities, in institutions in terms of contract certain niche fields technological competences particular in the common smart R&D could reduce regional • Good scientific and among SMEs specialisation fields and focusing industry science cooperation entrepreneurial innovation • Administrative requirements of on potentials of bordering regions potentials potential CBC programmes reduce the • Enhancement of cross-border • Many companies prefer to cooperation in the field of food conduct R&D with own resources

Territorial and Socio-economic Analysis, Interreg SI-AT 2021-2027

• Good partners in the food involvement of universities in CB research, new materials and in order to maintain exclusive research field and development of partnerships technologies utilisation of results food related regional products • There exist many good strategies, • Innovations, smart technologies • Consequences of the COVID-19 • Strong regional knowledge base in but there is a lack of coordinated and connections between SMEs pandemic may lead to further mechanical engineering and actions / implementation and faculties deduction of investments in R&D. process engineering, new • Home office has become normal materials and technologies, for many companies, thus biomedical technologies; Green representing new job Technologies opportunities for rural areas • Existence of many good smart • “Green Europe” as a chance for specialisation strategies the economy in the region (e.g. Green Technologies, Circular Economy, CO2 reduction) c) Growth and competitiveness of SMEs, start-up/scale-up • Technology parks, business • Lack of non-technological • Promotion of non-technological • Globalisation threatens the incubators and business support innovations innovation could foster more industry location of the services enabling concentration • Inadequate utilisation of marketable regional products and programme area. New and future and integration of cooperation across the border services competitors are of non-European entrepreneurship, knowledge and and lack of internationalisation of • Development of CB value chains origin (e.g. China, India, Brazil development SMEs could help regional SMEs to gain etc.) • Dense population of industry • Low knowledge of potential capacities to access international • Poor equity capital basis and clusters in the programme area partners along the value chain markets and growth prospects growth prospects of SMEs could • Strong regional knowledge base in across the border • Fostering of entrepreneurial lead to increased business failures the field of agriculture and • Enterprises find themselves in an activity could strengthen the local • Larger companies with bigger products, metal processing, unfavourable sandwich position firm base in peripheral rural areas marketing budgets overrun automotive sector, wood between high technology • SMEs with interesting niche smaller SMEs in the regional processing, ICT manufacturing and service products, including those based competitive market • Strategic development and regions in the core of Europe and on traditional sectors innovation partnerships (SRIP)

Territorial and Socio-economic Analysis, Interreg SI-AT 2021-2027

addressing specific smart low technology suppliers in • New business models combined • Globalisation (and global specialisation topics organised in Croatia, Romania and Turkey with innovative marketing competition) may weaken Slovenia • Lack of entrepreneurial initiatives channels and established cross local/regional economies in rural areas (a small number of border partnerships as better • Sudden interruption of cross- family SMEs) chances to remain competitive border mobility of labour forces • Lack of active internationalization • Development of technology and good may harm production networks or cooperation innovative enterprises in rural processes platforms area • Low rate of private risk capital in • Lack of coordination among • New Koralmbahn may create new investments municipalities regarding location opportunities for location • The Covid19 crisis will lead to development development (business parks, severe financial problems for the (Standortentwicklung) Standortentwicklung) and economy, especially SMEs • Poorly developed and used areas creation of new cross-border within the creative industries value chains • Going international is not • Creation of regional innovation perceived as an opportunity for hubs (creative industry) growth by many companies • Circular economy • Lack of intercultural skills • Many family enterprises that developed in the 90’s are now facing the challenging transition of the leadership & ownership to younger generation, which is not an easy process d) Digitalisation of citizens, companies and governments • Some local producers have gained • Low level of online sales • Covid-19 pandemic experiences • Internationally operating booking first experiences with new digital competence and opportunities for increased the sensibility of and sales platforms with excellent distribution channels local / regional producers and consumers for regionally service and high margins are tourism businesses creating with globally available

Territorial and Socio-economic Analysis, Interreg SI-AT 2021-2027

• Consumers have gained produced and available products products strong competition for experience and competence with and services local producers, are reducing online purchasing tools • Development of new online sales regionally created profits and • Covid-19 crisis and home channels (for individual value added and are transferring schooling boosted the utilisation enterprises, regional sales profits out of the region of digital tools in schools and platforms) • Easy accessible information about households • Digitalisation may open new and availability of globally opportunities for institutions and available products confront administrations in the areas of businesses in the region with monitoring of natural resources, global competition and increase disaster management, etc. the pressure on prices for locally / • Digitalisation of households and regionally produced products businesses may create new work (and services) opportunities in rural / peripheral areas • The digitalization of all higher schools (Austria) within the next two years might increase the chances for a qualified workforce as well as the acceptance for the digitalization as such

Challenges Needs

• Fragmented capacities of of R&D / innovation in the region • Intensification of cross-border cooperation among actors in the field of R&D • Heterogenity of available R&D facilities and activities in the region (networking of stakeholders, developing R&D facilities, …) (concentration in central towns, deficits in rural and peripheral regions) • Support to the internationalisation of SMEs (establishing new partnerships • Low level of (cross-border cooperation between institutions (and SMEs) across the border, entering into new markets, …) within R&D and along the value chains,

Territorial and Socio-economic Analysis, Interreg SI-AT 2021-2027

• Internationally operating booking and sales platforms with excellent service • Development of cross-border value chains and clusters (eg. automotive, and high margins are creating with globally available products strong metal processing, automatisation, circular economy, green technologies, …) competition for local producers, are reducing regionally created profits and • Establishment of new distribution channels (and marketing) for local value added and are transferring profits out of the region producers (regional online shops and delivery systems, 24/7 sales outlets, • Easy accessible information about and availability of globally available regional shopping platforms, …) products confront businesses in the region with global competition and • Digitalisation of citizens, governments and businesses as a cross increase the pressure on prices for locally / regionally produced products cutting/support to solving of identified needs (and services) • Regionalisation of production • Preparation of businesses for transition to Industry 4.0 and Society 5.0 • Regionalisation of value chains • Lack of skilled workforce • Sustainable, green, low-carbon economy

• Coordinated intermunicipal / cbc location and value chain development for taking best advantage of new Koralm Bahn

Cross-border cooperation potentials

• Joint R&D in the areas of specific niches, based on equal cooperation and with businesses in the region (new materials, new technologies, etc.), supporting the fields of smart specialisation • Strengthening R&D initiatives and their linkages with SMEs outside urban centres • Creation of business networks within the regions and across the border, both for existing SMEs and start-ups • New, cross-border integrated location development (Standortentwicklung) and value chain development in connection with new opportunities due to the opening of Koralmbahn; • Coordinated location development (Standortentwicklung) among municipalities and along the axis Graz-Maribor • Improvement of cross-border vaue chains (processing/refinement of agricultural products, automotive, automatisation technologies, metal industry, etc.) • Support to new distribution and marketing channels for businesses (online shops, 24/7 sales outlets for regional products, logistic / delivery servces, etc.) • Digitalisation may open new cooperation opportunities for institutions and administrations in the areas of monitoring of natural resources, disaster management, etc.

Territorial and Socio-economic Analysis, Interreg SI-AT 2021-2027

• Transition to green technologies in the border region • Initiatives to obtain skilled work force • Supporting CB circular economy • Sharing experiences (and capacity building) on “how to transfer familly businesses and SME’s to younger generation”

Strengths Weaknesses Opportunities Threats

a) Energy (efficiency), renewable energies • Potential for the use of renewable • Regulatory barriers for renewable • Increasing energy self-sufficiency • Non-systemic, unplanned and resources – solar, wood biomass, in regional energy markets due to potential of renewable environmentally problematic use hydro and geothermal energy • Mismatch between spatial energy sources of alternative energy sources • Existing awareness about requirements and development • Smart grids and efficient transfer • Conflicts with nature and importance of renewable energy planning from energy sources to energy environmental protection sources and already existing • Lack of business models for demands – resolving peaks and measures experiences of its utilization, adequate prosumer markets in new distribution grids • High energy demand (and huge • Existing good practice for energy the field of renewable energy • Measures for reducing energy use CO2 production) of industries in efficiency solutions available for sources and innovative mobility (e.g. ‘work from home’ as a policy some regions (Obersteiermark) transfer solutions (adapted to the available with multiplying consequences on • Inability of people to achieve • Existing regional/national resources and environment) traffic, energy and climate issues) mind-change and change of strategies and institutions for • Dispersed settlement • Holistic and coordinated use of behaviour sustainable energy, • Lack of baseline and monitoring natural resources (especially water • Existing research competences in (geothermal) based) renewable energy sources • Inefficient energy use • Improvement in local and regional spatial planning

Territorial and Socio-economic Analysis, Interreg SI-AT 2021-2027

• Mismatch between political • Research and piloting on utilisation ambitions and strategies of new energy sources (hydrogen, • Low capacity at local level to …) actually implement strategies • Carbon neutrality • High dependency on fossil fuels • District heating (fostering biomass potentials) • Energetic self-efficiency b) Climate Change (adaptation), risk prevention and disasters resilience • Good emergency response • Uncoordinated planning and • Increasing awareness of policy • Climate change adaptation is a capacities response system with low support in adapting sectors to long-term process due to many • Available data and climate change implementation capabilities climate change sectors involved scenarios • Not enough attention is given to • New production opportunities for • Potentially conflicting with other • Addressing climate change in preventive measures regarding new species and plants in policies strategic documents is quite adaptation to climate change agriculture, forestry and fishery • Traditional crops and plants in common • Poor awareness about key agriculture and forestry are • Existing funding mechanisms (e.g. problems of climate change, increasingly vulnerable to Slovenian Climate Fund), notably on understanding of weather conditions • Existence of National / regional various measures (problem of • Supporting greenwashing climate change adaptation greenwashing) projects strategies c) Water management • Available and diverse water • Unsatisfactory status of water • Conservation and protection of • Increasing damage due to sources quality in CB River Kučenica water resources, wetlands and improper use of flood and land- • Existing awareness about • A diverse set of pressures on other water ecosystems according slide areas; importance of water use water sources and poor methods „EU Water Directive“ • Pressures from energy sector • Exiting initiatives and for cumulative impact • Improved cross-border • Climate change causes more methodologies or monitoring of assessments management of water bodies and weather phenomena with huge cross-border water bodies • Uncoordinated water body their use disaster potentials on water management bodies

Territorial and Socio-economic Analysis, Interreg SI-AT 2021-2027

• Exiting transnational large water • Spatial planning pressures on • Transfer of best practices and bodies management commissions flood areas development of new approaches (e.g. Danube Commission, etc.) • Poor understanding of the for reduced pressures on water effectiveness of natural systems bodies • Renaturation / revitalization of water bodies and ecosystems in the light of climate change • Ecosystem based adaptation measures d) Circular Economy, Environment protection, waste management, resource efficiency • High share of separately collected • Poor environmental legislation • Production of bio and alternative • Industrial hazards waste share implementation and control on consumables and fuels from waste • Operational capacities for • Existing good practices for circular several topics (e.g. waste, • Establishment of new financial and handling waste waste economy construction, etc.) legislative mechanism to enhance • Existing awareness about • Regulatory barriers for circular economy importance of the topic implementing circular economy • Enhancement of capabilities of • Very detailed strategies at measures/solutions municipalities in the shift towards national and regional levels • Lack of existing business models circular economy • High level of waste generation • Existing building stock – promotion (plastics) of re-use of existing buildings • Use of water from treatment plants for irrigation of agricultural land • Management of material flow and closing loops on local/regional level. • Exploring new solutions for recycling facilities within the programme area

Territorial and Socio-economic Analysis, Interreg SI-AT 2021-2027

• New R&D and business opportunities related to circular economy e) Enhancing biodiversity, green infrastructure in urban environment

• Rich natural heritage, bio- • Weak integration of the sectors of • Building partnerships for a • Vanishing small areas important /geodiversity and traditional agricultures, nature conservation programme built on an integrated for bio-/geodiversity heritage, culinary heritage, and protection of water resources approach to protect the conservation (e.g. wetlands) handcrafts and culture • Insufficient monitoring and environment • Inability of reconciling various • Preserved natural environment control mechanisms of Natura • Protected nature areas, national interests in the area (agriculture, with high share of protected areas 2000 sites parks, Natura2000, UNESCO Park, tourism, nature conservation (National parks, nature parks, • Lack of management structures in Geopark as a development and cultural heritage) Biosphere Parks, regional parks, protected areas (SI) opportunity • Neglecting ecologically degraded natural values, Natura 2000, • Dispersed settlements • Environmental Resources areas UNESCO park, Geopark) • Unharmonized environment Management (ERM) and • Protected areas are frequently • Existing good practice solutions in protection objectives revitalization of degraded areas considered an obstacle for green infrastructure • Mountains as the cornerstone of development rather than an • Good legislative and impact the protection of habitats opportunity assessment system • The designation/development of • Loss of habitats of protected • Population is already very new Biosphere Park at the Mur flora and fauna as a result of the sensitive regarding nature provides new opportunities for abandonment of agricultural use conservation issues regional development and cross- in the mountains • High share of organic farming border coordinated initiatives • Negative impacts of invasive • Development of cross-border species green infrastructure • Development pressures and • More efficient and comprehensive undervalued long-term management of environment biodiversity added value in depended objectives (nature relation to short term economic gains

Territorial and Socio-economic Analysis, Interreg SI-AT 2021-2027

protection, waters, water supply, • Inability to achieve mind-change etc.) and change of behaviour

Challenges Needs

• Energy efficiency, reduction of CO2 emissions – reducing demands • Increasing the share of renewable energy sources in the entire region (especially in construction, industry and traffic) • Adaptive measures for the challenges of climate change • Energy powerty (assessment and addressing the challenges), energy • Cooperation between rescue units transition • Cooperative/coordinated strategies and measures for conservation / • Coordinated spatial planing in the light of climate change improvement of water bodies • Maintaining biodiversity and rich natural heritage • Community-based initiatives/projects in implementing circular economy • Implementation of integrated circular economy solutions solutions

Cross-border cooperation potentials

(a) • Cooperative/coordinated strategies and measures for monitoring / conservation / improvement of water bodies • Cooperative initiatives and actions for environmental / disaster risk prevention, disaster management and climate change adaptation • Coordinated and cooperative development and utilisation of renewable and sustainable energy sources (b) • Capacity building on joint (holistic) aproaches in spatial planning responses in the light of climate change adaptation • Joint initiative to find common implemenation areas for the natonal climate change adaptation strategies • Improvement in regional spatial planning • Cooperation between rescue units (notably mountain rescue & response to natural hazards) • Development of climate change adaptation, risk prevention and disaster resilience

Territorial and Socio-economic Analysis, Interreg SI-AT 2021-2027

(c) • Coordinated cross-border initiaitves related to the establishment, enhanced management and valorisation of biosphere parks / nature protected areas • Improved cross-border management of water bodies and their use • Transfer of best practices and development of new approaches for reduced pressures on water bodies • Ecosystem based adaptation measures (d) • Coordinated strategies / measures for nature protection (in protected areas) and management of protected areas • Circular economy – waste of one industry as a material for other – networking, industrial symbiosis, cluster development; functional materials, new circular business models, processes and technologies • Waste management: intercommunal cooperations (e) • Improvement of management of natura 2000 sites, notably newly established management bodies, habitat and species protection. • Joint monitoring activities related to the state of habitats and species (notably birds, fishes). • Monitoring of the state of undergraund water and thermal aquifers.

ERDF Policy Objective 3: A more connected Europe by enhancing mobility and regional ICT connectivity

Strengths Weaknesses Opportunities Threats

a) (Cross border) Mobility & ICT connectivity • High frequency of border • Low knowledge of potential • Better utilization of existing • Restrictions in cross-border crossings (daily migration, partners along the value chain railway lines mobility due to unforeseen businesses, education, tourism) across the border • New sustainable forms for daily mobility offer (micro public

Territorial and Socio-economic Analysis, Interreg SI-AT 2021-2027

• Availability of local mobility • Poor availability of public transport solutions, mobility on events (e.g. pandemic threats, strategies and action plans transport in rural areas demand, mobility migration crisis) • Existing pilot projects on cross- • Lack of cross-border public cooperations/Fahrgemeinschaften, transport offer e-car-sharing, park & ride knots, border transport • Lack of integrated sustainable creation of multi-mobility knots • Existing initiatives for micro- mobility in tourism offer …), public transport and soft mobility • Public transport connection Graz- • Further development of initiatives Maribor (railway) is not framework conditions for e- sufficiently attractive and mobility in the region, frequent, • New high capacity railway (Koralm • Traditional public transport Bahn) will connect the region with systems no longer serve Vienna and Koper and may provide effectively and efficiently mobility new opportunities for businesses needs due to scattered and people (production sites, settlement structures, logistics and export opportunities, administrative and subsidy mobility of labour, ….) barriers • Broadband internet supports new job opportunities in rural areas for remote / home working • Integration of daily cross border flows (working migrants) and touristic needs

Challenges Needs

• Involvement of relevant actors from both sides for addressing • Coordinatated actions of public institutions and service providers for cross- harmonisation of public transport border mobility (data and information exchange, creating/improving • Harmonization of timetables and tickets on regional and national level attractive cross-border mobility services for local population and tourists, …) • Intensive and increasing transit of cargo and passengers through the region (nort-south) • Fostering e-mobility (concepts, technologies, service stations, promotion) • Mobility in rural areas

Territorial and Socio-economic Analysis, Interreg SI-AT 2021-2027

• Increase of sustainable transport share • Improvement of individualized (small scale) public transport systems in rural areas • Innovative last mile solutions (for public transport) • Further development and and capitalisation of cross-border connectivitiy of high-quality bycicle infrasructures (eg. Drauradweg) • Improving capacity of national institutions in finding new solutions and approaches in the field of public transport (in Slovenia) • Integration of public transport (e.g. shuttle services) in cross-border tourism products • Holistic management of sustainable mobility • Management of daily mobility flows

Cross-border cooperation potentials

• Harmonisation of timetables (train and bus connections) to the needs of tourist visitors • Harmonisation of payment methods, joint tariff areas • Cross-border mobility and commution regimes / mechanisms in case of national restrictions (like COVID-19) • Establishment of new connections on existing infrastructure (e.g. railway line Villach – Nova Gorica as a backbone of sustainable mobility between the two participating countries) • Establishment of mobility hubs, their promotion and encourgement of multimodal transport (interlinking economy activities on crossborder level with integration of labour market and spatial planning) • Response to the best utilisation of the future high-capacity railway offer (Koralmbahn) in the region (connecting the regions, population, econoic activities, goods to the train networks / railway hubs • Maribor, Graz, Klagenfurt, Ljubljana – policentric development model, implementation of local mobility strategies and action plans and trasfer of good practices • Better utilization of existing railway lines • Integration of public transport (e.g. shuttle services) in cross border tourism products

Territorial and Socio-economic Analysis, Interreg SI-AT 2021-2027

• Holistic management of sustainable mobility • Management of daily mobility flows • New sustainable forms for daily mobility offer (micro public transport solutions, mobility on demand, mobility cooperations/Fahrgemeinschaften, e-car- sharing, park & ride knots, creation of multi-mobility knots …), • Further development of framework conditions for e-mobility in the region.

ERDF Policy Objective 4: A more social Europe by implementing the European Pillar of Social Rights Note: Text in blue colour relates to Interreg-specific objectives regarding PO 4.

Strengths Weaknesses Opportunities Threats a) enhancing the effectiveness of labour markets and access to quality employment through developing social innovation and infrastructure & improving access to quality employment across borders • Relatively stable employment • Shortage of jobs for persons with • Addressing opportunities in the • Loss of jobs due to COVID-19 rates in Austrian regions, and tertiary education outside larger cross-border supply chains and • Further growth of one-way labour growth on Slovenian side (before urban centres clusters migration in specific profiles • Shortage of skilled labour in • Demographic trends and social COVID-19) needed at both sides of the certain sectors on both sides innovation bring new job border • Similar business sectors (tourism, health and social care, opportunities in the care • Imbalances in regional economic developed on both sides industry) economy strength and income levels may (automotive, metal processing, • One-way commuting across • Accelerated digital transition) lead to further reduced electro, tourism, wood, border, partly due to substantial brings new opportunities for job availability of skilled labour in agriculture ...) differences in wages generation also in rural areas especially rural areas (and the • Labour market institutions well • Specific groups of people with • Cooperation and exchange of Slovenian part), thus reducing lower chances of getting a job good practices on activation of dynamic growth potentials there accessible, EURES service support (long-term unemployed, older difficult to employ persons, • Restrictions of cross-border available and low-skilled workers) promotion of vocations in which mobility due to unforeseen events • CB- project partnerships • Insufficient information on rights shortages exist supported within the current and regulations for migrant • Cooperation and exchange on workers removing barriers related to

Territorial and Socio-economic Analysis, Interreg SI-AT 2021-2027

programming period (vocational • Lack of cross-border data on cross-border employability (data education, people at risk of social shortage of skills and exchange, recognition of exclusion, youth) competences, LM forecasts, data competencies, taxation, exchange on commuters transport/mobility)

• Shortage of qualified skilled workers in Austria • Challenges in mutual recognitions of qualifications Skills of labour still not fully correspond to market needs b) improving access to inclusive and quality services in education, training and lifelong learning through developing infrastructure & improving access to and the quality of education, training and lifelong learning across borders with a view to increasing the educational attainment and skills levels thereof as to be recognised across borders • Suitable density of schools of at • Language barriers • Transition of regional economies • Qualification attained in schools primary and secondary level, the • Differences in education systems to green, digital creates does not match the needs of latter being located in bigger • Less favourable education opportunities for cooperation in regional labour markets urban centres structure in some regions reskilling and upskilling for • Existing school systems do not • Tertiary education programmes (Koroška, Pomurska, partly specific regional needs (e.g. sufficiently prepare students for offered in regions outside Savinjska) sustainable economy, regional upcoming challenges in future university centres • Gaps in education attainment of identity & sustainable tourism, employment • Tertiary education programmes in men and women and of native- social services and products, line with smart specialisation born and foreign-born green technologies, services and fields • Shortage of digital skills and products) • Good practices of dual vocational competencies for 21st century • Digital trends open opportunities education in Austria • Schools not sufficiently equipped for participation in LLL, especially • Good network of institutions to address more complex in distant areas engaged in lifelong learning teaching environment • Cooperation partnerships • Some practices and projects of between schools and businesses bilingual schools, CB student (internships, etc.) for increasing exchanges and school employability of young people

Territorial and Socio-economic Analysis, Interreg SI-AT 2021-2027

cooperation at secondary level and strengthening links within exist regional labour markets • Exchanges and cooperation in promotion of dual vocational education and training for current and future needs c) increasing the socio-economic integration of marginalised communities, migrants and disadvantaged groups, through integrated measures including housing and social services & promoting social inclusion and tackling poverty, including by enhancing equal opportunities and combating discrimination across borders • Decreasing risk of at risk-of- • Disparities in the quality of life • Social innovation creates • Sudden interruption of cross- poverty or social exclusion rate, in and inclusion between regions opportunities for joint border labour mobility may particular in Slovenia • Ageing of the population, in development of new approaches / threaten the supply of social • Some project and partnership particular in remote, border areas common services to improve care services in some Austrian regions already existing and address • Social care services insufficient to for elderly and provision of • Economic change and potential vulnerable groups cover existing/future needs innovative services for other economic crisis are especially • Relatively well-developed civil • Above average risk of social vulnerable groups affecting vulnerable groups and society sector in the region exclusion in bordering regions • Cooperation in developing smart less qualified persons • Pilot projects in integrative long- (except for Gorenjska) in Slovenia technologies supporting • Outflow of workers in social and term care being implemented in • Dependence on foreign (also independent and quality life of health care on Slovenian side Slovenia Slovenian) health care and social elderly opens opportunities to care personnel in some Austrian better address their needs regions • Strengthening exchange on • Jobs in the social care system are approaches on further paid below the national average empowering and inclusion of • Existence of a grey labour market disadvantaged groups in personal and social services with precarious working conditions for especially female foreign persons (in Austria),

Territorial and Socio-economic Analysis, Interreg SI-AT 2021-2027

• Income level of women is still substantially lower than of men d) ensuring equal access to health care through developing infrastructure, including primary care & enhancing the equal and timely access to quality, sustainable and affordable healthcare services across borders; improving accessibility, effectiveness and resilience of healthcare systems and long-term care services across borders • Increased life-expectancy • Regional disparities in the health • Cross border cooperation as • Shrinking of health services • Good density of primary health status of population opportunity to better address covered by health insurance care centres • Regional differences in access to emergency situations in bordering (Slovenia) • Density of doctors and hospital health services, in particular in areas • Further asymmetry in mobility of beds relatively balanced and good Slovene border regions (except • Cooperation in telemedicine health workers on the Austrian side for Gorenjska), long waiting times opens opportunities to improve • Increasing gaps between public • Health education institutions at in Slovenia access to health services and private health services (2- secondary and tertiary level are • Shortage of doctors in primary • Smart technologies can support class medicine) present in the border regions level care in rural areas independent and quality life of • CB project partnerships existing in • Differences in the health care elderly people the current SI-AT programme system hindering use of services focusing (digitalisation, across the border (asymmetry) knowledge excellence, models) • Asymmetry in the cross-border • Pilot project in long-term care mobility of health workers services being implemented in • Legislation on long-term care not Slovenia yet adopted in Slovenia

Challenges Needs a. Effectiveness of labour markets and access to quality employment a. Effectiveness of labour markets and access to quality employment - Regional asymmetries in economic activity and income possibilities/ - Improvement of the exchange on labour market situation, skills needs levels provoke outmigration of (qualified) persons to urban centres and forecasts, exchange of good practices in promotion of vocations and (partly) towards Austria at shortage

Territorial and Socio-economic Analysis, Interreg SI-AT 2021-2027

- Matching skills with the needs of the regional labour markets - Creation of jobs in particular in the peripheral border areas, especially - Expected loss of jobs as a consequence of the COVID-19 pandemic for people with higher educational level - Activation and increasing of employability of long-term unemployed - Improve socio-economic situation and quality of employment for more balanced migration of labour - Ageing of the labour force - Improve conditions for increasing employment of older workers and b. Access to inclusive and quality services in education, training and lifelong learning difficult to employ persons, - Supporting regional labour markets with personnel matching current and future skills needs - Harmonisation of labour regulations across the border b. Access to inclusive and quality services in education, training and lifelong learning - Improving access to informal, lifelong learning, especially outside urban centres - Identification and mapping the current and future skills needs in areas of common interests c. Socio-economic integration of marginalised communities, migrants and disadvantaged groups - Developing education system and life-long learning offer that matches - Ensuring independent, healthy and secure living and social the needs of regional labour markets participation of the elderly, in particular in rural and border areas - Engaging the young into professions where regional LM needs exist - Shortage of personnel in personal and social services due to c. Socio-economic integration of marginalised communities, migrants and unfavourable job / employment conditions disadvantaged groups - Activation and inclusion of other disadvantaged groups (e.g. - Identify capacities, standards, potentials linked to provision of health unemployed, NEETs) and social care and any administrative barriers hindering cooperation across the border, d. Ensuring equal access to health care - - Ensuring equal access to quality and affordable health care services fostering the development of (new) services and assisted technologies supporting the elderly to live a quality life, including intergenerational - Ageing of the population increases the need for health care services support and requires new services d. Ensuring equal access to health care

- Identify capacities, standards, potentials linked to provision of health and social care and any administrative barriers hindering cooperation across the border, - ensure a range of services to provide the elderly with relevant support to live a quality life

Territorial and Socio-economic Analysis, Interreg SI-AT 2021-2027

Cross-border cooperation potentials a. Effectiveness of labour markets and access to quality employment • Develop partnerships for exchange between labour market institutions, economic sector and educational institutions on labour market situation, forecasting the needs for development of skills and competences of common interest, address labour mobility issues (e.g. recognitions of competences) • Develop partnerships to address skills needs in areas of common smarts specialisation themes and supply chains, clusters, in particular in areas linked to green and digital transitions • Transfer of good practice models and approaches in addressing the employability of long-term unemployed and joint creation of models for addressing of the employment creation in particular in areas outside big employment centres (based on local potentials, traditions, natural assets) b. Access to inclusive and quality services in education, training and lifelong learning • Development of cross-border cooperations and exchange between education institutions, LM and businesses to improve capacities for better skills intelligence, • Promotion of skills and vocations that are commonly identifed on both sides of the border, development of skills for future needs, upskilling and reskilling according to regional LM needs and transition to green, digital and care economies • Supporting new approaches to cross-border teaching and learning, methods, digital tools, including approaches to improve cross-cultural and CB-language and other transversal competencies, sharing of good practices in vocational education (dual education), lifelong learning, etc. c. Socio-economic integration of marginalised communities, migrants and disadvantaged groups • Provision of a common platform for exchange of data and good practices in the sector, identification of common needs and potentials for sharing of resources, identification and harmonisation and/or removal of any administrative barriers • Networking and promotion of partnerships between public and private organizations for exchange and cooperation in the area of social innovation and social economy for development of new models and services to ensure quality ageing and support for the elderly and other vulnerable groups • Promotion of social businesses and social economy, joint development of smart technologies supporting the elderly to stay at home safe • Skills development for the informal/family caretakers and promotion of peer-to-peer support d. Ensuring equal access to health care • Exploring potentials for cross border provision of social and health services • Exploring potentials for sharing of capacities and staff across the border and respond to emergency situations (in particular along the border)

Territorial and Socio-economic Analysis, Interreg SI-AT 2021-2027

• Supporting the development of telemedicine or other related services and technologies enabling more equal access to health care

ERDF Policy Objective 5: A Europe closer to citizens by fostering the sustainable and integrated development of urban, rural and coastal areas and local initiatives.

Strengths Weaknesses Opportunities Threats a) fostering the integrated social, economic and environmental development, cultural heritage and security in urban areas • Small and medium sized • Cross-border cooperation • Promoting cooperation of urban • Demographic and climate change agglomerations are important between towns and cities areas across the border in fields challenges hinder sustainable centres of development and institutions often project based of common interest (e.g. urban development of both rural and employment in the border region • Lack of stable cross border planning, revitalisation, creating urban areas (extreme weather • Some cooperation between structures promoting the towns and cities for all ages, events, heat waves) towns/cities already established cooperation among urban areas strengthening resilience of urban • Negative development in the (e.g. Graz-Maribor, Bad • Lack of cross-border concepts or areas, smart cities, rural and wider EU context increase Radkesburg – Gornja Radgona) strategies for sustainable urban linkages…) national sentiments, distrust and • Experience in the bottom-up development of urban areas • Increased awareness about short challenge relative high safety of design and implementation of regional economic circles the area urban strategies supported by ERDF (ITI) in the city municipalities in Slovenia • Cultural, historical and socio- economic ties exist between urban areas across the border • Bilateral conference of mayors in eastern part of the analysed area b) fostering the integrated social, economic and environmental local development, cultural heritage and security, including for rural and coastal areas also through CLLD

Territorial and Socio-economic Analysis, Interreg SI-AT 2021-2027

• Rich cultural heritage in the • Rural areas along the border with • Transfer of good practices of the • A wide range of challenges for region and a range of successful limited access to services, jobs existing territories covered by rural and peripheral regions cross-border initiatives and facing outmigration EGTCs to other parts of the related to demographic change, • A range of tourist products • Fragmented tourist products, so programme climate change similar on both supported in the previous period far little real cross border • Capitalisation of tourist products sides of the border (based on natural and cultural promotion in CB-context through common • Negative development in the potentials) • Low level of knowledge about the themes – e.g. biking, hiking, green wider EU context increase • Good practice of recently developments across the border, tourism (e.g. Alps/ Karavanke, national sentiments, distrust and established EGTC Geopark potential cooperation actors and Mura/Mur), cultural heritage and challenge relative high safety of Karavanke/Karawanken their interests its diversity, regional products the area • Carinthia (AT) with experience in • Low capacity (human, financial) of and diversification the EGTC and cross-border small municipalities, CSOs for • Providing instruments to foster cooperation under CLLD with Italy cooperation across the border people-to-people cooperation • Initatives for sustainable • Little possibilities for cross-border across the border in culture, territorial development, such as cooperation of smaller actors in sport, arts and other fields Unesco Biosphere Reserves recent Interreg programme • Use small grants for exploring the (Lower Mura Valley (AT), Mura • Cross-border strategies for sub- potential for cooperation in areas river (SI), Julian Alps (SI)) territories not yet developed that so far were not yet • Transboundary park initiatives (sufficiently) addressed (e.g. • Established LAGs with some sharing of management experience in cross-border experience among small cooperation municipalities on sustainable • Interest of regional structures to development) support thematic cooperation

Territorial and Socio-economic Analysis, Interreg SI-AT 2021-2027

Challenges Needs

➢ Cities and towns facing social, environmental and economic challenges due ➢ Improving exchange of experiences and learning from implementation of to changes in demography, climate, and other global developments pilot activities in addressing challenges resulting from demographic and ➢ A wide range of challenges for rural and peripheral regions related to climate change, and strengthening resilience of urban and rural areas demographic and climate change are similar on both sides of the border ➢ Creating a platform for capitalisation on existing natural and cultural (depopulation and ageing in peripheral areas, access to services, job heritage and tourist products with a focus on sustainable tourism and thus creation, mobility) ensuring balance and management of tourist arrivals ➢ Addressing better the cultural heritage and tourism potentials for ➢ Providing more opportunities to engage and bring citizens together to sustainable development, also in the view of the consequences of recent exchange on challeneges, needs and potentials for cooperation in fields of COVID-19 pandemics common interest, building trust between citizens and organizations across ➢ Making cross border cooperation more visible and to the ground, especially the border along the border in problematic rural areas, and strengthening linkages ➢ Simplify conditions for participation in the programme, in particular for between rural and urban areas actors with smaller capacities and experience ➢ Many municipalites are lacking the resources (financial, personnel) for getting involved into cross-border activities that are beyond their immediate political and administrative mandate

Cross-border cooperation potentials

The below identified fields of cooperation require the design of a cross-border territorial strategy, which, however, at present except for the EGTC Karavanke/Karawanken, does not exist. • Support in development of cross-border concepts and strategies for potential functional or geographical areas sharing common needs, challenges and potentials, whereby building on the existing model of Geopark and similar good practice models and initiatives already existing in the area • Enabling networking, exchange and cooperation of actors across the border in common areas of interest based on specific (functional) needs (e.g. sustainable development of cities and towns) or geographically smaller territories (e.g. less developed areas along the border, mountainous areas (Alpine area/Karavanke), common nature protected areas (Mura/Mur, Alpine region)

Territorial and Socio-economic Analysis, Interreg SI-AT 2021-2027

• Further development and regional outreach/extension of cross-border tourism infrastructures, support to increased visibility of diverse regional thematic tourism products and routes (hiking trails, cycling path network, …) or destinations (Alpine, Pannonian) and creating more opportunities for small and family businesses to grow in sustainable tourism sector • Cultural cooperation and exchange initiatives • Cooperation of urban centres and villages (e.g. smart cities and villages) • Supporting of CB rural-urban cooperations

ISO 1: Interreg-specific Objective: A better cooperation governance

I. enhance the institutional capacity of public authorities, in particular those mandated to manage a specific territory, and of stakeholders; II. enhance efficient public administration by promoting legal and administrative cooperation and cooperation between citizens and institutions, in particular, with a view to resolving legal and other obstacles in border regions; III. enhance institutional capacity of public authorities and stakeholders to implement macro-regional strategies and sea-basin strategies; IV. building up mutual trust, in particular by encouraging people-to-people actions by enhansing sustainable democracy and by supporting CB socity actors and their role in reforming processes and democratic transitions (a compromise in the negotiation process has not been reached yet).

Strengths Weaknesses Opportunities Threats • Initial practical experiences in • Differences in political, legal and • Strengthening of cross border • Regional election cycles could institutional CB co-operation of administrational framework cooperation structures offering lead to instable institutional rescue services and planning conditions still hamper CB co- joint platforms for coordination cooperation patterns because of • Successful initiatives of CB operations at institutional level and exchange changing personnel cooperation in the past involving • Language barriers still prevail (in • Harmonised joint (regional, • Sudden and unexpected border local and regional administrations particular regarding specific sectoral, thematic) development closures (such as during the • Individual regional administrative terminology) strategies Covid-19 pandemic) interrupt bodies are showing pro-active • Many local administrations are • Cooperation, coordination and accustomed movement of people approach to tackle restrictions lacking resources (personnel, know-how exchange in (labour force, population) and problems caused by border finances, know-how) to get intercommunal and cross-border • Language barriers may hamper regime restrictions actively and professionally development and marketing of the effective utilisation of

Territorial and Socio-economic Analysis, Interreg SI-AT 2021-2027

• Existence of professional inter- involved into cross-border business sites and location electronic / online communication communal / regional cooperation projects / activities (additional to development (Gewerbegebiet tools in cross-border structures with resources their obligatory administrative Entwicklung, communication (personnel, financial, credibility) tasks) Standortentwicklung) experienced in project • Lack of cross-border crisis • New electronic communication management and EU procedures; management and conference tools help • Individuals within institutions who • Lack of active internationalization bridging physical distances are driving forces for cooperation networks or cooperation between actors in absence of formal structures platforms • Introducing instruments that • Lack of regular information flows enable cooperation of smaller on developments in specific fields, players/stakeholders challenges and opportunities

Challenges Needs

• Differences in political, legal and administrational framework conditions still • Harmonised joint (regional, sectoral, thematic) development strategies hamper CB co-operations on an institutional level • Cooperation, coordination and know-how exchange in intercommunal and • Language barriers still prevail (in particular regarding specific terminology) cross-border development and marketing of business sites and location • Many local local administrations are lacking resources (personnel, finances, development (Gewerbegebiet Entwicklung, Standortentwicklung) know-how) to get actively and professionally involved into cross-border • Establishment of institutionalized communication and cooperation projects / activities (additional to their obligatory administrative tasks) between local and regional administrations and institutions in all sectors (especially spatial planning, sustainable tourism, climate change adaptation, civil protection, labour market) across the border

Cross-border cooperation potentials

• Establishing of cross-border coordination structures supporting the networking and exchange among local and regional administrations and institutions for addressing common challenges and finding harmonized approaches in cross-border relevant thematic areas (labour market, business support, spatial planning,

Territorial and Socio-economic Analysis, Interreg SI-AT 2021-2027

social services, education / qualification initiatives, tourism, nature protection, management of protected areas, environment protection, resource management, circular economies, disaster management, climate change adaptation, regional and cross-border mobility solutions, etc.) • Cross-border cooperation initiatives in location / economic development and regional / cross-border value chains • Harmonizing administrative, organisational and legal frameworks in all sectors of socio-economic development, labour market, health services, nature and environment protection, climate change adaptation, etc. • Establishment of cross-border mechanisms for emergency situations and disaster management, monitoring of natural resources, etc. • Support to small-scale and people-to-people cross-border initiatives bringing together citizens and local actors to get to know better each other and to network, build trust and foster cooperation in the field of culture, sport, education, nature, society and other fields of common interest

Territorial and Socio-economic Analysis, Interreg SI-AT 2021-2027

4. Summary of main findings based on Territorial and Socio-Economic analysis structured per specific Policy Objective

ERDF Policy Objective 1: A smarter Europe by promoting innovative and smart economic transformation

SPECIFIC OBJECTIVE KEY FACTS AND TRENDS MAIN DISPARITIES COMMON CHALLENGES COOPERATION POTENTIALS

a) Enhancing Research • Concentration of R&D • Austrian regions are • Fragmentation and • Joint R&D in the areas of &Innovation capacities activities in urban stronger innovators than heterogenity of specific niches (new + uptake of advanced agglomerations, less in Slovenian regions and R&D available R&D facilities materials, new rural/peripheral areas expenditures (in GDP) are and activities in the technologies, wood and technologies • Processing industries higher region (concentration in metal processing, green b) Developing skills for important in some parts of • Concentration of R&D in central towns, deficits in mobility, sustainable smart specialisation, the region (Östliche Osrednjeslovenska rural and peripheral tourism, etc.), supporting industrial transition and Obersteiermark, Süd-Ost regions) the fields of smart entrepreneurship Steirmark, Graz, • Low level of (cross- specialisation (cluster development) Unterkärnten, Koroška, border cooperation • Strengthening R&D Podravska, Gorenjska, between institutions initiatives and their Savinjska) (and SMEs) within R&D linkages with SMEs outside • Smart specialisation and along the value urban centres strategies on national and chains, • Improvement of cross- regional level exist border vaue chains (processing/refinement of agricultural products, automotive, automatisation technologies, metal industry, etc.)

Territorial and Socio-economic Analysis, Interreg SI-AT 2021-2027

SPECIFIC OBJECTIVE KEY FACTS AND TRENDS MAIN COMMON CHALLENGES COOPERATION DISPARITIES POTENTIALS c) Growth and • Many small and medium sized • Much higher • Strengthening the capacities of SMEs • Creation of business competitiveness of companies in the region and GDP in AT and start-ups, networks within the SMEs, start-up/scale-up they are motor for economic regions (about • Low level of internationalisation (also regions and across development, twice as high) cross-border) of the mostly micro and the border (both for • However, decreasing survival • AT side more small and medium enterprises existing SMEs and rate of new-born enterprises, experienced in start-ups) • SMEs generally not active in CBC, intermunicipal • Coordinated location • Difficulties of businesses to cope placement, development & with administrative logics of the development management CP and (Standortentwicklung) management of among municipalities hubs related to (Standortentwi Koralmbahn and cklung) along the axis Graz- Maribor-Žalec d) Digitalisation of • Digitalisation is a cross-cutting • No substantial • Rural areas are still less equipped with • New distribution and citizens, companies and policy objective in both countries disparities. high speed internet infrastructures, marketing channels governments and accelerating digitalisation of • Dominance of internationally for businesses (online citizens, companies and operating booking and sales platforms shops, 24/7 sales institutions can be observed in • Availability of globally available outlets for regional recent times throughout the products confront businesses in the products, logistic / region region with global competition and delivery services, etc.) • Infrastructures for digitalisation increase the pressure on prices for • Digitalisation in on high level and being further locally / regionally produced products monitoring of natural developed on national/regional (and services) resources, disaster levels management, etc.

Territorial and Socio-economic Analysis, Interreg SI-AT 2021-2027

SPECIFIC KEY FACTS AND TRENDS MAIN DISPARITIES COMMON COOPERATION POTENTIALS OBJECTIVE CHALLENGES

a) Energy • Increasing energy demand • Share of renewables (higher • Exploiting high • Smart grids? efficiency and • Efficient energy use not sufficiently in in AT) potential of RES • Geo-thermal? renewables focus • Low capacity of • Regulatory barriers • Research on new energy • High dependency on fossil fuels implementation of strategies • Carbon neutrality sources (e.g. hydrogen)? • High research competences in renewable on rural local level (SI) • Integration of RES • Spatial planning (positioning energy sources energy into the of energy sources) network b) Climate • Relatively high general awareness + • Stronger role of regional • Change of behaviour • Adaptive measures, Change strategies management in • Risk prevention and management, • Lack of preventive measures implementation of regional disaster resilience • Monitoring of climate • Increased number of natural disasters strategies and actions that • Adaptation of change effects refer to Climate Change in economy sectors • Disaster response & rescue Austria • Regional spatial planning c) Water • Good water quality of lakes and streams • High influence of river • Change of water • Monitoring and management • Decline of annual run-off management in Austria on regimes (peaks) due management of joint water • Mura/Mur and Drava/Drau are important water flow in Slovenia to climate change bodies sources of electricity • More renaturation projects in • Preservation of • Adapting to the effects of • High share of technically modified water AT than in SI natural climate change (preventive bodies characteristics of measures) water bodies • Ecosystem based adaptation • Pressures from measures energy sector

Territorial and Socio-economic Analysis, Interreg SI-AT 2021-2027

SPECIFIC OBJECTIVE KEY FACTS AND TRENDS MAIN DISPARITIES COMMON CHALLENGES COOPERATION POTENTIALS d) Circular Economy, • New trend that needs to • Slovenia declared CE as its • Necessity to develop and • Networking & cluster Environment be more embeded in strategic objective promote and expand new development - Connecting protection, waste regional strategies • Better and already existing approaches and solutions business, research, • Considerable gap on CE capacities for recycling of all • Regulatory barriers educational institutions management and potentials in smaller local types of waste (AT) • High level of waste and NGOs into a chain of resource efficiency governments • Nature and environmental generation higher added value. • High share of separately protection measures • Limited operational • Enhancement of collected waste (relatively more protected capacities for handling capabilities of • Potential for reducing sites in SI) waste municipalities to engage in preasure on nature • Reducement of waste CE solutions resources generation • Planning and pilot implementation of closing cross-border CE loops on local/regional level e) Enhancing • Relativelly well preserved • Lack of management • Balancing conservation and • Integration of sectors of biodiversity, green natural environment structures (SI) development needs agriculture and water infrastructure in urban • Increasing number of • Smaller share of NATURA • Revitalization of degraded resources into nature protected areas 2000 sites (AT) areas conservation environment • Raised awareness and • Management of visitor • Improved management of sensitivity of population flows in relation to carrying protected areas and regarding nature capacity coordinated measures conservation • Adequate monitoring • Promoting pro-biodiversity mechanisms of habitats and business species • Loss of habitats • Invasive species

Territorial and Socio-economic Analysis, Interreg SI-AT 2021-2027

ERDF Policy Objective 3: A more connected Europe by enhancing mobility and regional ICT connectivity

SPECIFIC OBJECTIVE KEY FACTS AND TRENDS MAIN DISPARITIES COMMON CHALLENGES COOPERATION POTENTIALS

a) (Cross border) • Increasing transit traffic • More accessible public • Increase of share of • Implementation of cross Mobility & ICT through the area transport in Austria sustainable transport border public transport for connectivity • Considerable number of • More daily commuters from • Shortage of rural and CB daily workers and its daily crossings of borders, Slovenia to Austria than public transport services integration in cross border notably of workers from viceversa • Pressure of suburban tourism products Slovenia to Austria • Better integration of public mobility (daily traffic flows) • Harmonization of • Adequate coverage and transport in tourist products • Better exploitation of timetables and payment access of inhabitants to in Austria railway infrastructure methods broadband connections. • Using broadband internet • Multimodal transport • Traffic as a main for job creation in rural • Implementation of contributer to GHG areas sustainable mobility solutions

Territorial and Socio-economic Analysis, Interreg SI-AT 2021-2027

ERDF Policy Objective 4: A more social Europe by implementing the European Pillar of Social Rights

SPECIFIC OBJECTIVE KEY FACTS AND TRENDS MAIN DISPARITIES COMMON CHALLENGES COOPERATION POTENTIALS

a) Enhancing the • Favourable employment • Significant difference in • Expected further loss of jobs • cooperation of the LM effectiveness of labour trends (before COVID-19) net salaries of employed due to COVID-19 institutions on exchange of markets and access to • Ageing of the labour force (SI to AT) • Job creation in less dynamic, data, forecasting, labour • • Asymmetric CB- remote areas mobility, recognition of quality employment Shortage of skilled workers in specific sectors commuting (SI to AT) • Matching the skills with the qualifications • Long-term unemployment • Gender pay gap (AT) needs of labour market, • exchange on good • forecasting of the needs practices, models related • • Promoting active ageing to upskilling, employment • • Activation of difficult to employ support, job creation persons • harmonisation of labour regulations across border ? b) Improving access to • Tertiary education level • Regional disparities in • Existing educational • Cooperation in mapping inclusive and quality above country average in educational level programmes do not sufficiently and addressing the needs services in education, urban agglomeration • Vocational education/ prepare students for future for skills development, • Shortage of investments in dual education less work matching existing and training and LLL education infrastructure developed in SI • Access to LLL, especially outside future regional LM needs • Language barriers urban areas • Culture and language • learning activities • Enhancement of digital skills?

Territorial and Socio-economic Analysis, Interreg SI-AT 2021-2027

SPECIFIC OBJECTIVE KEY FACTS AND TRENDS MAIN DISPARITIES COMMON CHALLENGES COOPERATION POTENTIALS c) Increasing the socio- • decreasing risk of poverty • Regional disparities in the • Ensuring independent, healthy • Fostering the development economic integration of or social inclusion quality of life and and quality life of the elderly, of (new) services for the marginalised • Ageing of the population inclusion, above average secure living and social inclusion elderly – assisted and increasing needs for risk of exclusion in • Inclusion of other vulnerable technologies, care communities, migrants elderly care bordering regions groups services,… and disadvantaged • • High dependence on • Danger of increased • Exchange of knowledge on groups foreign health and social unemployment and social standards, practices, … care personnel, grey consequences due to Covid-19 • Activation of socially labour market (AT) pandemic excluded • Gender pay gap (AT) • Inclusion of immigrants d) Ensuring equal access • Increasing life expectancy • Regional disparities in • Ensuring equal access to • Promotion of healthy to health care • Population ageing and health of the inhabitants affordable health care services lifestyle, healthy working increasing need for • Differences in access to • Covering the needs for and living environment? services health services (rural, increased elderly health care • CB education/training of • Shortage of personnel urban) • Ccombating and surveillance of health professionals (primary care, rural areas) • Assymmetry in CB- communicable diseases • Assisted technologies ? commuting (SI to AT) • Addressing non-communicable • Exchange on health trends, • Higher density of doctors diseases (cardio-vascular, practices and measures, and hospital beds in AT mental health) • CB Emergency response • Long waiting times (SI) • Cooperation between • Differences in health sys. health system institutions, local authorities, public health institutes, NGOs

Territorial and Socio-economic Analysis, Interreg SI-AT 2021-2027

ERDF Policy Objective 5: A Europe closer to citizens by fostering the sustainable and integrated development of urban, rural and coastal areas and local initiatives.

SPECIFIC OBJECTIVE KEY FACTS AND TRENDS MAIN DISPARITIES COMMON CHALLENGES COOPERATION POTENTIALS

a) Fostering the • Urbanisation • Overall disparities in • Shrinking of active population, • Cooperation of cities and integrated social, • Ageing of population economic development growing needs for elderly care towns (governance, economic and • Multiculturality • Asymmetric commuting • Excluded groups services, urban planning, (SI-AT) • …) environmental • Dynamic commuting Sustainable transport and • • Public transport more mobility solutions • Further valorisation of development, cultural Growing city tourism • Sustainable mobility developed on AT-side • Strengthening resilience to cultural heritage through heritage and security in • • climate change tourism urban areas • • Economic transformation • Smart cities and rural- (COVID-19, green economy) urban cooperation b) Fostering the • Depopulation and ageing • Overall disparities in • Revitalising remote rural areas, • EGTCs established or in integrated social, • Shortage of jobs for highly economic development especially along the border establishment, experience economic development, educated people • Higher share of employed • Ensuring quality access to health in CLLD exist • in agriculture & forestry and social care, education • Valorisation of natural, cultural heritage and Growth of rural tourism, outdoor, regional branding (AT) • Balancing nature protection and cultural heritage through security • • In general, lower service economic development sustainable tourist accessibility than in urban • Bringing people across the products areas border closer together • Cultural cooperation and • exchanges • Smart villages

Territorial and Socio-economic Analysis, Interreg SI-AT 2021-2027

ISO 1: Interreg-specific Objective: A better cooperation governance

KEY FACTS AND TRENDS MAIN DISPARITIES COMMON COOPERATION POTENTIALS CHALLENGES

• Dominance of small • Average size of • Differences in • Establishing of cross-border coordination structures supporting the municipalities, lacking municipalities in political, legal and networking and exchange among local and regional administrations capacities for getting Slovenia is twice the administrative and institutions for addressing common challenges and finding involved into cross-border ones in Austria, framework harmonized approaches in cross-border relevant thematic areas: activities • Regional (NUTS III) conditions still - labour market, - business support, - spatial planning, • regional development administrative hamper CB co- - social services, - education / qualification initiatives, structures with capacities structures in AT do not operations on an - tourism, - nature protection, management of protected areas, (personnel, know-how and have corresponding institutional level - environment protection, - resource management, partly funds) for counterparts on SI side • Language barriers - circular economies, - disaster response, supporting cross-border • Language knowledge of • Many local - climate change adaptation, regional and cross-border mobility cooperation the partner country is administrations solutions, • 1st formalized cbc more frequent among are lacking • Harmonizing administrative, organisational and legal frameworks in all structures Slovenian actors resources sectors of socio-economic development, labour market, health • wide range of specific/ • Availibility of funds for (personnel, services, nature and environment protection, climate change thematic cb contacts regional development finances, know- adaptation, etc. among (semi-)public on inter-communal how) to get • Establishment of cross-border mechanisms for emergency situations structures. However, level on Austrian side, actively and and disaster management, monitoring of natural resources, etc. mostly not formalized • higher number of cbc professionally • small-scale and people-to-people cross-border initiatives bringing • most structures focus their partners in the eastern involved into cb together citizens and local actors to get to know better each other and activities within the own part and close to the activities to network, build trust and foster cooperation country border

5. Literature

▪ Action Plan concerning the European Union Strategy for the Alpine Region, COM (2015) 366 final, 2015 ▪ Action Plan European Strategy for Danube Region, EC, SWD (2020) 59 final, 2020 ▪ Alps2050, Common spatial perspectives for the Alpine area; ESPON 2018 ▪ Analiza izvajanja pomoči na domu 2018, Inštitut RS za socialno varstvo, 2019 ▪ Border Orientation Paper Slovenia-Austria; European Commission, DG REGIO 2019 ▪ Breitbandstrategie Steiermark 2030 ▪ Building next generation of research and on territorial development, ESPON Scientific Report 2019 ▪ Bundesministerium für Digitalisierung und Wirtschaftsstandort: Digitaler Aktionsplan Austria, Wien, 2020 ▪ Celoviti nacionalni energetski in podnebni načrt Republike Slovenije, 2020 ▪ Common Provisions Regulation COM/2018/375 ▪ Cooperation Programme Interreg V-A Slovenia-Austria 2014-2020 ▪ Digitaler Aktionsplan Austria, 2020 ▪ Economic Strategy Styria 2025, Land Steiermark 2018 ▪ Education and training monitor 2018, country analysis, EC, 2019 ▪ EGTC Monitoring report 2018 – 2019, EC, 2020 ▪ Energie in Österreich 2019 (BMNT) ▪ ERDF and Cohesion Fund Regulation COM (2018) 372 ▪ European Innovation Scoreboard, 2020 ▪ European skills agenda for sustainable competitiveness, social fairness and resilience, EC, June 2020 ▪ Evaluation of the CP Interreg V-A Slovenia-Austria 2014 – 2020, Impact evaluation I, draft report, February 2020 ▪ Federal Waste Management Plan, Austria 2017, and provincial waste management plans ▪ Glas gospodarstva, September 2019, Poslovanje regij, GZS ▪ Grünbuch Landesentwicklungsstrategie Steiermark 2030+, Land Steiermark, Graz 2019 (unveröffentlicht) ▪ Interreg Regulation COM(2018)374 ▪ Izhodišča za Strategijo razvoja KRZS 2030, Razvojni svet KRZS, 2019

Territorial and Socio-economic Analysis, Interreg SI-AT 2021-2027

▪ Joint Drava river corridor analysis report, SEE River project, South East Europe programme, 2014 ▪ Klima- und Energiestrategie Burgenland 2050 (Amt der Bgld. LR 2019) ▪ Klimastrategie Kärnten, 2017 ▪ KWA-Klimawandel Anpassungsstrategie Steiermark 2050 (Graz 2017) ▪ KWA-Strategie Steiermark 2050 (2017) ▪ kwf Strategie 2030, kwf, Klagenfurt 2019 ▪ Mikro-ÖV Strategie Steiermark (2017) ▪ Mobilitäts Masterplan Kärnten 2035 (2016) ▪ Momak2035 for Carinthia, Mikro ÖV Strategy Styria (2016) ▪ Načrtom aktivnosti ministrstev in vladnih služb (NAMVS) 2015–2016 ▪ OECD Functional Urban Areas, Austria, Slovenia; OECD 2019, (http://www.oecd.org/cfe/regional-policy) ▪ OECD: Education at a glance, 2019 ▪ Okvirni program za prehod v zeleno gospodarstvo – OPZG z Akcijskim načrtom izvajanja OPZG (ANi OPZG) in ▪ ÖROK: Kleinräumige Bevölkerungsprognose für Österreich 2018 bis 2040 mit einer Projektion bis 2060 und Modellfortschreibung bis 2075 (ÖROK-Prognose), (2019) ▪ ÖROK: Policy framework for smart specialisation in Austria, Vienna 2016 ▪ Regional Action Plan for improving crossborder public transport, Carinthia-Koroška, Interreg TRANS-BORDERS project, 2018 ▪ Skupaj za družbo zdravja, Resolucija o nacionalnem planu zdravstvenega varstva 2016- 2025, Republika Slovenija, Ministrstvo za zdravje ▪ Slovenian Smart Specialisation Strategy, 2017 ▪ Slovenski turizem v številkah 2019, STO ▪ Socialni položaj v Sloveniji 2018-2019, Inštitut RS za socialno varstvo, 2020 ▪ State of health in the EU, Austria Country Health Profile 2019, EC ▪ State of health in the EU, Slovenia Country Health Profile 2019, EC ▪ Steirische Breitbandstrategie 2030 (2019) ▪ Steirischer Gesundheitsplan 2035 (2018) ▪ Strategija trajnostne rasti slovenskega turizma 2017-2021, Republika Slovenija, Ministrstvo za gospodarski razvoj in tehnologijo ▪ Strategische Landesentwicklung Kärnten (STRALE 2025), Land Kärnten 2015 ▪ Strateška izhodišča razvoja kohezijske regije Vzhodna SLovenija, RS Vzhodna Slovenija in MGRT, 2019 ▪ The Austrian strategy for adaptation to climate change, 2017

Territorial and Socio-economic Analysis, Interreg SI-AT 2021-2027

▪ Turizem v številkah 2019, STO ▪ UN Agenda for Sustainable Development, 2015 ▪ Water Framework Directive

Data sources: ▪ AMS ▪ ARSO ▪ Convention on Biological Diversity ▪ Eurostat ▪ Land Kärnten ▪ Landesentwicklung Steiermark ▪ Naravni parki Slovenije ▪ Nationalparks Austria ▪ NIJZ ▪ Poslovne cone in subjekti inovativnega okolja ▪ SI-STAT ▪ Statistik Austria ▪ Sustainable Development Report 2020 ▪ UNESCO Biosphere Reserves ▪ WIBIS ▪ WIBIS Kärnten ▪ WIBIS Steiermark ▪ ZRSZ

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