Regional Context Analysis

Regional context analysis

A comparative picture of the six partner regions of the ICHNOS Plus project with regard to the implementation of the One-Stop-Shops for business start-ups: Galicia, North Aegean, Sardinia; Silesia, Southern Estonia and Vysocina.

November 2008

1 Introduction ______2 2 Goals of a Regional Centre of Competence for OSS ______3 3 Socio Economic report of each new region ______3 3.1 Galicia ______3 3.2 North Aegean ______24 3.3 Sardinia ______37 3.4 Silesia ______47 3.5 Southern Estonia______67 3.6 Vysocina______89 4 State-of-the-art in the partner regions related to OSS ______99 4.1 Galicia ______99 4.2 North Aegean ______105 4.3 Sardinia ______107 4.4 Silesia ______110 4.5 Existing best practices and other supporting organisations ______112 4.6 Southern Estonia______115 4.7 Vysočina______115 5 Structural Funds Operational Programmes______124 5.1 Galicia ______124 5.2 North Aegean ______124 5.3 Sardinia ______124 5.4 Silesia ______125 5.5 Southern Estonia______126 5.6 Vysočina______126

1 Introduction

After having analysed in the first phase of ICHNOS project the state-of-the-art regarding one- stop shops (OSSes) in the three partner regions, the points in common for the definition of an OSS model were published in the Green Paper. In this publication we concluded that three main activities that should be covered by OSS: o Consulting on specific business ideas and/or administrative issues o Management of the authorization process o Marketing of the territory

With this starting point, additional interviews and experts panels were carried out to many stakeholders in the three regions. Based also on the experience as a Centre of Competence of the Galician eCommerce Leveraging Centre, we recommend a general model of Regional Centre of Competence (RCC) for OSS that provides the necessary support they need which can be extended along Europe. A Regional Centre of Competence (RCC) for One-Stop Shops (OSSes) is defined as a non- profit or profit organization whose main objective is to develop specific actions to support the operation of OSS in a region, contributing to the economic growth of the region by facilitating business start-ups and providing a better support to entrepreneurs. In this sense, and in accordance with the requirements that the Commission’s proposal for a Services Directive (Bolkestein Directive)1, RCCes should assure the conditions so that “by three years after the entry in force of this Directive at the latest, it is possible for a service provider to complete the following procedure and formalities (...):

a) all procedures and formalities needed for access to his service activities in particular, all necessary declarations, notifications or applications for authorisation from the competent authorities, including applications for inclusion in a register, a roll or a database, or for registration with a professional body or association: b) any applications for authorisation needed to exercise his service activities.” The proposed model consists of four interdependent modules, as well as a management department:

1. An Observatory module that assesses the current regional socioeconomic situation in order to support the set-up of new OSSes. It will also monitor the performance of each individual OSS and evaluate the obstacles that may prevent them from running smoothly. Additionally it will also monitor the latest information about eadministración solutions for OSS and processes and recommendations of simplification of the bureaucratic procedures for facilitating business set-ups. 2. An Advisory and Support module that carries out the core activities of the OSS, giving support to OSS managers and to local authorities on the four main areas: legal, technological, marketing of the territory and organizational. 3. A Training module that offers knowledge to OSS staff and to third bodies connected with OSS’s activities. Online and face-to-face courses, as well as paper-based documentation on guidelines are the main means. which will be focused on the procedures regarding business creation, the procedures for contacting third bodies, and the novelties on legal and technical aspects of OSS activities. 4. An Information and Communication that promotes OSSes and disseminates their achievements and benefits among their stakeholders in the region among their end- users and around an interregional European level. 5. Management and Institutional Relations that, apart from the general administration, promotes the OSS system among public and private institutional stakeholders within the region and an interregional European network of RCC for OSS that exchanges information and experience and cooperates in the EU territory.

1 In the 4th April 2006 the Commission come forward with and amended proposal. The amended proposal will now be considered by the Member States of the EU in the framework of the Council of Ministers with a view to reaching a Common Position.

It is essential to highlight that the modules are groups of functions that are to be provided. Depending on the budget the Centre count on, the number of OSS under its control and the existence of other organizations working on the marketing of territory field, the model could be adapted.

2 Goals of a Regional Centre of Competence for OSS

According to the study by the association EUROPA for the « Délégation à l’aménagement du territoire et à l’action régionale (DATAR), the pursued goal of setting up an OSS in the analysed cases is modernizing the administration by a process of simplification, ensuring transparency and efficiency.

As far as a Regional Centre of Competence for OSS, it must guarantee the smooth and efficient functioning of OSS as a single point of single contact, and should begin by answering these questions: - What is the situation related to entrepreneurship? What is the entrepreneur’s awareness about OSS? - Why don’t SMEs and citizens use the possibilities offered through OSS? - What can a LC do in order to remove the identified obstacles? - How will the obstacles be leveraged.

3 Socio Economic report of each new region

In this chapter, each region will summarize their respective socioeconomic situation, in order to get a picture of the capabilities and opportunities of each region. Definitory characteristics of each territory, economic indicators, entrepeneurship, population and social conditions and research and development activities will be highlighted in this chapter.

3.1 Galicia

Area: 29.574,4 km2.

Peripheral region: • Located on the Northwest coast of the Iberian Peninsula: to the south it borders on Portugal, to the west to the Atlantic Ocean, to the north the Bay of Biscay and to the east the Spanish mainland.

• Really complex orographic disposition: with an average height of 500 m it is separated from the Central Plateau and Asturias by a set of mountain chains. Source: Galician Institute for Economic Promotion.

Geographic distribution of population: - Galicia is divided into 4 provinces: A Coruña, Lugo, Ourense and Pontevedra. Figure 1: Galicia geographic location

Figure 2: Main Galician cities GALICIA MAIN CITIES CITY POPULATION (2007) VIGO 288.324 A CORUÑA 242.458 OURENSE 109.011 SANTIAGO DE COMPOSTELA 93.273 LUGO 89.509 FERROL 79.520 PONTEVEDRA 76.798

- Scattered population: It has 192 municipalities with 5000 or less inhabitants out of 315 with a population density which amounts to 93 inhabitants per km2.

Figure 3: Galicia population density

Figure 4: Population units NUMBER OF TOWN COUNCILS, COLECTIVE ORGANIZATIONS, SINGULAR ORGANIZATIONS AND POPULATION CENTRES ACCORDING TO THEIR POPULATION 1 2 3 4 5 6 7 8 9 10 TOTAL Town councils 0 1 13 68 110 65 36 15 4 3 315

Singular organizations2 26.753 2.839 213 57 60 25 6 - 4 3 29.990 Collective organizations 1.011 1.974 433 187 121 44 8 0 0 0 3.778 Population centres 27.441 2.823 205 89 57 25 6 0 4 3 30.653

Source: National Statistics Institute. Census 2001

1. Less than 101 inhabit. 6. From 5.001 to 10.000 2. From 101 to 500 7. From 10.001 to 20.000 3. From 501 to 1.000 8. From 20.001 to 50.000 4. From 1.001 to 2.000 9. From 50.001 to 100.000 5. From 2.001 to 5.000 10. From 100.001 to 500.00

2 Singular organizations of population: it refers to whatever habitable area within the municipality, habited or exceptionally inhabited, clearly perceived as different from the rest and known by a specific denomination which identifies it without possibility of confusion.

Contrasts between the Atlantic coast and inland areas In spite of being maybe a simplification, Galicia can be divided into two areas: coastal and island. The two coastal provinces of A Coruña and Pontevedra accounted for about 74% of population in 2002, being the demographic trend towards increase along recent years. Within these two provinces the principal industrial areas are located: A Coruña-Ferrol and Pontevedra- Vigo. Actually, the per capita income in these areas is close to national average thanks to the substantial industrial industry, fishing activities and an increasing flow of tourist. On the other hand, inland Galicia (provinces of Lugo and Ourense) is being depopulated, specially in rural areas. Inland, Galicia is predominantly agricultural, its farm-holdings small and specialized in dairy and beef cattle. They are too small and too poorly equipped to be competitive and to generate the work and the wealth needed to employ the population. Other handicap of inland Galicia is the wide dispersal of population that live, moreover, in really small municipalities, which represents an obstacle for communications and rational production in most inland areas of Galicia and add important cost of efforts to improved infrastructure and facilities.

Selected economic indicators

GDP:

An analysis of the the tendency over recent years reveals that Galicia, like Spain, is in a process of convergence with the rest of Europe.

In the last decade, the mean cumulative interannual growth rate of the GDP stood at 3.6%, a rate of growth above that of the European average.

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Galicia 4.3 5.2 4.0 2.8 2.3 2.6 3.5 3.2 4.1 4.0 EU 2.9 3.0 3.9 2.0 1.2 1.3 2.5 1.9 3.0 2.9 EU data for 27 countries. Source IGE. Eurostat.

EU data for 27 countries. Source IGE. Eurostat

Harmonised index of consumer prices:

Figure 9: Harmonised index of consumer prices –July 2005

3 SPAIN EU HARMONISED INDEX OF CONSUMER 128 117,8 PRICES (BASE 1996) JULY 2005 Source: Eurostat and INE.

Index of Consumer Price and Inflation:

Figure 10: Index of Consumer price and annual change 4 PERIOD GALICIAN ICP GALICIAN STRUCTURAL INFLATION INDEX % CHANGE FROM INDEX % CHANGE FROM PREVIOUS YEAR PREVIOUS YEAR 1999 94,4 2,5 95,4 2,6 2000 97,5 3,3 97,8 2,6 2001 100,9 3,4 101,1 3,3 2002 103,8 3,8 104,1 4,1 2003 107,0 3,1 107,1 2,9 2004 110,2 3,0 109,9 2,6

Figure 11: General index of Consumer price

We can see a similar tendency in Galician and Spanish General Index of Consumer Price. Taking into consideration that Spanish ICP is higher than European one, and remembering that since the Monetary Union we have the same currency, we can infer that Galicia has problems of competitiveness in relation to Europe due to its price levels.

3 July 2005 INE, EU index is calculated including the 25 countries the European Union consists of. 4 Index of Consumer Price without non-elaborated food and energetic products.

Electricity and gas prices- industrial users:

Figure 12: electricity prices for an industrial consumer (small consumers)

Electriciy prices for an industrial consumer Power 30kW, 1000 hours used

Sweden 4,63 Sweden United 6,28 United Kingdom Finland 6,37 Finland Denmar 6,4 Norway 7,18 Denmark France 8,28 Norway Austria 8,9 France Greece 9,06 Austria Spain 9,51 German 10,77 Greece Italy 10,86 Spain 11,31 Portuga Germany Belgium 12,31 Luxemb 12,86 Italy Ireland 13 Portugal Belgium 0 2 4 6 8 101214 Luxembourg cent€/kWh Ireland

Figure 13: electricity prices for an industrial consumer (medium consumers)

Electricity prices for an industrial consumer Power 100kW, 1600 hours used Sweden Sweden 4,35 Finland Finland 6,35 Denmark 6,49 Denmark Spain 6,64 Spain United Kingdom 6,9 United Kingdom Norway 7,17 France 7,59 Norway Austria 7,6 France Greece 8,33 Portugal 8,39 Austria Italy 9,4 Greece Germany 9,46 Portugal Luxembourg 9,81 Belgium 10,78 Italy Ireland 11,17 Germany 024681012Luxembourg Belgium cent€/kWh Ireland

Source: Spanish Energy Commission

EUROPEAN COMPARISON OF ELECTRIC PRICES

Figure 14: European comparison of average electric prices in 2004

Source: Spanish Energy Commission from International Energy Commission.

Based on previous graphic and tables, we can infer that Galicia and Spain are one of the cheapest regions in relation to electricity supply. So, if their enterprises are not competitive, the reasons can’t be found here.

Figure 15: Natural gas prices European ranking in 2003- Small Industrial Consumer

Natural gas prices European ranking. Taxes excluded. 2003 Small Industrial Consummer-I1 (0, 1163 GWh, no modulation)

United Kingdom 1,8 Luxembourg 2,4 Sweden 2,7 Denmark 2,8 Belgium 2,8 Ireland 2,8 Austria 2,8 France 2,9 Spain 2,9 Germany 3,4 Portugal 3,7

0 0,5 1 1,5 2 2,5 3 3,5 4 Cent€/kWh

Figure 16: Natural gas prices European ranking- Medium sized Industrial Consumer

Natural gas prices European ranking. Taxes excluded. 2003.Medium sized industrial consumer- I4-2 (116,3 GWh, modulation 330 days, 8000 hours)

United Kingdom 1,2 Spain 1,6 Belgium 1,6 Denmark 1,7 Finland 1,7 France 1,9 Italy 1,9 Austria 2 Ireland 2 Portugal 2,1 Luxembourg 2,1 Sweden 2,2 Germany 2,4

00,511,522,53 Cent€/kWh

As for natural gas, figures 15 and 16 show how Spain would be placed differently depending on the size of the industrial consumer: with really competitive prices if we refer to medium-sized consumers and within the more expensive countries as far as small consumers is concerned.

Labour costs:

Figure 17: Annual costs per worker (euros) EUROS GROSS COST NET COST

TOTAL INDUSTRY CONSTRUCTION SERVICES TOTAL INDUSTRY CONSTRUCTION SERVICES SECTORS SECTORS

GALICIA 20.435 22.712 18.999 19.794 20.252 22.483 18.890 19.612 2002 GALICIA 23.898 26.933 23.135 23.021 23.598 26.582 22.847 22.736 2007 Source: INE.

Average price of new housing:

Figure 18: Average price of the m2 of new housing at province capitals and town councils of 100.000 inhabitants or over

2 2 AVERAGE PRICE OF NEW HOUSING M (€/M 2002)

GALICIA A CORUÑA SANTIAGO VIGO OURENSE PONTEVEDRA LUGO

800.08 1145.17 1143.17 1104,97 987,9 872,98 678,46 Source: Ministry of Public Works. The table illustrates the great differences in new housing prices, standing out the largest cities because how high-priced they are.

External Trade and Foreign Investment

The last 17 years have seen a steady increase in Galician exports with an average year-on-year increase of 11.6%, 3 points higher than Spain as a whole. In 2007 the value of exports reached 15,999.59 million euros, with imports of 16,575.56 million euros.

SHARE Year Galicia Spain 1990 70.13 63.28 1991 64.88 62.81 1992 65.32 65.23 1993 84.79 76.47 1994 82.19 79.20 1995 87.93 80.38 1996 91.47 83.05 1997 90.97 85.34 1998 85.24 81.27 1999 91.08 75.34 2000 93.29 73.27 2001 98.91 74.94 2002 104.29 75.71 2003 97.40 74.86 2004 95.52 70.71 2005 88.81 66.37

2006 93.43 64.88 2007 96.53 64.71

The Galician share of the Spanish export market has risen steadily over recent years, from 4.75% in 1990 to 8.82% in 2007, representing a higher rate than that of the corresponding imports.

The share for Galician foreign trade rose in 2007 to 96.53%, higher than the rate for Spain as a whole by 31.81 %.

EXPORTS IMPORTS SHARE YEAR Galicia Spain % Galicia Spain % Galicia Spain o/Spain o/Spain 1990 1,608.63 33,841.71 4.75 2,293.73 53,482.28 4.29% 70.13 63.28 1995 2,383.16 68,152.46 4.96 3,847.75 84,782.97 4.54% 87.93 80.38 2000 8,298.58 124,177.34 6.68 8,895.69 169,468.19 5.25% 93.29 73.27 2005 12,066.66 153,558.99 7.86 13,586.75 231,371.57 5.87% 88.81 66.37 2007 15,999.59 181,478.55 8.82 16,575.56 280,430.56 5.91% 96.53 64.71 Source: Galician Institute for Promotion and Development

Population distribution: Galician population is an aged one. That fact is the consequence mainly of a high life expectancy -80,3 years- along with a low birth and fecundity rate- 7,1‰ and 0,9-.

Figure 21: Distribution of Galician population in 2002 AGE 2002 0-14 162.927 15-64 915.149 MEN 65 over 238.645 Total 1.316.721 0-14 154.140 15-64 848.085 WOMEN 65 over 341.013 Total 1.420.649 TOTAL BOTH SEXES 2.737.370 Source: Spanish National Statistics Institute.

Figure 22: Galicia’s population structure 2002 We have drawn the data relative to 2002 in order to make the comparisons of most of data in this report easier, taking also into consideration the really slight differences between populations in 2002 and currently population.

Population change:

Galician population has gone through almost no changes in last years, going from 2.583.674 in 1950 to the currently 2.783.100 on 1st of January 2008. This fact has leaded our community to loose share in Spanish population amounting in 2002 the 6,5%5. The natural increase by 1000 inhabitants rate confirms the almost inexistent change in population levels, with a value in 2008 of -3,35.

Labour market: Population over 16, active population, employed population, unemployed population and active population, employment and unemployment rates

Figure 23: Different data of Labour market ACTIVE ACTIVE POPULATIO EMPLOYEE UNEMPLOYEE EMPLOYME UNEMPLOYMENT POPULATIO POPULATIO PERIOD N>16 S S NT RATE RATE N N RATE THOUSANDS OF PEOPLE PERCENTAGE 1999 2303,6 1158,6 971,1 187,5 50,3 42,2 16,2 2000 2318,5 1188,6 1011,9 176,8 51,3 43,6 14,9 2001 2331,7 1158,6 1031,0 127,6 49,7 44,2 11,0 2002 2337,9 1178,6 1035,3 143,4 50,4 44,3 12,2 2003 2348,3 1125,2 1069,4 155,8 52,2 45,5 12,7 2004 2357,4 1254,2 1083,6 170,6 53,2 46,0 13,6 Source: Observatory of Galician Economy.

Figure 23 reflects the good behaviour of labour market until 2001, which appear to be going through a downturn since that year. In any case, unemployment rate is above Spanish and European average.

Figure 24: Evolution of total and female unemployment

Evolution of unemployment in Galicia

25 22,9 21 20 19,3 17,5 18,4 16,2 Female 15 14,9 15,5 13,6 unemployment rate 12,2 12,7 11 10 Total unemployment rate 5

0 Source:ow n elaboration 1999 2000 2001 2002 2003 2004 from IGE data

Female unemployment is much higher than male one: as a result, setting their own enterprise is an interesting solution for women. The graphic shows its evolution, parallel to general economic situation in Spain and in the world.

Total population employed as of 4th quarter 2007: 1,196,100

5 See figure 7.

Source: Galician Institute of Statistics.

The mean annual unemployment rate as of 2007 was 7.65%.The highest rate of unemployment is among young people, the population group with the highest level of education. The availability of labour is obvious and is being reinforced by the immigration of descendants of Galician emigrants from Latin America and Europe.

Labour costs

Figure 25 points out that Galicia’s labour costs per employee are much below Spanish ones (86% of Spanish costs) and below main European economies.

Education

According to the Spanish Statistics Institute, in 2002 there were 64.827 illiterate people and 402.195 with high studies from the population of 16 or over years old.

Research and development The R&D expenditure by public and private sector as a percentage of GDP comes to 0,70% in 2003 and 1% in 2007. Meanwhile, that figure stands at 1.10% for the overall Spain.

• Use of ICT by enterprises (%)

Figure 26 Use of ICT by interprises COMPUTER LAN WIRELESS INTRANET INTERNET EXTRANET EMAIL WEB LAN GALICIA 93,54 42,91 4,74 27,44 76,97 13,19 75,25 39,63 Source: INE.2003

• Percentage of enterprises which use the Internet for interacting with public authorities

Figure 27 Percentage of enterprises which use the Internet for interacting with public authorities 2003 TOTAL CONSTRUCTION SERVICES % OF ENTERPRISES WHICH USE THE INTERNET FOR INTERACTION WITH 55,17 55,45 54,85 PUBLIC AUTHORITIES FOR OBTAINING INFORMATION 53,08 53,51 52,57 FOR OBTAINING FORMS, ETC. 49,47 51,05 47,57 FOR SENDING BACK FILLED FORMS 33,15 30,5 36,33 FOR A ENTIRE ELECTRONIC PROCESS 24,62 22,41 27,26 Source: INE

The table shows the share from the total of enterprises with internet connection.

Figure 28 GALICIA TRANSPORT INFRAESTRUCTURE

Source: IGAPE

Figure 29 Passengers and goods transport at airports AIR TRANSPORT OF PASSENGERS-2002 (passengers) AIR TRANSPORT OF GOODS-2002 (ton) 2.511.897 7.298

Figure 30Passengers and goods transport at ports TRANSPORT OF GOODS- 2002 (miles of ton) TRANSPORT OF PASSENGERS-(passengers) 28240 644.916 Source: Galician Institute of Statistics from Estate Ports.

Figure 31 Kilometres of roadway

ONE DOUBLE FREE TOLL PROVINCE TOTAL Km PAVEMENT PAVEMENT MOTORWAY MOTORWAY GALICIA 17.293 16.474 84 413 322 A Coruña 4.212 3.896 52 75 189 Lugo 6.298 6.182 2 114 0 Ourense 3.316 3.163 7 146 0 Pontevedra 3.467 3.233 23 78 133 Source: Ministry of Promotion. 2006

Unlike the rest of Spain, the ratio of toll motorway relative to free motorway is substantially high (43.80%), being an added cost for transport of goods in the community.

• GVA

Figures 32 Gross Value Added by sector

GVA distribution for Galicia 1995

Services

7,60% 5,78% 10,98% Industrial goods

Construction

Agriculture, Forestry 60,34% 15,30% and Fishing Energy production

Source: IGE

GVA distribution for Galicia 2003

Services 5,90% 5,10% 11,60% Industrial goods

Construction

Agriculture, Forestry and Fishing 59,40% 17,90% Energy production

Source: IGE

The graphics shows how primary sector has been reducing its contribution to Galician GDP in recent years. In spite of this, it is still above the Spanish average. If we take into account the evolution of occupied population, we can see that there are great differences in the contribution of primary sector with a less drop. It suggests a decrease also in the productivity in the mentioned sector, which has been a chronic problem of Galician agriculture. As for construction sector, it appears to be in stagnation situation with little changes both in relation to occupied population and contribution to GVA. Finally, the services sector is leading the change, with the highest raise in occupied population shortening the gap with Spanish share, despite of being still below and far from it. A comparison of the distribution by sectors of GVA in Galicia between the years 1995 and 2007 highlights the positive growth in the participation of the services and construction sectors, with an increase of 1.6 and 4.02 points respectively.

Source IGE

Figure 33: Occupied by sector

Occupied by economic sector

700 600

500 Primary 400 Industry Source: own elaboration from IGE data 300 Construction 200 Services 100 0 1999 2000 2001 2002 2003 2004 Source: Ige

2005 2006 2007 Galicia Galicia Galicia Agriculture and fishing 120,9 110,9 103,1

Industry andConstruction 342,4 352,9 364,6 Services 666,7 700,5 725,7 Source: own elaboration from IGE data

Source: IGE

Figure 34: Comparison of occupied population by economic sector –Galicia, Spain Ocupied population by economic sector (annual means) % 2002 2003 Galicia Spain Galicia Spain Agriculture and fishing 12,88 5,91 12,37 5,64 Industry 20,34 19,40 19,41 18,71 Construction 12,44 11,77 11,71 11,89 Services 54,34 62,92 56,51 63,76 Source: IPA. INE

Comparing the distribution of GVP by sector between 1995 and 2003 and the evolution of occupied population by sectors we can see the tertiarition process or Galician economy. However the share of primary sector in Galicia economy is still over Spain average. Moreover, the low productivity of Galicia agriculture is noticed if we compare the share of primary sector in the occupied population with its lower share in Galicia GVA.

Main economic sectors

After searching for information about key sectors among public authorities6 some differences between the considerations. After crossing information we can highlight as the strategic sectors in Galicia: food and agriculture, fishing and aquaculture, quarrying of non metallic minerals, energy, forestry and timber, textile and fashion, automobiles and components, shipbuilding, tourism. Brief data are shown in the following table. The strategic sectors in Galicia haven’t changed dramatically since 2002, so data from 2006 is very similar to 2002.

Figure 35: strategic sectors in Galicia

2002 DATA Gross value Number of Average Producti added persons wage vity employed and salary FOOD AND 974583 103351 15485 9963 AGRICULTURE FISHING AND 674015 34080 14621 22018 AQUACULTURE QUARRYING OF 217915 6335 16090 34950 NON METALLIC MINERALS ENERGY 899538 2664 33341 - FORESTRY AND 266981 6794 7909 39279 TIMBER TEXTILE AND 82711 3609 12339 23591 FASHION AUTOMOBILES 1969768 42352 14873 37391 AND COMPONENTS SHIPBUILDING - - - - TOURISM AND 50648 LEISURE

Source: own elaboration from Economic Accounts Base 1995-2002 INE

1. Food and agriculture

This sector accounts for the 2.7% of Galician GDP, employing 117.000 people. Its production value stands at 1.813.571 euros (2002), amounting almost a 5% of total Spanish agriculture production. In spite of its considerable importance in the region’s economy, it is essentially oriented towards subsistence farming. Among the various types of farming found, stock-raising is the greatest contributor to the region’s income (63.6%), principally beef cattle and poultry farming. Galicia is, in fact, Spain’s leading producer of milk and eggs.

2. Fishing and aquaculture The fishing sector (fishing, shellfishing and aquaculture) is still one of the main ones in Galicia economy. In 2002 its turnover stood at 922.14 thousands of euros, according to the IGE. However, its importance comes not only by its direct turnover but also because of the influence

6 Galician Institute for Economic Promotion, Galician Ministry of Economy, Commission of European Communities, Galician Observatory of Economy, Social and Economic Council.

it has on other economic sectors, as a study by the University of Santiago de Compostela proved in 1999 that it influenced 54 out of 74 economic sectors in the Community7. Galician fishing fleet consists of 5.600 fishing ships and 1.000 of aquaculture ships. Among the ports, Vigo stands out as 20% of captures is unloaded in it. The inshore fishing fleet has great social importance in some areas. The main one is the craft fishing fleet with more than 4.900 ships with a capacity of less than 2 ton. and a length below 6 metres. They are focused on octopus, cockle, spider crab, etc. The enclosure fishing fleet is the second more important within the inshore one with more than 1.500 seamen sailing in 246 ships. They work in Cantabric fishing-grounds from Portugal to Francia’s sea as well as Irish. The deep-sea fishing fleet employs nearly 7.000 seamen. On the other hand, shellfishing by foot is still a residual non professional activity. Public institutions are promoting that its 5.500 workers (95% are women) have their incomes risen, and, at the same time, they trust on the professionalization and the semi-growing to increase its productivity. As far as aquaculture is concerned, the FAO has highlighted the potential for growing of the sector foreseen that by 2030 half of the total fish consumed will come from aquaculture. Galician sea has great conditions for aquaculture due to phytoplankton in plenty, its temperature and its water salubriousness. In 2003 the production of the sector reached an estimated production over 258.000 ton. Its star product is mussel whose sales were above 126.011.590 euros. Fish canning is essential for Galicia economy as it demands a great volume of fishing production and, on the other hand, it also demands high added value goods as machinery or control laboratories. Located mainly in A Coruña and Pontevedra, it employs more than 8.000 persons indirect employments are more. Finally, freeze industry gave employment to 8.600 persons in 2003 and turned over 3.500 millions of euros, being especially important in Vigo coast area. The sector is currently going through a crisis caused partly for the risen in petrol prices and partly due to structural reasons related to it loss of competitiveness.

3. Quarrying of non metallic minerals The quarrying and processing of non-metallic minerals such as granite, slate and quartz makes a significant contribution to the Galician economy. From the total production around 53% is exported. Within granite industry about 80% of enterprises are devoted to quarrying and transformation and the rest are auxiliary industries. Whilst, enterprises in slate sector are devoted to exploitation and transformation, and commercialization, exporting the 67% of their production.

4. Energy Hydroelectric plants, thermal power stations and wind-farms have helped provide Galicia with an energy surplus in this sector. The community accounts for about the 10% of the national total of primary energy. Embryonic ecological initiative have particularly boosted growth standing out wind power as the most potential of grow. Some brief characteristics of the sector are: • The 65% of available energy for consumption was destined to domestic use and the rest to export to other communities. • Electric energy represents the 12% of Spanish total, the 24% of which is produced in establishments that use renewable energy. • Galicia exports the 38% of electricity and the 33% of petrol products to other regions and countries. • As for the electric energy produced with renewable energy in Spain, Galicia contribution stands at 23.6% (mainly with wind power).

5. Forestry and timber The excellent natural conditions of Galicia enable timber yields up to 10 times higher than that of other European timber exporting countries. This sector is extremely competitive in

“ Input-output table. Galician canning industry.”

international markets and benefits from the proximity of its prime material and from technological backup. The main products are cellulose, paper, chipboard and sawdust.

6. Textile and fashion Textile industry in Galicia is turning out to be one of the most dynamic ones in recent years. In spite of its capacity of influencing other economic sectors being limited, other factors justify its importance: - Export and international projection capacity, which has contributed to improve Galicia image abroad. - It success cooperates as well in communicating an image of that Galician projects can become successes. - Its capacity of employment creation, particularly in rural areas, and especially because of one main company (Inditex).

7. Automobiles and components. It’s mainly concentrated around Vigo and its area, around the enterprise Citröen S.A. and around all the auxiliary automobile industry. It is a key industry because it influence many auxiliary industries, creating not only direct employment but a significant amount of indirect employment; it importance also lays on its sales out of Galicia.

8. Tourism and leisure Tourism is a sector with high potential given the tendency in tourist markets of addressing to certain objectives of quality, natural resources, alternative tourism, and runaway of overcrowded-tourist areas… In this context tourism represents for Galicia an opportunity of becoming a complementary activity to traditional ones, especially in rural areas. Actually, “rural tourism” is growing quickly, supported and boosted by public institutions. This phenomenon of turning former agriculture exploitations into tourist establishments explains also part of the decline of agriculture in Galicia economy.

9. Shipbuilding The Galician shipbuilding industry, historically essential in the economic backbone of the region, is going through a critical crisis, due to high Asiatic competition. A large number of employment was destroyed in recent years, and public institutions are trying to reconvert the industrial activity of shipyards in order to reduce costs and trying to focus production to higher value added activities. Izar shipyards –the main ones-, located in Ferrol, are focused nowadays to military shipbuilding.

Figure 37: Distribution of industry activities in Galicia

A CORUÑA FERROL Textile Auxiliar Food SANTIAGO Naval Construction Timber Electricity Automobile industry BETANZOS Consumer industry Chemical industry A BARBANZA Fishing

LUGO PONTEVEDRA Food Construction Electricity Consumer industry Business services

O MORRAZO OURENSE Naval industry Information Fishing Textile

VALDEORRAS O BAIXO MIÑO Minerals Minerals VIGO Automobile industry

Source: ARDAN.

1.1. Distribution by sector, size and legal condition

Figure 38: Galician Business Structure DIRCE VARIATIONS FROM PREVIOUS GALICIA % OF ENTERPRISES RELATIVE TO

DATA YEAR SHARE POPULATION 1/1/04 Absolutes Relatives FROM SPAIN Total P. Active P. Occupie d P. ENTERPRISES BY SECTOR

TOTAL 180.959 6.876 3,95 6,15 6,58 13,86 15,84 Industry 14.971 -39 -0,26 6,04 0,54 1,15 1,31 Construction 25.343 1.386 5,79 6,48 0,92 1,94 2,22 Trade 54.908 1.122 2,09 6,65 2,00 4,21 4,81 Other services 85.737 4.407 5,42 5,80 3,12 6,57 7,51

BY SIZE Without employees 89.431 1.709 1,95 5,96 3,25 6,85 7,83 From 1 to 9 employees 82.266 4.843 6,26 6,50 2,99 6,30 7,20

TOTAL MICROENT. (0-9 EMPLOYEES) 171.679 6.552 3,97 6,21 6,24 13,15 15,03 Small enterprises (9-49 8.133 308 3,94 5,37 0,30 0,62 0,71 employees) Medium ent.(49-249 employees) 981 16 1,66 4,57 0,04 0,08 0,09

TOTAL SMES (0-249 EMPLOYEES) 180.811 6.876 3,95 6,15 6,57 13,85 15,83 Large ent. (over 259 employees) 148 0 0,00 3,82 0,01 0,01 0,01

BY LEGAL CONDITION. TOTAL Individual Enterprise 114.050 2.229 1,99 6,56 4,15 8,74 9,99 Private Limited Company 4.065 -5 -0,12 3,32 0,15 0,31 0,36 Limited Liability Company 49.062 3.459 7.59 5,84 1.78 3.76 4.30 Comunidad de bienes 4.842 468 10,70 5,46 0,18 0,37 0,42 General partnership (soc. 1.004 -42 -4,02 3,93 0,04 0,08 0,09 Cooperativa)

BY LEGAL CONDITION (WITHOUT

EMPLOYEES) Individual Enterprise 73.296 106 0.14 6.19 2.66 5.61 6.42 Private Limited Company 757 21 2,85 2,99 0,03 0,06 0,07 Limited Liability Company 9.627 1.024 11,90 4,96 0,35 0,74 0,84 Comunidad de bienes 2.138 169 8,589 5,75 0,08 0,16 0,19 General partnership (soc. 255 -20 -7,27 4,34 0,01 0,02 0,02 Cooperativa)

BY LEGAL CONDITION ( 1-9

EMPLOYEES) Individual Enterprise 40.193 2.096 5,50 7,37 1,46 3,08 3,52 Private Limited Company 1.457 -48 -3,19 2,93 0,05 0,11 0,13 Limited Liability Company 33.382 2.146 6,87 6,15 1,21 2,56 2,92 Comunidad de bienes 2.623 295 12,67 5,26 0,10 0,20 0,23 General partnership (soc. 562 -15 -2,60 3,67 0,02 0,04 0,05 Cooperativa)

Source: DIRCE8- General-directorate for SME policy

In the table we can observe that the number of enterprises grew during the 2003 in 3.595%, reaching 180.959 enterprises on the 1st of January 2004, which represents the 6.15 % of total number of enterprises in Spain. The total number for 2007 is 200.020 enterprises, the 5,98% of total number of enterprises in Spain, although the number of enterprises in Galicia raised, compared to the total number of enterprises in Spain, the percentage is lower than the 2004. This is because the level of enterprises in spain grown at a more fast pace than the 2004. As far as its distribution by economic sector is concerned, 77.72% of enterprises belong to services sector (trade and other services), while 8.27% are devoted to industry and the 14% to construction. These shares are according to Spanish ones. However, its construction the more dynamic sector, with a growth of 5.79% relative to previous year. On the one hand, in relation to their size, 180.811 of the 180.959 are SMEs which means a 99.91%. Moreover, it can be checked that the vast majority of Galician enterprises are microenterprises (94.87%), and 89.431 of them do not have employees. During 2003, it was the group of enterprises with 1 to 9 employees that rose the most (70.43% of the total of new enterprises). Nevertheless, there are a handful of very large firms (Citröen Hispania, Inditex, Pescanova,…)with great influence on the region’s industry.

8 The DIRCE covers all the economic activities but agricultural and fishing productrion, administrative services of central, autonomous and local government (included Social Security), activities by owners of properties associations and domestic service.

Porcentual distribution of enterprises by production sector 2004

8,27% 14%

Industry Construction Trade Rest of services

47,38% 30,34%

Figure 40: porcentual distribution of enterprises by production sector 2004

1.2. Brief description of the Galician most dynamic enterprises Figure 41: Competitiveness of Galician enterprises 2004 Competitiveness of Galician enterprises 2002

WEALTH- HIGH GACELA HIGH YIELD CREATORS PRODUCTIVITY ENTERPRISES(1) ENTERPRISES (2) ENTERPRISES (3) ENTERPRISES (4) (%/total) (%/total) (%/total) (%/total)

Construction 149 30,9 41 16,8 13 15,9 49 28,3 Manufacture 100 20,7 63 25,8 33 40,2 30 17,3 Wholesale 85 17,6 27 11,1 11 13,4 41 23,7 Services 60 12,4 70 28,7 6 7,3 15 8,7 Transport, communication 41 8,5 18 7,4 8 9,8 11 6,4 and public services Retail trade 29 6,0 15 6,1 8 9,8 22 12,7 Agriculture, forestry, stock- 12 2,5 7 2,9 1 1,2 3 1,7 raising and fishing Mining 6 1,2 3 1,2 2 2,4 2 1,2

TOTAL 482 100 244 100 82 100 173 100

(1) Those whose turnover increases steadily for, at least, 3 years consecutively, at an annual rate of 25% or over. (2) Those whose average economic yield within a 3 years period stands at 25%, not having had a yield below 15% in either of those years.

(3) Those whose gross value added in 2000 was over 150.000 euros and has risen at a rate of, at least, 10% within the following 2 years. (4) Those whose gross value added per employee was within the 25% of best enterprises of the sector and has been place in the 10% top during the 2 following years- Source: ARDAN.

The table provides us with a flash of the most dynamic enterprises in Galicia by sectors. These data have been extracted from ARDAN database which is limited to enterprises whose company address is set in Galicia (which implies that some big enterprises are not counted on the database), enterprises that had a turnover above 300.000 in 2002, are registered in the Trade Register and whose data are available for a period of 3 years consecutively – the database consists of a total of 11.379 enterprises. As for gacela enterprises, we should add that their average growth rate was 59.7% within the period 2000-02. These enterprises are concentrated in construction, wholesale trade and manufacture, which accounts for the 69.2%. Along with gacela enterprises there are 244 of high yield enterprises that are concentrated between services and manufacture sectors (54.5% of the total). As far as wealth-creator enterprises, we must start pointing out that they must verify three requirements: create positive value for their shareholders in 2000-02 period; their GVA in 2000 must exceed 150.000 euros, and, finally, the growth rate of their GVA must be, at least, 10%. According to ARDAN there are only 82 enterprises that fulfil these requirements, located mainly in manufacture sector. Finally, there are 173 highly productive enterprises, placed mainly in construction and wholesale distribution (51.2% of total). The ranking for the 2007 data is the same as for 2004 and 2002.

1.3. New entrepreneur profile • EDUCATIONAL LEVEL: According to the Spanish Chamber of Commerce, the new Spanish entrepreneur’s profile responds to a man (66%) aged between 25-35 (50%), with secondary or university studies (73%). Moreover, most of them have knowledge of computer science and foreign languages (English in the 85% of cases and French, 15%). • NEED OF INFORMATION: On the other hand, 87% of them ask for information before creating their own enterprise, through advisors, public authorities of chambers of commerce. According to the European Commission, Spanish Entrepreneur gives more importance to public institutions that supports business than the rest of European entrepreneurs. • REASONS FOR CREATING A NEW ENTERPRISE: most of entrepreneurs set their own enterprise since they are eager to work on theirselves (42%), then, because they want their patrimony to increase (18.7%) and, finally the 13,9% start their own enterprise to sort out an unemployment situation. • MANAGEMENT EXPERIENCE: The studied of the Council of Chambers of Commerce showed that in 1998, at least one of the founders of the new enterprises created in Spain had management experience. This percentage is reduced to 30% when it refers to experience in creating an enterprise. 9

Sources of information: • Spanish Statistics Institute (INE): www.ine.es • Galician Statistics Institute (IGE): www.xunta.es/auto/ige/datos • Eurostat: http//europa.eu.int/comm/eurostat/ • Galician Institute for Promotion and Development (IGAPE): http://investingalicia.igape.es/ingles/ • ARDAN: www.ardan.es • Economic and Social Council: www.ces.es • http://www.xunta.es/galicia2002/ • http://europa.eu.int/spain/publicaciones/ccaa/1999/pdf/galicia.pdf • www.galicia2010.org • Galician ministry of Economy and Finance • Ministry of Economy and Finance • Ministry of Public Works • Social and Economic Galician Council: www.ces.es • Spanish Central Bank.

9 Translated from “La Empresa en España”, Superior Council of Chamber of Commerce.

3.2 North Aegean

The region consists of 9 islands of various sizes: small, big and also medium ones. The islands which belong to the North Aegean Region are extended to the northeastern part of Aegean Archipelagos. Most of them are located along the coasts of Minor Asia and they are the eastern border of E.U. and Turkey. The basis of North Aegean Region is Mytilene. Lesvos, Lemnos, Chios, Samos and Ikaria, compared to the rest of the Aegean islands, are considered the bigger ones. Their size and population density make Lesvos and Chios, two of the 21 most important islands of Europe. These five big islands, together with four smaller ones - Fournoi, Psara, Inousses, Agios Efstratios – compose an area without a specific geographical consistency, which officially, is divided to three prefectures.

Administrative Structure of the Region

• The Prefecture of Lesvos is 2.154 Km², including: Lesvos, Lemnos and Agios Efstratios, seventeen (17) Municipalities and one Community, in four Provinces. • The Prefecture of Chios is 904 Km², including: Chios, Psara and Inousses and ten (10) Municipalities in one Province. • The Prefecture of Samos is 778 Km², including: Samos, Ikaria and Fournoi and eight (8) Prefectures in two (2) Provinces. The percentage of the mountainous extend, occupies about 33,2% of the total extent of the Region.

Definitory characteristics of the territory

According to the prosperity index, which indicates approximately the living standard of North Aegean Region population, there are major inequalities between the Region and the whole Country, and therefore the prosperity level of the region’s population, is lower than the national one. However, the constant progress of some of these indexes, show that the gap between the living standard at the Region and that of the Country has minimized. The region’s GDP has increased after 1995, increasing contemporaneously its percentage participation to the country’s GNP for 0,3%, something that indicates its faster growing rate than that of the country’s. At the same time, the GDP per head of North Aegean, increases with more quick rates than the country’s GNP, even if we consider the lower rates that population increase seems to have at the Region.The progress of GDP in North Aegean Region is attributed mostly to the prefecture of Lesvos and to the prefecture of Chios, as well. The prefecture of Samos shows a minor participation to the forming of Region’s GDP, but a greater one, to the forming of the average GDP per head, of the Region.

1) Table of the Prosperity Indexes of the Region Definitory Year North Agean Average of Ranking of the characteristics of the Region Greece Region compared territory /thous. euros to 13 Regions of Greece GNP-gross national 2005 14,5 20,6 11 product Savings account per 2005 11,4 12,2 2 resident Declared income per 2005 11,6 13,7 10 taxpayer Tax per taxpayer 2005 0,79 1,22 9 Natural increase at 2005 -3,5 0,2 13 population rates/ 1000 residents

Students of secondary 2005 60 63 10 education/ 1000 residents Students of elementary 2006 59 58 7 school/ 1000 residents

Percentage of 9,4 8,9 6 unemployment

Participation at the Country’s total proportions

GNP 2005 1,3% 13 Taxpayers 2005 1,9% 13 Declared income 2005 1,6% 12 Income tax 2005 1,2% 12 Savings Account 2005 1,7% 12 Source: Prefectures of Greece, 2007

At the table below, you can see the latest available information about the health sector of North Aegean Region.

2) Table of the Health Indexes in North Aegean Region Number of Number Number Rooms at Number Number Pharmacies rooms at of public of Private of of doctors the hospitals private clinics doctors per 100 hospitals clinics people Lesvos 324 2 0 0 330 3,09 81 Samos 166 2 0 0 179 4,17 26 Chios 173 1 3 77 197 3,77 37 Total 663 5 3 77 706 ---- 144 Source : Prefectures of Greece, 2007

Selected economic indicators GDP The economy of the three prefectures of North Aegean Region, is mainly based on the sectors of primary production and services, while the touristic sector seems to progress notably the recent years. Taken for granted are for example problems such us: the shortage of available natural resources, the decrease and the ageing of the population, the desertification of the agricultural land, and other problematic issues of the islands.

1) Table of GDP and its participation in the whole GNP of Greece (in million euros, in current prices)

PREFECTURE 2003 Participation 2004 2005 In total % Participation Participation In total % In total % North Aegean 2,334 1,34 2,348 1,27 2,481 1,25 Whole country 174,258 100 185,225 100 198,609 100 Source: National Statistics,2007

2) Table of the GDP of the prefectures of the Region (in millions of euros, in current prices)

Gross product (in millions. €) of the prefectures 2000 2001 2002 2003 2004 2005 of the region 2000-2005* PREFECTURE LESVOS 909 998 1003 1185 1146 1212 CHIOS 499 531 569 662 711 765 SAMOS 397 449 455 487 491 504 TOTAL 1.805 1.978 2.027 2.334 2.348 2.481 Source: National Statistics,2007

3)Table of the GNP, %GNP of the Country for all production sectors.

GNP, as % 2002 2003 2004 2005 AGRICULTURE MANUFACTURE SERVICES of the country for each production sector WHOLE 100 100 100 100 100 100 100 COUNTRY NORTH 1,9 1,34 1,27 1,25 2,85 0,87 1,27 AEGEAN (Source: Prefectures of Greece 2005)

The Region produces 1,25% of the Country’s Gross Domestic Product, which is a proportion that makes N. Aegean Region the last of all the other prefectures of Greece.

4)Table of the GDP per head, for the region (in euros and in current prices)

2000 2001 2002 2003 2004 2005 % of the Greece average N. AEGEAN 8.800 9.656 9.919 11.463 11.578 12.276 68,63 WHOLE 12.483 13.357 14.342 15.536 16.745 17.886 100 GREECE Source: Prefectures of Greece 2007

5) GDP per head (in million euros) of the Prefectures of the Region, 2000-2005* (in euros, in current prices) PREFECTURE 2000 2001 2002 2003 2004 2005 LESVOS 8.409 9.225 9275 10.989 10.674 11.339 CHIOS 9.384 10.017 10.785 12.603 13.573 14.634 SAMOS 9.056 10.285 10.469 11.263 11.403 11.738 TOTAL 8.800 9.656 9.919 11.463 11.578 12.276 Source: National Statistics* (2005, temporary elements)

Prices and costs • Harmonised index of consumer prices Sep. 08/Sep. Harmonised index of consumer prices (1) 4,7 07 From: www. mnec.gr (information for the whole Greece)

• Index consumer price Index of consumer Sep. 08/Sep. 4,6 from mnec.gr prices (1) 07 From www. mnec.gr (information for the whole Greece)

External trade and foreign investment

1) Table of the 20 major exportation destinations of N.Aegean (value in euros) The 20 most 2003 2004 2005 2006 significant exporting destinations of N. Aegean. ITALY 25.001.144 12.574.821 26.241.976 30.096.161 FRANCE 14.911.514 12.725.067 18.035.370 20.984.992 UNITED 4.242.055 4.984.615 8.209.001 9.489.422 KINGDOM SPAIN 12.099.578 7.547.420 14.437.068 14.251.773 PORTUGAL 1.695.568 3.350.536 5.989.112 9.292.466 GERMANY 4.324.551 4.064.211 7.909.421 9.185.002 USA 2.863.271 3.631.183 3.900.194 3.868.114 TURKEY 601.625 929.443 3.213.378 4.574.997 NETHERLANDS 1.737.656 1.887.795 3.739.954 4.857.907 UNITED ARAB 315.190 583.876 430.852 193.560 EMIRATES CYPRUS 334.992 1.298.292 1.210.447 1.688.214 EQUIP. OF SHIPS 129.835 275.030 120.990 141.829 WITH THIRD COUNTRIES ROMANIA 440 1.290 0 22.848 BULGARY 70.088 198.813 275.310 450.183 IRELAND 158.742 509.791 1.201.512 1.726.638 S.ARABIA 125.610 118.753 96.000 398.800 ISRAEL 449.465 355.682 261.059 529.926 BELGIUM 273.580 393.295 368.436 371.293 SLOVENY 0 0 434.773 403.026 CANADA 361.680 311.477 389.274 330.917 Source: Exporters Association of Northern Greece 2007

At the above table, you can see the most significant exporting destinations of North Aegean Region. The first positions, according to their exporting capacity, are taken by Italy, France, United Kingdom and Spain. Italy, France and Spain. There is a reduction in exports in 2007, compared to the former years. A significant reduction is notable for Germany as well, which is ranked at the 6th position, in regard with its exports in 2007. The years 2003-2006, were very fruitful for the most exporting destinations of N. Aegean, something which was changed in 2007. Significant and year to year improvement of the export relations, is notified for USA, United Arab Emirates, Romania and Bulgary. Furthermore, we can conclude that the major activity of the export trade stems from the intercommunity trade and specifically, at a proportion of 84% for the year 2007, while that proportion for the Third Countries is almost 16%.

2) Table of the exporting products of N. Aegean in euros.

2003 2004 2005 2006

Food 60.150.906 45.011.810 86.439.021 100.401.712 Drinks and Tobacco 6.783.398 7.687.439 6.397.581 8.428.548 Non-metalic minerals 11.000 345 1.453 1.400 Chemics and Plastics 1.090.322 2.255.948 1.467.116 1.166.855 Petroleum products 13.550 15.080 76.128 71.829 Wood and Paper 48.377 25.772 59.511 40.744 Textiles and Clothes 352.908 406.190 325.956 481.239 Minerals 20.580 48.624 3.700 35.853

Machines and Devices 195.204 174.727 99.957 55.434 Vehicles 201.650 1.000 20.395 30.266 Others 2.506.407 3.250.466 4.392.982 4.456.395 Total 71.374.302 58.877.401 99.283.800 115.170.275 Source : Exporters’ Association of Northern Greece 2007

At the above table, you can see all the categories of the products that are exported from the whole North Aegean Region. The dominant part, primacy as far as exports are concerned, is possessed by Food supplies, with a proportion of 83.82% of the total exports (Fish and Malacostracans, Fat and Olive, Dairy-farming and various Concoctions). At the second exporting position, you will find drinks and tobacco at a proportion of 5.7%, while in especially low proportions follow the Chemic and Plastic products and the Petroleum products as well. The last category, is the only one that shows improvement in the last five years. All the other categories apart from Textiles, Clothing and Vehicles present a decline in 2007.

3) Table of the exports of every Region, as a proportion of GDP, for every region.

Ranking of the Prefectures 2003 2004 2005 8. N.Aegean 2.70% 2.51% 4.00% Source: Exporters’ Association of Northern Greece 2007

4) Table of the export indexes. /GDP for the year 2003

Ranking of the Prefectures 2003 2004 2005 2. N.Aegean 100,0% 92,7% 148,0% Source: Exporters’ Association of Northern Greece 2007

5) Table of Exports annual percentage change

Prefectures 03/04% 04/05% 05/06% 06/07%

N.Aegean -17,5% 68,6% 16,0% -4,1% Source : Exporters’ Association of Northern Greece 2007

6) Table of the indexes of imports lapping over exports (exports/imports) Ranking of the 2003 2004 2005 2006 2007 Prefectures 2. N.Aegean 101.58% 151.46% 151.40% 173.82% 122,39 Source : Exporters’ Association of Northern Greece 2007

At the above tables, you can see the position of North Aegean Region at a national extend, as far as exports are concerned. It is easy to observe that the proportion of exports in absolute prices, is very low. N. Aegean Region’s exports constitute the 4,31% of the Region’s GDP, occupying the 8th position of the similar index, in a 13 region ranking. As an export index, being a proportion of the GNP for the year 2003, it takes the second place at this ranking. Contemporaneously, as far as the index of annual percentage change of exports is concerned, it presents a positive tension of about 17,3%, taking the 4th place of the ranking. It also occupies an important position in regard with a very crucial index for the economy, i.e. the index of exports lapping over imports, which is about 122,39%, a percentage approaching that of West Macedonia, which is the first region of the same ranking. The useful conclusion of all these, is that N. Aegean Region has a surplus in its trade balance.

Population • Population distribution North Aegean Region represents the 1,8%, of the population of whole Greece, being the smaller, therefore, Region. The census of 1991 and 2001 showed that the population of the Region increased for about 3,4%, while the whole country’s increase was about 6,9%. Considering the results of 2001 census, the population of the Region reached the amount of

206.121 residents, an amount that for the year 2001, represented the 1,88% of the country’s total population, while in 1991 that proportion was almost 1,94%.

1) Table- Census Data POPULATION CENSUS 1981 1991 2001 Number of 195.004 199.231 206.121 residents Extent 3.836 3.836 3.836 klm² Density of 50,8 51,9 53,7 Population. Residents/ klm² Civil Population 54.733 54.951 88.996 Rural Population 106.142 110.974 117.125 Number of 69.380 68.872 74.355 households Number of houses 116.717 128.412 142.203 Source: National Statistics-Census 2001

2) Table - Age ranking of the population % Age 0-14 15-24 25-39 40-54 55-64 65-79 >80 North Aegean 14,64 15,26 20,33 17,73 10,68 16,81 4,56 Region Total of 15,19 14,28 22,87 19,97 10,98 13,69 3,02 Greece Source: National Statistics-Census 2001

3) Table – Distribution of the population at the Prefectures PREFECTURE LESVOS CHIOS SAMOS CENSUS 1991 2001 1991 2001 1991 2001 RESIDENTS 105.082 109.118 52.184 53.408 41.965 43.595 Source: National Statistics-Census 2001

• Population change The population of the Region shows a decreasing rate, since it kept the highest percentage of population’s natural reduction for the years 1999-2001 and for the year 2002 it held the second bigger rate. As we can see at the table below, the percentage of natural decrease of the population, increased in 2003, bringing the North Aegean Region at the first position, compared to all the other regions of Greece.

1) Table – Natural Decrease of the Population / 1.000 residents 2002 2003 NORTH AEGEAN REGION -3,62 -4,28 TOTAL OF THE COUNTRY -0,01 -0,07 Resource: Prefectures of Greece 2005

2)Table – Distribution of the population at the Prefectures PREFECTUR 2002 2003 2004 2005 2006 2007 E LESVOS 108.08 107.859 107.661 107.050 106751 106344 6 CHIOS 52.792 52.522 43.129 43.015 52150 52022 SAMOS 43.454 43.248 52.379 52.337 42830 42717 TOTAL 204.33 203.629 203.169 202.402 201.731 201.083 2

Resource: Prefectures of Greece 2007

The urbanization percentage of the Region, increased for about 1,2 percentage units (in the decade of '90) and reached the levels recorded in 1981 (24,7%), although still remaining at much lower levels than those of the whole Country and keeping its rural manner.

Urbanization The urbanization percentage of North Aegean Region in 2001 is 43%, while 71% is the urbanization percentage of the whole country. The urban centers of the Region have 88.996 residents (43% of the total population of the Region), while the rural population is about 117.125 residents (56% of the total population). The highest percentage of urbanization among the prefectures of the Region, is indicated at the prefecture of Chios, which is an amount of about 53%.

3) Table - Civil & Rural Population in the Region REGION LESVOS CHIOS SAMOS Census 1991 2001 1991 2001 1991 2001 1991 2001 Civil Population 54.951 88.996 24.953 45.567 29.998 28384 - 15.045 Rural Population 110.974 117.125 63.509 63.551 22.186 25.024 25.279 28.550 Source: National Statistics-Census 2001

Labour market • Population over 16, active population, employed population, unemployed population, and active population, employment and unemployment rates

The labour force of N. Aegean

1)Table of the labour market elements for the year 2004

Total Men Women Population able to 119.946 61.220 58.726 work (over 16)

Labour force 74.160 47.657 26.503

Employed 67.200 45.921 21.279

Unemployed 6.960 1.736 5.224

Long lasting 3.468 696 2.772 unemployed

Non-Active 45.786 13.563 32.223

Source: National Statistics, Research about the Work force of 2004, 2nd Trimester. Worked out by P.A.E.P.S.A.

2) Table of the percentage of labor market indexes for the year 2004

Total Men Women Population at a proper 100% 51,0% 49,0% age to work

Working force 100% 64,3% 35,7%

Employed 100% 68,3% 31,7%

Unemployed 100% 24,9% 75,1%

Long lasting 100% 20,1% 79,9% unemployed

Non- Active 100% 29,6% 70,4%

Source: National Statistics, Research about the Work force of 2004, 2nd Trimester. Worked out by P.A.E.P.S.A.

According to the above tables, the following indexes for N.Aegean Region are: 1. Unemployment percentage =9,38 % 2. Index of the employed, according to the financially active population = 56,02%

• Labour costs

Number of employed people, working hours and labor cost at the N.Aegean for the year 2004

Total number of employed Working hours Working hours paid out Total labor cost 9.117 12.109.046 13.116.174 133.395.410 € Source: National statistics

Education North Aegean Region, has 59 pupils of elementary school for every 1000 residents, which is a percentage a little higher than the country’s average. (58 pupils/ 1000 residents). This locates the region at the seventh position of the ranking, between the other 13 regions. In Lesvos, there are 159 public elementary schools and 1 private one with 100 pupils. As far as the index of secondary education is concerned, the Region still keeps a low position, which is the 10th, with a percentage of 60 pupils out of 1000 residents, while the national average is 63 pupils out of 1000 residents.

1) Table of the number of educational institutions and pupils of primary and secondary education. Region’s total LESVOS CHIOS SAMOS number Number of elementary schools 159 85 33 41 Pupils at elementary schools 11.762 6.384 3.040 2.338 Tutorial staff of elementary 1.603 946 387 270 schools Number of high schools 51 27 14 10 Pupils of high schools 6.249 3.272 1.639 1.388 Tutorial staff of high schools 898 453 266 179 Number of senior high schools – 56 30 15 11 technological secondary education Pupils of senior high schools– 6.06 3.099 1.714 1.251 technological secondary education Tutorial staff of senior high 921 481 255 185 schools–technological secondary education Source: Regions of Greece, 2007

University of the Aegean The University of the Aegean is located at the capital of Lesvos Prefecture, the city of Mytilene, where the rectorate, the central administrative services of the institution, the central library and the searching committee are situated. The University of the Aegean for the years 2005-2006 had 8.603 undergraduate and 2.013 postgraduate students. As far as the academic staff is concerned, the university has 252 people as Teaching and Research Staff and 184 as Adjunct Instructors (or Instructors on contractual basis; that is, PD 407/80 staff) and Visiting Professors. That makes a total of 404 employees as administrative staff, who are responsible for the working of the university units in the five islands.

Centres of Professional Education (C.P.E) In the North Aegean there are 17 Centres of Professional Education and 1 branch in the island of Ikaria.

Table of the number of C.P.E of the North Aegean. ISLAND C.P.E LESVOS 7 CHIOS 4 LEMNOS 3 SAMOS 3 IKARIA 1 branch TOTAL 18

Technical Professional Education In total there are 18 Technical Professional Education in the North Aegean Region: 10 in Lesvos prefecture, 2 of them operate in Lemnos Island 5 in Chios prefecture, 1 of them operates in Inouses Island 3 in Samos prefecture, 1 of them operates in Ikaria Island

Institutes of Professional Training (I.P.T) There are 44 public I.P.T in the North Aegean Region.

Centres for adult education (C.A.E) In the North Aegean region there are 3 educational structures (one in every capital of its Island)

Research and development

1) Table of Regional allocation for Research and Development cost per sector Gross Enterprices Public Universities Non-Profitable domestic Research Organizations expenditure Units for R&D (GDERD) North 0,99% 0,00% 0,23% 2,01% 0,00% Aegean Source: Strategic Plan for Research, Technology and Innovation within the framework of National Strategic Plan 2007-13

GDERD = Gross domestic expenditure for research and technological Progress PBED: Private Business Expenditure for R&D R&D= Research and Development

2) Table of Regional Expenditure for R & D to the Regional GDP. Year 2003 Unit: Millions € GDERD PBED Regional GDERD PBED GDERD PBED / GDP /GDP /GDP /population (euros (euros per per person) person) NORTH 9,66 0 2.873 0,366% 0 47,34 0 AEGEAN Source: Strategic Plan for Research, Technology and Innovation within the framework of National Strategic Plan 2007-13

Passengers and goods transport at airports Domestic International Airpo Departures/ Boar Land Commodi Departures/ Boar Land Commod rts Arrivals ded ed ties* Arrivals ded ed ities 13.85 12.62 Ikaria 606 0 0 4.180 0 0 0 No data Mytile 201.4 194.2 77.59 76.81 ne 7.107 77 34 903.308 1.329 1 5 No data Samo 110.6 105.7 132.2 132.8 s 4.919 12 24 489.160 2.031 34 83 No data 115.4 107.0 12.62 13.21 Chios 4.363 46 56 506.549 401 0 0 No data 441.3 419.6 1.903.19 222.4 222.9 16.995 85 34 7 3.761 45 08

Source: Civil Aviation Authority *Commodities in kilos

• Passengers and goods transport at ports

Passengers movement and cargo handling at the main ports of Greece Charged Ports Disembarked Embarked Discharged Merchandises Merchandices Mytilene 278.000 271.000 No data Samos No data No data Chios 253.000 249.000 No data 531.000 520.000 Source: National Statistics 2007

• Kilometres of roadway In the road transportation there has been a tremendous improvement of the local network, mainly as far as the provincial one is concerned, while the national and provincial road network still needs to be improved, in order to decrease ‘time; and ‘distance’ and ensure the road safety. The national road network in the islands of North Aegean has a total length of 124,3 km, from which the 60 km are in Lesvos, the 40,3 km in Chios and the 24 km in Samos. The provincial road network is about 1.222 km (Lesvos prefecture 544, Chios prefecture 411, and Samos prefecture 267), while with the interventions of R.O.P, the total length of provincial network became 1.252 km, while the rural network, extended to a total of 2.600 kilometres, facing quality problems.

There is a strong seasonal movement in the islands’ road network due to tense touristic summer periods and low winter periods. The main problems of the islands’ road network are: • low technical characteristics of mapping out (mainly in the mountainous), • lack of central road axes and • lack of regional by-passes that would lead with safety vehicles and passengers from the harbours to the mainland. (Source: Business report, ΚΕΤΑ North Aegean 2007)

Main economic sectors The North Aegean islands’ economy is characterized by a slow change of the traditional productive model, and each island has a different development rate. There is a different productive model for each island and especially for the five big ones.

The difference is due mainly to the social-cultural elements of each island. Most islands demonstrate an important productive base, with intense structural problems, which are responsible for the slow transformation of the traditional productive model to a modern and dynamic one.

In most islands the basic productive sector is the primary one, having strong products that face problems of promotion in the national and international market. • The manufacturing sector, which presents a strongly connection with the primary production, is lean, it has a traditional form and presents fluctuations, with increasing tendencies, in the last few years. • The services sector, in most islands, is identified or it tends to be identified with tourism, presenting intense differentiation in Chios and a smaller differentiation in Lesvos. (Source: Business report, ΚΕΤΑ North Aegean 2007)

Distribution by sector, size and legal condition Five of the most important business sectors in prefecture of Lesvos are: 1. Retail Trade – apart from car, vehicle and motorcycle’s trade 2. Hotels – Restaurants 3. Constructions 4 Other Business Activities 5. Terrestrial Transports through Channels

The five most important business sectors in the prefecture of Samos are: 1. Hotels – Restaurants 2. Retail Trade – apart from car, vehicle and motorcycle’s trade 3. Constructions 4. Other Business Activities 5. Wholesale Trade and Supply Trade, apart from car, vehicle and motorcycle’s trade

The Five most important business sectors in the prefecture of Chios are: 1. Retail Trade– apart from car, vehicle and motorcycle’s trade 2. Constructions 3. Hotels – Restaurants 4. Other Business Activities 5. Wholesale Trade and Supply Trade, apart from car, vehicle and motorcycle’s trade. 3.5 Legal Forms of Businesses in North Aegean At the next paragraph we can see the businesses of every prefecture of North Aegean and the legal forms as given at the Enterprise’s Records of 2002.

Personal Enterprises The most preferable legal form of enterprise in North Aegean is the Personal Enterprise. There are about 14.005 Personal Enterprises in North Aegean, from which 6.563 run in the Prefecture of Lesvos, 3.905 in the Prefecture of Samos and 3.537 in the Prefecture of Chios. Most of them, concerning North Aegean, are restaurants (a total of 974 personal enterprises).

S.A. Companies According to National Statistics, in the North Aegean there are 414 S.A. Companies, 150 from which, 150 run in the Prefecture of Lesvos, 179 in the Prefecture of Samos and 85 in the Prefecture of Chios. The majority of them belong to the tourism sector and more specifically: • Hotels with Restaurants (5511) • Hotels and Motels without restaurants (5512)

1. General Partnership Companies In North Aegean run 1.170 companies, 600 of which are in the prefecture of Lesvos, 234 in the prefecture of Samos και 336 in the prefecture of Chios. In the prefecture of Lesvos most of the General Partnership Companies are restaurants, but in the prefecture of Chios the majority of them, are bars.

2. Partnership 285 enterprises occupying the legal form of Partnership, run in North Aegean, 106 of which concern the prefecture of Lesvos, 81 of them the prefecture of Samos and 98 the prefecture of Chios. The majority of them belong to the type: ‘Structure of buildings and technical works of civil engineer, which concentrates a total of 116 enterprises.

3. Private Limited Companies 314 Private Limited Companies run in North Aegean Region: •136 in the prefecture of Lesvos • 99 in the prefecture of Samos • 79 in the prefecture of Chios

4. Society 27 enterprises function, having the form of society: • 18 in the prefecture of Lesvos • 7 in the prefecture of Samos • 2 in the prefecture of Chios

5. Marine Enterprises & Co-Ship ownerships 27 Marine Enterprises run in the Region, 5 of which are located in the prefecture of Lesvos, 9 in the prefecture of Samos and 5 in the prefecture of Chios. As Co- Ship ownership, 31 enterprises are in function: • 18 in the prefecture of Lesvos (13 of them belong to the sector of Piscary) • 8 in the prefecture of Samos • 5 in the prefecture of Chios (5 of them belong to the sector of Piscary)

6. Other Kinds of Enterprises 322 enterprises function in the Region, bearing another Legal form (free lancers, etc.) • 173 in the prefecture of Lesvos • 67 in the prefecture of Samos and • 82 in the prefecture of Chios (Source: Business Report ΚΕΤΑ North Aegean 2007)

Brief description of the Partner’s most dynamic enterprises Entrepreneurship Activity of North Aegean

There is a reduction at the percentage of the starting capital for new established enterprises, of about 24,1%. This is an amount of about 2.745.2000 Euros. The same research shows indexes of effectiveness for every region and sector of entrepreneurship. In North Aegean, the bigger net profit for the year 2004, was recorded at the industry sector a percentage of 3,27%. The commercial sector follows, with a percentage of 2,63% and tourism with 1,54%. The index of these three sectors, shows a reductive tendency, compared to that of year 2002 (industry 5%, trade 3,10% and tourism 4,32%). For the regions of Ionian Islands and South Aegean, as well as for many other touristic regions, for the year 2004 (year when the Olympic Games were organized in Greece) the profit margin was negative at the tourism sector. Although the fact that North Aegean Region concentrates a small share of tourist investments, compared to that of whole Greece (almost the1,06% of the initial value of constant dynamic of the sector), it was the only region that in 2004 offered a positive net profit margin (1,54%).

In the commercial sector we can observe high returns of own funds, implemented by enterprises of the North Aegean, while we can also observe that the percentage of tourism (0,76%), exceeds the average of all other Regions. On the contrary, the industrial sector of Ionian Islands has the worse return of own funds for the year 2004 (-3,12%).

At the industrial sector, the bigger part of financial expenses concerning sales, was recorded from Eastern Macedonia and Thrace Region. The analogy has increased since 2003 for the North Aegean Region. The enterprises of the regions of Ionian Islands and South Aegean, have bigger funds and therefore bigger investments in fixed assets, of own, foreign and loan funds. The result of these characteristics is the existence of big reserves and financial expenses.

As a conclusion, we can say that the characteristics of the enterprises of North Aegean in comparison to those of the Ionian Islands and South Aegean Islands, are the following:

• The increased general and special cash flow (cash flow index) • The bigger functional and mixed profit margin • On average, smaller speed at the cash flow of the reserves and income requirements • Bigger capital efficiency • Smaller proportion of financial expenses • Smaller proportion of circulating asset (reserves, customers, remaining requirements) • Smaller relation between foreign and own funds

New entrepreneur profile New businessmen mostly turn to entrepreneurship activity in order to take advantage of a business opportunity that they perceive in their local market. Therefore, their activity has more chances to become successful, as it is based on the diagnosis of a real opportunity and not on the lack of another option. Greece keeps the 17th position out of 35 countries of GEM (2005) as far as business opportunity is concerned, something which shows the wide improvement margins that exist for that qualitative dimension of Entrepreneurship. The majority of new businessmen restrict their activity to specialized information searching, for subsidized programmes. The absence of other complicated requests, such as the searching of ways for the increase of enterprise’s competitiveness and extroversion, or the decrease of business risk through better examination of the market in specific sectors to which businessmen are concerned to, is something very important, that needs to be thought about. Young people in North Aegean Region, who want to become entrepreneurs, don’t consider at all the long term viability of their business activity. The majority of them belong to what we call: seasonal entrepreneurship, which means that business activity is chosen, because they haven’t got another occupational option. This assumption agrees with the elements the Foundation for Economic and Industrial Research, which present Greece as a champion of that kind of entrepreneurship compared to other European countries. Wherever business ideas exist, they are characterized by a non- documented aspect concerning the following parameters: 1) the purpose of the existence of the new enterprise. 2) the purpose of its establishment at the specific area of interest 3) the total cost of the establishment and function of the enterprise and 4)the combination of previous experience, abilities and businessman’s education level, with the conditions that the potential businessman bear, in order to create a viable enterprise.

3.3 Sardinia

Sardinia is the second greatest island of the Mediterranean (Sicily is the largest) between Italy, Spain and Tunisia and Corsica. It is situated between the north latitudes 38° 51' 52 '' and 41° 15' 42 '' and between the 8° 8' and 9° 50' East longitude. Due to its position between the Tirreno and the Sardinian sea, its natural beauty and its history, Sardinia is a very popular destinations for the tourism. Sardinia has an area of 24,090 km2 and a population of 1.65 million inhabitants.

Characteristics of the territory The coasts of Sardinia (1.849 Km long) are generally steep and rocky and often rectilinear for kilometres. They are articulated in promontories, with ample and deep bays and inlets surrounded by smaller isles.

The Island, being an ancient territory with rocks that go back to the Ancient Palaeozoic (300.000 years ago), doesn't possess any high mountain due to the very long erosion processes. The Gennargentu is particularly important among the high mountainous, in the centre of the Island, with its highest peak (1,834 m.), with the Mount Limbara (1,362 m.) in the North and the Rasu Mount, which is the culminating part of the so-called "Marghine chain", which runs crosswise for 40 Km towards North.

The climate is generally mild, influenced by Atlantic, African and Artic air masses. The weather is clear: in the arc of the year approximately 300 days are sunny. The remaining “rainy” days are mainly concentrated in winter and autumn although some unexpected heavy showers can occur in spring.

The name: Sardinia

The Greeks called Sardinia Sardò, connecting it to Sardo, the son of Eracle that according to the myth would have reached the island at the head of a group of Libyan colonizers. Sardinia was also called Ichnussa, from the Greek ichnos (footstep), due to its characteristic shape.

Administrative information

Sardinia is one of the five Italian Region with an Autonomous Statute (as also Valle d’Aosta, Trentino-Altro Adige, Friuli-Venezia Giulia and Sicilia).This statute was given by the constitutional law of 1948, some years after the Second World War, in order to secure the rights of the various minority language groups and to preserve their particular cultures. Strong autonomous powers, both legislative and administrative, were granted which influence also the economic activities (agriculture, industry, arts and crafts, tourism, commerce and public works). The 85 member – directly elected – Regional Council constitutes the legislative body of the region and is the proportional representation of the population of the eight provincial aggregations of Sardinia. The Regional Government is composed of the President of the Region and 12 regional ministers, named by the President who are responsible for the various branches of administration. The capital of the region is Cagliari.

Sardinia is divided into eight territorial aggregation (provinces), according to the “New provincial assets” approved by the Regional Council on 31st March 1999, the first step of the foundation process of the new provinces passed through several legal acts (L.R. 2 January 1997 n.4 – “Schema di nuovo assetto provinciale”; L.R. 12 July 2001 n.9; L.R. 1 July 2002 n.10.) and concluded last May with the election of their respective Presidents and District Councils.

Sardinia has in total 377 Municipalities, divided between the new provinces as follows:

α) Cagliari (71 Municipalities) β) Medio Campidano (28 Municipalities ) χ) Carbonia-Iglesias (23 Municipalities ) δ) Nuoro (52 Municipalities ) ε) Ogliastra (23 Municipalities) φ) Oristano (88 Municipalities) γ) Sassari (66 Municipalities) η) Olbia Tempio (26 Municipalities)

The territorial fragmentation is a very important condition for the social and economic development and for the Administrative organization: 315 Municipalities (about the 83.6% on the total number of Municipalities of the Region) have a number of inhabitants lower than 5.000. Sardinia is part of the aggregation of southern regions collectively known as Mezzogiorno10, which are characterised by lower levels of development, occupation and education relative to both the (more affluent) north of Italy and the country average. Compared to others Mezzogiorno regions, Sardinia is more sparsely populated and more isolated from the mainland.

10 The area known as mezzogiorno includes six regions of southern Italy (Basilicata, Abruzzo, Calabria, Campania, Molise, Puglia) and the two islands of Sicily and Sardinia

Selected economic indicators • GDP

Sardinia Italy Total GDP 2006 (mln Euros) 32.579,0 1.475.403, Source http://www.sardegnastatistiche.it GDP per capita 19.1333,1 23.100 Source: Eurostat 2003

The economic structure of Sardinia is characterized by a high level of specialisation in the primary activities and a relative specialisation in the services sector, while industry accounts for a low share compared to the Italian average. Moreover in Sardinia, as well as in the other Italian Regions under Convergence Objective, the construction sector and the other services (included Public Administration) account of an high share. The average annual growth rate of the added value in the period 2000-2005 is however high (+1,3%), mostly in the industry sector (+4,8%).

% Specialisation index composition Sardinia Sardinia Cro Conv Agriculture, forestry and fishing 3,7 138,5 81,6 177,3 Industry 22,6 82,9 106,7 71,7 -Industry tout court 15,6 72,4 110,0 57,8 -Construction 7,0 123,3 94,2 124,5 Services 73,7 105,3 98,1 108,0 -Commerce, reparation,, hotels and restaurants, 22,7 94,1 100,8 96,5 others - monetary and financial intermediation, real 22,2 87,4 102,6 89,1 estate, other -Other service activities 28,7 140,1 89,3 144,9 Added value at basic prices 100,0 100,0 100,0 100,0

Regional economic structure - Enterprise.

The table 1 shows some synthetic data about the ‘demography’ of the active enterprises, operating in Sardinia during the period 2001-2005. The table reports the figures of the enterprise ‘stock’, and the variation, absolute and percentile, of the analysed period. The birth and death rate, the enterprise turnover of the regional aggregation and of the provincial compartments, are as well reported. The regional aggregation accounts for 136.621 active enterprises in 2001, and 149.375 in 2006. It follows that the stock absolute variation is no less than 12.574 units in the space of the 5 years reference period, with an average year growth of 1,77%. This percentile variation is considerably high when compared to the analogous national share and that of the aggregations under Ob. Conv. and Cro . In addiction to that, the number of active enterprises every 100 inhabitant – which expresses the entrepreneurial density of a specific area – displays a markedly dynamic locality, when evaluated in the national context: while in 2001 the Sardinian entrepreneurial density share was low, compared to the Italian average (8,4 enterprises every 100 inhabitants, as the average national share is 8,6), in 2005 the value grows to a value which slightly exceeds the national aggregation average (8,9 in comparison with the national 8,7). Moreover, the data point to a substantial stability in the enterprise birth rate. In spite of this, however, a noteworthy increase of the death rate is to be observed, and thus the consequent drop of the turnover rate, which is – anyhow – higher than the analogous national average one. For what concerns the sub-regional territorial compounds, all the provinces show an enterprise consistency variation rate which is far higher than both the national and Conv./Cro regions

average. The province of Oristano is the only exception, with an enterprise consistency variation rate clearly lower than all the extra-Sardinian areas here considered.

On the otther hand, the entrepreneurial density share of all the provinces but Cagliari, is higher than the national and Ob. Conv/Cro regions average. For what concerns the turnover, the patent dynamism of Sassari province looks opposed to the weakness of the entrepreneurial landscape of Oristano.

Table 1 – Synthesis of enterprise demography in Sardinia, Italy and Conv./ Cro regions (2001-06)

Active Enterprises Active enterprises Active Birth rate Death rate Turnover variation 2000-06 enterprises number(per 100 inhabitants) Area 2001 2006 Absolut %averag 200 200 200 200 200 200 200 200 e e 1 6 1 6 1 6 1 6 values variation Sardini 136.621 149.375 14.458 1,7 8,4 8,9 8,2 8,1 6,0 6,9 2,1 1,2 a Sassari 40.123 44.650 5.190 2,1 8,9 9,3 8,5 8,9 5,9 6,4 2,6 2,5 Nuoro 24.306 26.771 2.498 1,6 9,2 10,1 6,9 8,1 5,6 6,6 1,2 1,5 Cagliari 57.814 63.344 6.607 1,9 7,6 8,1 8,9 7,9 6,2 7,2 2,6 0,7 Oristan 14.378 14.610 163 0,2 9,4 9,5 6,7 6,8 6,3 7,5 0,4 -0,6 o Conv. 1.332.99 1.408185 93.155 1,1 7,7 8,0 8,7 7,8 6,5 7,2 2,2 0,7 regions 7 Cro 3.564.95 3.750.09 224.757 1,0 9,0 9,0 8,7 8,5 7,0 7,3 1,7 1,1 regions 6 3 Italy 4.897.93 5.158.27 317.92 1,1 8,6 8,7 8,7 8,3 6,9 7,3 1,9 1,0 3 8

External trade and foreign investments.

The regional economic system is not much internationally oriented. Sardinian enterprises usually do not invest in foreign countries: between 2000 and 2005 the invested resources, in GDP percentile, almost amount to nothing. This lack of internationalization is serious, as it determines the lack of relevant growth opportunities, and appears even more worrying when compared to the other territorial competing territorial sectors which, in turn, appear more open and dynamical: the regions under Conv. Ob. invest between 0,1% and 0,2% of their GDP, while those under Cro Ob. about 1,3%. The sector where the Sardinian share is relevant are: oil (28%), energy and non-energy minerals (4,3%). The export share of the agricultural and food sector is not positive: in spite of the fact that in this field Sardinia should be competitive and somehow advantaged, the GDP percentile export share has progressively decreased between 2001 and 2005.

Capacity to attract foreign investments (Thousand Euros), 2006

Sardinia 0,2 Italy 374,6 Data from http://www.sardegnastatistiche.it

Agriculture and Food

Sardinia has a mild climate, with a high windiness index. For its peculiar morphology, it is defined as mountainous. This accounts for the fact that – of its entire surface – only 630.000 hectares (approximately a fourth) are considered as cultivable. The peculiarity of the area also accounts for the fact that zootechnical enterprises in Sardinia prevail over other major agricultural and food activities, especially those concerning vegetable, fruit, cereal, flower and wine. Among the most representative products is olive oil, whose production amounts to 10.000 tons per year. Sardinia olive oil is in general considered of first-rate quality, and is processed in cooperative and private oil presses. Thanks to autochtonal favourable climate conditions, the cultivation of olive trees offers excellent prospects both for oil production and olives for consumption. The agricultural sectors includes 118.000 farm companies, where 40.000 are devoted to breeding farms. The variety of the ground and the peculiarity of the climate – in addiction to distinctive cultivation techniques and a handicraft mentality – contribute to the unique taste and genuineness of the products. The production of durum wheat is concentrated in the Centre/South Sardinia, with a production of about 1.500.000 quintals. Marginal areas are also devoted to the cultivation of officinal herbs (mostly saffron). The figures of the distribution in the Provinces, denote Cagliari as the area where the majority of the food enterprises and employees are concentrated. Sassari, then Nuoro, and then Oristano, come after. Besides, from 1998 to 2000, both the number of enterprises and that of the employees grew in all the Provinces of Sardinia. The export figures are even more encouraging, and back up the weight of the agriculture and food segment in Sardinian socio-economic system. In 2000 this sector represented the 46% of the export handicraft enterprises, the volume of export sales amounting to 103,4 millions of Euro. In general, Sardinian productive system still appears strictly linked to its regional market, while agricultural and food enterprises represent the largest percentage (35%) of export. From 1999 to 2001, dairy produce registered an export sales share essentially stable (about 20%), whereas the share of non-dairy enterprises has significantly grown (11%-16%). A note has to be made on organic farming, since Sardinia is the Italian region where this activity has been developed at its best, thanks to an almost unpolluted environment and a tradition of extensive cultivations. The following table shows the dimensions of the phenomenon in the various Provinces, where the number of organic enterprises accounts for about 8000 farms:

Table 2- Organic Farms

Organic Farms in Sardinia 12,3 (997)

32,4 (2621) Sassari Cagliari Nuoro 41,6 (3361) Oristano

13,6 (1100)

Tourism and cultural resources.

The Sardinian industry of tourism is the expression of a product based on the uniqueness of its natural and cultural resources, as a source of competitive advantage in the international scenario. The island tourist offer consists of 625.000 sleeping accommodations: 465.00 in holiday homes, 88.665 in hotels, and 82.192 in complementary business accommodations (source: ISTAT 2005). In this last category the 79% of sleeping accommodations in camping and holiday villages, and the progressive relevance of bed &breakfasts (5% with an amount of 3.779 sleeping places) is to be underlined. However, Sardinia suffers from two critical situations, due to the fact that the marine/bathing model is almost the only tourist offer. The criticalities lie: a) in a double concentration of space and time; b) in the low level of integration with the other productive sectors. a) The marine/bathing product is the main cause of spatial concentration, as it absorbs the 90% of the hotel sleeping accommodations, while – chronologically – these accommodations are restricted between June and September. Among the reasons for this double concentration is the inadequate consistency and functionality of the accommodation facilities, which often appear unable to guarantee high quality and comfort standard in the off-season period. b) The poor level of integration between the tourist sector (in a narrow sense) and other regional productive sectors (i.e. agriculture and food, handicraft, high level vocational training, transport, etc.). The restaurant and hotel sector often recurs to import for the raw materials and the manpower required for its productive processes. In addiction to that, Sardinia has a low ability to attract a weighty share of foreign tourism, which usually shows more purchasing power than the national one, and has also more sensibility towards local productions. Even if above the national average, the value added share activated by the tourist sector in Sardinia is 7,7% of the total value added, while in Trentino and Val d’Aosta is 12%. Anyhow in the last years the trend looks on the rise.

For what concerns Sardinian cultural resources, there is some difficulty in defining its entity and substance, then - consequently - its potential. The first data to be taken into consideration are those relative to the State Arts and Antiquities Institutes in the island: only 11 of the 379 Italian institutes are located in Sardinia. The State archives on the territory are just 4, while the total national number is 100. Far more numerous are the archaeological and architectural resources included in the ‘risk chart’ : in Sardinia these resources are 2100, in the whole nation more than 57.000. In the field of cultural locations, Sardinia is characterized by a significant presence of relevant sites, especially archaeological ones, signalled by the Ministry of cultural heritage and activity. From this point of view, the island is in the third position after Lazio and Toscana, possessing 151 of 1504 total national sites. The presence of industrial archaeological settlements (especially related to mining industry) is also remarkable, and often located in areas characterized by high tourist potential. The museums are widespread on the region: 6 state ones, and about 170 under the supervision of the local government agencies. The situation of the libraries is somehow positive: it is a sector where a pervasive diffusion on the territory is supported by the efficiency of the service. According to ISTAT, in 2005 there were 284 libraries of the Territorial Agency, 37 of other government agencies, 48 private libraries, and 106 University ones. The context emerging from these figures is that of a plentiful cultural estate, which appears frequently integrated with its notable landscapes and characterized by the uniqueness of several typological elements.

Population

Sardinia has 1.650.052 inhabitants, with a density of 68 inhabitants per square kilometre (ISTAT 2005). The population is mainly concentrated in the cities (the most populated cities are Cagliari, Sassari, Quartu, Olbia, Alghero, Nuoro and Oristano) and along the coasts.

The territorial aggregation identified by the Regional Law n. 4/97

Population Area Territorial Population (absolute Population (%) (square per aggregations density values) Km)

Cagliari 504.018 31,5 3.613 142 Medio Campidano 127.565 8,0 2.062 63 Carbonia-Iglesias 136.164 8,5 1.741 80 Nuoro 165.188 10,3 4.143 41 Ogliastra 57.980 3,6 1.854 32 Oristano 162.480 10,2 2.972 57 Sassari 317.536 19,9 4.337 76 Olbia-Tempio 128.580 8,0 3.368 41 Sardegna 1.599.511 100,0 24.090 68

A large part of the population (32,8%) lives in small Municipalities with less of 5.000 inhabitants. Almost the same percentage lives in Municipalities with a range of population comprised between 10.000 and 50.000 inhabitants. The remaining part 858,694 people representing the 53,3% of the total population, lives in one of the 29 urban centres with over 10.000 inhabitants.

Table 3. Number of Municipalities and resident population per demographic range at 31.12.2004 Demographic range Number of Municipalities Resident population

A V. % A V. %

Until 5000 inhabitants 315 83,6 541.492 32,8

5001-10 thousand 33 8,8 228.471 13,8

10.001-50 thousand 26 6,8 523.877 31,7

50.001-100 thousand 1 0,3 69.818 4,2

Over 100 thousand 2 0,5 286.394 17,4

Total 377 100 1.650.052 100,00 Source: Istat, demografic budget 2004

Labour market In Sardinia, during the last decade, the employment rate has constantly increased, more than in Ob. Conv regions and UE15, though less than in the other Italian and Ob. Cro regions. The following table reveals that Sardinia still suffers from a strong occupational lack, especially in comparison with the Lisbon Agenda, which aimed at a 70% employment rate to be attained by 2010.

Table 4 - Employment rate and relative average year variation rate (1995-2005) 1995 2000 2005 1995-00 2000-05 1995-05 Sardinia 47,1 49,2 51,5 0,9 0,9 0,9 Italy 51,8 54,8 57,6 1,1 1,0 1,0 Conv 41,5 42,9 44,4 0,7 0,7 0,7 Cro 56,3 60,0 63,1 1,3 1,0 1,2 EU (25 countries) - 62,4 63,7 - 0,4 - EU (15 countries) 60,1 63, 4 65,1 1,1 0,6 0,8

In all the several territorial departments, differences in the occupational rates – on the basis of age and gender – are still remarkable. In 2005 the employment rate for the range of 55-64, is 31,3%, a figure almost equivalent to the national average (31,4%) and to that of the other Ob. Cro regions (31,1%). However, the comparison with the European rates shows that the target value, established in Lisbon, is still far: the employment rate for aged employees is 44,1% in UE15 countries and 42,5% in UE25 countries. The difference between woman and male unemployment rate in Sardinia, is decreasing at a rate of - 2% per year. A value which is lower to that of the other Ob. Cro regions (- 2,3%).

The following table shows that in 2005 the unemployment rate in Sardinia was still very high, especially in comparison with the other Ob. Cro regions. Yet, after the unemployment increase in the period 1995-2000, the situation has improved and the relative rate was diminished at the rate of – 3,8% per year.

Table 5 - Unemployment rate and average year variation rate (1995-2005) 1995 2000 2005 1995-00 2000-05 1995-05 Sardinia 14,7 15,7 12,9 1,2 -3,8 -1,3 Italy 11,2 10,2 7,7 -1,9 -5,3 -3,7 Ob. Conv regions 19,1 20,1 15,1 1,0 -5,6 -2,4 Ob. Cro regions 8,3 6,5 5,3 -4,8 -4,2 -4,5 EU (25 countries) - 8,6 8,7 - 0,2 - EU (15 countries) 4,9 7,6 7,9 9,2 0,8 4,9

The rate of juvenile unemployment (age range 15-24) in Sardinia is 32,6%, 8 points more than Italy (24%) and 17 more than the other Cro regions (15,7%). Nevertheless, the values show a drop of the phenomenon in the years 2000-2005 (-1,7 % per year), even if this decrease is slower than that of the Ob. Con. Regions ( -2,8% per year). The differences are even more patent in the field of gender divisions: among young female people the unemployment rate is 38,6%, more than 11 points than the national rate and almost 20 points than the other Ob. Cro regions.

Table 6 – Average year variation rate of male and female unemployment (1995-2005) 1995-00 2000-05 1995-05 1995-00 2000-05 1995-05 Sardinia 0,7 -1,7 -0,5 -0,8 0,1 -0,5 Italy -2,3 -2,4 -2,3 -2,2 -3 -2,6 Ob. Conv regions -0,1 -2,8 -1,5 0,0 -4,1 -2,1 Ob. Cro regions -6,0 -0,9 -3,5 -5,6 -0,8 -3,2

Education and Training At the moment, the educational level of adult people in Sardinia is – as it was in the last decade – lower than in the rest of all the other territorial aggregations here considered. Besides, the gap between Sardinia and the European countries (UE 15) is even larger: in 2005 (the latest datum at disposal) the percentage of people possessing only the low secondary education level was 33,8% in the UE 15, and 30,9 in UE 25. In the same year the percentage in Sardinia was 60,7 and 50,3 in Italy. The reason of the low average education level in Sardinia is to be connected with the dropping out of school in the first years of secondary school, while in the last decade the same phenomenon has progressively decreased in compulsory school. Between 1994/95 and 2004/05, the rate of upper secondary school attendance was higher in Sardinia (92,1%) than the national average (86%), the Ob. Conv. Regions (81,9%), and the Ob. Cro ones (88,6). In the same period, however, the school drop-out rates at the end of the first and second year of upper secondary school, were constantly higher than those of the other regions considered. The differences have been definitely decreased from 2001/02, and the positive trend is confirmed by the values of the last year at disposal (2004/05). The upper educational level (i.e. the percentage of people aged 20-24 with at last an upper secondary school degree) is, however, lower in Sardinia (62,25) than in Italy (74,8%) and than the UE average (77,5%).

The University system is concentrated in Cagliari and Sassari, and the regional University registration rate is higher than the Italian average, with a strong gender differentiation. Still, although University education is attractive for young Sardinians, only the 6,2% gets a degree, while the national average is 7,5 and 6,8% in Southern Italy. The share of graduated students in technological/scientific subjects in 2005 is 6,5 per thousand inhabitants, as in the Southern Italy is 7,3 and in Italy 10,9 per thousand. The shortage of qualified human capital still represents one of the main weak points within Sardinian socio-economic system. For what concerns vocational training, the percentage of unemployed workers who participated to a training or educational activity in 2004-06 is 7,1%, while the average rate of the Ob. Conv./Cro regions is 6,1%. The higher rate of attendance in vocational training activities for people in search of employment may be connected to the lack of job opportunities in the narrow local market, but also to the fact that in many cases the courses include an expense repayment for the participants.

Research and development

Scientific research, technological innovation and ICT have been encouragingly developed both in economic and entrepreneurial terms, but Sardinia does not show a strong interrelation system to connect enterprises, research structures and the educational/training sphere, yet. A thing that would be precious in order to promote investments in companies which are being under innovating processes. In spite of these recent positive developments, at the moment research is mostly carried out by public authority structures and the incidence of private investments in this field is nearly nothing (0,04% of the regional GDP, while the national value is 1,13%).

Total expenditure in research and development in % of GDP (2004):

Table 7 – Enterprises(%)

Table 8 – Public Administration (%)

Infrastructure and accessibility level of the territory

The analysis of the infrastructural facilities in Sardinia, underlines a strongly destitute situation. Humble infrastructural facilities, combined with an insular condition, establish a serious disadvantaged condition in comparison with the majority of UE regions: perifericity, distance from the markets, marginality, represent relevant lag factors for a development politics still based on market integration and the growing exchange with national, European and extra- European contexts. For what concerns internal links, the island suffers from inadequate infrastructures regarding both the connection between North and South of the region, and the accessibility to internal areas. In particular, with regard to public transport, the situation is marked by the weak competitiveness of the system: scanty integration of the public transport conditions, travelling time/ frequency which often poorly answer the needs of the users, heavy conditioning caused by vehicle traffic, serious deficit of services in urban areas, problematical feedback between low demand and limited frequency – a combination that favours the widespread use of personal vehicles. In the framework of regional mobility, the extreme weakness of the railway system stands out, marked by long travelling times: the average speed along the rail net is 65/70 Kmh, and only the route Cagliari -Oristano (94 Km) is covered at a 100 Kmh speed. A further problem regards the 626 Km of narrow-gauge railway, whose upgrading opportunities, according to a sustainable fruition of Sardinian ‘wild’ landscape, clashes with ah historical sloppy condition of its infrastructures. Air transport definitely plays a key role in order to reduce the marginality that affects the insular condition, as it represents the only fast link with the Italian peninsula. The introduction of concessional fares for residents has had – as its first consequence – an exponential increase of the demand, so that the percentage of flights is double in comparison with the national average. The road network is still, on the other hand, mostly inadequate. The adjustment of the SS131 has – up to the present time – only involved the 50% of the itinerary, while the Olbia-Sassari connection today is assured by a one-lane traffic series of roads. In the last decade, the major criticalities of the basic roads appear on their way to be solved, while the situation of the complementary roads net is still severe. These routes, in addiction to their problematically long travelling time, suffer from the decay of their roadbed, of their structures, of safety measures, of signs and markers, and so on. The infrastructural density at the regional level is 20% lower than the national one, while the provincial one is 40% lower. Besides, more than the 73% of the regional net has a cross-section less than 9mt wide (the national average does not exceed 59%). In short, Sardinia has few roads with bad geometrical characteristics. The effect of these infrastructural parameters impacts on the quality of the service. This situation is to be deemed as one of the fundamental causes of the depopulation of the internal areas. Active population prefers to move to the coastal areas, which now are affected by increasing phenomena of urbanization and overcrowding.

Table 9 – Means of transport employed for job or study reasons (percentile value) REGIONS Walk Train Bus Underground Coach Company Car Motorbike Bike Coach Sardinia 18% 2% 6% 0% 5% 2% 48% 3% 1% North- It 12% 3% 7% 2% 5% 2% 48% 3% 4% Centre- It 12% 4% 10% 4% 3% 3% 46% 4% 1% South – It 22% 4% 6% 2% 7% 3% 39% 2% 0% Islands- It 20% 1% 6% 0% 4% 2% 43% 5% 0% Italy 15% 3% 7% 2% 5% 3% 45% 3% 2%

3.4 Silesia

Area Figure: 1 Map of Poland with Silesia

Poland has a total area of 312.679 km2, making it the 69th largest country in the world and 9th in Europe. The Silesian Region, of which the Business Incubator in Ruda Slaska is a part of, covers an area of 12333.51km2. Upper Silesia is the southeastern part of the historical and geographical region of Silesia; Lower Silesia is to the northwest

Definitory characteristics of the territory Poland is a unitary state made up of sixteen voivodeships. The administrative authority at voivodeship level is shared between a government-appointed voivode (governor), an elected regional assembly and an executive elected by that assembly. Poland is also a member of the European Union, NATO and OECD.

Figure: 2 Definitory characteristics of the territory Nationality: noun: Pole(s) adjective: Polish Ethnic groups: Polish 96.7%, German 0.4%, Belarusian 0.1%, Ukrainian 0.1%, other and unspecified 2.7% Religions: Roman Catholic 89.8% (about 75% practicing), Eastern Orthodox 1.3%, Protestant 0.3%, other 0.3%, unspecified 8.3% Languages: Polish 97.8%, other and unspecified 2.2% Towns: The largest metropolitan areas in Poland are the Upper Silesian Coal Basin centered on Katowice (3.5 million inhabitants); the capital, Warsaw (3 million); Kraków and Łódź (each 1.3 million); the Tricity of Gdańsk-Sopot- Gdynia in the Vistula delta (1.1 million) Number of inhabitants Number of towns >1 000 000 5 500 000 – 1 000 000 4 250 000 – 500 000 8

100 000 – 250 000 26 50 000 – 100 000 54 20 000 – 50 000 138 10 000 – 20 000 177 <10 000 445

Source: Ministry of Economy

Figure: 3 Poland in International rankings Countries Index Rank reviewed Human Development Index 2007 37th 177 OECD Working time 2nd 27 Index of Economic Freedom 2008 83rd 157 Privacy International Yearly Privacy ranking of countries 2006 8th 36 Reporters Without Borders Press Freedom Index 2007 56th 168 UNICEF Child Well-being league table 14th 21 Networked Readiness Index 2007-2008 62nd 122 OICA Automobile Production 20th 53 Source: Ministry of Economy

Figure: 4 The largest towns of the Śląskie Voivodeship:

Inhabitants in thousand Katowice 322 285 Częstochowa 249 453 Sosnowiec 229 989 Gliwice 201 586 Zabrze 193 665 Bytom 191 060 Bielsko-Biała 177 390 Ruda Śląska 148 361 Rybnik 142 272 Tychy 132 151 Dąbrowa Górnicza 131 371 Chorzów 115 844 Jaworzno 96 703 Jastrzębie Zdrój 96 475 Source: www.silesia-region.pl

The high urbanisation rate is evidenced by the value of almost 79% of the population inhabiting the region’s 71 towns of which: • 4 towns have the population over 200 thousand inhabitants, • 8 towns have the population from 100 to 200 thousand inhabitants, • 11 have the population from 50 to 100 thousand inhabitants.

Selected economic indicators • GDP GDP in 2008 - 330.920,64 EUR GDP per capita - 8710.72 EUR

Figure: 5 GDP in Poland Year Increase GDP Year Increase GDP 1992 1,5% 2001 1,0% 1993 3,8% 2002 1,4% 1994 5,2% 2003 3,8% 1995 7,0% 2004 5,3% 1996 6,0% 2005 3,5% 1997 6,8% 2006 6,2% 1998 4,8% 2007 6,5% 1999 4,1% 2008 5,4% 2000 4,0% Source: Central Statistic Office of Poland

• Government deficit and debt

Figure: 6 Polish govermment deficit and debt in 2004-2007 2004 2005 2006 2007

mln euro

GDB 264736.13 281562.87 303580.45 334083.84

15086.05 12175.07 11500.44 6785.50 Deficyt % GDB 5,7 4,3 3,8 2,0

120947.80 132503.51 144646.51 151052.32 Debt % GDB 45,7 47,1 47,6 45,2 Source: Minisrty of Economy

The Upper Silesian is the largest urban center in Poland. Its population is 2.2 million, within a conurbation of 2.8 million, and with a greater metropolitan area of 3.5 million. Gross Domestic Product is 8%.

• Harmonised index of consumer prices – 102,4 • Index consumer price – 102,4 • Electricity and gas prices- industrial users - average price of electicity 36.88 EUR/MWh. - average price of gas 7,17 euro/1 GJ.

Figure: 7 Average production and consumption of electricity, oil and gas – production: 162,0 mld kWh electricity: – consumption: 121,3 mld kWh – production: 24 530 bar/d crude oil: – consumption: 476 200 bar/d

– production: 2,1 mld m³ gas: – consumption: 11,5 mld m³ Source: Central Statistic Office of Poland

• Average price of the m² of new housing at province capitals and councils of 100.000 population or over.

Figure: 8 Average price of the m² of new housing in Poland in June 2008

Source: www.gazeta.pl

External trade and foreign investment The government offers investors various forms of state aid, such as: CIT at a level of 19% and investment incentives (including income tax exemption, real estate tax exemption, competitive land prices) in 14 Special Economic Zones and several industrial and technology parks, the possibility to benefit from EU structural funds, brownfield and greenfield localisations. According to National Bank of Poland estimates, the value of foreign direct investment (FDI) reached in 2007 EUR 12 834 million, down by EUR 2 227 million, a 14.8% decrease, when compared with EUR 15 061 million in 2006. The greatest amount of direct investment inflow in 2007 (total EUR 12 834 million) was invested in manufacturing (20%), real estate and other business activities (19.8%), financial intermediation (15.3%) as well as trade and repairs (11.9%). It is estimated that in 2007 85.3% of direct investment flows were from European Union countries, mainly from France, Germany, Austria, Italy and Sweden. The most significant investment from outside the European Union came from residents of United States of America, The Netherlands Antilles, Republic of Korea (South Korea) and Japan.

Poland's location at the very heart of continental Europe, on the trans European road network, and with easy access to 250 million consumers within a radius of 1000 kilometers are amongst the main reasons for which investors choose Poland. Poland has a significant market of 38 million consumers

The Polish government has a dedicated body that deals with foreign investors. The Polish Information and Foreign Investment Agency offers support for foreign investors - assistance with regards to all necessary legal and administrative procedures.

Poland mainly imports capital good necessary for industrial retooling and for manufacturing inputs, rather than consumption. Therefore, a deficit is expected which should even be regarded as a positive at this point. Poland is a member of the World Trade Organization and the European Union. It applies the EU's common external tariff to goods from other countries (including the U.S.). Most Polish exports to the U.S. receive tariff benefits under the Generalized System of Preferences (GSP) program.

Figure: 9 Export and import in Poland Poland Current account -$15.91 billion (2007 est.) balance: Exports: $144.6 billion f.o.b. (2007 est.) Exports - machinery and transport equipment 37.8%, intermediate commodities: manufactured goods 23.7%, miscellaneous manufactured goods 17.1%, food and live animals 7.6% (2007) Exports - partners: Germany 25.9%, Italy 6.8%, France 6%, UK 5.9%, Czech Republic 5.5%, Russia 4.7%, Ukraine 4% (2007) Imports: $160.2 billion f.o.b. (2007 est.) Imports - commodities: machinery and transport equipment 38%, intermediate manufactured goods 21%, chemicals 14.8%, minerals, fuels, lubricants, and related materials 9.1% (2003) Imports - partners: Germany 28.9%, Russia 8.8%, Italy 6.5%, Netherlands 5.6%, France 5.1%, China 4.2% (2007) Reserves of foreign $65.75 billion (31 December 2007 est.) exchange and gold: Debt - external: $169.8 billion (31 December 2007)

Stock of direct foreign $143 billion (2007 est.) investment - at home: Stock of direct foreign $19.69 billion (2007 est.) investment - abroad: Market value of $149.1 billion (2006) publicly traded shares: Currency (code): zloty (PLN) note: zlotych is the plural form of zloty Exchange rates: PLN per US dollar - 2.81 (2007), 3.1032 (2006), 3.2355 (2005), 3.6576 (2004), 3.8891 (2003) Source: Ministry of Economy Population

• Population distribution

Figure: 10 Population in Poland and Silesia Poland Silesia Population: 38,500,696 3,487,000 (July 2008 est.) - Density 1,643/km² (4,255.4/sq mi) Age 0-14 years: 15.2% (male 3,013,109/female 0-14 years: 17 % structure: 2,849,977) 15-64 years: 66 % 15-64 years: 71.4% (male 13,681,481/female 65 years and over: 17% 13,808,412) (2008 est.) 65 years and over: 13.4% (male 1,964,477/female 3,183,240) (2008 est.) Median age: total: 37.6 years total: 38,9 years male: 35.8 years male: 36,9 years female: 39.5 years (2008 est.) female: 40,9 years (2008 est.) Sex ratio: at birth: 1.06 male(s)/female at birth: 1.07 male(s)/female under 15 years: 1.06 male(s)/female 15-64 years: 0.99 male(s)/female 65 years and over: 0.62 male(s)/female total population: 0.94 male(s)/female (2008 est.) Source: Central Statistic Office of Poland

• Population change

Figure: 11Population change in Poland and Silesia Poland Silesia Population growth -0.045% (2008 est.) -0,8 (2008 est.) rate: Birth rate: 10.01 births/1,000 population (2008 9,4 births/1,000 population (2008 est.) est.) Death rate: 9.99 deaths/1,000 population (2008 10,2 deaths/1,000 population est.) (2008 est.) Net migration rate: -0.46 migrant(s)/1,000 population -0.42 migrant(s)/1,000 population (2008 est.) (2008 est.)

Infant mortality total: 6.93 deaths/1,000 live births 6,7 deaths/1,000 live births rate: male: 7.66 deaths/1,000 live births female: 6.17 deaths/1,000 live births (2008 est.) Life expectancy at total population: 75.41 years total population: 74.49 years birth: male: 71.42 years male: 70.42 years female: 79.65 years (2008 est.) female: 78.55 years (2008 est.) Total fertility rate: 1.27 children born/woman (2008 1.29 children born/woman (2008 est.) est.) Source: Central Statistic Office of Poland

Labour market • Population over 16, active population, employed population, unemployed population, and active population, employment and unemployment rates

Figure: 12 Labour market in Poland and Silesia Poland Silesia Population over 16: 15-64 years: 27489893 (male 15-64 years: 3 051 575 (male 13,681,481/female 13,808,412) 1 567 0 /female1 484 500) employed population: 15 689 thousand ( IX. 2008) 90,4 thousand ( IX. 2008) Labor force - by agriculture: 16.1% agriculture: 3 % occupation: industry: 29% industry: 38% services: 54.9% (2007) services: 58% (2007) Unemployed 1 378,5 thousand.( IX. 2008) 118 thousand ( IX. 2008) population: Unemployment rate: 9,1% (IX. 2008 est.) 6,7 %(IX. 2008 est.)

Employment rate: 50,1% 64,2% Not register at a 14 445 thousand labour office Population below 15% (2007 est.) poverty line: Source: Central Statistic Office of Poland

Figure: 13 Number of unemployment people in Silesia

Source: Regional Labour Office

• Labour costs

Poland’s employment costs are amongst the lowest in all of Europe. The country’s wage costs are not only less than those of western Europe, but also lower than those of Slovenia, Estonia, Slovakia, the Czech Rep., Hungary and Latvia. Lower employment costs in terms of national average incomes can only be found in Ireland, Greece and Italy. When compared to Central and Eastern Europe, lower employment costs are only to be found in Romania. Lithuania and Bulgaria have similar wage levels to Poland. Poland is in the lowest quarter of a list of 24 European countries.

The average gross monthly salary in the private sector, over the period of the first three quarters of 2008, was at a level of 921 Euro, which is 18% higher than in the analogous period the year before. The lowest sallary in Poland is 317 Euro. Salaries vary between the regions: the median wage in the capital city Warsaw was 1200 euro while in Białystok it was only 670 euro. In Silesia the average gross monthly salary is 1200 Euro.

Figure: 14 The average salary in the private sector in Poland

Source: Ministry of Labour

Education

Formal education in Poland starts at the age of six (or seven) years in primary school. Next is the lower secondary level consisting of three years, starting at the age of 13, and ending with an exam. This is followed by the upper secondary level, which has several alternatives, the most common being the three years in high school (liceum) or four years in a technical secondary school. Both end with a maturity examination (roughly equivalent to the British A-levels examination), and may be followed by several forms of tertiary education, leading to Bachelor degree, Master degree and Doctoral degree.

Figure: 15 Number of schools and students in Poland and Silesia Type of Number of Number of Number of Number of school school students school students 2007/2008 2007/2008 2007/2008 2007/2008 Poland Silesia public 16902 871900 1 188 102 059 kindergartens primary 14305 2347921 1 170 257 561 school lower 7213 1494153 656 157 110 secondary school vocational 1873 236432 school secondary 7445 1473508 271 77 569 school (general and specialized) University 455 1 937 404 59 197 761 public 131 1276900 14 128544 university non public 324 660467 30 69217 university Note that many of these institutions style themselves as "University" in English, even if they do not officially have the status of University. School life total: 17 years expectancy start: from 6 year (primary to tertiary education): Payment: In Poland, education in the state/public system is free. Only extra-mural tertiary students are required to pay for their education. Education 5.5% of GDP (2007) expenditures: Source: Central Statistic Office of Poland

Students in Polish schools typically learn one or two foreign languages at schools. Generally, in 2007/08 the most popular obligatory foreign languages in Polish schools were: • English- 65.9% • German- 33.3% • French- 13.3% • Spanish- 10.2% • Russian- 6.1% • Italian- 4.3% • Latin- 0.6% • Others- 0.1%

Upper Silesian Industry Area is one of the most important education centers of Poland (along with Warsaw). It is home to seven major universities and near 44 smaller schools of higher education. The most important are: 1. Silesian University 2. Silesian University of Technology in Gliwice 3. Medical University of Silesia 4. University of Economics in Katowice 5. University of Music in Katowice 6. University of Sports in Katowice 7. University of Arts in Katowice

Research and development

The activity of the research & development institutions focuses predominantly on the environment protection, power engineering, control engineering and electronics as well as on building engineering.

Figure: 16 Research and development units

Source: Central Statistic Office of Poland

Analysis comparing Poland to the other EU nations, indicates a great scope for development of the Science and Technology sector in this country. The average expenditure on R&D in the EU is 1.95% of GDP, whereas in Poland it’s 0.59%. The percentage of innovative companies among the businesses that are active in the EU is 51%, whilst in Poland it’s 16.9%.

Higher education employs 87 789, including 75 762 in public education and 12 027 in the private sector. There are also approximately 300 research and development institutes, employing approximately 10 000 additional researchers. In total, there are around 91 000 scientists in Poland today including: the Polish Academy of Sciences, independent and specialised R&D centres and support agencies.

Potential R&D is also developing due to other entities, among which there are over 600 businesses both in Poland and abroad. It’s estimated that foreign firms will invest app. 100 million USD in R&D centres. Today there operate app. 40 R&D centres, employing 4,500 Polish scientists and specialists. Most work in the telecommunications, automotive, chemicals, aviation, food and IT sectors (e.g: General Electric, Samsung, IBM, Motorola, Delphi, Siemens, Oracle, Wabco, ABB, Plisa, IBM, Lufthansa, Maersk, Philips, Accenture, HP, Volvo, GalxoSmithKline, Aircraft Engines Aerospace, AVIO Group and UTC/Pratt & Whitney). These centres are mainly located in large urban areas with well developed academic institutions, developed infrastructures and provide attractive working conditions for potential employees.

In Poland, R&D activities are financed 57.7% from the national budget, 26% by business entities and 16.3% of finance is from other sources. enterprises universities goverment non profit organizations.

Figure: 17Expenditure on B&R in 2003-2006 in Poland in mln Euro

Source: Central Statistic Office of Poland

Figure: 18 Source of funding B&R Source of total Own budgetary funds from abroad bank credits funding Years 2007 2007 2007 2007 2007 euro Euro euro euro euro Expenditures on innovation 813915116,7 activities by 5699173909 4263484979 63428587,53 62115742,31

sources of funding Source: Central Statistic Office of Poland

Within the Śląskie Voivodeship, there are 12.1% of Poland’s R & D potential – the second largest centre in Poland. It comprises 112 units, including 36 scientific and research & development units (of which 6 divisions of the Polish Academy of Sciences), 46 development units and 14 schools of higher education, doing research.

Figure: 19 R&D in Poland and Silesia Poland Silesia R&D Units (total) 925 112 The employed in the R&D branch for 1,000 of proffesionally active people 4,5 3,6 (total) including the scientific and research employees 3,4 2,7 Expenditure on R$D (GERD)* current prices: 119 80 per one inhabitant in zlotys The GERD/GNP** relation (in%) 0,58 0,32 The structure of the internal expenditure on the R&D activity as per the category of expenditure (%): current 85,5 82 investment 14,5 18 Source: www.silesia-region.pl

* GERD: Gross Domestic Expenditure on R&D – the total amount of the internal expenditure incurred in the relevant year on the R & D activity by all the unit carrying out the activity in the relevant year ** data for 2005, The Statistical Yearbook of the Voivodeships, The Main Statistical Office, 2007, the Statistical Yearbook of the Śląskie Voivodeship, The Statistical Office, 2007, Science and Technology in 2007, The Main Statistical Office, 2007

• Use of ICT by enterprises - 92% (employing 10 persons or more) were using a computer, and 85% had Internet access. - 95% of the enterprises surveyed and 92% had Internet access - 33% the employees were using computer in their work routine, of which 26% with Internet access - 64% has local computer network– LAN - 53% has broadband Internet connection (94% - large companies and 47% small companies) - 53% of the enterprises have web site - 32,9% of the enterprises have Intranet and 7,1% have Extranet - 1/5 of the enterprises have free computer software eg. Linux - 21% of the enterprises have CRM system [Customer Relationship Management], - 13% of the enterprises have ERP - Enterprise Resource Planning - 64% of the enterprises have contact with public administration via Internet - 50% of the enterprises are making on–line shopping - 15% of the enterprises are selling their goods via Internet - electronic signatures are using by17% of the enterprises, (32% - large companies and 14% small companies.

• Percentage of enterprises which use the Internet for interaction with public authorities

Figure: 20 Percentage of enterprises which use the Internet for interaction with public authorities in Poland Enterprises

Total with using Internet for interaction with public authorities

Internet Total to get to get to send to make an info forms filled offer in forms electronic system of public order 0 1 2 3 4 5 6 7

Total 74824 68620 47522 39741 41570 42103 5630 % 100 91.7 63.5 53.1 55.6 56.3 7.5 small 58875 52785 34279 28015 29192 29569 3853 % 100 89.7 58.2 47.6 49.6 50.2 6.5 medium 13213 13109 10782 9420 10029 10190 1425 % 100 99.2 81.6 71.3 75.9 77.1 10.8 Large 2735 2727 2461 2305 2350 2343 351 % 100 99.7 90.084.3 85.9 85.7 12.8 Source: Central Statistic Office of Poland

From May 2008 all public offices must provide access to submit documents via Internet. Only about 20 – 30 thousand companies are using electronic signatures. From July 2008 the enterprises who hire more than 5 employee have to all documents to Polish security office send with electronic signatures. One electronic signature cost about 85 Euro. Every year companies must pay about 30 Euro for each signature.

Passengers and goods transport at airports

Figure: 21 Number of airports in Poland Airports: 123 (2007) Airports - with paved runways: total: 83

Airports - with unpaved runways: total: 40 Source: Central Statistic Office of Poland

Figure: 22 Passengers and goods transport at airports in Poland Kod Number of goods City with airport +/- +/- IATA passengers ( kg) 1 Warszawa - Okęcie WAW 9 268 551 +14,40% 63 332 933 +4,31% 2 Kraków – Balice KRK 3 042 351 +29,60% 3 801 355 +10,60% Katowice - 3 KTW 1 980 358 +37,66% 7 782 000 +27,30% Pyrzowice 4 Gdańsk GDN 1 708 739 +36,72% 4 757 358 +17,85% 5 Wrocław WRO 1 270 825 +48,13% 1 457 090 -3,50% 6 Poznań POZ 863 018 +35,48% 2 453 731 +13,80% 7 Łódź LCJ 312 775 +52,58% 0 0 8 Rzeszów RZE 274 272 +32,54% 508 700 -6,04% 9 Szczecin SZZ 228 071 +29,09% 1 773 930 +263,81% 10 Bydgoszcz BZG 181 576 +36,51% 411 057 +20,72% 11 Zielona Góra IEG 6 739 -18,96% 0 0 Total in 2007: 19 136 865 +24,57% 86 278 154 +8,75 Source: Central Statistic Office of Poland

Kilometres of roadway

Poland has a poorly developed infrastructure of roads and expressways by Western European standards. There are very few main expressways, some express roads with lower speed limits than motorways but with many of their features, and an extensive network of roads (almost all of them single lane) connecting all major cities.

Figure: 23 Kilometers of roadway in Poland Roadways: total: 423,997 km paved: 295,356 km (includes 662 km of expressways) unpaved: 128,641 km (2007) Expressways total: 502,7 km under construction: 230,6 km Highways: total: 698 km under construction: 350 km Source: Central Statistic Office of Poland

Figure: 24 Map with highways in Poland

exist under construction planed

The Śląskie Voivodeship is the most important industrial region, located in the southern part of Poland. It has got connections with the transeuropean transport network. Within its area, the main transeuropean routes cross (the corridor III: Berlin-Wrocław-Katowice-Krakow-Lvov as well as the corridor VI: Gdańsk-Katowice-Żylina).

Partner Economic Structure

In 2007, GDP grew an estimated 6.5%, based on rising private consumption, a jump in corporate investment, and EU funds inflows. GDP per capita is still much below the EU average, but is similar to that of the three Baltic states. Since 2004, EU membership and access to EU structural funds have provided a major boost to the economy. Since joining the European Union, many workers have left to work in other EU countries (particularly Ireland and the UK) because of high unemployment, which was the second-highest in the EU (14.2% in May 2006). However, with the rapid growth of the salaries, booming economy, strong value of Polish currency, and quickly decreasing unemployment (8% in March 2008) exodus of Polish workers seems to be over. In 2008 people who came back outnumbered those leaving the country. Tightening labor markets, and rising global energy and food prices, pose a risk to consumer price stability. In December 2007 inflation reached 4.1% on a year-over-year basis, or higher than the upper limit of the National Bank of Poland's target range. Poland's economic performance could improve further if the country addresses some of the remaining deficiencies in its business environment. An inefficient commercial court system, a rigid labor code, bureaucratic red tape, and persistent low-level corruption keep the private sector from performing up to its full potential. Rising demands to fund health care, education, and the state pension system present a challenge to the Polish government's effort to hold the consolidated public sector budget deficit under 3.0% of GDP, a target which was achieved in 2007.

Main economic sectors

Industry Before World War II, Poland's industrial base was concentrated in the coal, textile, chemical, machinery, iron, and steel sectors. Poland's industrial base suffered greatly during World War II, and many resources were directed toward reconstruction. The communist economic system imposed in the late 1940s created large and unwieldy economic structures operated under a tight central command. In part because of this systemic rigidity, the economy performed poorly even in comparison with other economies in central Europe. Commodities produced in Poland include: electronics, cars (including the luxurious Leopard car), buses (Autosan, Jelcz SA, Solaris, Solbus), helicopters (PZL Świdnik), transport equipment, locomotives, planes (PZL Mielec), ships, military engineering (including tanks, SPAAG systems), medicines (Polpharma, Polfa), food, clothes, glass, pottery (Bolesławiec), chemical products and others. The Silesian voivodship is predominantly an industrial region. Most of the mining is derived from one of the world's largest bituminous coalfields of the Upper Silesian Industrial District and the Rybnik Coal District. The most important regional industries are: mining, iron, lead and zinc metallurgy, power industry, engineering, automobile, chemical, building materials and textile. In the past, the Silesian economy was determined by coal mining. Now, considering the investment volume, car manufacturing is becoming more and more important.

Agriculture Agriculture employs 16.1% of the work force but contributes only 3.8% to the gross domestic product (GDP), reflecting relatively low productivity. Unlike the industrial sector, Poland's agricultural sector remained largely in private hands during the decades of communist rule. Most of the former state farms are now leased to farmer tenants. Lack of credit is hampering efforts to sell former state farmland. Currently, Poland's 2 million private farms occupy 90% of all farmland and account for roughly the same percentage of total agricultural production. Farms are small—8 hectares on average—and often fragmented. Farms with an area exceeding 15 ha accounted for only 9% of the total number of farms but cover 45% of total agricultural area. Over half of all farm households in Poland produce only for their own needs with little, if any, commercial sales. Poland is a net exporter of processed fruit and vegetables, meat, and dairy products. Processors often rely on imports to supplement domestic supplies of wheat, feed grains, vegetable oil, and protein meals, which are generally insufficient to meet domestic demand. However, Poland is the leading producer in Europe of potatoes and rye and is one of the world's largest producers of sugar beets and triticale. Poland also is a significant producer of rapeseed, grains, hogs, and cattle. Attempts to increase domestic feed grain production are hampered by the short growing season, poor soil, and the small size of farms.

The Śląskie Voivodeship’s share in the national production sold equals 17.2%, of which 62% falls within the private sector.

Figure: 25 Production of the region’s major industrial products

Source: www.silesia-region.pl

Partner economic entities structure

• Distribution by sector, size and legal condition

Figure: 26 Distribution by sector, size and legal condition in Poland Specification Number of of which natural gross value employed entities persons added by persons by of national conducting sections sections economy in total economic activity

Poland total % total % total / % in % mln euro thous Total 3685608 2787650 13 287.985 553,6 of which services 2817206 2085126 64,5 55,9 185.990 7 577,5 Trade and repair 1149810 40,8 935812 44,9 49.532 18,9 2 161,8 16 Hotels and 113253 4,0 89997 4,3 3.115 1,2 235,4 1,7 restaurants Transport, storage and 263423 9,4 236393 11,3 19.299 7,4 758,5 5,6 communication Financial 133020 4,7 121292 5,8 11.843 4,5 324,0 2,4 intermediation Real estate, renting and 611339 21,7 390410 18,7 36.228 13,8 1 056,9 7,8 business activities Public administration and defence; 26841 1,0 40 0,0 15.582 5,9 895,7 6,6 compulsory social security Education 95407 3,3 43320 2,1 12.944 4,9 1 026,4 7,6 Health care and 165792 5,9 145171 7,0 9.719 3,7 720,5 5,3 social welfare Other community, social and 258247 9,2 122691 5,9 9.783 3,7 398,3 2,9 personal service activities Source: Central Statistic Office of Poland

Figure: 27 Entities - indicators

new entities of the national entities recorded in the entities unregistered from economya recorded in the regon register per 10 the regon register per 10 regon register per 10 thous. thous. population thous. population population Poland 967 77 64 Silesia 918 66 61 Source: Central Statistic Office of Poland

Figure: 28 Entities by size classes

0 – 9 10 – 49 50 – 249 250 – 999 1000 and more total employees employees employees employees employees Poland 3 685 608 3 502 303 150 128 28 462 3 911 804 Silesia 427413 403089 20277 3457 505 85 Source: Central Statistic Office of Poland

Figure: 29 Entities of the national economy recorded in the regon register by ownership sectors Private sector Total entities natural commercial of the persons companies associations (private + commercial co- national conducting with foreign foundations and social public) companies operatives economy economic capital organizations total activity participation Poland 3 685 608 3 546 103 2 787 650 253 437 61 402 18 128 9 812 80 636 Silesia 427413 408698 322859 27551 5022 1244 712 7476

Public sector state and state and local local self- entities of self- commercial state- government the national government commercial companies with owned units of the economy units of the companies foreign capital enterprises budget law, total budget law, participation auxiliary total units Poland 139 505 66 605 572 4 862 144 722 Silesia 18715 6894 84 633 20 35 Source: Central Statistic Office of Poland

Figure: 30 Entities of the national economy recorded in the regon register by sections Poland Silesia ENTITIES OF THE NATIONAL ECONOMY RECORDED IN 2007 2007 % THE REGON REGISTER BY SECTIONS % 3 546 408 total 103 698 91 2,57 5 1,40 Agriculture, hunting and forestry 459 9% 728 % 0,05 0,01 Fishing 1 955 5% 52 % 0,06 0,06 Mining and quarrying 2 352 6% 225 % 373 10,5 42 10,3 Manufacturing 680 38% 099 0% 0,07 0,05 Electricity, gas and water supply 2 609 4% 188 % 392 11,0 44 10,9 Construction 112 58% 656 3%

Wholesale and retail trade; repair of motor vehicles, 1 149 32,4 144 35,2 motorcycles and personal and household goods 307 10% 138 7% 112 3,16 14 3,52 Hotels and restaurants 379 9% 379 % 262 7,40 31 7,64 Transport, storage and communication 696 8% 233 % 132 3,74 16 4,14 Financial intermediation 896 8% 938 % 549 15,4 56 13,9 Real estate, renting and business activities 543 97% 974 4%

16 0,45 0,23 Public administration and defence; compulsory social security 018 2% 940 % 48 1,38 5 1,43 Education 998 2% 846 % 158 4,45 16 4,08 Health and social work 132 9% 655 %

251 7,10 28 7,01 Other community, social and personal service activities 877 3% 644 % 0,00 0,00 Activities of households 20 1% 3 1% Source: Central Statistic Office of Poland

Figure: 31 Entities of the national economy removed from the regon register by sections

ENTITIES OF THE NATIONAL ECONOMY REMOVED FROM Pola Sile THE REGON REGISTER BY SECTIONS % % nd sia

240 28 Total 966 361 3 1,37 0,67 Agriculture, hunting and forestry 305 % 190 % 0,05 0,00 Fishing 129 % 1 % 0,03 0,02 Mining and quarrying 78 % 6 % 24 10,1 2 9,05 Manufacturing 451 5% 566 % 0,04 0,02 Electricity, gas and water supply 95 % 5 % 27 11,2 2 10,3 Construction 190 8% 923 1% Wholesale and retail trade; repair of motor vehicles, motorcycles 85 35,3 11 38,8 and personal and household goods 268 9% 016 4% 11 4,68 1 4,18 Hotels and restaurants 288 % 186 % 15 6,42 2 7,09 Transport, storage and communication 477 % 010 %

9 4,05 1 4,70 Financial intermediation 751 % 333 % 40 16,8 4 15,4 Real estate, renting and business activities 610 5% 391 8% 0,01 0,01 Public administration and defence; compulsory social security 14 % 3 % 4 1,69 1,90 Education 067 % 538 % 5 2,43 2,08 Health and social work 847 % 591 % 13 5,56 1 5,65 Other community, social and personal service activities 393 % 602 % Source: Central Statistic Office of Poland

Brief description of the Partner’s most dynamic enterprises In 2008 4 polish enterprises were on list of 2 thousend world bigest and most dynamic enterprises published by Forbes.

Figure: 32 List of the most dynamic enterprises Market Place Enterprise Sector Income Profit Assets value Petrochemical 671 PKN Orlen 18,17 mld. $ 0,68 mld. $ 15,56 mld. $ 7,36 mld. $ corporation 735 PKO Bank Polski Banking 3,18 mld. $ 0,74 mld. $ 34,80 mld. $ 18,12 mld. $ Polskie Górnictwo 926 Naftowe i Natural Gas/ Oil 5,22 mld. $ 0,45 mld. $ 10,42 mld. $ 11,20 mld. $ Gazownictwo KGHM Polska Copper mines 1035 4,42 mld. $ 1,21 mld. $ 4,41 mld. $ 9,40 mld. $ Miedź and mills Source: Central Statistic Office of Poland

Based on revenue data provided by the technology companies operating in the Central European marketplace, Deloitte professionals selected the fastest-growing firms in 2007 ranked in the Deloitte Technology Fast 50 Central Europe. Polish Blue Media Sp. z o.o. with record-breaking revenue growth of 11,226% over five years is again the overall winner of the 8th Technology Fast 50 annual ranking measuring the growth of technology companies in Central Europe. Again, second place belongs to a Polish company, Travelplanet.pl, an internet travel services provider with growth of 4,798%. This year's Rising Star, with record-breaking revenue growth of 12,667% over the past three years is a Polish company Hoopla.pl. A Polish e-shopping provider Agito.pl became second in this ranking.

The most profitable company in Silesia is Fiat Auto-Poland S.A. in Bielsko-Biała with a revenue of PLN 6.2 billion in 1997. Recently a new car factory has been opened by GM Opel in Gliwice. There are two Special Economic Zones in the area: Katowice and Częstochowa. The voivodship's economy consists of about 323,000, mostly small and medium-sized, enterprises employing over 3 million people. The biggest Polish steel-works "Huta Katowice" is situated in Dąbrowa Górnicza.

New entrepreneur profile

Figure: 33 New-registered entities of the national economy recorded in the regon register by sections of PKD NEW-REGISTERED ENTITIES OF THE NATIONAL Poland Silesia ECONOMY RECORDED IN THE REGON REGISTER BY SECTIONS OF PKD 2007 % 2007 2007 Total 291 369 3 664 291 369 Agriculture, hunting and forestry 4 863 1,67% 4 4 863 Fishing 118 0,04% 0 118 Mining and quarrying 207 0,07% 0 207 Manufacturing 25 391 8,71% 6 25 391 Electricity, gas and water supply 337 0,12% 33 337 Construction 49 833 17,10% 10 49 833 Wholesale and retail trade; repair of motor vehicles, motorcycles and personal and household goods 80 106 27,49% 6 80 106 Hotels and restaurants 11 900 4,08% 17 11 900 Transport, storage and communication 18 225 6,25% 15 18 225 Financial intermediation 13 433 4,61% 2 13 433 Real estate, renting and business activities 48 515 16,65% 2 105 48 515

Public administration and defence; compulsory social security 309 0,11% 292 309 Education 5 538 1,90% 819 5 538 Health and social work 10 739 3,69% 98 10 739 Other community, social and personal service activities 21 842 7,50% 256 21 842 Source: Central Statistic Office of Poland

3.5 Southern Estonia Area Total area of Estonia is 45 227 square kilometers Administrative division Capital: Tallinn (402,500) Other cities: Tartu (101,000), Narva (68,000), Kohtla-Järve (59,000), Pärnu (45,000) Estonia is devided into 15 counties, 181 rural municipalities and 47 towns Source: www.investinestonia.com (27.10.2008)

Definitory characteristics of the territory Estonia is the northernmost of the three Baltic States, and it is one of the countries forming the rapidly developing Northern Europe business area, which has a population of around 70 million. The country lies just south of Finland and across the Baltic Sea from Sweden. The population is around 1.34 million, one third of it in and around the capital, Tallinn.

Counties in Estonia There are 5 regions in Estonia: 1. Northern Estonia (Harju county); 2. North-East Estonia (Ida-Viru county); 3. Western Estonia (Hiiu county, Lääne county, Pärnu county, Saare county); 4. Central Estonia (Järva county, Lääne-Viru county, Rapla county); 5. Southern Estonia (Jõgeva county, Põlva county, Tartu county, Valga county, Viljandi county, Võru county).

These regions are (NUTS 3 level) statistical units, which are covered by neither administration nor development activities. At the same time they can be considered suitable territorial units for describing regional development in Estonia.

Southern Estonian economy, is based primarily on industry and agriculture, and has been losing its share of Estonia’s economic life in recent years. In particular, its three southerly counties have aroused considerable concern in Estonia. Until the 1990s, several big machine building factories were located in the towns of Tartu and Võru. Of the remaining industrial enterprises, the most important are those engaged in food, timber, building materials and clothing manufacture. Estonia’s most important dairy industry is located in Põlva. During the period of transition to a market economy, these enterprises have swung production away from the Estonian market to become major exporting companies.

Despite these moves, since 1991 industry’s share of employment has decreased in all sectors. New and knowledge intensive industries which have started up in recent years are those related to laser manufacturing and biotechnology, although for the moment they are still smallscale. The region, however, lacks definite specialisation in particular industrial sectors. If anything, the situation is worst in the agricultural sector, where the number of employees has decreased threefold, as have sown areas and livestock numbers. A number of largescale farms have closed down, primarily in the southern part of the region, where the hilly landscape prevents competitive largescale production. A number of small farms and some enterprises producing organic foodstuffs have emerged, but they make only a minor contribution to the region’s economy.

The town of Tartu has developed into an important educational, scientific and cultural centre for the country. Tartu is also the center for Estonian biotechnology sector. Additionally, ICT sector has been growing rapidly during recent years. Free economic zones for the development of industry and warehousing have been established in the towns of Võru and Valga to make use of existing transport routes and hopefully invigorate their economies. Allyearround services for the tourist industry have become an important branch of the economy. The town of Otepää was already in the 1970s and 1980s used as a sports centre by champions from the former Soviet Union, while throughout the region varying forms of adult education, workshops, seminars are now offered. The number of farms accommodating and catering for tourists in Southern Estonia has rapidly grown. The region’s international links, however, are not yet well established and the services offered are mostly of internal importance.

The main means of transport in Southern Estonia are road and rail. The military and civil airports near Tartu exploited during Soviet times are not in regular use today. The region has no access to the sea. Rivers in Southern Estonia are navigable over a distance of 140 km, although at present the region does not exploit its inland waterways for transportation purposes.

There is a dense railway network in the region. From Tartu, the railway runs in three directions, with regular passenger services to Tallinn in Northern Estonia, to Põlva in the southern part of the region, as well as to the border town of Valga, and from there on to Võru. Apart from the line from Narva which connects Estonia with Russia, another important main line crosses the regions southern part, running southwest to Riga from Valga and east to Pskov and on to Moscow.

Selected economic indicators

Estonia is considered one of the most liberal economies in the world, ranking in 2004 4th, in 2005 7th in 2005 and in 2006 12th in the Heritage Foundation's 2006 Economic Freedom Index, above the all rest of BSR countries. By World Competitiveness Ranking Estonia have had on 23rd to 25th place in last years (2004 25th, 2005 23rd, 2006 25th), being the most competitive among East European countries. Estonian economy is diverse – industry and transport, as well as commerce and different branches of services are all equally important. Due to the available natural resources Estonian economy largely relies on the branches related to the forest. Estonian energy sector is based on

oil shale, a resource quite rare elsewhere in the world. Finland and Sweden are the most important trade partners. Table 1 represents some basic Estonian key economic indicators. Estonian economy is characterized by: • Rapid GDP growth, being yearly above 7% in 21st century

• Very liberal economic policy in trade and taxation (a flatrate income tax system, the first in the world)

• Large stock of inward FDI

• Balanced state budget

• Very low external debt of government

• High level of gross fixed capital formation

Table 1. Estonian Economy 2007 GDP per capita EUR 11,380 GDP growth: 6.3% FDI stock: EUR 11.3 billion (31.12.2007) FDI into Estonia EUR 1.8 billion (in 2007) Exports EUR 8 billion Imports EUR 11.3 billion Inflation (CPI) 6.6% Unemployment rate 4.7% Average monthly gross wages EUR 724 Source: www.investinestonia.com (27.10.2008)

GDP Estonian Economic growth 2001 – 2011*

Figure 1. Estonian economic growth until 2011 Source: Estonian State Budget Strategy 2008-2011, Ministry of Finance of Estonia http://www.fin.ee/doc.php?78918 (27.10.2008)

Volume GDP growth in 2007, percentage change on previous year

Figure 2. GDP GROWTH IN 2007 Source: Eurostat 27.10.2008

Government deficit and debt The lowest general government expenditures in 2007 were in the Slovak Republic,Luxembourg, Romania, Bulgaria, Spain, Lithuania, Latvia and Ireland – all below 40% of GDP, and in particular in Estonia, where it was below 35%. At the end of 2007, the lowest ratios of government debt to GDP in Europe was recorded in Estonia (3.5%). (Source: Eurostat)

Figure 3. Primary balance and interest paid in Member States in 2007 (Source: Eurostat)

Figure 4. Public dept at end-2007 and end 2002 (Source: Eurostat)

Prices and costs

Figure 5. Consumer price index 2002 – 2007 Source: Estonian Statistical Office www.stat.ee (31.10.2008)

The price of electricity depends on the time of consumption (there are daytime tariffs and nighttime tariffs) and on the chosen price package. Detailed information is available on the website of the Estonian national energy company Eesti Energia. Natural gas is provided by AS Eesti Gaas. In 2007 Eesti Gaas sold 810 793 million cubic meters of gas, which was 2% more than in 2006. The owners of the company are Gazprom, Ruhrgas, Fortum and Itera Latvija.

Table 2. Electricity and Gas Tariffs in Estonia For private consumers For industrial consumers Electricity 0,05 – 0,10 EUR/kWh + network fee* 0,03-0,06 EUR/kWh + network fee* Gas 0.38 – 0.59 EUR/m3 + network fee** price agreed * plus renewable energy fee and excise duty ** plus excise duty Source: Eesti Energia, Eesti Gaas; VAT included; www.investinestonia.ee 31.10.2008

Real state

Purchase of Property by Foreign Citizens or Foreign Companies Foreign citizens and foreign companies may purchase any property (apartments, houses or buildings) without restrictions. Foreign companies and individuals also have the first option to buying the land under the buildings they have acquired. There are no particular restrictions for Estonian citizens and citizens of the countries belonging to European Economic Area - EEA (EU countries + Norway, Iceland, Liechtenstein) in purchasing land up to 10 hectares. Concerning land plots larger than 10 ha, the ownership can be transferred to a foreign citizen or a foreign company with permission from the County Governor at the location of the plot of land. When purchasing larger areas of forest and agricultural land the company must be registered in Commercial Register and must have been active in areas of forestry or manufacturing of agricultural products for at least the past three years. There are some restrictions on foreigners regarding purchases of land on small islands (i.e. islands other than Saaremaa, Hiiumaa, Vormsi and Muhu)

• Prices of Industrial Land Plots In the Tallinn area industrial land prices range in huge intervals. In the central city area, close to main roads prices reach up to EUR 125 per m2. However a few kilometres away, and less favourably located, prices fall to EUR 10 per m2.

• Office, Retail and Industrial Premises There are no restrictions for the lease of buildings and rooms. Nor are there any procedural peculiarities. Costs for electricity, heating etc are normally excluded from rent and have to be paid by the lessee.

Table 3. Indicative range for rents in major towns of Estonia, class A premises (EUR/m2 per month) Type of Space Tallinn Tartu Pärnu Narva Office 11,5 – 17,5 9,5 - 11,5 7,5 - 16 7,5- 9,5 Retail 13 - 50 7,5 - 60 5,5 - 20 9,5 - 25 Industrial 4,5 – 6,5 5 - 6,5 3 - 4 4 - 5 Source: Arco Vara Indicative costs for construction of new storage or industrial facility ranges between EUR 500 and 800 per m2 (excluding land cost).

Foreign trade and foreign investment

Proximity to the Nordic markets, location between Eastern and Western Europe, competitive cost structure and high-skill labour force have been the major Estonian comparative advantages since the 1990’s. As a member of the European Union, Estonia today obviously enjoys free trade within the Union, and full participation of external trade agreements signed by the Union. In November 1999 Estonia became a member of the World Trade Organisation (WTO), and in May 2004 the country joined the EU. Already from its early years of re-independence in the 1990’s, Estonia pursued a clear pro-trade policy, opening up its borders to foreign trade and investments in a quite unique way. This early exposure to foreign competition and capital, guaranteed the country a comparatively quick transformation to a full-fledged market economy, dominated by the spirit of free-trade, already before joining the EU. Also as a consequence of

the openness, many large Estonian companies are today owned by foreign capital, and the share of subcontracting works in exports is still high.

In 2007 the exports of goods made up to 8 billion EUR and imports accounted for 11.3 billion EUR. Compared to the previous year, the value of exports increased 4% and of imports 6% which is the smallest growth during the last four years. The slowdown of the growth was partly caused by the rapid growth rate of exports and imports in 2006 (24% and 30%, respectively).

Figure 6. Estonian Foreign Trade 2000 - 2007, special trade method (billion EUR) Source: Statistics Estonia (http://www.stat.ee)

The share of the EU countries (EU 27) accounted for 70% and the share of CIS countries for 11% of the total exports. The exports to the EU countries grew 11% compared to the previous year, the exports to the CIS countries 14%. The main countries of destination were Finland (18% of the total exports), Sweden (13%) and Latvia (11%). The biggest increase in exports was to Latvia and to Togo. Among the 10 main countries of destination the exports decreased only to the USA. In total imports the share of the EU countries was 78% and the share of CIS countries 13%. The imports from the EU countries increased 11%, but the imports from CIS countries decreased 13% compared to 2006. The main countries of consignment were Finland (16% of the total imports), Germany (13%) and Russia (10%). During the year the imports from Russia and Finland decreased. The biggest increase in imports was from Latvia and Sweden. Estonia exported goods to 131 countries and imported from 98 countries. The trade balance was positive with 74 countries.

Table 4. Export and import by countries

Exports Imports Country of 2006 2007 % Country of 2006 % 2007 % destination % origin 1. Finland 18.2 17.9 1. Finland 18.3 15.9 2. Sweden 12.2 13.2 2. Germany 12.4 12.9 3. Latvia 9.1 11.4 3. Russia 13.0 10.2 4. Russia 7.8 8.8 4. Sweden 9.1 10.1 5. Lithuania 4.8 5.7 5. Latvia 5.8 7.6 6. Germany 5.0 5.2 6. Lithuania 6.5 6.8 7. USA 6.6 4.2 7. Poland 3.8 4.5 8. Togo 1.0 3.4 8. Netherlands 3.5 3.4 9. Norway 2.6 3.4 9. UK 2.0 3.7 10. UK 2.6 2.8 10. Italy 2.5 2.8 Source: Statistics Estonia (http://www.stat.ee) 31.10.2008

Population The last official census was taken in 2000 Population: 1,363 million (Source: Population Register) Population density: 31 inhabitants per square km The proportion of urban population (1.01.2007): 69.4% The proportion of rural population: 30.6% The birth rate in 2006 was 11.1 per 1000 residents while the mortality rate reached 12.9 per 1000 residents Largest ethnic groups: Estonians (69%), Russians (26%), Ukrainians (2%), Belarussians (1%) and Finns (1%)

Figure 7. Population distribution years 1992 – April 2008 Source: Estonian Statistical Office www.stat.ee (31.10.2008)

Labour market

In 2004, Estonia had an average of 588,600 people aged 15–64 and the employment rate in the same age group stood at 62.6%. The Estonian labour market experienced significant change in the 1990’s. The reason, on one hand, was economic restructuring which created new types of employment. On the other hand there were significant demographic changes. Employment rate by age groups and sexes, it appears that employment of women and seniors in Estonia is among the highest in the European Union. But we fall behind in the employment of the young and, to a certain extent, also in the employment of people in their prime working age. Rise in the employment rate to 70% in the age group of 15–64 by 2010 is one of the most important goals set in the Lisbon strategy. Proceeding from the base scenario, it means that by 2010 about 55,000 people aged 15–64 would have to become employed additionally. For the sake of comparison, in 2001–2004, when employment growth was positive, the number of employed in that age group grew by 4,350 people a year.

Table 5. Labour market dynamics years 2004 - 2007 2004 2005 2006 2007 Total labour force (thous) 659,1 659,6 686,8 687,4 Employed (thous) 595,5 607,4 646,3 655,3 Employment rate (%) 56,8 57,9 61,6 62,6 Unemployed (thous) 63,6 52,2 40,5 32,0 Unemployment rate (%) 9,7 7,9 5,9 4,7 Economically inactive (thous) 388,7 389,0 362,3 359,0 Source: Estonian Statistical Office www.stat.ee (31.10.2008)

In 2006 and 2007 the demand for labour grew rapidly, resulting in falling unemployment and a return to the labour market by persons formerly non-active. The number of employed people increased in 2006 as much as 6,4% compared to 2005 and in 2007 1,3% compared to 2006. Unemployment fell from 7,9% in 2005 to 4,7% in 2007. Depending on methods of measurement however, the unemployment rate could be estimated at an even lower level.

• Labour costs

The minimum wage in Estonia is EUR 230 per month. In 2007 the average monthly gross salary was EUR 720. The highest gross salaries are paid in the financial intermediation sector, and the lowest in the hotels and restaurants sector. Table 6. Average monthly gross salary by economic activity, 1st quarter 2008 (EUR)

Economic activity Average salary Financial intermediation 1 997 Public administration and defence 969 Electricity, gas and water supply 877 Mining and quarrying 873 Real estate, renting and business activities 847 Construction 840 Transport, storage and communication 830 Forestry 808 Manufacturing 727 Source: Estonian Statistical Office www.stat.ee (31.10.2008)

Education The Estonian educational system covers pre-school education, basic education, upper secondary or vocational education, and post-secondary education at universities and at other post-secondary institutions. Some schools are funded by private capital, although the majority of schools are funded by state or local government budgets. The education system is divided into three parts: • Primary education • Secondary education • Post-secondary education The principal objective of Estonia’s educational system is to develop Estonian society into an open learning environment, where every person can be considered as a life long learner. The Education Act, adopted in 1992, states the following as the general goals of education: to promote the development of personality, family and the Estonian nation; to promote the development of national minorities, the Estonian economic, political and cultural life and the preservation of nature in the global economic and cultural context; to teach the values of citizenship; and to set up the prerequisites for creating a tradition of life long learning nationwide. The most relevant trend in recent years, mainly as a result of the development of private universities and post-secondary institutions, is the continuous growth in the number of students pursuing post-secondary education. The enrolment of public universities has also increased. PRIMARY EDUCATION The state and local governments arrange children’s education and studies in pre-school institutions. Compulsory school attendance generally starts at the age of 7 and lasts until primary education is completed (form 9) or until the pupil is 17 years old. Basic education is funded by the state. The school year lasts for 175 days and including holidays, it lasts from September 1 until the month of June. In primary and secondary schools, there is a uniform grading system with a range from one to five, where "5" represents the best result and "1" the worst result. SECONDARY EDUCATION In order to complete secondary education, a three-year study period has to be concluded. Similar to primary education, the state funds secondary education.

The number of private schools is increasing year-by-year. The education provided by private schools must correspond to the education standards enforced at the state level and demanded by the state curriculum. The state curriculum requirements are compulsory for all schools. In addition to these requirements, schools can teach extracurricular subjects or teach curricular subjects intensively. A student must pass at least three state examinations in addition to school examinations, in order to receive a secondary education certificate. As of September 2004, there are 240 schools providing general secondary education. VOCATIONAL EDUCATION Parallel to secondary and post-secondary education institutions there are also vocational schools, which are primarily state funded. The main emphasis in vocational education lies in acquiring professional skills and practical experience. There are 71 vocational schools in Estonia, 17 of which are private. A current administrative issue concerns the regulation of the school network and for this purpose a number of small vocational schools merged to become a single regional vocational education centre. Following this example, a number of strong vocational education centres have been established in southern, central and eastern Estonia. The vocational education system was developed from the secondary and post-secondary education levels so that students could acquire either vocational secondary or vocational higher educations. In 2000, parliament (Riigikogu) passed the Law on International Recognition of the Vocational Certificate. POST-SECONDARY EDUCATION The provision of post-secondary education in Estonia began in 1632, with the establishment of the University of Tartu. Today, it is once again an internationally recognised post-secondary institution. There are 47 post-secondary education institutions in Estonia of which 24 are based on private capital. Post-secondary education can be acquired via diploma or academic programmes. The latter is divided into bachelor, master and doctorate programmes. As Estonia’s standard of post-secondary education is internationally recognised, the diplomas of accredited Estonian post-secondary education institutions are recognised abroad. In order to evaluate the quality of post-secondary education institutions (accrediting), a separate institution has been established that orders specialist evaluations from an international commission. In addition to academic studies, scientific work is also carried out intensively at post-secondary education institutions. Estonia has achieved world-class results in bio- and gene technology, comparative linguistics, and semiotics.

Research and development

Estonia has set a target (Knowledge based Estonia, Estonian Research and Development and Innovation Strategy 2007-2013) to increase the public sector research and development investments to 1.05% of GDP by 2010. Increasing public investments consistently and ensuring their efficiency create good conditions for the growth of enterprises’ research and development investments and allows setting the target of total expenditure on R&D to 1.9% of GDP by 2010.

The target of 3% of GDP expenditures on research and development, as agreed in the Lisbon Strategy, is planned to be achieved by 2014. Complying with the agreement on stable growth of public financing, raising the quality and intensity of RD&I as well as increasing the involvement of enterprises’ research and development investments, will ensure successful and competitive development of Estonia and provide an opportunity to advance creativity and competence in the European Research Area.

In 2001-2005, R&D expenditures in enterprise sector (BERD) grew on average 31% per year, being the highest in EU (incl 42,2% growth in 2004 and 45,5% in 2005; 70% growth of GERD in 2005 came from BERD). The growth of total R&D expenditure (GERD) of Estonia has also been in 2001-2005 the fastest in EU reaching on average 21% per year. R&D financing from foreign sources ca 17%, growth in public sector in 2006 – 27.

R&D expenditure in Estonia (2005): R&D expenditure: GERD (% GDP): 0.94 1.13 (2006) EU25 = 1,85 BERD (% GERD): 46 EU25 = 64

Financing: 44 % (Gov), EU-27 35% 38 % (Enterprise sector), EU-27 54% 17 % (Abroad)

Number of researchers (FTE per 1000 workforce): 5,0 Source: Estonian Statistical Office www.stat.ee (27.10.2008)

1,8

1,6 GERD

1,4 BERD 1,2

1 Public Sector R&D

% GDP expenditure 0,8 By R&D Strategy 0,6 2002-2006

0,4 By R&D Strategy 2007-2013 0,2

0 2000 2001 2002 2003 2004 2005 Progn 2007 2008 2010 2006 Figure 8. R&D expenditure (% GDP) Source: Estonian Ministry of education and research (Knowledge Based Estonia, Estonian Research and Development and Innovation Strategy 2007-2013)

Use of ICT

With its policies and innovative initiatives the Estonian Government is helping companies make the information technology sector one of the fastest growing in the country. The World Economic Forum's Global Information Technology Report 2007-2008 - The Networked Readiness Index, also indicates a strong Estonian standing in government and the community readiness to participate in and benefit from ICT developments: the study ranks Estonia 20th out of 127 countries thanks to its regulatory framework for ICT, making Estonia the leader among the Central and Eastern European countries.

Table 7. USE of ICT 2004 2005 2006 2007 Telephone main (fixed) lines per 100 inhabitants 32.9 32.8 33.7 35.7 Share of digital lines (%) 83 83 85 86 Number of mobile phone subscribers per 93 107 123 147.6 100 inhabitants Broadband connections per 100 inhabitants (%) 13 17 21 21 Number of households connected to broadband per 100 homes 28 36 44 44 Sources: National Communication Board 66 per cent of population aged 16 to 74 are Internet users (2008, Statistics Estonia). 58 per cent of households have access to the Internet at home (2008, Statistics Estonia). All Estonian schools are connected to the Internet. All Estonian towns and villages are covered by the network of public Internet access points.

There are more than 1 100 free wireless Internet zones around the country. More information: www.wifi.ee Incomes can be declared to the Tax and Customs Board via Internet. In 2008, the percentage of electronic tax declarations was over 88. Expenditures made in state budget can be followed on the Internet in real-time The Government has changed Cabinet meetings to paperless sessions using a web-based document system All of Estonia is covered with digital mobile phone networks

Human resources

Finance

Sourcing/ Supply

Logistics/ Stock keeping

Production planning

Production

Marketing/Sales

Accountancy

0 % 10 % 20 % 30 % 40 % 50 % 60 % 70 % 80 % 90 % 100 % Use Plan to use Not use

Figure 9. Areas use of internet Source: LogOnBaltic ICT survey www.teaduspark.ee 31.10.2008

ICT usage and Internet access is constantly monitored in Estonia and has been highly appreciated at an international level. According to EMOR (www.emor.ee), 90% of the companies in Estonia have Internet access and at least one computer, although the use of the possibilities of e-commerce and e-business is not too common. Also 90% of the inhabitants live in the areas with possibility for immediate broadband connection. In 2006, 58% of the population aged 15-74 used Internet. The main business areas where ICT is used are Accountancy (close to 95%) and Marketing/Sales (over 80%). In Finance and Sourcing/Supply, ICT usage is also over 70%. Less then 50% of the companies use ICT means in Production Planning and just over 50% in Human Resources. But at the same time, these are the business areas in several companies where the plans to start using ICT is the highest. The high usage of ICT means in the areas of Finance and Accountancy is not surprising, due to the high level of public services available via electronic channels in Estonia – especially concerning the report of taxes and other financial/economical data compulsory to the companies. Also, the increasing usage of Internet in Estonia is a key factor in high-level Marketing/Sales activities done with the help of ICT. Companies have realized the importance of being visible in the Internet which is already a “MUST” in doing business on national level. Low usage of new solutions in Production and its related areas is also very typical for Estonian manufacturing industry which is still based on subcontracting and low-price advantage, but the need for change is acknowledged. The low percentage in management of Human Resources is explainable by the lack of need for such means among SME’s. The number of companies planning to start using ICT in some of the areas is surprisingly high, which shows that companies are informed about the possibilities and are willing to use new solutions. (Source: LogOnBaltic survey. 31.10.2008).

Transport Due to its favourable economic and geographical position, Estonia has become a transit gateway for east-west as well as north-south trade. Its location is ideal for the creation of efficient transportation links and distribution chains of goods and services for companies in Europe and in other parts of the world.

In 2007 Estonian transport enterprises carried 105,8 million tons of goods (92,6 million in 2006), of which 62,4% by railway (66,1), 36,1% by road (38,2) and 1,5% by sea (1,6). The export and import of goods to the west, north and south are mainly organised by exploiting the opportunities of maritime and road transport, to a marginal extent also by air transport. As a rule, the goods are delivered to the harbours of Muuga, Tallinn, Paldiski, Sillamäe, Kunda or Pärnu, or taken by road transport to other European countries via Latvia mostly using the Tallinn-Ikla road, or delivered to Russia by the Tallinn-Luhamaa and Tallinn-Narva roads. The transit is dominating in Estonian rail and ports freight operations. Goods transit made 81% of goods tonnage transported by Estonian rail carriers and 78% of Estonian ports turnover in 2006. Major part of transit goods is originating from / destined to Russia. By nomenclature of transit goods crude oil and oil products are prevailing, (68% of transit goods by rail and 56% of local ports turnover in 2006). However these shares have decreased since 2004. Instead of this the share of transits of coal has strongly increased. The further decrease of oil & oil products transits via Estonia is anticipated as Russia is attempting to move their oil exports into their own Baltic Sea ports. Therefore Estonian ports and their operators are seeking additional transit goods (development of container transit via Trans Siberian Railway; cars transit; acting as distribution centre for China's goods for Europe, etc.) and partners (China, Ukraine).

Table 8. International passenger transport through ports Vessels total Estonian vessels Foreign vessels 2001 5 956 2 795 3 160 2002 6 166 3 036 3 129 2003 6 081 2 820 3 260 2004 6 940 3 331 3 609 2005 7 192 3 263 3 928 2006 7 016 3 591 3 425 2007 6 841 3 518 3 322 Unit: Thousands Passengers * Source: Estonian Statistical Office www.stat.ee (31.10.2008)

Table 9. Transport of goods Transport of Transport of goods in goods international traffic 2001 Total 80265 38394 Road transport 14105 3421 Railway transport* 64657 33483 Sea transport 1495 1483 Air transport 8 7 2002 Total 90542 43509 Road transport 17848 3236 Railway transport* 71125 38706 Sea transport 1562 1560 Air transport 7 7

2003 Total 93998 44006 Road transport 27133 3935 Railway transport* 65588 38798 Sea transport 1273 1269 Air transport 4 4 2004 Total 95116 48334 Road transport 28076 4134 Railway transport* 65648 42813 Sea transport 1388 1383 Air transport 4 4 2005 Total 96301 47333 Road transport 27358 5383 Railway transport* 68187 41194 Sea transport 751 751 Air transport 5 5 2006 Total 92625 49499 Road transport 30349 6546 Railway transport* 61284 41961 Sea transport 987 987 Air transport 5 5 2007** Total 108286 40549 Road transport 38523 7025 Railway transport* 68538 32299 Sea transport 1221 1221 Air transport 4 4 Unit: thousand tonnes ** The data may be revised when the data for the next quarter are added. Railway transport*: * The quantity of total freight in tonnes may be double as in case of domestic freight the same quantity of freight may be carried to the destination by several railway enterprises if one of them carries the freight on the public railway and the other on non-public railway. That is the reason why it is recommended, in order to characterise the quantity of the freight carried, to use the indicator freight turnover which indicates the volume of work (in tonne-kilometres) made while carrying the freight. Source: Estonian Statistical Office www.stat.ee (31.10.2008)

• Road Network

The Estonian road network is comparable to that of the Nordic countries in terms of its density and quality. The infrastructure along the main highways has improved fast as modern gas stations and better roads have been built. The major road transport passages through the country are Tallinn-Narva (Russian border), Tallinn-Tartu-Russian border and Tallinn-Pärnu- Latvian border.

In the beginning of 2008 the total length of the Estonian roads is 57,565, out of which 16 465 km is national roads. 55% of the national roads are paved. The volume of goods carried by Estonian road transport companies was 38,2 million tons in 2007 compared to 30,3 million tons in 2006 and 27.4 million tons in 2005.

Table 10. Length of national roads Total length of national roads 2004 16459 2005 16470 2006 16479 2007 16465 Unit: kilometres Source: Estonian Statistical Office www.stat.ee (31.10.2008)

• Rail System

The total length of the Estonian railway lines in is 1200 km. 133 km is electrified. All bigger towns and centres are united through the railway network, which covers the whole mainland part of Estonia. This creates good prerequisites for the development both for passenger and freight transport on railway. So far, the percentage of the passenger transport by railway has been relatively small, but in the past few years it has shown some stable tendency of growth.

One of the shortest and best developed transit corridors uniting CIS countries and Europe passes through Estonia. Together with ports, railway comprises an important infrastructure for the Estonian economy. The main part of the goods’ volume transported on the railway is transit goods that are transported from Russia to the Western countries. In international goods transportation, railway dominates with 79%, followed by road transport with 17% and sea transport with 4%.

During 1995-2003, the amount of goods carried by railway constantly increased, from 41.2 million tons in 1995 to 72.2 million tons in 2003. In 2004, the amount of freight carried decreased to 65.6 million tons, increased again to 68.2 million tons in 2005, fell back to 61,3 million tons in 2006 and increased again to 66,1 tons in 2007. In recent years petroleum products have trended lower among rail-transported goods, but instead, the amount of coal transported has increased. The amounts of transports of these products are very dependent on investment projects implemented in Russia.

Figure 10. Freight carried by railway, 2000 - 2007 (million tons) Source: Estonian Statistical Office www.stat.ee (31.10.2008) The major freight railway operator is the state enterprise Eesti Raudtee (Estonian Railways), formed in 1992. Given its good relations with Estonian ports, neighbouring railways and international expediting companies, Eesti Raudtee is able to offer services, which are fast and secure by European standards. Private freight transporters in Estonia are AS Spacecom and Westgate Transport OÜ. In passenger transportation the operators are AS Elektriraudetee and Edelaraudtee Ltd . The Tallinn-St Petersburg-Moscow line is operated by Go Rail.

• Sea Transport

There are 64 ports along the coast of Estonia, 31 of them handle commercial shipping and are open to vessels from other countries. Port of Tallinn is one of the fastest developing ports in the Baltic Sea and an authority managing five harbours: - Muuga Harbour - main oil, dry bulk and container port in Estonia, max depth 18m, ice-free - Old City Harbour - main passenger port in Estonia, max depth 10.7m - Paldiski South Harbour - scrap metal, timber and roro port, max depth 13,5m - Paljassaare Harbour - timber, oil, coal max depth 9m - Saaremaa Harbour – passenger port, max depth 10m Other Estonian seaports are Kunda (timber, cement), Sillamäe (timber, metals, oil products), AS Pärnu Sadam (timber, peat) and Paldiski Põhjasadam (timber, vehicles, containers). Passenger traffic from Estonia to Finland to Finland, Sweden and Germany is organised by several companies and the amount of connections per day is increasing year by year The vessel traffic through Estonian ports has decreased a little during past years. In 2007, 14 443 vessels came from abroad to Estonian ports (15 240 in 2006). 8 817 (9 632) of these were passenger vessels. 44,7 (49,7) million tons of goods were transported through ports; the amount has increased more than three times since 1995. Of the total volume in 2007, oil products accounted for 55,0%.

Figure 11. Transport of goods through ports 2000 - 2007 (million tons) Source: Estonian Statistical Office www.stat.ee (31.10.2008)

Main economic sectors

• Wood industry

Estonia's wood processing industries - like other industrial sectors - underwent a rapid restructuring process in the early 1990s. The recovery has been sound and presently the share of wood processing in manufacturing industry is 23.6 %. In 2007 the sales of wood processing and furniture production companies totalled 1,550 million EUR, accounting for 23.5% of the industrial sales of all Estonian manufacturing enterprises. Wood processing companies are located all over Estonia. Larger concentrations may be observed near bigger centres such as Tallinn, Tartu, Pärnu and Rakvere. In developed countries the products of Estonian wood processing companies are competitive mostly thanks to their reasonable price-quality ratio. This means that the prices of Estonian companies are lower than those of West European enterprises but the quality is higher than the one offered by Polish and other Baltic manufacturers. Estonian producers price their products based on market situation and the costs incurred. Most companies apply cost-based pricing. Table 11. Manufacturing of wood and paper products, 2005 – 2007

2005 2006 2007 Sawn timber, thousand m³ 2062.5 1958.4 1528.6 Railway sleepers, thousand m³ 1 0.8 Plywood, thousand m³ 71

Fiberboard, million m² 22.4 21.5 4.0 Particle board, thousand m³ 230.6 248.7 272.2 Windows, doors and their frames of wood, 3014.3 3959.9 thousand pst Glue-laminated timber, thousand m³ 218.5 256.7 259.8 Pallets of wood, thousand pst 2618 2504.6 Prefabricated buildings of wood, million EUR 112.2 137.6 Cellulose, thousand t 67.1 69 Paper and cardboard, thousand t 86 78 Paper, thousand t 69.6 67.4 61.3 Cardboard, thousand t 16.4 10.6 Boxes, cases, bags from paper or carton, 22.9 31 thousand t Labels of paper or paperboard, thousand t 2.4 2.7 Paper office supply, million EUR 18.9 24.5 Wood pulp, thousand t 67.3 Source: Estonian Statistical Office www.stat.ee (31.10.2008)

Most wood processing companies consider the Estonian market highly competitive. For furniture and wooden building manufacturers the market is saturated and new entrants have few possibilities for competing with existing players. Scarcity of raw material is one reason why companies find it difficult to succeed.

• Machine building and metalworking industry

The Estonian engineering and metalworking industry is an industry of traditions with a history dating back to the second half of the 19th century. Today it is a growing modern industry with strong links to the Scandinavian and Western European engineering clusters.

FIGURE 12. STRUCTURE OF ESTONIAN MANUFACTURING SECTOR, 2006

Source: Estonian Statistical Office www.stat.ee

The importance of the machine building and metalworking industry both in Estonian exports as well as imports has increased remarkably during recent years constituting 39,5% of exports and 45,6% of imports (2007). In 2006, the production value of the various parts of the metal processing industry was EUR 1,3 bln, making out some 19% of total industrial production. The metal industry employs more than 23 000 people.

A large share of enterprises in the machine building and metalworking industry are situated in Tallinn and its nearby regions while the main part of vacant production capacity is located farther from Tallinn. Taking into account the relatively well-developed network of roads, railways and ports all enterprises wherever in Estonia they are located, are potentially suitable partners for foreign firms. Two-thirds of the total number of nearly 23 000 people who are engaged in the machine building and metal industry are working in companies with over 100 employees. The Tallinn Technical University, Higher Technical School and high-level vocational schools specializing in the field of engineering ensure qualified engineers and workforce for Estonian enterprises. • Construction Industry

The construction industry has successfully grown during the last few years. It is an important branch of the Estonian economy since construction contributes 8,0% to the total GDP (2006). Construction works conducted in Estonia at current prices amounted to EUR 3,7 bln and construction activities in foreign countries to EUR 0,15 bln in 2007.

The growth of the construction industry during the last few years in current prices is presented in the graph below:

Figure 13. Construction activities 2002 - 2007 Source: Estonian Statistical Office www.stat.ee (31.10.2008)

The growth of the overall construction industry in 2007 thus amounted to 22% in current prices. The fastest growth has taken place in construction of residential buildings. The increasing importance of the residential construction segment is also manifested in an ever increasing amount of building permits and completed dwellings. In 2006 a total of 12 863 building permits for dwellings were issued, an increase of 41% relative to 2005. The number of completed dwellings increased by 29% to 5068 units.

Figure 14. Construction production by type of construction, 2006 Source: Statistics Estonia

Construction of residential buildings takes place mainly in Tallinn and in its closest neighborhood but also in Tartu and Pärnu. The share of those three cities in the turnover of the market of residential buildings is 70-80%.

Construction works performed abroad constituted 4% of the total turnover of the Estonian construction companies in 2007. Construction works outside Estonia are performed mainly in Latvia, Lithuania and the Ukraine, where the Estonian companies are competitive in a cost/quality perspective. There have not been any remarkable exports to western markets, since acquiring work permits in the destination country has presented difficulties to Estonian companies.

In 2007 the construction industry employs approximately 80 thousand people in Estonia, or some 12% of all persons employed in the country. The wages have risen very quickly in recent years, jumping about 20% in 2006. In mid-2007 there are signs that construction workers who have earlier moved to Finland due to higher compensation are returning back to Estonia.

Chemical Industry

Estonian Chemical Industry is characterized by strong concentration, proceeding from the traditional fields and development potential of the relevant region. Thus the largest part of the chemical industry has concentrated to East-Virumaa (AS Viru Keemia Grupp, AS Nitrofert, OÜ Kiviõli Keemiatööstus, AS Velsicol Eesti, AS Silmet, etc). In spite of the big changes in the structure of chemical industry in 1990s, expressed mostly in decrease of production volume and in vanishing some of the sectors of chemical industry (production of phosphor fertilizers, benzene and toluene has finished, production of medicine decreased), the chemical industry has retained its stability.

Production The production of chemical industry accounted for 5,7% of the manufacturing in 2007. The output of chemical industry was 469 million EUR and it has grown ca 14% compared to 2006.

Figure 15. Structure of Estonian manufacturing sector, 2006 Source: Estonian Statistical Office www.stat.ee (31.10.2008)

Chemical industry has been very export oriented. 81.8% of production of chemicals and chemical products were exported in 2007. The growth in the proportion of exports indicates the growth in foreign demand. Production of chemicals and chemical products has had one of the highest shares of export in sales in manufacturing, the figures have over the years been above industry average. Main export countries are Latvia, Russia, Netherlands and Lithuania. The main export articles of Estonian chemical industry are: oil shale, dyes, organic chemicals, fertilizers, pharmaceutical products.

Electronics

The Estonian electronics industry has a long tradition. Already in 1907 a telephone factory was established in Estonia in the university town of Tartu, where 13 000 telephones were produced during World War I. Today the expanding economy, fuelled with notable inflows of foreign direct investment, has been driving the growth of electronics industry in Estonia. The electronics industry is now one of the fastest developing industries of the Estonian economy. Many multinational enterprises active in this field have already taken advantage of the attractive production and investment environment in Estonia. A constant shift of foreign electronic companies from labour intensive production to more complex and higher value-added operations is further contributing to the rising competitiveness of the industry. Currently ca 14 500 skilled people are employed in the electronics industry. The number of employees has changed little in the last years, however the output has risen remarkably. The production of the industry has grown almost fifteen times during the past ten years. The industrial production of electronics industry in 2006 was 17% higher than in 2005.

FIGURE 16. INDUSTRIAL PRODUCTION OF ELECTRONICS INDUSTRY Source: Estonian Statistical Office www.stat.ee (31.10.2008)

The electronics industry in Estonia consists of about 345 companies. The biggest company in this sector, Elcoteq, employs 2000 people. Most of other enterprises of this branch are small and medium sized businesses employing less than 50 people. They account for more than half of the industry's total turnover. Large enterprises with more than 300 employees have amounted to almost 1/3 of the total turnover. The share of electronics industry in total production of manufacturing industry in Estonia has grown significantly over past years – from 3.4% in 1994 to ca 11% in year 2006. This growth tendency is most likely to continue also in future.

Table 12. Share of electronics industry in total production of manufacturing (%) 2002 2003 2004 2005 2006 Computers and office machinery 0.5 0.5 0.6 0.6 0.6 Electrical machinery and apparatus 2.2 2.5 3.6 4.5 5.2 Telecommunication equipment 2.2 2.4 3.9 4.0 3.6 Medical, precision and optical 1.4 1.5 1.7 1.8 1.5 instruments Electronics industry total 6.3 6.9 9.8 10.9 10.8 Source: Estonian Statistical Office www.stat.ee (31.10.2008)

The largest sub-sector of the Estonian electronics industry is the manufacturing of electrical machinery and apparatus, which accounts for 47.8% of the net sales. Telecommunication equipment constitutes 33% of the total, followed by medical, precision and optical instruments with 13.8%. Assembly of computers and office equipment makes up 5.4% of the total sales.

Figure 17. Structure of electronics industry, 2006 Source: Estonian Statistical Office www.stat.ee (31.10.2008)

• Transport and logistics

Transport and logistics play a vital role in the Estonian economy. The country’s favorable geographic location, along with its well-developed infrastructure, offers excellent opportunities for all transport and logistics related activities. Estonia has become a transit center between the East and the West as well as the North and the South. Its location is ideal for the creation of efficient transportation links and distribution chains of goods and services for companies in Europe and in other parts of the world. Approximately 8% of the country’s workforce is employed in transportation and road management, and over the past years the share of transportation and telecommunications in the economic activity has steadily increased and currently constitutes ca 15% of the GDP. Railway transport dominates the cargo sector, comprising 80% of all carried goods, domestic and international. Road transport is the one that prevails in the passenger sector, accounting for over 90% of all transported passengers.

The Estonian transportation and logistics sector is comprised of a successful combination of transportation services, transit trade, distribution centers and value-added logistics. Transit services constitute a profitable form of exports for the nation, and their future success ranks highly among the priorities of Estonia’s economic policy. The structure of cargo sector has during the past 10 years changed significantly. The turnover of sea transportation has due to the active privatization process decreased more than four times compared to 1994. Volume of goods carried by road and by railway has increased respectively 2.3 and 1.6 times.

Figure 18. Total cargo turnover 2002 – 2007 Source: Estonian Statistical Office www.stat.ee (31.10.2008)

Biotechnology in Estonia

The history of biotechnology in Estonia begins with Karl Ernst von Baer (1792-1876), a Prussian-Estonian biologist, embryologist, anthropologist and geographer. Von Baer’s contribution to modern day biology was rather significant – he discovered the mammalian ovum and the notochord, and he was the founder of comparative embryology.

Biotechnology-related research in Estonian universities has been compatible on the world-scale ever since. In 1970s significant investments into biotechnological research were placed by the state of that time to develop genomic studies. In 1980s two leading research institutions – the Estonian Biocentre in Tartu and the Laboratory of Molecular Genetics at the National Institute of Chemical Physics and Biophysics in Tallinn were set up.

This built a solid foundation for outstanding growth of the sector, especially after Estonia regained its independence. There are now 15 research organisations in biotechnology, employing around 300 people. The first viable spin-off companies appeared in the 1990s and currently 40 biotechnology enterprises are accounted in Estonia, with new additions to the list every year. Research institutions and companies have mainly clustered around two centres – Tallinn and Tartu, being strongly interlinked. One of the characteristics of the Estonian biotechnology is also many co-operation contacts outside the country, especially in the Nordic region.

The main competences of Estonian biotechnology lie in medical biotechnology – immunology, genomics and cancer research. Industrial biotechnology is also rather advanced developed both on the research and industry side, including biochemistry, organic synthesis, environmental and food biotechnology. The progress of the biotechnology sector has also been recognised by the state. In „The Estonian Strategy for Research and Development 2002-2006”, biomedicine was defined as one of the three key areas in the country’s economy. The continuing document for years 2007-2013 has extended the status of “strategic key technology” to biotechnology in general. The aim of the current strategy document is to increase R&D investments to 3.0% of GDP, with more than a half of it being contributed by the private sector. The strategy also aims for the number of R&D staff per 1000 employees reach 8, and for productivity per employee to reach 72% of EU average. In order to reach those goals, specific programmes, including one for biotechnology will be developed. Until then, biotechnology is benefiting from a range of generic measures designed to support innovation.

More Information about Estonia

• President of Estonia: http://www.president.ee/en/ Estonian State Web Centre: http://www.valitsus.ee/?lang=en • Riigikogu (the Parliament): http://www.riigikogu.ee/?lang=en • Estonica - Encyclopedia about Estonia: http://www.estonica.org/ • Estonian Tourism Board: http://www.visitestonia.com • Estonian -Wide Web: http://www.ee/en/ • Tartu City: www.tartu.ee • Tartu Science Park: www.sciencepark.ee • Tallinn Technology Park: www.tehnopol.ee

3.6 Vysocina

The Vysocina Region is situated in the centre of the CR, neighbouring Jihocesky, Stredocesky, Pardubicky and Jihomoravsky Regions. With the last of them Vysocina forms the NUTS II area for the purpose of a regional development support. It differs from neighbouring regions by a dissected territory, higher altitude and low residential density. Disintegrated residential structure causes in some cases that people are moving away from smaller municipalities; young and qualified inhabitants leave.

The Vysocina Region has an inland location and its borders do not touch the state borders of the CR. However, the southern part of the region stretches to the zone that is close to the borders with Austria. The region is attractive for its rather low air pollution, healthy forests and clean water resources and expanses of water that are important for water supply and distribution.

With its area of 6 796 sq km (as of 1 January 2007) the region ranks among regions of above- average size; only 4 regions of the CR have a larger area. The highest point of the region is Javorice in Javoricka vrchovina (the Peak Javorice in the Javorice Highlands, 837 m above sea level), while the lowest point (about 239 m above sea level) is the surface of the Jihlava River in the place where is leaving the region, which is to be found in the southwest of the Trebic District. There are two protected landscape areas in the region: Zdarske vrchy (the Zdar Hills) and Zelezne hory (the Iron Mountains). The Melechov Hill on the territory of the Havlickuv Brod District is called in some sources a geographical centre of Europe.

As for administrative breakdown, the territory of the Vysocina Region comprises 5 districts, 15 administrative districts of municipalities with extended powers and 26 administrative districts of municipalities with authorized municipal office. The basic self-governing unit is a municipality; there are 704 of them in the region (as at 1 January 2005). The average population per municipality amounts to 725; it is the lowest of all the regions of the Czech Republic. The highest number of municipalities comprises those of population under 500. There are 34 municipalities with the status of town in the region, and the number, in relation to the region’s area, falls slightly below the national average.

Fig. 1 Settlement of the Vysocina region, 2007

Source: Czech Statistical Office (CZSO), 2008.

As at 1 January 2007, the region’s population was 511 645; it is the fourth smallest among all the regions of the Czech Republic.

Fig. 2 The Vysocina Region within the administrative structure of the Czech Republic (NUTS II and NUTS III)

Source: The Vysocina Region profile, 2007.

The economic structure of the Vysocina Region has been influenced by the historical background and natural conditions. Since 1989 the region’s economic system has gone through significant transformation changes relating to very quick privatization and economy restructuring. Economic performance of the region in comparison with other regions of the CR is below the national average. Share of the region at GDP of the CR was during the last years about 4, 2%, which ranks the region eleventh among all fourteen regions. When calculating GDP per capita the region ranks seventh position. In 2006 this indicator was 265 339 CZK, i.e. 84, 3% of the national average.

The basic GDP data on the Vysocina Region provides Table No.1, compared with other Czech regions and with the Czech Republic as a whole. GDP share of Vysocina was only 4,2% in 2005, but indicator of GDP per capita showed 7th place of all regions (84,2%), paying attention to the statistical distortion of the Prague’s GDP per capita indicator value.

The Vysocina Region is known among Czech regions for its above-average dynamics of regional GDP in recent years. When comparing annual GDP growth of the Vysocina Region with its superior NUTS II region and with the Czech Republic, there are some oscillations visible. In 2006 the annual GDP growth of the region reached 7,2 %, outperforming both NUTS II and CR annual GDP growth. However, the share on Czech Republic GDP has dropped down in 2005 – 2006 to 4,2 %.

Tab. 2: Basic macroeconomic indicators

Indicator Unit 2002 2003 2004 2005 2006 GDP mil. CZK 106 930 110 837 120 038 125 677 135 618 GDP, CR = 100 % 4,3 4,3 4,3 4,2 4,2 GDP per capita CZK 209 301 217 107 235 264 246 426 265 339 GDP per capita, CR = 100 % 86,6 85,9 85,3 84,4 84,3 GDP per capita, EU27 = 100 % 61,2 63,5 64,8 65,1 66,8 GDP, previous year = 100 % 102,0 102,9 103,7 106,6 107,2

Source: CZSO, 2008.

The GDP of the Vysocina Region has been growing in last few years (see fig. 3).

Fig. 3 Regional GDP development, 2001-2006, millions CZK

Source: Regionalni úcty 2006. CZSO Praha, 2007.

Prices and costs

This topic can be described by the gross wages table:

Non-enterprise sphere Enterprise sphere

2006 2007 2008 2006 2007 2008 Česká republika 22 371 23 654 23 220 23 043 24 812 25 964 Hl. m. Praha 27 000 27 385 26 868 32 699 35 115 37 286 Jihočeský 20 518 22 647 22 153 19 961 21 227 21 875 Jihomoravský 21 230 22 875 22 479 21 672 23 406 24 672 Karlovarský 20 896 23 285 22 503 20 757 21 855 21 547 Královéhradecký 21 214 23 240 22 855 19 819 21 397 21 788 Liberecký 20 862 22 398 21 892 20 603 23 048 23 833 Moravskoslezský 20 565 22 795 22 264 20 872 22 450 23 401 Olomoucký 21 166 22 991 22 413 20 851 22 098 23 129 Pardubický 20 403 21 788 21 423 19 830 21 462 22 519 Plzeňský 21 651 23 652 23 373 21 733 23 262 24 240 Středočeský 20 855 22 686 22 305 23 162 25 432 26 422 Ústecký 20 161 22 492 21 996 21 690 22 640 23 476 Vysočina 20 585 22 323 22 122 19 853 21 607 22 735 Zlínský 20 176 21 899 21 579 20 228 21 567 21 808 Source: MPSV

Population and average age

*Dispalyed data are valid to Januar 1 of each year * 2004 2005 2006 2007 2008 Population total 517 511 510 114 510 767 511 645 513 677 - females 261 690 258 027 257 953 258 302 259 125 - males 255 821 252 087 252 814 253 343 254 552 Average age total 38,94 39,24 39,49 39,79 40,03 - females 40,36 40,66 40,91 41,21 41,45 - males 37,50 37,79 38,05 38,33 38,58 Source:CZSO

Basic demographic data 2004 2005 2006 Population total 31 December 517 153 510 767 511 645 Live births 4 819 5 070 5 113 Death 5 074 5 339 4 773 Total increase -358 653 878 Natural increase -255 -269 340 Net migration -103 922 538 Divorces 1 216 1 247 1 224 Marriages 2 435 2 428 2 393 Population by age 0 - 14 89 728 88 582 88 582 Population by age 15 - 64 357 909 353 068 353 068 Population by age 65+ 71 574 70 493 70 493 Nationality Czech, Moravian or Silesian 502 141 495 203 495 203 Nationality other 17 070 16 940 16 940 Source: CZSO

Unemployment rate (%) in last 6 months 5/2008 6/2008 7/2008 8/2008 9/2008 10/2008 Celkem ČR 5,04 5,01 5,26 5,32 5,31 5,20 Zlínský kraj 5,06 4,98 5,35 5,47 5,40 5,29 Jihočeský kraj 3,56 3,51 3,72 3,84 3,94 3,92 Jihomoravský kraj 5,74 5,68 6,00 6,07 6,09 5,98 Karlovarský kraj 6,39 6,31 6,58 6,65 6,70 6,70 Královéhradecký kraj 3,79 3,80 4,08 4,07 4,01 4,04 Liberecký kraj 5,61 5,56 6,04 6,09 6,14 6,12 Moravskoslezský kraj 8,05 8,00 8,18 8,15 8,03 7,73 Olomoucký kraj 5,64 5,57 5,87 5,90 5,87 5,76 Pardubický kraj 4,47 4,48 4,80 4,92 5,01 4,89 Plzeňský kraj 3,68 3,74 4,04 4,24 4,28 4,18 Praha 1,96 1,96 2,12 2,16 2,12 2,06 Středočeský kraj 3,61 3,64 3,85 3,94 3,98 3,91 Ústecký kraj 9,47 9,32 9,50 9,41 9,38 9,22 Vysočina 4,57 4,64 5,03 5,17 5,16 5,08 Source: MPSV

Graphical comparison of unemployment rate in Vysočina region and Czech Republic in long period

0 1 357911135791113579 2006 2007 2008

Celkem ČR Vysočina

Source: MPSV

Labour force

XII.06 XII.07 IX.08 Applicants total Applicants total 448 545 354 878 314 558 Applicants by age < 25 years 78 480 54 835 60 414 25-50 years 248 456 191 307 161 264 > 50 years 121 609 108 736 92 880 Average age of applicants Average age of applicants 39,23 40,36 39,44 Edukation of applicants elementary 140 919 112 047 94 503 secondary education without leaving examination 194 459 150 772 126 501 secondary education with leaving examination 97 585 78 079 77 203 university 15 582 13 980 16 351 Applicants according to short term < 12 months 263 636 217 965 208 918 duration of unemp. long term > 12 months 184 909 136 913 105 640 Jobs acc. To needed education elementary 30 519 61 954 61 022 secondary education without leaving examination 45 110 57 849 57 032 secondary education with leaving examination 13 528 16 182 16 507 university 4 257 4 897 4 983 Source: MPSV

Education: Schools, pupils, students

2004 2005 2006 Nursery schools 286 276 276 Children persons 15 216 14 720 14 722 Basic schools 257 251 270 Pupils, total persons 50 965 48 364 47 304 Grammar schools 18 18 18 Pupils, initial study persons 6 813 6 871 6 949 Secondary technical schools 38 39 45 Pupils, initial study persons 10 425 10 386 10 656 Secondary vocational schools 29 31 33 Pupils, initial study persons 9 588 9 276 8 678 Higher professional schools 12 14 14 Pupils, initial study persons 1 873 1 482 1 167 Universities 1 2 2 Students, full-time study (Czech citizens) persons 59 687 . Source: CZSO – Jihlava:Long-term development of the region: 1993 – 2006

Vysočina region controls 97 schools as allowance organizations with cca 4100 employees (31.12.2007) Source:data wareshouse of regional authority of the Vysočina region

Population according to education attainment

2006 elementary education or without successfully finished education 103 723 secondary without school leaving examination,secondary technical schools, secondary vocational schools 171 757 secondary with school leaving examination 102 605 Higher professional schools 13 504 University education 28 500

Data source: CZSO, KROK database

Population structure:

From the point of view of a sector structure, nearly a third of all employees in the Vysocina Region are employed in the processing industry (78,8 thous., i.e., 33,0%). As for production industries, more than 20 thousand people work in agriculture, forestry and fishing (23,9 thous., i.e., 10,0%) and construction (22,5 thous, i.e., 9,4%). Most fields in the tertiary sector lag significantly behind compared to the national average.

Fig. 4 Employment in the Vysocina Region by sector

Source: The Vysocina Region profile, 2007.

Vysocina has the greatest number of employees in the primary sector of all regions, although their number is dropping. It also has an above-average number of employees in the secondary sector – here, stagnation in development can be seen. There is only a slight increase in the number of employees working in the tertiary sector. The development of employment in the region has not changed significantly over the last few years, and the sector structure continues to differ from the national structure of employment. The average number of employees in the primary sphere of economics (agriculture, forestry) in the region is 10% of all employees (4,5% nationally).

Vysocina has kept its agricultural character to date. Similar, although not as striking, are the differences in the secondary sphere (industry, construction), where the number of employees is dropping, but the sector continues to employ 45,4% of the labour force (nationally, the share of employees in the secondary sphere dropped under 40% in 1999, and is now 39,4%). The slow development of the tertiary sector is as characteristic of the Vysocina Region as the low

dynamics of the decline in the significance of the production sector. The number of employees has grown since 1997, but the share of the third sector remains low (44,6%, CZ 56,1%).

Structure of economic entities and their number

The Vysočina region according to the Business Register (further "RES") is second to last in the number of registered economic subjects in comparison to other regions, as of 31st December 2007. There were 98 957 economic subjects registered to that date which comprises 4% of all registered subjects in the Czech Republic.

Research and development

Main R&D indicators: by region

R&D employees - headcount, R&D expenditures (CZK mil.) 31 Dec CR, regions

2004 2005 2006 2004 2005 2006 60 148 65 379 69 162 35 083 42 198 49 900 Czech Republic Hl. m. Praha 24 158 26 658 28 398 13 300 15 835 19 186 Středočeský 5 250 5 044 5 587 7 238 8 561 8 525 Jihočeský 2 161 2 430 2 668 1 146 1 610 1 713 Plzeňský 1 944 2 286 2 465 836 1 130 1 334 Karlovarský 268 151 330 96 76 71 Ústecký 1 046 957 1 155 510 589 588 Liberecký 1 656 1 604 1 892 868 1 110 1 483 Královéhradecký 2 113 2 271 2 171 1 177 1 169 985 Pardubický 2 310 2 632 2 944 1 364 1 632 1 932 Vysočina 789 845 791 529 707 517 Jihomoravský 10 227 11 391 10 963 3 964 4 654 5 057 Olomoucký 2 501 2 998 2 967 1 054 1 372 1 328 Zlínský 1 895 2 226 2 335 787 1 571 1 646 Moravskoslezský 3 831 3 886 4 496 2 212 2 182 5 535

R&D employees (full time incl.: Females

equivalent) CR, regions

2004 2005 2006 2004 2005 2006 Czech Republic 28 765 43 370 47 729 8 808 14 135 15 056

Hl. m. Praha 11 832 17 584 19 889 4 215 6 593 7 005 Středočeský 3 498 4 513 4 924 818 1 168 1 272 Jihočeský 1 111 1 644 1 815 387 567 612 Plzeňský 776 1 432 1 799 142 290 436 Karlovarský 115 70 94 49 30 33 Ústecký 438 697 793 156 255 288 Liberecký 767 1 295 1 857 142 319 445 Královéhradecký 1 050 1 365 1 198 320 417 340 Pardubický 1 201 1 936 2 145 275 521 564

Vysočina 498 699 605 84 132 102 Jihomoravský 3 791 6 036 6 200 1 173 2 037 2 001 Olomoucký 1 145 2 058 2 049 448 843 824 Zlínský 829 1 665 1 775 161 380 448 Moravskoslezský 1 714 2 376 2 585 439 582 684 Source:CZSO, Statistical yearbook of the Vysočina region 2007

ICT infrastructure overview

The Vysocina Region gained recently an image of the highly innovative region, a „region of informatics“. Its advantage has always been – paradoxically - weak telecommunication infrastructure in the past, which means that it was easier and cheaper to build high-tech infrastructure „on the green field“ than e.g. in Prague or in other regions.

According to the last data on households' access to personal computer, the Vysocina region ranked the 2nd place of all Czech regions in 2007. However, household's access to Internet reached average position only (see fig. 6).

Fig. 6 Households’ access to personal computer and Internet in Czech regions, 2007

Source: Czech Statistical Office, 2007.

Another aspect is use of personal computer and internet by individuals. In both cases the Vysocina region achieved results under the Czech average in 2006 (see tab. 8).

Tab. 8: Use of personal computer and the Internet in Czech regions, 2003 – 2006

Use of personal computer Use of the Internet by individuals by individuals CR, regions 200 200 200 200 200 200 2003 2004 5 6 3 4 5 6

37,6 42,0 42,0 48,0 28,0 31,6 32,1 41,0 Czech Republic Hl. m. Praha 53,4 54,6 51,4 59,1 46,9 48,7 45,0 53,7 Stredocesky 37,6 42,6 44,0 50,8 27,6 34,4 32,7 42,7 Jihocesky 30,8 43,8 39,9 45,5 19,4 30,7 28,0 37,1 Plzeňsky 32,6 41,5 46,2 47,9 20,3 30,7 33,8 40,3 Karlovarsky 39,3 39,8 41,4 51,4 29,5 27,2 26,9 38,3 Ústecky 30,1 40,6 34,0 38,5 21,5 29,1 23,8 33,2 Liberecky 38,9 36,6 38,7 44,1 23,4 23,3 27,7 35,5 Kralovehradecky 35,5 44,4 43,8 47,8 26,4 30,3 35,6 41,6 Pardubicky 36,3 37,1 48,2 49,8 26,4 27,0 42,1 43,9 Vysocina 35,7 37,6 42,7 46,0 25,0 27,1 30,6 39,9 Jihomoravsky 40,3 43,6 41,5 48,9 30,7 31,5 31,9 42,7 Olomoucky 39,9 31,6 31,7 42,5 23,1 23,2 23,5 36,4 Zlinsky 36,6 38,8 38,5 42,7 25,8 26,0 29,2 36,0 Moravskoslezsky 36,6 39,8 40,5 46,9 26,9 29,7 29,6 39,1 Source: Czech Statistical Office, 2007

Fig. 7 Use of basic ICT in enterprises in Czech republic, 2007

Source: Czech Statistical Office, 2008. TRANSPORT

Region takes care about class II and class III roads and motorways and class I roads are maintained by the Czech state.

Selected transport indicators 2004 2005 2006 Length of roads and motorways (km) 5 094 5 095 5 094

Motorways 93 93 93 Class I 421 422 420 Expressways - - - Class II 1 636 1 631 1 631 Class III 2 944 2 949 2 949 Motor vehicles Passenger cars, incl. vans 182 782 187 071 194 280 Commercial vehicles 16 257 17 885 19 687 Road tractors 1 142 1 083 999 Semi-trailers 1 862 1 882 2 761 Buses 861 845 878 Motorcycles 52 754 52 429 53 462 Road transport of goods Export of goods to other regions (thous.t) 3 234 3 079 3 323 Import of goods from other regions (thous.t) 3 779 4 503 5 011 Transport of goods within the region 14 478 15 052 19 502 Public bus transport Passenger transport within the region (thous.persons)1) 18 551 19 975 25 201 Bus links within the region 27 883 27 099 28 315

Working day 22 026 21 271 22 309 Saturday 2 012 1 950 2 054 Sunday and holidays 3 845 3 878 3 952 Rail transport Lenght of operated railway lines (km) 703 650 651 Passenger transport within the region (thous.persons) 3 469 3 606 3 749 Departures of passangers to other regions 1 680 1 718 1 697 Arrivals of passangers from other regions 1 214 1 971 1 766 Export of goods to other regions (thous.t) 224 211 326 Import of goods from other regions (thous.t) 668 729 874 Transport of goods within the region 59 44 53 Train links within the region 8 396 8 485 8 643

Working day 3 307 3 444 3 479 Saturday 2 534 2 531 2 585 Sunday and holidays 2 555 2 510 2 579 Source: CZSO, Statistical yearbook of the Vysočina region Primary source: Ministry of Transport of The CR

4 State-of-the-art in the partner regions related to OSS

Regional Centers of Competence (RCC) for OSS in the framework of ICHNOS project are understood as profit or non profit organizations whose main objective is to develop specific activities for support of OSS operation in a region, contributing to the economic growth of the region. Especially RCC should serve to smooth implementation of Bolkestein directive on services into the practice in EU member states. Among the most important topics discussed in this section are, the status of the implementation of the Bolkenstein directive in each region, stand alone initiatives for OSS supporting with each region own funds and supporting organisations like chambers of commerce or incubators that can help in promote and support an OSS collaborative structure in each region.

4.1 Galicia Introduction

The fact that until 2007 there were no One Stop Shops for businesses in Galicia put us in a disadvantageous position in relation to other European Union countries and regions that have already taken important steps towards the simplification of business procedures11. The main sources of economic doctrine of the EU highlight the relevance of businesses in the regional and local development, particularly that of SMEs, and also encourage the promotion of entrepreneurs in the creation of businesses.

The focus is particularly relevant in Galicia, due to the considerable weight that individual business people (sole traders), micro businesses and SMEs have in the business fabric and given their importance related with the particular territorial situation of Galicia. Single Contact Points for businesses and yet one more tool to support business fabric, both for the processing and the creation of businesses, which constitutes, as the European Commission recognizes, a factor of competitiveness and economical growth. The implementation of single contact points for businesses in all European member countries is one of the objectives of the Directive of the European Parliament and the Counsel related with services for the internal market, also known as Bolkestein Directive. As part of the European Unions, but overall to support businesses and entrepreneurs, Galicia must put in motion all the mechanisms that will allow to achieve this objective.

The European Framework In the conclusions of the Presidency on March 23 and 24, 2006 of the European Spring Counsel, there are several specific priority areas. Among them, stands the renewal of the promotion of the entrepreneurial potential, especially SMEs, because that constitutes the main axes of the European economy. In the same line, the European Counsel calls member states to incorporate to their internal legislation and properly apply communitarian legislation, so that entrepreneurs, workers and general users can enjoy the advantages of the internal market. It is necessary to develop global politics to support SMEs, together with a juridical environment that should be transparent and easy to apply. It is due to this that the conclusions of the presidency state the following: “The Member States should establish, by 2007, a one-stop-shop, or arrangements with equivalent effect, for setting up a company in a quick and simple way. Member States should take adequate measures to considerably reduce the average time for setting up a business, especially an SME, with the objective of being able to do this within one week anywhere in the EU by the end of 2007. Start-up fees should be as low as possible and the recruitment of a first employee should not involve more than one public administration point.” 12. With these recommendations and together with the approval in November 15th 2006 of the by the European Parliament of the Directive for Liberalization of Services in the Internal Market of

11 As it is reflected in the study by the World Bank about businesses creation. 12 European Counsel. Conclusions of the Presidency. Brussels 23 and 24 de March 2006.DOC/06/1

the European Union, also known as the Bolkestein Directive, the bases for one of the main elements of the directive are set up: the simplification of bureaucratic procedures. There are three articles13 in the Bolkestein Directive that specifically regulate the implementation of one-stop shops for businesses. This should be incorporated into national legislations in no more that a three year period, meaning that all member states should have an operative one stop shop or similar, offering the services stated in the directive, no later than December 12th 2009. Precedents for the implementation of single contact point for businesses. Since the European Commission decided to approve, on April 22 1997, the Recommendation 97/344/CE, where the simplification of administrative procedures and the legislation concerning with businesses are contemplated, there have been many efforts put in that direction. Among all, those initiatives that have taken place in Galicia are going to be analyzed: OUT and PAITS.

OTU The preoccupation to promote the creation of businesses with the purpose of dynamizing Galicia’s economy is an idea that comes from years ago. Already in 1998, the Consellería de la Presidencia y Administración Pública (Regional Directorate of Public Administration) together with the Consellería de Industria (Regional Directorate of Industry) saw it necessary to support and promote the creation of industries in Galicia. 14 As a consequence of such idea the Oficina de Tramitación Única de Industrias (OTU) in 1998, thanks to the initiative of both Consellerías . The main mission of this office was to inform and advise those who had an interest in creating and industrial business. The office was also in charge of the procedures related with the administrative authorizations required by the Xunta de Galicia (Galician Regional Government). The underlying idea was the concept of simplifying the procedures related to those industries that did not need previous authorization, with the goal of reducing the number of procedures. There was also an interest in the diffusion of such practice, since the OUT was established in each local delegation of the Consellería de Industria y Comercio. It is true that the initiative was innovative and important at the time, since the OTU was the “antecedent of the one stop shop”. (political profile). However the idea has been superceded, both from the conceptual and the practical point of view, especially because of the development of the ITC. The OTU, since one of its mayor inconveniences was the fact that it was limited to the start up of entrepreneurial projects linked with the industrial areas, that are in truth important for the development of an economy, but they leave apart a significant percentage of entrepreneurs.

The PAIT in Galicia The PAIT constitute a network of points for advising and starting up procedures, and it belongs to the CIRCE (center for the information and creation of businesses). The PAIT has a double mission: providing entrepreneurs with advising and information, including the first years of activity of new enterprise (SLNE). Besides, in the PAIT the procedures to constitute a new enterprise can be done using the DUE (unique electronic document). The DUE, is one of the main elements of the system, which contains all the data required by the administration and registers for the constitution and start up of the activity. The other main component is the PACDUE, the informatic system for electronic procedures, in charge of sending the required documentation to each of the organisms that play a role in the creation of a new company.

13 Articles 6,7 and 8. 14 Diario Oficial de Galicia. Nº 147. Viernes, 31 de Xullo de 1998.

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The following graph shows the percentage of business created electronically by autonomic regions in Spain:

Graph 1:Telematically created businesses by autonomic 1,19% community. 1,60% 0,41% 1,93% 2,83% 0,00% 4,47%

5,70% 34,43% MADRID GALICIA 8,07% COMUNIDAD VALENCIAN CANARIAS ANDALUCÍA 8,40% CASTILLA Y LEÓN REGIÓN DE MURCIA CATALUÑA PRINCIPADO DE ASTURIAS 8,73% LA RIOJA CASTILLA-LA MANCHA 22,25% EXTREMADURA ARAGÓN

Source: Secretaría General de Industria. DGPYME. Data 22/01/2007. Own elaboration.

There are some relevant data in the graph: 22,25% of the new enterprises created in Spain, are created in Galicia. This shows that there is demand for the agilization of procedures for the creation of businesses, since new enterprise is not the more frequent legal form to start up a company, and its success comes from the speed in the procedures, given that in Galicia there is not a one stop shop, or single contact point, system.

The next graph shows the number of new enterprises created telematically in some of the PAITS in Galicia:

BUSINESESS IN AVERAGE CREATED PROCESS OF NUMBER OF PUNTO PAIT BUSINESSES CREATION DAYS IGAPE 477 13 1,41 DIPUTACIÓN PROVINCIAL DE OURENSE 36 1 1,69 AYUNTAMIENTO DE LUGO 7 3,85 AJE 6 4 1,16 CONFEDERACIÓN DE EMPRESARIOS DE A CORUÑA 4 0,75 INFOPYME 4 0,5 CÁMARA DE COMERCIO DE SANTIAGO DE COMPOSTELA 3 0,66 CÁMARA DE COMERCIO DE VIGO 2 1,5 COGAMI 2 1 DGPE 1 1 FUNDACIÓN CEL-INICIATIVAS POR LUGO 1 1 TOTAL 543 18 1,32

Source: Secretaría General de Industria. DGPYME. Data by 22/01/2007. Own elaboration.

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Graph 2: Telematically created businesses in PAITS in Galicia.

87,85%

IGAPE

DIPUTACIÓN PROVINCIAL DE OURENSE OTHER SOCIETIES

7% Source: Secretaría General de Industria. DGPYME. Data by 22/01/2007. Own elaboration

As shown in these graphs, the IGAPE is the PAIT point that registers more new enterprises, with 88% of the total in Galicia. The next one would be the Diputacion of Ourense, with 7% of all of those created with the same procedure. From what has been said, it can be deduced that the PAITS are a good experience and also that the constitute the precedent of one stop shops in Galicia. There is an actual demand of this kind of electronic procedure, because many entrepeneurs come to constitute limited liability societies by electronic means, and it could not be done till 2007.

With regards to this, it is important to mention that on November 21st 2006 the Real Decreto 1332/2006 was approved, making it possible the constitution of Limited Liability Societies using Internet from March 2007. This means that the electronic system can be extended to all limited liability societies, and not only to limited liability new enterprises. The fact is especially relevant taking into account that around 31% of all the companies created in Spain are limited liability societies. The following graph shows the percentages corresponding to the different types of societies created in 2006.

Public limited compañy Graph 3: Percentage of societies by legal form in Spain 2006. Limited liability society

Communitar y

3,70% Comanditarias 31,27% Co-ow nership

56,42% Cooperatives 0,00% 0,01% Asociations and others 3,23%

0,27% 4,29%0,80% Autonomous organisms and others Self-employed

Source: INE. Directorio central de Empresas (DIRCE) 2006. Own elaboration.

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Observing the data corresponding with Galicia, this is how the different kinds of societies (by legal form) are divided:

Graph 4: Number of businesses by province and legal form.

50000 Public limited compañy 45000

40000 Limited liability society

35000 Communitary

30000 Comanditarias 25000 Co-ow nership 20000 Cooperatives 15000

10000 Asociations and others

5000 Autonomous organisms and others 0 A Coruña Lugo Ourense Pontevedra Self-employed Provincias

Source: INE. Directorio central de Empresas (DIRCE) year 2006. Own elaboration.

Graph 5: Percentage of companies in Galicia by legal form, year 2006

10,39%

Self-employed Limited liability society Other societies

29,64% 59,98%

Source: INE. Directorio central de Empresas (DIRCE) year 2006. Own elaboration

The data clearly indicate that a high number of businesses could benefit from the advantages offered by one-stop shops or from the increment of the functions of the PAIT, given that most new businesses are either limited societies of self-employment.

OSS and Entrepeneurship in Galicia

On March 2007, the Regional Directorate of Economy of the Regional Government announced that in 72 hours an enterprise (Limited Liability company) can be set up using the new OSS established at the IGAPE (Galician Economic Promotion Institute) premises in Santiago, Vigo

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and A Coruña. This new e-system replaced the old one, in which all the documentation was printed in paper (15 forms) and submitted to a notary. Around 5000 business (Limited Liability Company) are set up using this legal form in Galicia.

The GEM study, that measures the impact of the entrepeneurship activity, remarks that financing issues still are the biggest problems for entrepreneurs, also with red tape procedures linked to public subsidies. In Galicia, the lack of social awareness about entrepeneurship is an important issue too, still unconsidered positively to be an entrepreneur.

By 2007 Galicia raised as the 3rd region in the European Ranking of Entrepeneurship, and moreover, Galician entrepreneurial initiatives are well consolidated inside the EU. These are the highlights extracted from the Executive Summary Galicia 2007, done under the project GEM (Global Entrepeneurship Monitor), one of the most important International Observatories regarding entrepreneurial activities. The development of entrepreneurial initiatives and ventures, not only is one of the characteristics of a developed society, but also is one of the fundamental aspects of the economy of a country, consolidating its economic growth. The Galician region goes well on this, because the number of entrepreneurial initiatives is raising dramatically, and the consolidated ones are in a good position.

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4.2 North Aegean

There is a Government initiative under the Operational programme “Competiveness” of the Ministry of Development which is expected to come into power soon. This is proposing Centres of Business and Technological Progress (KETA) to work as OSS and be funded by the Ministry and the Operational programme.

As the European Committee has recently demonstrated, the Centres of Business and Technological Progress (KETA), which were funded by the Operational Program “Competitiveness”, 2000 – 2006, of the Ministry of Development, constitute a regional network of non-profitable organizations, supporting entrepreneurship at a local level, and are considered as good practices.

The European Committee has chosen among 90 and more programmes of 23 different countries members of the EU that placed their proposals, and selected 27 national programmes which stood out due to their results, their effects, their innovative character and their contribution in the achievement of national development plans.

Between the 27 good practices that were chosen, in the terms of the programme BEST “Support for the internationalization of SME”, there are also 13 Centres of Business and Technological Development (KETA) included, that were funded by EPAN (Operational Program “Competitiveness”) and function at the capital of every Region (13 Region in Greece), as integrated services, contributing in the briefing, informing and supporting of SME and potential businessmen and also in the endorsement of entrepreneurship and the encouragement of competitiveness. Basically, they do constitute a complete structured network that supports enterprises.

Moreover, KETA are working on the motivation and support of enterprises, which are ready and capable to proceed to exporting activities. KETA’s support is focused in common efforts for the promotion of their products and services at the international markets. This activity is implemented via the coordination and collaboration of the Greek Organization of External Trade.

KETA have received the cooperation and support of all the significant contributors, like the ministry of Development, the local authorities, the Chambers of the Country, the professional corporations, the developmental companies, etc, that have financed them or have constituted the authority that established them. The European Committee presented in printed form, the 27 better practices for the support of SME, something that was distributed initially, last June in Slovenia, at the conference of the European map and concerned small enterprises.

The various practices contain nine sectors, focusing on subjects that are valued of high importance for the process of internationalization of the SME: 1. Sensitization 2. Information of high value 3. Development plans regarding human resources 4. Support of the financing needs of internationalisation 5. Promotion of networks 6. Support of the internationalisation of services 7. The internationalisation as a vehicle for the improvement of competitiveness 8. Individualised support 9. Borderlands and cross-border collaboration

The basic criterion for the choice of good practices in each one of the nine sectors, was the ability of each selected program to provide support to the SME, so that they effectively face one or more of the subjects, that each sector valued more. Moreover, the practices should have had continuity and should have been functional and easily conveyed. These practices are

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available at the list of good practices of the General Management of Enterprises and Industry, at the web address: http://ec.europa.eu/enterprise/enterprise_policy/charter

The ministry of Development - Special Secretary for the Competitiveness, has worked out a study in order to determinate the future operation of KETA, aiming to their further empowerment and development to One Stop Shops, through their collaboration with the chambers. Website:http://ec.europa.eu/enterprise/enterprise_policy/charter/gp/index.cfm?fuseaction =practice.detail&gp_pk=2090

Resources :

• Business Report of North Aegean 2007, by ΚΕΤΑ, for North Aegean (www.keta-ba.gr) • Business Programme of Crete and Islands of the Aegean • Prefectures of Greece , 2007 (http://www.economics.gr/AllMedia/_gr/nomoi • National Statistics Agency of Greece (www.statistics.gr) • Exporter Association of Northern Greece (www.seve.gr) • Economy Department (www.mnec.gr) • Observation Post of Occupation – Inquiring Informatics S.A. (http://www.paep.org.gr/gr) • University of North Aegean (www.aegean.gr) • Civil Aviation Service (www.ypa.gr) • ICAP- Advisory Services (www.icap.gr) • North Aegean Region (www.northaegean.gr) • Regional Operational Programme of North Aegean (www.pepba.gr) • Charter Good Practice On-Line Catalogue, (http://ec.europa.eu/enterprise/enterprise_policy/charter/gp/index.cfm?fuseaction=practi ce.detail&gp_pk=2090&)

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4.3 Sardinia

Regarding the existing legislation framework, In our nation and in our region we have not totally implemented the Bolkenstein directive but we are checking all procedures and changing rules in order to implementing the directive. In the following paragraphs the national and regional existing legal framework

The Italian constitution adopted in 1948 which remained valid until the beginning of the ‘90ies was based upon a strong role of the State which intervened in the economy, showing as such the influence of a fascistic regime and the ideologies which were developed in that historical timeframe.

The basis was that only an accurate control of the state on economical initiatives could ensure an equilibrated economical and social growth of the country. Until 1998 the number of legal procedures required to start an activity were extremely high. There were very strict rules which defined that all phases of planning, localization, realization, management and dismissal of an enterprise required specific authorizations of the public administration (both preventive as for control). The economical activities were divided in sectors: commercial (on its turn divided in 14 categories), crafts, agricultural, industrial and services. Aside of these, some activities - although characterized with a strict economical aim – were put under strict control for reasons of “public security”.

The competences resulted spread of tens of central public organizations which were interconnected and which made the time required to complete the administrative requirements incompatible with the economical reality. In a survey realized by the Ministry of Economy the mean time needed to localize an industrial enterprise was 48 months!

The above mentioned national laws and competences were sided by the regional laws and competences. The original version of article 117 of the Italian Constitution delegated to the Regions the competence on the productive settlements. The various Regions could, within the framework of the principles and the national law, adopt a specific legislation. This legislation could contain aspects which regard the economical planning and/or specific activities. As a consequence, who for instance wanted to open a alimentary store needed to consider aside of the national law also the regional, provincial and municipal rules. The localization of a productive activity does not regard though only the legislation on “productive activities” but also others as the legislation on constructions, health, fire prevention, security, ..

In addition there are specific consequences due to the special statute of Sardinia which has a Specific Autonomy. In conclusion: the effort for the entrepreneur who wants to start-up its activity is triple a) discover the national and regional laws relevant for the activity b) accept the often very long time needed to complete the bureaucratic procedures c) accept the economical costs related to the presentation of the various documentations.

This legal situation, described above, is completely inadequate to face the challenges of the economical globalisation and the opening of the markets. There was a concrete risk that the weight of bureaucracy would discourage the establishment of new economical activities which would be induced to invest abroad where there were less administrative obstacles.

The “sportello unico per le attività produttive” represents a tool created by the legislator to overcome the above mentioned critical point within the Italian bureaucracy. Localised at the institution which is traditionally the closest to the citizens, the OSS has the challenging role to coordinate all the phases/procedures needed for the realization of activities of entrepreneurs, including the aspects which regard city planning, health, environment, security.

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The administrations responsible for the various procedures within the context of the OSS, are obliged to adopt the necessary organizational measures for the fastening of their activities. This obligation was defined in order to overcome the resistance and some consolidated procedures which prevent to reply efficiently to the entrepreneurs. It is in fact the “tradition” (the habits) that prevented the take-off of the OSS. The fact that many administrations (of the municipalities) are still unaware of the fact that they are obliged to create the OSS or that they claim that there is no need for OSS in their territory, shows that too little has been done to inform (and explain things to) the public administration and the private sector. The Italian law confers to the municipalities the administrative role to realize, extend, close, reactivate, localize and re-localize productive settlements, including the release of permissions and authorizations to construct. It are the Regions however that are responsible for the support services to the enterprises, through the collection and dissemination of information regarding the settlement and the activities of enterprises and the support measures which can regard public contributions, taxes and/or employment The municipalities can fulfil their role autonomously or in association with other local administrations through the creation of a single structure. The indications regarding the organization of the OSS are kept on purpose very flexible as they wanted to respect the organizational autonomy of the Local Administrations.

The only indication regards the uniqueness of the structure responsible for assisting the enterprises from the very first phases (business plan) to the activities aimed to support existing/growing enterprises. As a result of the uniqueness of the structure also the authorization procedure has become “unique”. One office – one authorization ! It is necessary however to underline the legislation did not however in any way limit the number and the nature of the administrative procedures needed. No simplifications have been introduced! The creation of the OSS just centralized all the responsibilities to one unique structure, responsible for collecting, coordinating and evaluating the necessary phases (called “endo-procedures”).

The OSS has to accomplish the following functions: a) administrative functions, for the management of the unique process b) information/support functions, to support and orient enterprises and citizens c) promotional functions, to improve the awareness of opportunities and the potential for the economical development of the territory The informative and support functions can be split in two types of activities. Information in the strict sense, related to the existent opportunities to establish new enterprises; the level of convenience; the ongoing promotion activities; the list of requests for authorizations presented and their state within the complete authorization process; the presence and the territorial distribution of the single structures; the legislation applicable in general terms; the support measures and funding available; other information available on regional level. The specific support and consultancy to enterprises articulated in: H considerations regard the specific initiative of the entrepreneur that contacted the OSS I being the connection between the entrepreneur and the unique structure: the OSS is responsible for receiving the requests and for delivering the replies (after the necessary integrations – consultations with other administrations) The OSS avoid confusion and incertitude as it eliminates other similar initiatives and or structures. The Offices responsible for the Relations with the Public should for instance redirect the entrepreneurs to the OSS. Due to its character it is important that the OSS coordinate themselves with other organizations which have similar functions (regarding information, support and consultancies). Agreements with the organizations/associations representing the entrepreneurs should be established in order to involve them in organic support actions of the OSS and/or even to define how to create the OSS! It is to be taken into consideration however that the responsible of the OSS needs to be a officer of the municipality. This requirement was established to assign the direct responsibility of all activities to the administration.

The unique structure is responsible for managing the process and can be subdivided in a “front office” (the counter) and a “back office” (where the process is managed).

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In the case the unique structure is run in the associated form, the association can create a new institution (consortia) or not (agreements). In the first case the municipalities will assist to a pool by delegating staff to it whereas in the second case one municipality will be considered “leader”

The activities of the OSS are based upon a set of principles among which the transparency of the procedures and an opening for observations of “interest-holders” and the possibility of the interested party to auto-certify, under its own responsibility, the conformity of the project in relation to the legislation.

The process that the entrepreneur can activate within the OSS are: preliminary opinions, simplified processes through the conference of services, auto-certified procedures, processes with a variation of the city planning, mixed processes. Preliminary opinions regard the possibility to submit a preliminary project to receive an opinion on its conformity with the relevant legislation. The auto-certified processes regard questions of entrepreneurs which include a set of auto- certifications by authorized professionals and lead automatically to an authorization whenever the administration does not denies it explicitly within 45-60 days. The simplified process starts when an entrepreneur presents a question to the OSS which informs the relevant administrations to provide the required authorizations within 90 days. In the case of a negative reply within the defined time limit, the process is considered closed leaving the entrepreneur the possibility to call for a “conference of services” in order to overcome the negative opinion. The “conference of services” is also gathered in the case one of the administrations did not reply within the legal 90 days deadline. Whenever a “conference of services” is called (the call is public) all the stakeholders (public or private, individual or collective) that can be prejudiced or that asked to be heard (within 20days of the presentation of the question to the OSS) can participate. The conference completes all steps to reach to a final decision and fixes a new deadline to complete these (respecting the legal limits).

With article 38 Decreto Legge 112/2008, as converted by law 133/2008 , Italy is giving new rules for OSS. It seems all activities linked with Bolkestein directive will start in one day. The law is approved but we need the subsequently executive act to understand how the procedures will work.

The Law regional 5 March 2008 n.3 modified radically the procedures of the OSS foreseeing two possible procedures for start up of an enterprise: “immediate start” “immediato avvio” and Public Administration Conference (Conferenza di servizi) (Art. 1 paragraphs 16 -32). In the immediate start the entrepreneur introduces the DUAAP (self declaration) to the OSS, attaching the technical relationships . After 20 days without anomalies are signalled, the entrepreneur begins the entrepreneur begins to build the office, or the shop, or the farm the or starts his/her own activity. In particular cases (according to the paragraph 24), the entrepreneur, depend on the activity typology or the location of the building, you/he/she must attend the results of a special Public Administration Conference. It deals with connected cases, for instance, to the environmental verifications, to the public safety, to the guardianship of the health and the public safety.

Some OSS supporting Government initiatives like the Regional Coordination for OSS, founded by Deliberation of the Regional Junta n. 38/23 of 24/10/2003, has as primary objective to represent a point of meeting among the operators involved in OSS' procedures. The net among the administrations is constituted by all the Public Administrations involved in the procedures: among the others Regional offices, Local Health Authority, Fire- fighter Authority, Archaeological superintendence, Associations of entrepreneurs. Regional Coordination adopts actions to give an address to the structures of the public administration involved in order to simplify and update forms and procedures linked to enterprises

Meetings with the provinces, the interested local administrators and the operators involved in OSS issues are periodically organized in order to favour the exchange of experiences, knowledge and competences, as well as the resolution of problem arising

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Provinces are operating a local coordination of OSS. They are organising meetings, giving forms and sending consultants to support OSS. Among the others a best practice is the province of Oristano.

It dedicates a special part of its web-site to the local coordination of OSS (http://www.provincia.or.it/index.php?option=com_content&task=view&id=607&Itemid=609)

4.4 Silesia

In order to transpose the Directive, member states must: • simplify the administrative procedures and formalities • eliminate from their legislation a number of requirements listed in the Directive that hamper access to and the exercise of service activities • guarantee in their legislation the free movement of services from other member states and adapt any rules that would difficult such movement • evaluate the justification and proportionality of a number of require-ments listed in the Directive which, where they exist in their regulations, may significantly restrict the development of service activities.

According to schedule accepted by the Cabinet of Ministers on 16.11.2007, the Plan of Implementation of directive is as follows:

Numer of directive 2006/123/WE 32006L0123 Implementation deadline 28.12.2009 Study on evaluation of implementation 01.2008 consequence and preparation guidelines Social consultations 03 - 04.2008 Preparation of project of legal acts 06.2008 Deadline of acceptance the projects of acts by 11 - 12.2008 goverment

• 17 articles of the Bolkenstein directive have to be implemented to main act “Act about liberty of economic activity” (articles: 4, 5, 10, 11, 13, 16, 18, 19, 20, 24, 25, 28, 29, 30, 32, 33, 35), • 8 articles need to be implement to other legal acts (articles: 10, 11, 14, 15, 16, 21, 23, 24,), • 24 articles do not need to be implement (articles: 1,2, 3, 6,7, 8, 9, 12, 17, 22, 26, 27, 31, 34, 36-46). Resulting from consultations, a preliminary list of legislations requiring amendments has been composed. The main act of implementation of the Bolkenstein directive regards the field set-up of a business:

The entire registration process, takes from 3 to 4 weeks and requires a significant amount of time and effort. Company formation step by step: • Entry in the City Office Register • Registration with Poland's Central Statistical Office (GUS) and obtaining a statistical number (REGON) • Registration with the Tax Office and obtaining a Taxpayer's Identification Number (NIP) • Registration with the Social Security Office (ZUS) upon employment of the first employee.

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After implementation of the Bolkenstein directive It will be possible to start business even, when the company is not register jet. It will be enough to fill in an application form. Registration of business activity will be possible through: • Points of single contact, so called „one window” – to set up a business it will be enough to apply in one place in every city office. The one window will be transitional solution, in which companies and businesspeople will be prepared for the introduction of "zero window” principle. • „Zero window” is a system in which will allow the completion of all administrative processes required in opening a business to be done on the Internet. The process of registration will be fast and simple (electronic signature will be required). A Central Record and Information Data of Business Activity – public platform with information regarding Polish enterprises will be created.

Currently, the fee for the registration of a business is approximately 35 Euro. Following the implementation of this system, registration will be free.

The project for the new legislation was accepted on 17.10.2008 by government and will be in force from: 1. 01.04.2009 in scope: • points of single contact • running a business after filling an application form, • application form could be send via Internet with electronic signature, 2. 01.07.2011 in scope: Central Record and Information Data of Business Activity

Regulations for foreign enterprises pertaining to the performance of commercial activity in Poland

Foreign enterprises from EU-member countries, which are, on the basis of free enterprise agreements between these countries with other EU-member countries are permitted to undertake and perform business activity on the same principles as the citizens of Poland. The are also permitted to render services for a specified period of time as per without the necessity of obtaining an entry into the City Office Register or registration with the Central Statistical Office of Poland

In order to perform commercial activity on the territory of the Republic of Poland foreign entrepreneurs are, unless ratified international agreements state otherwise, permitted to establish branches with their headquarters on the territory of the Republic of Poland, henceforth referred to as "branches".

Foreign entrepreneurs forming branches in Poland, are permitted to perform only those commercial activities within the range and scope of said foreign enterprise.

In order to obtain concessions, commercial activity must be performed within the scope of the following areas: • research into or identification of mineral deposits and/or their extraction, containerless warehousing of substances or the storage of waste in rock masses, including underground voids; • The manufacture and marketing of explosives, firearms and ammunition, products and technologies for use in the military or police; • The manufacture, processing, storage, transmission, distribution and marketing of fuels and energy; • Protection of persons and property; • The circulation and distribution of radio and television; • The air transport sector Concessions are granted for a limited time period of not less than 5 years and not more than 50 years, with the exception of circumstances in which an enterprise proposes a concession period of less than 5 years.

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Stand alone initiatives for OSS supporting

In accordance with the amendments to the “Freedom of Economic Activity Act” from 01.04.2009 a contact point for businesspeople will be established in all city offices. These will be financed by local governments.

The main tasks of this OSS will be: - Inform about how to establish a business - Accept application forms (only one application form will be necessary) - Inform applicants about other institutions supporting business management.

4.5 Existing best practices and other supporting organisations Like chambers of commerce or incubators that can help in promote and support an OSS collaborative structure in your regions.

A National System of Services for SMEs exists in Poland, consisting of:

Figure: 34 National System of Services for SMEs

Polish Agency for Enterprise Development (PAED)

member of member of member of member of member of member of member of National SME National SME National SME National SME National SME National SME National SME Services Network Services Network Services Network Services Network Services Network Services Network Services Network (KSU) (KSU) (KSU) (KSU) (KSU) (KSU) (KSU)

Consultation Consultation Consultation Consultation Centres (PK) Centres (PK) Centres (PK) Centres (PK)

The Polish Agency for Enterprise Development (PAED) is a governmental agency subordinate to the Minister of the Economy. Its task is the management of funds assigned from the State Budget and European Union for the support of entrepreneurship and the development of human resources, with particular consideration given to the needs of small and medium sized enterprises (SMEs). PAED is among the institutions responsible for the implementation of activities financed from the Structural Funds. The objective of the Agency is the implementation of economy development programmes, in particular with respect to the support of: SME development, Export development, Regional development, Application of new techniques and technologies, Creation of new jobs, tackling unemployment and human resources development. This objective is carried out through: the provision of grants to SME sector companies, institutions supporting the development of SMEs, training institutions and labour market institutions, the rendering of advisory and expert services,

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the facilitation of access to knowledge, economic information, studies and analyses to entrepreneurs, the organisation of undertakings of an informative and promotional nature. the support for the investment projects with regard to the application of new product technological, service or organisational solutions, the support provided within the scope of the industrial property rights protection, the support for innovative enterprise development, strengthening the cooperation between the education the support for the projects aimed at service quality improvement rendered by the organisations supporting enterprises development, the support for national and trans-regional training and advisory projects.

The National SME Services Network (KSU) has been in operation since 1996 and is organisationally and essentially supported by Polish Agency for Enterprise Development. After twelve years, it comprises over 180 cooperating outlets in 190 localizations in Poland. In Silesia is 28 outlets. Business Incubator from Ruda Slaska is one of them. Members of the National SME Services Network are independent and self-financing organisations, such as: regional development agencies, business support centres, foundations, credit guarantee funds, loan funds, business incubators, research and development institutes, chambers of commerce, industry and commercial chambers as well as trade chambers, clubs and employers and entrepreneurs organisations, centres of innovation and technology, entrepreneurship support centres, associations and other non-governmental organisations. The National SME Services Network centres are organisations, which: • ensure the provision of appropriate advisory, training, information and financial services to all micro-, small and medium- sized enterprises as well as business start-ups, and • are non profit organisations or organisations that appropriate their profits for the achievement of objectives pursued by PAED. Currently all centres registered in the National SME Services Network have a quality management system, which guarantees work organisation, service provision and cooperation standards. Each registered in the National SME Services Network centre provides at the very least one of the four categories of services small and medium sized businesses and/or business start-ups - i.e.: advisory services (including: for general and pro-innovation ones), training, information and financial services (including: for granting credit/loan guarantees and loans).

ADVISORY SERVICES General advisory services for SMEs, for example: • marketing, finances, law, planning and management, export, quality management, etc. • proinnovation advisory services supporting business development by improving the existing or implementing new technological process, product or service, including: • assessment of technological needs - diagnosing needs for a new technology, • promotion of technology and new organizational solutions, • other activities where technology transfer or implementation of know-how INFORMATION SERVICES Information concerning: • administrative and legal aspects of set up and running business activity • available public assistance programmes for entrepreneurs as well as other available sources of financing business activities • contact details • trade fairs, exhibitions and other business events • EC investment laws and regulations • rules of preparation of applications for public assistance and for financing a business activity from other sources • input of commercial offer information to databases used for facilitation of business cooperation (including international cooperation) • finding potential business partners in available databases (including ones verified by commercial providers of business information)

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TRAINING SERVICES • including e.g. marketing, finance, management for business start-ups, industry specific and general training (i.e. computer, languages), etc. • open to general public FINANCIAL SERVICES • granting credit/loan guarantees which present additional manner of credits/loans security (credit guarantee funds) • granting loans for start-ups or for further business development (local loan funds)

Nevertheless, some of the KSU members are specialized in only one field (e.g. provide services related to a specific trade) and they are not able to cover all needs of the entrepreneurs. Therefore, the internal information system for the KSU members has been created in order to support the KSU centers in finding the right partner for you. Due to implemented instruments of information exchange each KSU member is able to find the expert you need or organize the team of experts that will meet your expectations.

Consultation Centres (PK) function as first-contact institutions for small and medium-sized enterprises and business start – up’s. In 2007 around 190 were in service. Now it is 90 in all country. In Silesia is 12 PK. PKs provide free information services with respect to issues associated with entrepreneurial activities and enterprise management. The role of a PK advisor is to identify the available assistance programmes and to provide detailed information as to the conditions for the granting of assistance. They are co-financed from European Union funds.

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4.6 Southern Estonia

Implementation of the Bolkenstein directive in Estonia is being managed by The Ministry of Economic Affairs and Communications is preparing the change of the Public Information Act and State Portal Regulation in order to set-up OSS.The Estonian Government Coalition Agreement mentions the obligation of creating a one-stop-shop into the State Portal.

Stand alone initiatives for OSS are still missing. In 2008 a consortium consisting of the Archimedes Foundation, Tallinn Technology Park Tehnopol and Tartu Science Park started working under the umbrella of Enterprise Europe programme. The consortium is lead by the Estonian Chamber of Commerce and Industry. The goal of this consortium is to assure the competitiviness of the Estonian SME-s, but also innovation raising capacity and regionally balanced offering.

Additionally to the European Commission funding, the consortiums activities are co-financed by Enterprise Estonia. In autumn 2008 the consortium will apply for financing from European Commission to be able to offer several services to Estonian enterpreneurs, including the consulting of the 7th frameprogramme and organizing several seminars.

The Estonian Chamber of Commerce and Industry is the supporting organisation and belongs into the respective working group. Technical solution of OSS will be developed by the Estonian Informatics Centre. The Centre of Registers and Information Systems will develop the information system from which the list of activities database will be drawn.

4.7 Vysočina

Regional Centers of Competence (RCC) for OSS in the framework of ICHNOS project are understood as profit or non profit organizations whose main objective is to develop specific activities for support of OSS operation in a region, contributing to the economic growth of the region. Especially RCC should serve to smooth implementation of Bolkestein directive on services into the practice in EU member states. The Czech case is slightly different from the other partners so the structure of their ‘implementation’ is different to. From the 2005, when the „Legal, Economic and Organisational Context for OSS in the Czech Republic - VYSOCINA Report“ was prepared during the ICHNOS project, the business environment in the Czech Republic has changed significantly till now (October 2008). The main reasons for this were as follow:

• European Union initiatives focused on simplification of business bureaucracy (Small Business Act for Europe, implementation of European Charter for Small Businesses) • Adoption of the European Directive on Services in Internal Market, that was approved by European Parliament on 12.12.2006 (even in rather reduced form) • Systematic and lasting pressure of local entrepreneurs and their professional associations on reducing of bureaucracy load • Realization of long term government programme

Many concrete changes were introduced, from which the finalization of ZAP project and amendment of Trade Licensing Act were the most important ones.

Several partial amendments of entrepreneurs’ legislation were adopted before 1.7. 2008: • The project ZAP (Zjednodušení Administrativy Podnikatelů – Simplification of Administrative Proceedings) was finalized and entered into operation • The Simple Register Form (Jednotný Registrační Formulář - JRF) was launched by Amendment of Trades Licensing Act. This form unified the registration procedure into several obligatory record systems (evidences)

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• Trade licensing offices were entitled to provide a function of Central Registration Point (Centrální registrační místo - CRM) – see the scheme

• A new information system called Registr živnostenského podnikání (Trades Register) was launched and put into operation • A system of new points for general communication of citizens with public administrative was put into operation. These unified points are called CzechPoints (Český Podací Ověřovací Informační Národní Terminál) • Chamber of Commerce extended its network of InMP - Information Places for Entrepreneurs and started with establishment of Single Points of Contacts in some its offices.

Actually, revolution changes were introduced only after adoption of new version (amendment) of Trades Licensing Act with effect from 1. 7. 2008: • This amended Trades Licensing Act more simplified the business start-ups and next operation. The underlying changes are as follow: o Replacement of „Free“ trades with only one Free trade with 80 branches. (Before this, 125 independent free trades existed and the entrepreneur had to have a separate Trade Certificate for each of them. Of course, for each of them an appropriate fee in amount of 1000 CZK (approx. 40 EUR) had to be paid.) o Instead of Trade Certificates and Licence Deeds an Excerpts form Trades Register (Trades Register Statements) are used o The Simple Register Form was reduced from 8 pages to only 2 pages. o The Business (Trade) can be announced at any Trade Office (i.e. at any Central Registration Point) regardless the place of business. (Before this, the business had to be announced only at the local CRM belonging to the place of business) o Public Administration Offices will be able to find out some necessary information themselves and it will not be an obligation of entrepreneurs.

o For handicraft trades entrepreneurs will prove the shorter practice then so far. Selected handicraft, regulated or licensed trades are newly moved under free trade. o On the other side, sanctions for unlawful business tightened up. • From 1. 10. 2008 it is possible to announce a new business as well as changes in existing business also electronically, namely by 2 ways: o From own computer (at home or in the office) with guaranteed electronic signature

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o From the PA office, from the dedicated computer (this way is better for those entrepreneurs that do not still want to make out a guaranteed electronic signature)

The methodical support of entrepreneur was improved, too. Several clear and understandable guidelines for entrepreneurs were elaborated. All phases of doing business were described in details – how to start business for individual as well as for legal entities, how to run business, make changes etc. These guidelines for concrete situations in “How to arrange...” form were published at several internet portals, i.e. BusinessInfo (www.businessinfo – the official Czech Business Web Portal), the Portal of Public Administration (portal.gov.cz), portal of Ministry of Industry and Trade (www.mpo.cz), official portal of Czech judicial system (www.jusitce.cz), web pages of Trades Register (www.rzp.cz), web pages of governmental Investment and Business Development Agency Czechinvest (www.czechinvest.org) and others.

• Ministry of Industry and Trade has elaborated Guidelines for doing business for Czech legal entities • Ministry of Industry and Trade has elaborated Guidelines for doing business for foreign entities, namely: o Guide to Trade Licensed Business for legal entities with domicile outside the states of EU, European Economic Area and Switzerland o Guide to Trade Licensed Business for individuals with domicile outside the states of EU, European Economic Area and Switzerland o Guide to Trade Licensed Business for individuals with domicile outside the Czech Republic (except inhabitants of EU member states, European Economic Area and Switzerland) o Guide to Trade Licensed Business for legal entities with domicile outside the Czech Republic (except inhabitants of EU member states, European Economic Area and Switzerland)

• Temporary and occasionally services providing under the Trade Licensing Business in the Czech Republic were affected by an amendment of respective laws. (Act No. 18/2004 Coll., on Recognition of Professional qualification and Other Competence of Nationals of Member States of the European Union and on the Amendment of Some Acts (the Act on Recognition of Professional Qualification and Act. no 455/1991, Trades Licensing Act.) This amendment transposes respective directions of European Community (Directive 2005/36/EC of the European Parliament and of the Council of 7 September 2005 on the recognition of professional qualifications, Article No. 49 – 55 of the Treaty establishing the European Community)

Next measures for improvement of business environment in the Czech Republic are in progress. Appropriate amendments of law are in legislative process. There is expected next removing of administrative barriers and reduction of charging, too. Some examples of preparing measures: • Over 50% cheaper technical rules (proposal of change of the Act on technical requirements on products. This Bill was approved by Chamber of Deputies in the 1st reading on 23. 10. 2008). • Announcement of trade via internet (it is already possible from 1.10. 2008) • Less statistical forms • Reducing of author fees (royalties)

Ministry of Industry and Trade in cooperation with other ministries prepares a Plan on the reduction of administrative load before 2010. The plan to reduce administration in business intends, in its first phase, to abolish or reduce 206 obligations, which, in financial terms, represent a fifth of the total annual load (16.7 billion CZK). The reduction will in this first phase apply to the regulations of 6 ministries (the Ministries of Labour and Social Affairs, Environment, Finances, Health Care, Industry and Trade) which impose the most extensive (more then 88%) bureaucratic load. In the second phase, the remaining departments will be involved so that the total reduction of administration may even exceed the 20% threshold. This process was invoked

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inter alia also by the transposition of European directive on Services in Internal market into the Czech legal rules.

Approving of the Directive on services in internal market in December 2006 (even in less ambitious form then the original proposal supposed) opened an opportunity to remove lasting barriers for free movement of services between EU member states. In the Czech Republic, about 30 laws that loaded entrepreneurs so far will be abandoned or changed in relation with the Directive.

For full implementation of the Directive, a brand new law “Act on free movement of services“ is preparing in the Czech Republic. The Government has approved a subject matter of the bill on free movement of services and submitted it for discussion and comments. To the Czech legal system, the bill transposes the Services Directive, which is considered to be one of the most significant acts within the European legislation in the last decade. The Act on free movement of services will bring several crucial changes, which will significantly simplify a process of starting a business and provision of "cross—border” services.

The Ministry of Industry and Trade will prepare the articulated bill so that the Government could discuss it in autumn. The Services Directive should be implemented in the rules of law of the member states by the end of 2009. It is expected the Czech Act will be approved before 2009.

At this time, we can present many partial steps that were already realised (see the text above). We also can sum up some proposals of simplification of business bureaucracy.

Concerning the new Act that is under preparation now, we can quote only from the „subject matter of the bill “. (However, it is expected the Act will be finalized during the ICHNOSPlus project).

Main benefits of the law We can distinguish 2 lines of benefits that the European Service Directive and Czech Act on free movement of services bring:

1. Simplification of business environment in the field of services provision, both for local (Czech) and EU member states entrepreneurs on the territory of the Czech Republic, also in cross-border services. The simplification of business environment will be achieved by many new institutes (e.g. institute of silent consent, simplification of permission procedure) 2. Finalizing of internal market of services – the Directive makes systemic and anchors rules of EC law that is involved in practice of the European court in the field of internal market of services. After its implementation in all EU member states (in the Czech Republic through the Act on free movement of services) an entire internal market should be established - the spaces where will be able to provide services regardless the provider’s domicile.

Main institutes involved in the Act on free movement of services • Establishment of Points of single contacts where entrepreneurs would be able to get all necessary basic information related to start the business and where all formalities necessary for starting business will be intermediated (also on line); • Removal of discriminatory, non adequate and ungrounded requirements in permit processes, e.g. terms for achieving of certain age for operation of specific activity, removal of limited validity period for permission, cancelation of dedicated period for temporary services providing or ensuring of a legal claim for permission granting. • Recognition of acquittal, i.e. if fulfilment of particular terms is claimed for receiving the permission for services providing and a provider already fulfilled such terms in other member state, these requirements will be considered as fulfilled.; • Recognition of documents about fulfilment of particular requirement, if those documents confirm fulfilment of such requirement in other member state;

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• Recognition of insurance – if it is necessary to have insurance of professional responsibility for provision of particular activity and a provider evidences insurance from other EU member state, the obligation will be considered as fulfilled; • A possibility to submit an unattested copy of a document providing that it is possible to attest its content through electronic system of information exchange within internal EU market (IMI system); • A possibility to submit an unattested translation of a document into Czech, Slovak or English language providing that it is possible to attest its accuracy through electronic system of information exchange within internal EU market (IMI system; • Ban of discriminatory measures against recipients of services; • Obligation to provide or make accessible defined information about a provider and a service provided; • Specification of surveillance competences among particular member states authorities with power over providers that provide cross-border services; • Anchoring of operation of electronic system of information exchange within internal EU market (IMI system), through which competent authorities will change information on service providers; • Implementation of compulsory notification for cross-border services providers that intent to provide their services temporary on the Czech Republic territory based on their permission from other member state.

Final form of Points of Single Contacts is not defined yet. Organization of these Points is left in member states, in amount of activities (they have to reflect the Directive scope but it can be wider) as well as in amount of competences (from simple coordination to transfer of particular power). Their role can be entrusted to public administration bodies, state agencies, professional chambers, associations or other private bodies. Some countries as Netherlands chose the „coordination model“ (i.e. only signpost to authorities competent on the matter) in comparison with so called „client approach“, that solves every case since the start till end including formalities. Absolute majority of member states choose Points of Single Contacts as places providing complete service. According to the Analysis of Economic Impacts of the Proposed Directive on Services in Internal Market that was elaborated by KPMG in June 2006 „... as the most proper solution we can consider a usage of existing networks that have broad experience, contacts to entrepreneurs and nationwide availability“.

CZECH Point project

The first "look-like" OSS supporting Government initiative in Czech Republic has been the CZECHPOINT project, which was launched by Ministry of Interior, the body responsible for development of e- government, as the project is understood one of four main parts of the complex e-government scheme, proposed by the Ministry of Interior and represented by body-like frame.15 Within the scheme CZECHPOINT is symbolized with fingers.

The main idea of this project was to make Czech public administration more effective. From 2006 CZECHPOINT project has become the most visible governmental initiative with the high political priority. In scope of the ICHNOS+ project it is good to remark that the services provided within CZECHPOINTs are still being updated and there is a possibility that the network could be used also for purposes described in the ICHNOS Greenpaper.

As per 29th of October 2008, the total number of CZECHPOINTS reached 2 608 (app. 160 in Vysocina), located primarily at municipality offices, regional authority offices, Czech Post branches, Chambers of Commerce, notaries and agencies abroad. CZECHPOINTS provide following services:

15 http://www.ods.cz/pics/obr/egon.jpg

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• Abstracts from the cadastral register (previously available only in Cadastral offices) • Abstracts of the trade licence register (previously available only in trade licence offices) • Extract from the crime register (previously available only in Prague, or at municipality offices with a delay of 3 weeks) • Submission of the new trade licence application form or trade licence details change (previously available only in trade licence offices)

It is obvious that only the fourth service approaches ICHNOS OSS services idea. The other services may be useful especially for persons from small distant villages, however after recent release of the CZECH POINT E-SHOP service is it possible to order abstracts or extracts online and get it via ordinary post service, which means that the main CZECHPOINT service portfolio will be almost useless. On the other side, the chance still exists to create new services and implement them within the network of CZECHPOINTs, which is currently still being developed.

See the list of CZECHPOINTS in ANNEX I.

Central registration point (CRP)

CRP were established as per 1st of August 2006, independently on rising of CZECHPOINT project, although both ideas started to be realized in similar period of time. However, the idea of CRP is a little bit older and it is a result of previous governmental activities focused on simplifying of processes connected with conducting licensed trade. The Ministry of Industry and Trade is responsible for the CRP project, in co-operation with other three Ministries involved in trade and business administration procedures. CRPs are always located at trade license offices and their total number is app. 100 (15 in Vysocina). The provided services are identical to the CZECHPOINT service listed above, but as CRP is directly linked to trade license register, the registration is faster and also cheaper, because it is necessary to pay extra charge when accessing CRP-like services through CZECHPOINTs.

The main difference is that CZECHPOINT is focused on citizens, with attendant services, which are expected to be implemented in the future, according to public demand. CRP is then directly focused on traders and persons who would like to start their own business. In this way CRP is closer to ICHNOS OSS ideas, but there still exists a huge task to implement especially consulting services.

CzechInvest Agencies The network of CzechInvest (www.czechinvest.org) points for support of entrepreneurs and investments is operating in all Czech regions under responsibility of the Ministry of Industry and Trade. Main objectives are to support business infrastructure, innovations and to attract foreign investors. Ensuring Communication Framework between government, entrepreneurs and European Community, CzechInvest is re-distributing some finances, managing development programmes and providing specific functions, such as promotion of the Czech Republic abroad, exclusively suggesting to National Government investment offers, supporting Czech companies on their way to Europe. Czech Invest is suggesting services

• Support for the realization of investment projects • Intermediary services for the state investment support • AfterCare – services for foreign investors already present and just coming to the Czech Republic • Holding and updating of the databases of the business real estates • Support for subcontractors (database of subcontractors) • Information services for SMEs

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• Implementation of the business supporting programmes, administrative advisory services

See the list of CzechInvest agencies network – ANNEX II

Information points for entrepreneurs (IPE)

Since 2003, The Chamber of commerce CR has been realizing a project of Information points for entrepreneurs (IPE), financed by Ministry of Industry and Trade within its programme supporting SMEs competitiveness. The IPE project was realized under the central government decree and was funded both from central and regional sources. The National ZAP project on simplification of administrative procedures is using some experiences from those IPEs , which are providing information services and some methodical support for entrepreneurs at 180 places with more then 20 places for specific branch information services. The main tool for knowledge-based support of the IPE project is so called Information Refinery. It is an expert system for monitoring, selecting and evaluation of public information sources on the internet, available for free or on base of agreement. The running information services in IPEs are using synergies and cooperation with different already existing information centres, such as Czechinvest, Portal of Public Administration, National Registry of Consultants, and others. The main services of IPE are as follow: - Regional information - Branch/Industry information - Business support, grants - Start up/Closing business, changes in lifecycle of a business - Running and operation of a business - Export and cross-border services provision - Business and other contacts

Entrepreneurs can use services of IPE by several ways: - eForm for submission of any request for information concerning business (the request is executed by the Information Refinery and an answer is responded in one or more days) - the Library of business information (links to different sources of information) - Industry guidelines (more then 10 “electronic books” in pdf format for free download with complex explanation of solving specific issues)

This initiative fulfils one of the main objective of OSS (according to the ICHNOS Green Paper) – free consultancy on specific business ideas and administrative issues. There are about 20 IPEs in Vysocina available for multichannel contact also through internet (webforms). The network of Chambers of commerce plays an important role in general service provision for entrepreneurs in Vysocina region and in the Czech Republic.

Centre for regional Development The Centre for Regional Development of the CR (CRD CR) is a state contributory organisation, founded by the Ministry for Regional Development, which has actively supported regional policy of the Government of the CR since 1997. Except the central office in Prague, it provides 8 regional branches covering 8 NUTS II regions. The list of NUTS II Branches is in Annex III. Information and services offered by the CRD CR are earmarked especially for experts, representatives of state administration and self-government authorities and to public, e.g. SMEs.

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The CRD CR provides its services and targets at activities compliant with the requirements both of the Ministry for Regional Development and its clients’ needs. The most useful service is RIS - Regional Information Service, the system of administrative, geographical, economic and business information related to specific region. This web-based information network accompanied with NUTS II Regional branches would be good base for territorial marketing services proposed in ICHNOS project.

Single Points of Contact

Single Points of Contact is an initiative of the Chamber of Commerce. In all regional capitals there are Single Points of Contacts established with aim to provide information and arrange formalities related to starting and running business. These services are provided by skilled consultants, also in electronic form. An entrepreneur can use web-based “consulting room” or “Forms portal” that offers all official forms needed for specific transaction concerning all phases of business. In this project, Chamber of Commerce exploits its experience gathered from IPE, CzechPoints and other projects. Single Points of Contact offers services as follow: - Consultancy and advisory - Checking and certification - Out-of-Court settlement of litigations - Special education and training - Registries (catalogues) of companies and products - Active support of business - Forms for entrepreneurs - Contacts

Chamber of Commerce in general is not allowed to access to Public Administration official registries and evidence, therefore it will probably operates as mediator between business community and PA.

Business incubators The network of 8 incubators, operating in Vysocina region, represents a private initiative (operated by EURONEST ltd), which appropriately supplements the regional system of collaborative support structure for entrepreneurs. Incubators are intended primarily for starting (in business up to 18 month) or innovative entrepreneurs. There is a wide portfolio of services, provided to entrepreneurs within the incubator. Free of charge services include telecommunication services and applications, administrative services, consulting services or other services according to the needs of SMEs. Other services are charged, such as book keeping, HR management, tax consultancy, EU projects management, training etc. This primarily involves creating of a network of advisory and “reception” services, offering space for business and research in IT (or other fields), ensuring “demand” for viable research projects, in practice, etc. Advisory services supposed not to be restricted for simply assistance of start up businesses in the incubator, but are still developing in order to provide a support service for businesses in all phases of operation – that is, including existing and operational companies. Part of the incubator network will be a “one-stop shop” advisory, training, and re-qualification centre, which will be located in the central incubator (advisory, training and re-qualification centre) in the City of Třebíč. Regional broadband Looking at regional broadband as the best practice in general, ROWANET project of Vysocina broadband (optical fibre) need to be mentioned here, although the first phases of its implementation were more technologically oriented. But now broadband connectivity between main cities in Vysocina is ensuring a perfect platform for development of modern inclusive online services for all, including entrepreneurs.

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Regional information centers (OSS) Based on a new on-line capacity of ROWANET, a new service has appeared in Vysocina as Information One Stop Shops. Regional information centers, initiated and supported by the Regional Authority, are working for all citizens and businesses, providing regional specific information services.

Regions in the Czech Republic have still limited power in the field of transformation of bureaucracy related to business development. These matters are fully in the competence of the central government and Czech regions have to ensure seamless operation of all policy measures. For successful implementation of the Service Directive in the Vysočina Region, three facts will be significant:

• Development of functions and operation of CzechPoints, which is related to transformation of the National basic Registers, eGovernment Interoperability, etc. • Functioning of Central Registration Points (at Trade Licensing offices) • Provision of regional specific supporting information and advisory services for entrepreneurs by different bodies (not unified across regions). The big advantage of Vysocina is the existence of fully operating broadband platform ROWANET.

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5 Structural Funds Operational Programmes

This chapter highlights the possibility of sustain the RCC and OSS by SFOP funding programmes. Topics like ¿Are OSS a priority under the NSRF of your country? or the possibility of your OSS project to be funded by SFs, are taken into this chapter

5.1 Galicia

For the 2007-13 period, Spain has been allocated €35.217 billion in total: €26.180 billion under the Convergence objective (€3.543 billion from the Cohesion Fund), €8.477 billion under the Regional Competitiveness and Employment objective and €559 million under the European Territorial Cooperation objective.

Galicia is under the Convergence Operational Programme and not in the Regional Competitiveness Operational Programme in which OSS thematic is a priority.

That’s why the OSS initiative in Galicia is funded by regional/national funding. More in-depth, the Galician OSS infrastructure is supported by the Galician Institution for Economic Promotion, an organisation dependant on the Regional Ministry of Economy. All the funds allocated to the OSS are provided by the Regional Government of Galicia and so their sustainability is maintained by the Government

5.2 North Aegean

The only structural operational that can support OSS in the Region is the Operational programme “Competiveness” of the Ministry of Development.

5.3 Sardinia

OSS is not a priority under the NSRF in Italy. But in article 38 of the Law (Decreto legge) n. 112/2008, as converted by law 133/2008 there so many changes for OSS and for the coordination among OSS and Chamber of Commerce that we think that national government will give funds for them.

Operational programs 2000-2006 supported the creation of the administrative structure and procedures for the establishment of OSSes. The ERDF Operational Programme 2007 - 2013 attaches a special attention to the development and adoption of the Information and Communication Tools which can facilitate and support the smooth running of OSSes and at Regional level.

There is a specific operational objective which is Objective 1.1.1: to strengthen the availability of enabling infrastructures, the capacity in the fruition of the services of interconnection and the operability of OSS.

In particular, implementation of the online Information tools for improving the OSS functioning.

There are also several funds to help enterprises but not to the coordination of them. At this moment, there is not more information available because until December 2008 Sardinian Region is still engaged on the closure of the Operational Programmes 2007 -2013.

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5.4 Silesia

On the NSRF strategic level, measures favourable to achievement of provisions of the Lisbon Strategy would be executed as a Objective 1 of NSRF – Improving the functioning standard of public institutions and development of partnership mechanisms, support would be granted to undertakings favourable to modernisation of the Polish institution and regulatory system, and which affect positively the development of social dialogue and partnership. One of the elements in establishment of institutional efficiency of the Polish administration is improving the quality and accessibility of public services, by introducing modern services provided by electronic mail. In addition informatisation of public administration allows rationalisation in functioning of public administration, and as a consequence at reducing administrative barriers for business operation of entrepreneurs, as well as facilitating and hastening the information flow between different administration levels and the customers. The Government of the Republic of Poland, have on aim for example limiting bureaucracy that hinders the development of enterprises, and used for facilitating investments (e.g. introduction of a single service desk for entrepreneurs in an office). For this purpose complementary measures will be executed within OP Human Capital (Priority II Development of Human Resources and adaptation potential of enterprises and improving the health condition of working persons and V Good Governance) and OP Innovative Economy (Priority 7 Establishment and development of information society in Poland). within OP Human Capital 1. Priority II Development of Human Resources and adaptation potential of enterprises and improving the health condition of working persons Main goal: Development and improvement of functioning of system support for adaptation abilities of employees and enterprises (2.2.1 OPHC): - improving the quality of services provided for enterprises by training institutions and institutions supporting entrepreneurship and innovativeness of enterprises, in particular through: - development and propagation of organisational standards in institutions and the standard of services provided by them, - advancement of qualifications and abilities of employees that provide training and counselling services aimed at supporting the development of entrepreneurship and innovativeness of enterprises, - supporting the process of certification for qualifications of the training personnel, - supporting the system of complex services provided by institutions to entrepreneurs and persons wishing to launch economic activity. These activities will be realized by The Polish Agency for Enterprise Development. Budget for this activities is 142.433.656 euro.

2. Priority V – Good Governance Main goal: Improvement of quality of the public policies and services related to enterprise creation and business operation: - introduction and propagation of client service standards in self−government administration, - introduction of the “one−stop−shop” system (single access points for entrepreneurs in administrative offices), - development of system related provisions and informatic tools to assist public management. These activities will be realized by public administration. Budget for this activities is: 999.096,10 euro within OP Innovative Economy Priority 7 Establishment and development of information society in Poland Main goal: The priority axis aims at improving the conditions of undertaking economic activity through the increase in accessibility of public administration information resources and public services in the digital form for citizens and enterprises:

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- establishment or extension of informatic systems for public administration which assist management in the public sector (e.g. electronic flow of issues and documents, state electronic registers, electronic signature), - establishment and development of platforms for integrated electronic services designated for business and for citizens related inter alia to fiscal settlements, administrative charges, registration of business operation, services related to public procurement, - establishment of multi−channel transaction platforms, - making available and promoting standards for electronic communication between administration on the one hand, and entrepreneurs and citizens on the other.

These activities will be realized by public administration. Budget for this activities is 788.235.294,00 euro.

OSS sustainability will be funded by local goverment.

5.5 Southern Estonia

OSS is not a priority to the NSRF; hence there will be no permanent financing of OSS throughout the structural funds.

Domain specific action plans exist, however the creation of OSS have not been specificly pointed out. The creation of OSS has been covered as one of the indicators in E-business Environment Development Programme 2008 – 2009 in the framework of Information Society Development Plan 2013.

5.6 Vysočina

The NSRF (National Strategic Reference Framework) 2007–2013 constitutes the reference document for the programming of European Union Funds at national level for the 2007–2013 period. It was elaborated within the framework of the new strategic approach to the Cohesion Policy of the European Union, according to which NSRF “…ensures that the assistance from the Funds is consistent with the Community strategic guidelines on cohesion and identifies the link between Community priorities, on the one hand, and the national reform programme, on the other.” NSFR was proposed by the Czech Republic in applying the partnership principle. It reflects the Union‘s orientations, lays down a national strategy and its programming. The NSRF of the CR was finally approved by the Commission in July 2007.

Allocation (EUR):

Total ERDF 268 263 565 Total ESF 150 829 884 Total NSRF 26 302 604 484

Objectives of NSRF of the CR for programming period 2007 - 2013:

5.6.1 Global Objective The global objective of NSFR is to transform CR's socioeconomic environment in compliance with the principles of sustainable development, so as to make the CR an attractive location for investment as well as for the work and life of its citizens. By means of incessant strengthening of the country's competitiveness, a sustainable development will be reached which will proceed at a pace higher than the EU 25 average. The CR

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will strive to boost employment and to pursue a balanced and harmonized regional development, which will result in enhancing the quality of life of the country's population.

Strategic objectives As laid down in the Czech National Strategic Reference Framework (NSRF), the EU funding will be avaliable for the four strategic objectives divided into 15 strategic priorities:

I. Competitive Czech economy - Competitive business sector - Support of Research & Development capacity for innovation - Development of a sustainable travel and tourism sector and utilisation of the potential offered by the cultural heritage. This objective should contribute to reinforcing the competitiveness of the business sector by increasing its productivity and speeding up sustainable economic growth based on systematically developed innovative potential of a strong and progressively structured Czech economy, generating robust and sustainable economic growth.

II. Open, flexible and cohesive society - Education - Increasing employment and employability - Strengthening social cohesion - Development of the information society - Smart administration The authorities plan to support the development of a diverse, socially aware and cohesive society, open to outside opportunities. The aim is to create a modern education system which will become the driving force behind an effi cient and flexible labour market. The authorities plan to reduce the administrative burden for business people by at least 20%.

III. Attractive environment - Protection and improvement of the environment quality - Improved accessibility to transport (for instance, increasing the share of railway transport and developing combined transport) This objective provides a high quality physical platform for economic and social development through investments into improving the quality of the environment and access to transport networks.

IV: Balanced territory development - Balanced regional development - Development of urban areas - Development of rural areas - Regional Competitiveness and Employment – the Capital City of Prague. - Territorial Cooperation. The authorities plan to ensure balanced and harmonious development of the whole territory of the CR achieved by mitigating disparities between regions and within regions. Economic growth and an increase in employment will be supported by the use of natural, economic and socio- cultural regional dissimilarities and their differentiated internal potential. At the same time, respect for the variability of the geographical structure (population structure, hierarchy of towns, types of rural area) will reinforce territorial and social cohesion.

In spite of the fact the concept of OSS/Points of Single contacts is not namely mentioned in the NSRF, the four underlined priorities are the most important for implementation of the European Service Directive in regions. Especially the 2nd Strategic Objective of the Czech NSRF document16 "Open, flexible and Cohesion Society" namely includes the priority E: Smart Administration, where a special attention is paid to implementation of the policies to standardize procedures and to create a single administrative system, including the OSS model (CzechPoints are mentioned namely). The responsibility for the implementation of public

16 http://www.strukturalni- fondy.cz/uploads/documents/NOK/NSRF_en_170707_bez_zmen_db_fin.tabulka.pdf

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administration reforms in the CR was assigned to the Ministry of Interior, which will be responsible for an integrated approach to the implementation of the activities. On the other side, the Ministry of Industry and Trade, which is responsible for transposition of the European Service Directive, should use Structural Funds in support of infrastructure necessary for smooth operation of OSS.

Implementation of corresponding measures will be supported as a part of this priority both through the ESF (“soft” activities, the development of human resources etc.) and through the ERDF (material interventions, investment in “hard” infrastructure etc.)

The concrete Operational Programmes (there are 24 individual Operational Programmes in the Czech Republic: 7 Thematic OP, 7 Regional OP, 2 Prague OP, 7 Transnational and territorial Co-operation OP, 1 Technical Assistance OP) will be used for funding of different measures corresponding to the context of OSS.

Support of the modernisation of the public administration will be administered mostly via two thematic operational programmes: - via priority axis Public Administration and Public Services of OP HRE (Human Resources and Employment); - and via priority axes Smart Administration and Increased Quality and Accessibility of Public Services of the IOP (Integrated Operational Programme). Both priority axes are closely linked to priorities B, C, D of the strategic objective II of the NSRF.

Business environment and services in support of entrepreneurship can be co-funded also via OP EI (Enterprise and Innovation) - priority axis 5 Business and innovations environment - priority axis 6 Services for business development

Operational Programme for each region The Regional OP NUTS 2 Southeast (ROP SE) has been planned as a consensus of two NUTS 3 regions (Jihomoravsky and Vysocina). It aims to improve traffic accessibility and integration of the region incl. modernisation of public transport, support for the development of both tourism industry infrastructure and services, preparation of smaller business parks and improvements in living conditions in communities and in rural areas especially through quality enhancements to the educational, social and health infrastructures. It forms approximately 2.64 % of all the assets designated to the Czech Republic from EU funds.

The Regional OP Southeast consists of 4 priority axes which divide the operational program into logical units that are further defined through "support areas" that determine the types of project which can receive support within each priority axis. These taxis are:

• Transport Accessibility • Development of Sustainable Tourism • Sustainable Development of Urban and Rural Areas • Technical assistance

There are also some national OPs, which can be suitable for funding a OSS project in the region. The first one is the Integrated OP, which is managed by several Czech ministries. The Integrated Operational Programme is focused on solving common regional problems in areas of public administration, public service and regional infrastructure development: information technology development in public administration, social service infrastructure improvement, public health, employment services and services in the areas of safety, prevention and risk solving, tourism industry support, cultural heritage, improvement in housing estate environments and development of systems for the creation of local plans. It is expected to get a funding from the Ministry of Industry and Trade, Ministry of Interior, within the 2nd priority axe "Improvements in the quality and accessibility of public services".

The other national OP, Human Resources and Employment, might be available for covering of expenses for education of staff of OSSs.

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