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 STYRIA (AT) Prepared by: Christian Hartmann (Joanneum Research, AT) 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 – Styria (AT) Acronyms CIS Community Innovation Survey DG REGIO Directorate General for Regional Policy EAGGF European Agricultural Guidance and Guarantee Fund EC European Commission ERDF European Regional Development Fund ESF European Social Fund EU European Union FDI Foreign Direct Investment FIFG Financial Instrument for Fisheries Guidance GDP Gross Domestic Product GIA Gender Impact Assessment ICT Information and Communication Technology LFS Labour Force Survey NDP National Development Programme NGO Non‐governmental Organisation NTI New Technologies of Information OECD Organisation for Economic Co‐operation and Development PPS Purchasing Power Standard RTDI Research, Technological Development and Innovation R&D Research and Development SME Small and Medium Enterprise SPD Single Programming Document TOR Terms of Reference 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 for the roots of change: socio‐economic history of the region 10 1.3 Regional structural change and globalisation issues in 2000‐2006 12 1.3.1 Dimensions of structural change 12 1.3.2 Understanding the geography of structural change 20 2. Regional policy 2000‐2006: strategy and objectives 23 2.1 Regional policy mix for structural change and globalisation 23 2.2 Overall strategy of the 2000‐2006 Objective 2 Programme 25 2.3 Selected fields of intervention and measures 27 3. Effects of the selected ERDF measures on the process of structural change and adaptation to globalisation 33 3.1 Assessment of the structural and socio‐economic effects 33 3.1.1 Performance of selected measures 33 3.1.2 Contribution of selected measures to structural change and globalisation 40 3.2 Assessment of the effects on institutional capacity and policy learning 53 4. Conclusions: key findings and main message 55 5. Annexes 59 5.1 Statistical tables 59 5.2 List of references 65 5.3 List of persons interviewed 67 III Case Study – Styria (AT) List of tables Table 1.1 ‐ Regional performance in comparative perspective (NUTS2) ‐Basic data, population 1995, 2000 and 2006 8 Table 1.2 ‐ Employment by sector on NUTS21 level in comparison to Austria and EU15, 2000 and 2006 8 Table 1.3 ‐ Regional performance in comparative perspective (NUTS2) 9 Table 1.4 ‐ Regional specialisation, Employment by sector (NUTS2) 13 Table 1.5 ‐ Regional specialisation, Gross Value Added by broad economic sectors (NUTS2) 14 Table 1.6 ‐ Innovation potential (NUTS2) 18 Table 1.7 ‐ Innovation potential (NUTS2) 19 Table 1.8 ‐ Geography of structural change (NUTS3) 21 Table 1.9 ‐ Overview on Clusters within Styria 22 Table 2.1 ‐ Synoptic view of the Objective 2 Programme 26 Table 2.2 ‐ Measures relevant to structural change and globalisation: main features 30 Table 3.1 ‐ Measure 1.1 ‐ Comparison of selected planned and realised financial and material indicators (initial planning until 2005) 34 Table 3.2 ‐ Measure 1.1 ‐ Comparison of selected planned and realised material and socioeconomic indicators (initial planning until 2005) 34 Table 3.3 ‐ Measure 1.3 ‐ Comparison of selected planned and realised financial and material indicators (initial planning until 2006) 35 Table 3.4 ‐ Measure 1.3 ‐ Comparison of selected planned and realised financial and material indicators (initial planning until 2006) 36 Table 3.5 ‐ Measure 2.1 ‐ Comparison of selected planned and realised financial and material indicators (initial planning until 2005) 37 Table 3.6 ‐ Measure 2.1 ‐ Comparison of selected planned and realised financial and material indicators (initial planning until 2005) 37 Table 3.7 ‐ Measure 2.2 ‐ Comparison of selected planned and realised financial and material indicators (initial planning until 2005) 38 Table 3.8 ‐ Measure 2.2 ‐ Comparison of selected planned and realised financial and material indicators (initial planning until 2005) 39 Table 3.9 ‐ Measure 1.3 ‐ Allocation of projects 43 Table 3.10 – Allocation the costs in Measure 1.3 according to NACE sectors (%) 44 Table 5.1 ‐ Taxonomy of objective 2 eligible areas (NUTS3) 59 IV Work Package 4: “Structural Change and Globalisation” Table 5.2 ‐ Regional performance in comparative perspective (NUTS2) ‐Basic data 59 Table 5.3 ‐ Socio‐economic change and human capital (NUTS2) 60 Table 5.4 ‐ Regional specialisation (NUTS1) 61 Table 5.5 ‐ Innovation potential (NUTS2) 62 Table 5.6 ‐ Geography of structural change (NUTS3) 62 Table 5.7 ‐ Geography of structural change (NUTS3) 63 Table 5.8 ‐ Geography of structural change (NUTS3) 64 V Case Study – Styria (AT) List of figures Figure 1.1 – Structural Funds: eligible areas in Styria 2000‐2006 7 Figure 1.2 – GRP per capita at current prices, changes between 1995‐2005 9 Figure 1.3 ‐ GVA, produced by the manufacturing sector in Styria in 2004 14 Figure 1.4 ‐ Distribution of product and process development by company size in Styria 1998‐2000 16 Figure 1.5 – Distribution of companies by NACE sectors (%) in the eligible areas of Styria 2000‐2006 17 Figure 1.6 ‐ Distribution of the Innovation potential by size of firms between 1998‐2000 (NUTS2 Styria) 19 Figure 3.1 ‐ Location of impulse centres supported by ERDF according to the technology focus in Styria 47 VI Work Package 4: “Structural Change and Globalisation” Styria case study Executive summary Scope and research methods This report has been prepared in the framework of the ex post evaluation of cohesion policy programmes 2000‐2006 co‐financed by the European Regional Development Fund (Objectives 1 and 2). It is part of the Work Package 4: Structural Change and Globalisation. This case study focuses on analysing the results and outcomes of a set of specific measures of the ERDF 2000‐ 2006 Objective 2 programme implemented in the Styria region and considered particularly relevant in the context of structural change and adaptation to globalisation: Measure 1.1 was intended to broaden the industrial base and to build new regional sectoral strengths by attracting highly innovative firms to the region; Measure 1.3 aimed at strengthening the competences of existing and new start‐up SMEs; Measure 2.1 intended to improve the production system by the promotion of networking; Measure 2.2 aimed to increase the innovation potential in the region, by supporting technology transfer, diffusion of scientific, technological and industrial knowledge and/or the commercialisation of regional research activities. The study is based on various information sources: an in‐depth analysis of available documents (programming documents, programme complement, annual implementation reports, mid‐term and final evaluations, regional studies); monitoring data of the programme; on‐site interviews with regional authorities, representatives of the state bodies in the region and with final beneficiaries of the specific measures under review, including companies; as well as data from the Austrian statistical office (STATAT) and Eurostat. Key research question and hypothesis tested in the case study The main research question addressed by this case study is the extent to which regional policy measures, co‐ financed by the ERDF (European Regional Development Fund), supporting structural change and adaptation to globalisation1 have helped on the one hand to foster the sectoral diversity in more technology oriented niches and on the other hand to increase industry science cooperations in the eligible areas of Styria (Austria). In particular, did the ERDF support lead to a sound development of the automotive industry as promising new sector allowing Styria to catch up in regional economic growth and employment? Given the emphasis of the programming document, the case study focuses on three specific types of measures that have been supported: attraction of new firms to the region, the modernisation of enterprises, innovative new business parks and the promotion of collaborative R&D projects. 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 region, and in doing so tests three of the working hypotheses proposed in the conceptual model developed by the study. Firstly regional specialisation is 1 By measures “supporting structural change and enabling adaptation to globalisation”, the study refers to public intervention to promote the reallocation of resources (labour and capital) towards more efficient ends, either directly (e.g., promoting start ups, or favouring SMEs’ technological intake) and/or indirectly, by minimising possible adverse effects of structural change. 1 Case Study – Styria (AT) addressed: The spatial concentration of economic activities and possible externalities of agglomeration have to be taken into account in this regard.