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Case Study North West England Contract No. 2008.CE.16.0.AT.020 concerning the ex post evaluation of cohesion policy programmes 2000‐2006 co‐financed by the European Regional Development Fund (Objectives 1 and 2) Work Package 4 “Structural Change and Globalisation” CASE STUDY NORTH WEST ENGLAND (UK) Prepared by: David Bradley (CURDS, Newcastle University) and Paul Benneworth (KITE) for: European Commission Directorate General Regional Policy Policy Development Evaluation Unit CSIL, Centre for Industrial Studies, Milan, Italy Joanneum Research, Graz, Austria Technopolis Group, Brussels, Belgium In association with Nordregio, the Nordic Centre for Spatial Development, Stockholm, Sweden KITE, Centre for Knowledge, Innovation, Technology and Enterprise, Newcastle, UK Case Study – North West England (UK) Acronyms BERD Business Expenditure on R&D DG REGIO Directorate General for Regional Policy DTI Department of Trade and Industry EC European Commission ERDF European Regional Development Fund ESF European Social Fund EU European Union FDI Foreign Direct Investment FEA Fund Eligible Area FIFG Financial Instrument for Fisheries Guidance GDP Gross Domestic Product GERD Gross Domestic Expenditure on R&D GO‐NW Government Office for the North West ICT Information and Communication Technology NWDA West Development Agency OECD Organisation for Economic Co‐operation and Development PMC Programme Management Committee R&D Research and Development RDA Regional Development Agency RES Regional Economic Strategy RTDI Research, Technological Development and Innovation SME Small and Medium Enterprise SPD Single Programming Document WP Work Package II Work Package 4: “Structural Change and Globalisation” Table of Contents Executive Summary 1 Introduction 5 1. Structural change and globalisation in perspective 7 1.1 The region at a glance 7 1.2 Searching the roots of change: socio‐economic history of the region 14 1.3 Regional structural change and globalisation issues in 2000‐2006 15 1.3.1 Dimensions of structural change 15 1.3.2 Understanding the geography of structural change 26 2. Regional policy 2000‐2006: strategy and objectives 31 2.1 Regional policy mix for structural change and globalisation 31 2.2 Overall strategy of the 2000‐2006 Objective 2 programme 34 2.3 Selected fields of intervention and measures 40 2.3.1 Selection logic 40 2.3.2 Detailed description of the selected measures 41 3. Effects of the selected ERDF measures on the process of structural change and adaptation to globalisation 43 3.1 Assessment of the structural and socio‐economic effects 43 3.1.1 Performance of selected measures 43 3.1.2 Contribution of selected measures to structural change and globalisation 47 3.2 Assessment of the effects on institutional capacity and policy learning 49 4. Conclusions: key findings and main message 53 Key findings 53 Main Message 54 5. Annexes 57 5.1 Statistical tables 57 5.2 Details of measures relevant with respect to Structural Change and Globalisation 70 5.3 References 72 5.4 List of persons interviewed 75 III Case Study – North West England (UK) List of tables Table 1.1 ‐ Base economic data for the North West England region 8 Table 1.2 ‐ North West England Objective 2 eligible areas (NUTS3), 2000‐2006 10 Table 1.3 ‐ Objective 2 area population by county, 2000‐2006 10 Table 1.4 ‐ Sectoral employment in the North West England compared to UK and EU levels 17 Table 1.5 ‐ Concentration of manufacturing by NUTS1 region, 2005 18 Table 1.6 ‐ Employment changes by sector, North West England and UK, 1996‐2006, % 19 Table 1.7 ‐ Innovation potential (NUTS1) 21 Table 1.8 ‐ Major job creation projects through business expansion in the North West England in the study period 25 Table 1.9 ‐ Major job losses and prospective losses in the North West England in the study period 25 Table 1.10 ‐ Key sub‐regional economic data on the North West England(including Merseyside) 27 Table 1.11 ‐ Sub‐regional distribution of key clusters by county, North West, 27 Table 1.12 ‐ Cluster organisations and promotion activities in the North West England 30 Table 2.1 ‐ Synoptic view of the Objective 2 programme 34 Table 2.2 ‐ Summary of priority objectives and allocated resources for Programme 34 Table 2.3 ‐ Balance between allocation of resources between priorities in eligible and transition areas, North West England Objective 2 programme SPD 2000‐2006 in % 35 Table 2.4 ‐ Balance between allocation of resources between priorities in eligible and transition areas, North West England Objective 2 programme SPD 2000‐2006. Final Total ERDF paid (provisional data) in % 35 Table 2.5 ‐ Overview of the Objective 2 programme by Priority Area and available resources 36 Table 2.6 ‐ Priority 1 businesses and ideas: indicative breakdown by field (eligible/transitional areas) 37 Table 2.7 ‐ The split between focus areas in Priority 1 37 Table 2.8 ‐ A breakdown of priority 1 ERDF expenditure by area of activity 38 Table 2.9 ‐ Priority 3 strategic regional infrastructure: indicative breakdown by field (eligible/ transitional areas) 38 Table 2.10 ‐ The allocation of funding between sub‐priorities within Priority 3 39 Table 2.11 ‐ A breakdown of priority 3 ERDF expenditure by area of activity 39 Table 2.12 ‐ Measures relevant with respect to structural change and globalisation: main features 41 Table 3.1 ‐ Top ten ERDF‐funded measures by ERDF contribution, Measure 1.2 (increasing SME competitiveness) 44 Table 3.2 ‐ The distribution of projects by size, and total spend on projects by size, Measure 1.2 44 IV Work Package 4: “Structural Change and Globalisation” Table 3.3 ‐ Proportional allocation of funding between Action Plans under Measure 1.2 45 Table 3.4 – Measure 1.2 ‐ SPD Outputs and ‘Results’ targets, contracted and achieved 46 Table 5.1 ‐ Taxonomy of objective 2 eligible areas (NUTS3) 57 Table 5.2 ‐ Regional performance in comparative perspective (NUTS2) ‐ Basic data 58 Table 5.3 ‐ Socio‐economic change and human capital (NUTS2) 58 Table 5.4 ‐ Regional specialisation (NUTS1) 59 Table 5.5 ‐ Production system (NUTS1) 60 Table 5.6 ‐ Innovation potential (NUTS1) 61 Table 5.7 ‐ Relocations and restructuring 62 Table 5.8 ‐ Geography of structural change (NUTS3) 64 Table 5.9 ‐ Geography of structural change (NUTS3) 65 Table 5.10 ‐ Geography of structural change (NUTS3) 67 Table 5.11 ‐ Geography of structural change (NUTS2) – Clusters* 69 Table 5.12 ‐ Geography of structural change (NUTS2) – Organisations 70 Table 5.13 ‐ The distribution of projects by size, and total spend on projects by size, Priority 1.1 70 Table 5.14 ‐ The distribution of projects by size, and total spend on projects by size, Priority 1.2 71 Table 5.15 ‐ The distribution of projects by size, and total spend on projects by size, Priority 1.3 71 Table 5.16 ‐ The distribution of projects by size, and total spend on projects by size, Priority 1.4 71 Table 5.17 ‐ The distribution of projects by size, and total spend on projects by size, Priority 1.5 72 Table 5.18 ‐ The distribution of projects by size, and total spend on projects by size, Priority 3.1 72 V Case Study – North West England (UK) List of figures Figure 1.1 ‐ Map of the eligible area in the North West, 2000‐2006 9 Figure 1.2 ‐ Map of the eligible areas for funding in the North West, 2000‐2006 by category of eligibility 11 Figure 1.3 ‐ The impacts of globalisation on business in the North West 13 Figure 1.4 ‐ Specialisation by technology level of manufacturing 1996‐2006, Selected UK regions 20 Figure 1.5 ‐ Specialisation by technology level of manufacturing 1996‐2006, Selected Italian regions 20 Figure 1.6 ‐ North West England on the OECD innovation scoreboard 22 Figure 1.7 ‐ Piemonte on the OECD innovation scoreboard 22 Figure 1.8 ‐ Value of export of goods 2001 and 2006, GBP per employee 26 Figure 1.9 ‐ Provision of infrastructure supporting key sectors and clusters in the North West England 29 Figure 1.10 ‐ Patenting by sub‐region and sector, per million inhabitants (2004) 30 VI Work Package 4: “Structural Change and Globalisation” Executive Summary Scope and research methods This report has been prepared as a contribution to the DG REGIO commissioned ex post Evaluation of the cohesion policy programmes financed by the European Regional Development Fund during the period 2000‐ 2006, Work Package 4: Structural Change and Globalisation. The results and outcomes of the five measures funded under Priority 1 of the 2000‐2006 Programme (related to SME growth and competitiveness) and one under Priority 3 (related to strategic sites and premises) considered particularly relevant in the context of structural change and adaptation to globalisation and drilled down in more detail to examine Measure 1.2. The study is based on various information sources including: in depth semi‐structured interviews with regional and sub‐regional authorities (intermediary organisations financed under the selected measures, regional policymakers, Action Plan managing authorities); as well as analysis of various secondary data sources including programming and evaluation reports, statistical and monitoring data and scholarly articles (see Annex 5.2). Key research question and hypothesis tested in the case study The main research question addressed by the North West England case study is the extent to which regional policy measures co‐financed by the ERDF in the Objective 2 programme 2000‐2006, to support structural change and adaptation to globalisation have helped the innovation potential of the economic fabric of the North West England. The assessment of the effects of the selected ERDF measures aims to highlight the contribution of the Objective 2 programme to structural change in the North West England and in doing so tests one of the working hypotheses proposed in the conceptual model developed by the study, namely that “their innovation system may suffer from missing innovation drivers on the demand side.
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