Jörg Neubauer, Alexandre Dubois, Tomas Hanell, Kaisa Lähteenmäki- Smith, Katarina Pettersson, Johanna Roto & Jon Moxnes Steineke Regional Development in the Nordic Countries 2007 Nordregio Report 2007:1 Regional Development R 2007:1 Internal differences within the Nordic countries flit around the extremes of the pendulum. On in the Nordic Countries 2007 the one hand, the capital and other metropolitan areas of the Nordic countries are amongst the fastest growing on the whole continent. On the other hand peripheral areas are, when placed in their national contexts, lagging behind and in dire need of active support. This is the traditional picture of the Nordic dichotomy. In the first years after the turn of the millennium small indica- Jörg Neubauer, Alexandre Dubois, Tomas Hanell, tions suggest that the overly excessive concentration to a few metropolitan areas has partially Kaisa Lähteenmäki-Smith, Katarina Pettersson, and at least currently reached the end of its path. Johanna Roto & Jon Moxnes Steineke Regardless whether these new patterns are a mere breather in the time line of peripheral decline or if they will prove to be more permanent trends, it is currently nonetheless one of the most J. Neubauer et al. Regional Development in the Nordic Countries 2007 NORDREGIO REPORT 2007:1 important tasks for policy makers to try to strike a balance between the development trends in different parts of the Nordic countries. The task is further challenged by the shifting focus of the new EU Structural Funds 2007-2013 programming period away from the Nordic countries. The 2007 handbook in the series ‘Regional Development in the Nordic Countries’ provides a comprehensive picture of the current state of play of regional development challenges and the policies and tools utilised to tackle the problems now and in the years to come. This also includes an overview on the processes of administrative structural reforms of government in the Nordic countries. In addition Nordic relevant aspects of EU regional policy support and possibilities of territorial co-operation for the period 2007-2013 are covered. In the statistical annex, comparable demographic and economic indicators are given for all 1 366 Nordic municipalities and their corresponding regions including each of the autonomous terri- tories. Be sure to visit our website www.nordregio.se where all graphical material is easily acces- sible for download and can be used free of charge. Nordregio P.O. Box 1658 SE–111 86 Stockholm, Sweden [email protected] www.nordregio.se www.norden.org ISSN 1403-2503 ISBN 978-91-89332-614 Regional Development in the Nordic Countries 2007 Regional Development in the Nordic Countries 2007 Jörg Neubauer, Alexandre Dubois, Tomas Hanell, Kaisa Lähteenmäki-Smith, Katarina Pettersson, Johanna Roto & Jon Moxnes Steineke Nordregio Report 2007:1 ISSN 1403-2503 ISBN 978-91-89332-614 © Nordregio 2007 Nordregio P.O. Box 1658 SE–111 86 Stockholm, Sweden [email protected] www.nordregio.se www.norden.org Analyses & text: Tomas Hanell, Kaisa Lähteenmäki-Smith, Jörg Neubauer, Katarina Pettersson, Jon Moxnes Steineke Statistics: Alexandre Dubois, Tomas Hanell, Jörg Neubauer, Johanna Roto Cartography & graphics: Alexandre Dubois, Tomas Hanell, Jörg Neubauer, Johanna Roto Front cover: Alexandre Dubois, Jörg Neubauer Dtp: Hanna Pitkänen Linguistic editing: Chris Smith Repro and print: Katarina Tryck AB, Stockholm, Sweden Price: SEK 200.- Nordic co-operation takes place among the countries of Denmark, Finland, Iceland, Norway and Sweden, as well as the autonomous ter- ritories of the Faroe Islands, Greenland and Åland. The Nordic Council is a forum for co-operation between the Nordic parliaments and governments. The Council consists of 87 parlia- mentarians form the Nordic countries. The Nordic Council takes policy initiatives and monitors Nordic co-opera- tion. Founded in 1952. The Nordic Council of Ministers is a forum of co-operation between the Nordic governments. The Nordic Council of Ministers implements Nordic co-operation. The prime ministers have the overall responsibility. Its activities are co-ordinated by the Nordic min- isters for co-operation, the Nordic Committee for co-operation and portfolio ministers. Founded in 1971. Nordregio – Nordic Centre for Spatial Development works in the f ield of spatial development, which includes physical planning and regional policies, in particular with a Nordic and European comparative perspective. Nordregio is active in research, education and knowledge dissemina- tion and provides policy-relevant data. Nordregio was established in 1997 by the Nordic Council of Ministers. The centre is owned by the f ive Nordic countries and builds upon more than 30 years of Nordic cooperation in its f ield. Content Preface 1 Executive summary 3 Introduction 7 Regional development trends 9 New patterns of regional economic development 9 Nordic labour markets: simple turbulence or jobless growth? 15 Capital areas challenged 18 Unemployment: traditional patterns persist 20 Intensifying commuting 25 Demographic imbalances consolidating 31 Administrative structural reforms of government 39 Rationales and objectives of structural reforms 39 The reform process in Denmark 42 The reform process in Finland 45 The reform process in Iceland 48 The reform process in Norway 50 The reform process in Sweden 52 The reform processes in the autonomous Nordic territories 54 Implications for the future 56 Regional Policy in the Nordic countries 61 Comparing Nordic regional policies 61 EU Regional policy influence 62 National regional policies – recent developments and future trends 69 Territorial cooperation – extending interaction 89 Nordic regional cooperation at a glance 89 The impact of INTERREG 90 Territorial cooperation 2007-2013 92 Technical notes 97 Summary tables 103 Annex of figures and tables 141 Index 153 Figures Figure 1.1 Real GDP Growth in the Nordic countries 1997-2005, index 1997=100 9 Figure 1.2 GDP/capita change in European regions 1999-2003 10 Figure 1.3 GDP per capita in PPS in European regions 2004, index EU27=100 12 Figure 1.4 Level and change of GDP per capita in Nordic regions 1999-2003 13 Figure 1.5 Dispersion of regional GDP/capita within Nordic countries 1997-2004 13 Figure 1.6 Regional GDP per employed person 2003 14 Figure 1.7 Change of GDP per employed person in Nordic regions1999-2003 14 Figure 1.8 Change in employment 1997-2005, index 1997=100 15 Figure 1.9 Real GDP and employment growth in Nordic regions 1999-2003 16 Figure 1.10 Economically active/non-active persons in Nordic & EU/EEA countries 2005 16 Figure 1.11 Employment rate in Nordic and European regions 2005 17 Figure 1.12 Employment change 2001-03 and 2003-04 by city type 18 Figure 1.13 Employment change in Nordic municipalities & regions 2001-03 and 2003-05 19 Figure 1.14 Unemployment rate in Nordic municipalities and regions 2005 21 Figure 1.15 Labour market measure involvement 2004 24 Figure 1.16 Main commuter flows in the Nordic countries 2004 27 Figure 1.17 Travel-to-work distances around Nordic capitals and metropolises 2004 30 Figure 1.18 Population change in Nordic and European regions 2002-05 32 Figure 1.19 Population change in the Nordic countries by urban category 1990-2005 33 Figure 1.20 Domestic net migration in the Nordic countries 2002-05 34 Figure 1.21 Demographic structure of domestic migrants in the Nordic countries 2005 36 Figure 1.22 Population structure by age in the Nordic countries 2005 37 Figure 2.1 Changes in the Danish municipal structure from 1.1.2007 43 Figure 2.2 Municipal mergers in Finland at 1.1.2007 and beyond 47 Figure 2.3 Municipal mergers in Iceland between 2000 and 2007 49 Figure 2.4 Alternative regional divisions in Sweden as proposed by the Ansvarskommittén 53 Figure 2.5 Proposed changes to the municipal structure of the Faroe Islands 55 Figure 2.6 Proposed changes to the municipal structure of Greenland 55 Figure 3.1 Regional state aid in the Nordic countries 2007-2013 70 Figure 3.2 Regional state aid in EU countries 2007-2013 71 Figure 3.3 Regional Development Act & the regional development system in Finland 75 Figure 3.4 Strategic regional planning in Finland 76 Figure 3.5 Planning types at the county level 80 Figure 3.6 Relationship between the national strategy (SE) & EU funding 82 Figure 4.1 Dimensions in Nordic cross-border cooperation programmes 2006 92 Figure 4.2 The thematic concentration of 11 INTERREG 3A programmes 2000-2006 93 Figure 4.3 European territorial cooperation areas in the Nordic countries 2007-2013 94 Figure 5.1 Variation in the geographic extension of Nordic municipalities 2006/2007 99 Figure 5.2 Municipalities’ geographic extension and level of commuting 2004 99 Figure 5.3 The Nordic urban typology 101 Figure A.1 Unemployment rate in Nordic and European regions 2005 142 Figure A.2 Net migration in the Nordic countries 1998-2005 143 Figure A.3 Nordic population by sex and age group 2005 144 Figure A.4 Total age dependency ratio 2006 145 Figure A.5 Young age dependency ratio 2006 146 Figure A.6 Old age dependency ratio 2006 147 Tables Table 1.1 Commuting between administrative centres 2004 28 Table 1.2 Travel to work across municipal boundaries in the Nordic countries 2000-2004 29 Table 2.1 Key features of structural reforms in the Nordic countries 41 Table 2.2 Key responsibilities of the reformed regional & local administrations in Denmark 45 Table 3.1 A summary of the new objectives of the EU Cohesion Policy 2007-13 65 Table 3.2 Structural Funds spending in the Nordic countries 1995-2013 66