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2. Performance of countries depends on all its regions

This spring, the European Commission published the Regional Competitiveness Index (RCI 2.0), a fully revised version of a now long-established tool that measures different competitiveness dimensions for all EU regions. The index was published for the first time in 2010 and since then it has been widely used in academia and in guiding regional EU investments. The index also offers the regional picture as part of the European Semester country reports, the EU’s policy coordination framework for a robust and future-proof economy.

date:  29/04/2022

The results show how EU regions still need EU support to improve their competitiveness and narrow gaps between them.

Capital city regions are the most competitive in all EU countries except in Germany, Italy and the Netherlands. The gap with the other regions can be wide and is particularly high in France, Romania and Slovakia.

More competitive countries tend to have a smaller gap between their capital city region and the other regions. “This is a timely reminder that the performance of a country depends on all its regions: no team wins when half the players are still in the dressing room. So we must invest in all regions, adapting the policies to their different needs and assets to help them all fulfil their potential, and to stimulate multiple poles of competitiveness and growth and multiple sources of well paying jobs” said Commissioner Elisa Ferreira at the launch event.

Monitoring performance at regional level helps to see patterns that would otherwise be hidden in national averages. At EU level, there are already a few measures that offer a more granular view in issues like innovation, gender equality, social progress or tourism.

But what are the challenges when it comes to measure performance at sub-national level?

It’s an ambitious undertaking, in which data is by far the greatest challenge. In many cases, data is not available and national sample surveys are usually not representative at regional level.

On top of that, at EU level, the change in the Nomenclature of Units for Territorial Statistics (NUTS) also affects the comparability across different index editions.

Nevertheless, the team behind the Regional Competitiveness Index has found ways to overcome some of these issues. Since many official data are not available at regional level, they also rely on survey data, making sure to have an EU oversample so that it is possible to zoom in into EU regions without losing sample representativeness. To ensure comparability between regions across editions, the team back-calculates previous editions of the index. If there are changes in terms of territorial statistics units, the same value is assigned to regions that have been merged in the meantime or vice-versa. There are only very few cases in which regions remain non-comparable.