Catching up regions

The mandate of cohesion policy is to reduce disparities between Member States and regions. To this extent, around €454 billion of European Structural and Investment Funds have been allocated to help EU regions become more competitive in the 2014–2020 period. However, not all EU regions have been able to take fully advantage of the benefits due to the effects of the 2008 economic crisis, the COVID-19 pandemic and the different structural problems.

In 2015, the Commission launched the Catching-up Initiative (CuRI, also known as the Lagging Regions Initiative) to examine the factors that hold back growth in catching up regions. The initiative was part of the broader action to help Member States and regions improve the way they invest and manage cohesion funds.

Two types of lagging regions have been identified in the EU:

  • Low-growth regions, which cover the less developed and transition regions that did not converge to the EU average between the years 2000 and 2013 in Member States with a GDP per capita (PPS) below the EU average in 2013. This group covers almost all the less developed and transition regions in Greece, Italy, Spain and Portugal.
  • Low-income regions, which cover all the regions with a GDP per capita (PPS) below 50% of the EU average in 2013. This group covers the less developed regions of Bulgaria, Hungary, Poland and Romania

The analytical report ‘Economic Challenges of Lagging Regions’, published jointly with the World Bank in 2017, studied 47 regions in eight Member States and analysed the tools available within the framework of EU cohesion policy to revive or sustain their long-term growth and competitiveness. It also showed that regionally differentiated investments and policy responses are required should these regions be able to move to the next level of development.

The report has paved the way to a number of pilot projects, first in Poland and Romania and afterwards in Croatia and Slovakia. Some of these projects supported long-term actions aimed at reforming concrete policy areas while the others focused on ‘lighter’ interventions to address the key implementation bottlenecks, e.g. operationalisation of support conditions under cohesion policy. lagging_regions

Overview of all implemented and ongoing CuRIs


MS

Territorial scope

Timeline

Thematic scope

PL

Four phases focused on different regions, i.e., Podkarpackie, Swietokrzyskie, Lubelskie, Śląskie, Małopolskie, Kujawsko-Pomorskie and Zachodniopomorskie. Some national measures were included in the fourth phase.

2016 – 2021
(continuation of some measures under OPs)

Financial instruments, business services in SMEs, vocational education and training (VET), technology transfer mechanisms, master plans for integrated spatial planning, energy efficiency in single family houses (national level), demand-driven transport

RO 

Two phases in North East and North West  

2016 – 2021
(continuation of some measures under OPs)

Technology transfer polices and instruments, smart specialisation processes, strategies and governance

SK

Three phases focused on different regions:: Prešov, Banská Bystrica and Kosice

2018 – 2021
(continuation of some measures under OPs)

Tourism development (infrastructure in remote areas), energy efficiency in public buildings, public transport digitalisation, geo-spatial open data, vocational training

HR

The Pannonian NUTS2 region (8 counties)

2018-2022 (World Bank’s Reimbursable Advisory Service)

Defining the Plan for Industrial Transition  Pannonian Croatia for 2021 – 27 in 5 key sectors: ICT, food production and processing, wood processing, tourism and metal working and 3 horizontal strategic projects.

The initiative has proved to be of value added in improving the implementation of cohesion policy, particularly in the following areas:  

  • developing or perfecting the existing project pipeline and proposing novel instruments or problem-solving methods for project implementation, investment prioritisation and administrative procedures;
  • operationalising cohesion policy support conditions;
  • increasing administrative capacity of national, regional and local authorities;
  • tackling structural issues identified within the European Semester process;
  • proposing a new model of cooperation between national, regional and local authorities.

Key success factors:

  • Political commitment and buy-in on political leaders

The close involvement of political leaders has been key for mainstreaming results into programmes.

  • Practical approach

The CuRI aimed to translate cohesion policy objectives into strategic projects. Assistance was tailored to the needs of each participating country or region, complementing existing strategies and programmes. It also aimed to respond to policy recommendations under the European Semester.

  • Capacity building as key component

Experts did not replace, but they guided the beneficiaries. For some local administration, the CuRI was also the first opportunity to benefit from EU-funded assistance and first-class advisory services of the World Bank.

  • Effective ‘granular’ approach

‘Granularity’ means solving concrete problems, e.g. selection criteria for vocational education projects (VET) in Poland that focused too narrowly on school equipment or methodology for calculating 20% of commercial revenues from the use of publicly funded R&D equipment.

  • New models of cooperation

The CuRI delivered a unique collaborative working environment where government agencies, regional and local authorities, the Commission and international financing institutions could share their strategic and operational expertise across organisational and territorial boundaries.

  • CuRI as a policy lab

The CuRI also allowed for policy experimentation by propelling and testing new policy approaches.

Examples of projects

Research commercialisation in Romania

Romanian higher education institutions and public research organisations often struggle to bring innovation to the marketplace. Through the CuRI, efforts were made to build capacity for technology transfer and improve the technology readiness level of R&D projects in these organisations. For example, legal issues concerning intellectual property were clarified. Application of state-aid regulations was also in the spotlight in relation to using public research infrastructure for commercial purposes. Training sessions organised with research teams from the first two CuRI regions (Northeast and Northwest) identified project applications with commercial potential. An additional EUR 10 million from the Regional Programme were allocated for a national rollout of a programme supporting innovative SMEs to test and improve the commercial viability of their ideas.


Enhancing business support under regional cohesion policy programmes in Poland

The objective of the Enterprise Competitiveness Scheme (ECS) implemented in two Polish regions was to respond better to SMEs’ needs through demand-based vouchers. Specific obstacles to growth for SMEs included a weak access to financing, bureaucratic enterprise support schemes with high entry-level barriers and insufficient strategic buisness knowledge amongst managers. Subsequently, local SMEs were unable to differentiate their products from mass-market offerings and effectively compete with other companies on domestic or European markets. 
The ECS envisages support to three types of services based on the market needs – operational (basic services etc), strategic (aimed at changing firms’ orientation, developing new products, or entering new markets and group services (facilitating collective buisness ventures). The scheme offers faster application procedures compared to traditional grant programmes along with the effective quality assurance mechanism. The independent advisor helps SMEs diagnose their needs.

 

World Bank’s Reimbursable Service in Croatia

The initiative focuses on industrial transition in the selected counties (preparation of the so-called Plan for Industrial Transition of Pannonian Croatia – ‘PIT Pannonia’). The PIT aims to increase economic competitiveness of the region through a portfolio of strategic projects for five industries: agrifood, wood processing, machinery and metal processing, ICT/tech and tourism. 
The Ministry of Regional Development and EU Funds will use the pilot PIT as a model for similar Plans for Industrial Transition of two other regions in Croatia - North Croatia and Adriatic Croatia (to be financed through the Integrated Territorial Program 2021-2027).

 

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