News
Restructuring - the Role of Dynamic Regions!
January 2007
On 4 and 5 December 2006 the Restructuring Forum met in
Brussels, uniting around 400 regional and local leaders, social partners,
national representatives and senior European Union (EU) officials in a
discussion on how Europe's regions can make best use of EU funding to adapt to
economic change. Under the working title "How dynamic regions face
restructuring and the role of the European Social Fund and other Structural
Funds", this third meeting of the Forum looked in particular at
restructuring from a territorial perspective and the crucial role played by the
European Social Fund (ESF) and European Regional Development Fund (ERDF) in
supporting these developments.
Clearly, given its focus, the meeting presented an exciting
and unique opportunity to disseminate the results of EQUAL - indeed, an
opportunity that could not be missed! In the weeks and months leading up to the
Forum event, the EQUAL Unit of DG Employment, Social Affairs and Equal
Opportunities collaborated with colleagues in the ESF Article 6 Innovative
Measures Unit and the European thematic experts for Adaptability, to research
and publish a document on the restructuring-related achievements of EQUAL and
ESF Article 6. This document, entitled "Innovative and Socially Responsible
Restructuring", was one of the headline papers at the Forum meeting, backed up
by attendance of a range of EQUAL and Article 6 actors on the day!!
Please read on to find out what was discussed and debated in the
Restructuring Forum...
So where has the Restructuring Forum come from?
The Restructuring Forum was launched in June 2005 by the
European Commission as a high-level group of actors and stakeholders working in
the areas of change anticipation and management. The Forum's overall mission was
– and continues to be - to provide an EU-wide framework for gathering
information on restructuring by keeping in regular touch with the organisations
already working with this issue, as well as monitoring ongoing changes, and
ultimately ensuring that the various EU initiatives dealing with restructuring
are properly dovetailed.
Carrying on this mission, the third Restructuring Forum
meeting helped to emphasise the social and financial benefits of anticipating
change, and outlined the tools and practical examples of this being done in the
EU with the help of its financial and policy instruments. "Corporate
restructuring has serious impacts in economic, social and human terms. But with
the right policies, anticipation and support, regions can manage economic change
and turn it to their advantage," said Vladimír Špidla, EU Commissioner for
Employment, Social Affairs and Equal Opportunities: "By making use of good
practices from the past this Forum is helping regions focus on the future.
Funding available under the Structural Funds for the next seven years is
equivalent to the post-war Marshall Plan. It's now up to Member States to
translate this into projects on the ground."
Restructuring: the EU's initiatives and instruments
In terms of the EU's initiatives and instruments, the
Restructuring Forum meeting provided a good chance to 'take stock' of what's out
there and possible for restructuring stakeholders. Not surprisingly, the new
European Globalisation Adjustment Fund (EGF) formed an important part of this
significant discussion.
European Globalisation Adjustment Fund
The fund will have the potential to provide €500 million each year
to address the negative consequences of globalisation on workers who have been
made redundant due to changes in world trade patterns. Mr Jean-Louis Cottigny,
Member of the European Parliament (MEP), reminded everyone that the European
Parliament would have the final vote on the EGF during December. In his view,
this Fund serves as an essential instrument insofar as it shows European workers
that the EU can work directly for them. Financial assistance from the EGF is
available from January 2007.
European Regional Development Fund and European Social
Fund
Mrs Natalija Kazlauskiene, Director at Directorate-General
(DG) Regional Policy (DG REGIO) raised, amongst others, two issues concerning
the ERDF – delocalisation and the importance of National Development Plans. She
said that delocalisation cases like Rover (18.000 people made redundant in the
UK) and VW (4.000 in Belgium) have to be supported by the ERDF (and the European
Social Fund (ESF)). Mrs Kazlauskiene emphasised that delocalisation is a natural
process. However, the use of ERDF resources in supporting this process and in
alleviating its consequences have to be meticulously monitored. Mrs Kazlauskiene
also underlined the importance of bringing together regions to share their
experience in restructuring. In addition, she mentioned the possibility of the
reviewing of National Development Plans in order to receive more support for
restructuring activities in the regions[1].
Mr Xavier Prats Monne, Director at DG Employment, Social
Affairs and Equal Opportunities (DG EMPL) pointed out that the EU's financial
and policy instruments have never before been so complementary – the European
Employment Guidelines fit into the Lisbon Agenda and are supported by the Funds.
"Ageing population, stagnating growth, low employment rates are nothing new,"
he said: "the ESF is already addressing all these issues." However, the
ESF has also become more specific on issues relating to the anticipation and
management of change – these are identified as priorities in the new ESF
Regulation 2007 – 2013 (Article 3.1). According to Mr Prats, ESF support will
focus on three large areas: training for individuals, strengthening companies
and networks, and support to systems of change management. Specific attention
will be devoted to the plans and solutions addressing the issues of an aging
population, the diminishing number of young people and scarce labour through
proactive approaches and activities based on partnership.
Interaction!
An important part of the Restructuring Forum's discussion
took place during four Interactive Sessions. The first one focused on
instruments, the second on re-conversion strategies and coordination, while the
third and the forth discussed partnerships and Small and Medium-Sized
Enterprises (SMEs) respectively.
The first interactive session set out to discuss the
instruments, mechanisms and structures (regional labour market observatories,
experts' networks, reconversion cells, training of "change managers", etc.), as
well as effective interventions (anticipation, target training, aid to
individuals, promoting entrepreneurship, etc.) for better managing
restructuring. The discussion was based on the presentation of regional
restructuring cases from Italy, Ireland and Greece, all supported by the ESF.
All of the regions discussed had undergone profound structural changes in the
past and had managed to implement measures that had allowed them to remain
competitive in the global market.
Some 8.000 workers lost employment due to the decline of
traditional industries in Umbria Region (Italy). To address this problem, a
partnership was created between regional authorities and the social partners to
develop a long-term recovery strategy for the region. This plan included three
broad components: restructuring plans for the main industries, diversification
of these sectors/services and educational measures. The implementation of this
plan was supported by ESF and regional funds, which co-financed scholarships for
young researchers, training in adaptability, development of tourism, creation of
new services and new employment fields, as well as innovation and SME support in
the region. Five examples of restructuring programmes in Ireland showed how ESF
co-financing allowed for the anticipation of change in the declining industries
though the development of new occupations, skills and training programmes,
investing in future technology fields, creation of public employment centre to
help redundant workers training and advice to improve management practices and
provision of training to low-skilled workers in order to re-skill or up-skill
them. By comparing two regions with different entrepreneurial attitudes, the
Greek example clearly demonstrated that restructuring comes easier and smoother
in regions with high levels of entrepreneurship. The discussion also evoked the
roles and responsibilities of the regional authorities and entrepreneurs alike
in the restructuring processes - public actors should create a framework for the
management of change and the private actors should be in a position and have the
right attitudes to act on it.
In the second session the example of Spain was presented,
where traditional industries like shoe-making survive in the conditions of
global competition. They do so because of the institutional coordination in
creating the critical mass that allows the sector to evolve from manufacturing
to the knowledge-based industry characterised by innovation, brand and product
positioning. The session also underlined the importance of regional
observatories in anticipating change. Observatories can help with regional
profiling and building a strategy in specialised fields.
A German example of restructuring in the Bio-technology
sector illustrated the ideas presented in the third interactive session. This
project united three German Federal States in the creation of a cluster of 20
companies and a research centre to create a win-win situation for everyone. The
focus of the partnership was on commercialisation and promotion/valorisation of
the regional centres of competence. The initiative put the 'product' as the
basis of its economic success and ensured a sustainable financing of all the
actors in the supply chain. It illustrated once more that public financing is
not a prerequisite for a successful project. What companies need is a framework
to generate profit (70 per cent of the funding for the project was private and
30 per cent public). The main challenge for the project was to prove the
benefits of partnership working versus working alone. It showed that it is
easier to compete as a partnership because the partners can draw heavily on the
various strengths of the actors involved.
The fourth interactive session stressed the role of
territories as indispensable layers for the promotion of competitiveness and
innovation. It introduced the different measures regions have put in place to
address the issue of restructuring. What was common to all the examples was the
choice of these regions to continue to invest in promoting industry, instead of
channelling the investment to the more "promising" service sectors. Wallonia
(Belgium) and Basque region (Spain) have both continued to invest in the
industry, creation of industrial poles, technical education, research,
specialisation and industry clusters. The regions have used the bottom-up
approach of
asking actors involved to be active and creative in order to bring
about new employment profiles. The Participatory scheme was used not only in the
design of industrial development plans but also in ensuring their governance.
This approach has helped the regions to ensure international visibility and in
attracting Direct Foreign Investment (DFI). The Spanish and Belgian measures
have ensured the economic survival of traditional industries and created new
jobs.
A few concrete examples
The second day of the Forum began with the projection of
the film "Where you're going", which told the story of the Eurofoil aluminium
factory closure in Liège from the point of view of the workers. This really
interesting example is presented in a
separate document.
The second day also saw the presentation by Mr Frédéric
Bruggeman, the International Coordinator of MIRE project funded under the ESF
Article 6 innovative measures. This project is notable for its efforts to
produce a generic model for guiding the restructuring process. Mr Bruggeman gave
some points of reference for managing the restructuring in the regions:
- Participation and representation - all of the relevant territorial
actors must be present in the process of restructuring. If certain actors are
not represented during the restructuring process, their interests are not taken
into account and this may pose obstacles to the restructuring process and its
perceived success. These regional actors have to be flexible and willing to take
up new roles in the management of restructuring,
- Negotiation between actors (not merely a consultation) is a tool
for driving the monitoring restructuring. Whatever the device created to manage
the restructuring process, if it triggers negotiation, then it is a useful
(good) device. Negotiation, however, has to be targeted at goals that do not
damage society as a whole.
- Anticipation – territorial measures and instruments (like
development strategies, observatories, employment centres, etc), once
established, help to better manage each following restructuring case. On the
individual level, although it is not possible to train people for restructuring,
but we can foster the experiences of what is useful when restructuring occurs.
- Employability, achieved by training and validation of the
experience derived from work (validation of work-derived experience, is the
term), promoting employability of workers by training (top-down measures) and
validation of skills and experience (bottom-up approach).
- Evaluation is the final issue to be addressed in the context of
restructuring. So far, there has been no global approach to the long-term
evaluation of restructuring processes. And if evaluation is undertaken at all,
it is seldom made public. Restructuring processes are often rushed, painful and
charged with sensitive issues, so they tend to be always perceived negatively.
These factors also contribute to the fact that so little evaluation of the
restructuring has been produced so far, but without such evaluations there is no
way of saying what were the successful the processes and practices. Thus, there
is also no way of focusing on the problem solving approach.
Conclusions and a spotlight for EQUAL!
One of the final highlights of the Restructuring Forum was
the promotion of the "EQUAL and ESF Article 6: Innovative and Social
Responsible Restructuring" paper. This document made the most of EQUAL and ESF Article 6's
'special features', namely partnership-working, transnational collaboration and
innovation, for the more proactive management of change and/or for alleviating
the negative consequences of restructuring. Moreover, it gave a series of highly
relevant policy recommendations and practical solutions developed and backed up
by more than 30 partnerships. Overall, the paper provided an important
spotlight for EQUAL in the critically important restructuring debate!
In terms of overall conclusions, the participants of the
meeting seemed to agree that the pace of change is accelerating and that the
only way to keep up with this is to perceive it as a dynamic process that needs
constant monitoring and adjustment. In the words of the Commission
Vice-President, Günter Verheugen, responsible for enterprise and industrial
policy:
"Structural changes, which have always accompanied the
development of our economies, have recently accelerated. Rather than trying to
oppose them, we need to design policies to help businesses, workers and
consumers to foresee the changes, adapt more quickly to them and fully seize new
opportunities. I am happy to see the EU regional policy moving in this direction
and becoming an important instrument of the Growth and Jobs Strategy."
EQUAL and ESF Article 6: Innovative and Social Responsible Restructuring 
(full version), 
(summary)
All the documents concerning this forum 
About the film "Where you're going"
[1]
After the review of National Development Plans extra money can be
allocated to difficult restructuring cases though two Regional
instruments: JESSICA and JEREMY.
