European regions need to see skills and innovation as strategical issues

“The twelve pilot members have up to one year to underpin post-2020 policies and programmes in the UE”

At the “Regions in Industrial Transition” conference that took place in Brussels the 8th of May, experts from the UE and the OECD as well as political authorities presented their views on industrial transition in the UE. Since 2018 ten regions (Hauts-de-France, Centre Val de Loire, Grand-Est, Greater Manchester, Norra Mellansverige, Piemonte, Saxony, Wallonia, Cantabria and East-North Finland) and two small member states (Lithuania and Slovenia) have taken part in the pilot action on Regions in Industrial Transition. This project has been launched in a time when Europeans demand more measures against climate change and more initiatives to reduce unemployment, a phenomenon that is linked to the decline of traditional industries. European Commission things that by increasing digitalization and that by moving to a circular economy this problem can be partially solved. However, funding by its own cannot suffice to help regions engage in industrial transition. That is why a project based on cohesion has been launched.

With a starting grant of 300,000 euros each member is working at this moment for the industrial transition. Regional authorities consider that the most important aspect of being elected for this project is the opportunity to ask themselves if they should work in cooperation with Europe. While the benefits of global industrialization are widely spread, the costs are often localized. That is why cooperation represents a turning point. Thanks to cohesion regions can share now strategies and have an overall image of themselves. Moreover working along with other regions is essential to ensuring that all of Europe meets the challenges of industrial transition.

However Regions in Industrial Transition is not just about cohesion. Cooperation is essential for a collaborative, open and inclusive policy, but actually the pilot project represents a much wider concept. It is about how to adapt our industry to the challenges of the 21st century such as globalization, sustainability, new technologies and the transition to a climate neutral, circular economy.

Emilia-Romagna: a smart strategy model

In the words of Marc Lemaître, Director General DG-REGIO, the EU have started to deal with these issues, but more effort is needed on the part of regional authorities. “When we tell regions that they should put more money on strategy, they say to us that they have other needs”, he said. However the case of Emilia-Romagna (Italy) brings hope. On 7 August 2007, the European Commission approved an Operational Programme for this region for the period 2007-2013 with a total budget of some €347 million. This Operational Programme comes under the “Regional Competitiveness and Employment” objective and is the model of a smart strategy.

During 2017, employment in Emilia-Romagna grew thanks to innovation and human capital enhancement. Nowadays in gender terms, 75.2 % of working-age males and 62.1 % of females are in work. This is quite a high rate by comparison with both the Italian and the EU average, and brings to light a very dynamic industry in which exports are growing pretty fast. Skills are at the base of the Emilia-Romagna’s industrial policy and innovation is the result of the creativity and skills of the individuals that live in this region. According to European authorities, if the twelve members of “Regions in Industrial Transition” are to success they should follow the example of Emilia-Romagna.

More than ever innovation in the UE is needed. Artificial intelligence, batteries and cybersecurity are, according to experts, some of the many strategic and future oriented business sectors where raising Europe’s competitive advantage can produce growth across industry and regions. Skills are also essential for Europe in a time when labor market is experiencing a revolution. The employment share in manufacturing has already grown mostly in Eastern European regions while declined for the majority of Western European regions, and it is foreseen that by 2030 the majority of jobs will require medium or high qualification skills. If this phenomenon is no resolved in time, a gap in the labor market will come out.

Current strategies

Concerning innovation and skills there are two current strategies that stand out: the East North Finland’s and the Centre-Val de Loire (France)’s strategies. The main goal of the first region is sustainability innovation. The industries of the ENF region are strongly focused on the utilization of natural resources. For this reason, the maintenance of sustainable development is of vital importance for the future of the industries. Via a cross-regional voucher system, authorities want local firms to be able to acquire services in order to boost their innovations capacities and strengthen their role in the agro-forestry sector.

On the other hand, nearly 43% of Val-de-Loire’s companies report difficulties to recruit. It represents the highest rate in a country where 200,000 vacant positions were not filled in 2017. This phenomenon affects especially small companies that cannot afford a HR department and whose knowledge about recruitment is scarce. That is why this pilot region aims to work directly with SMEs (small medium-sized firms) to define their recruitment needs, provide coaching and support human resource strategies. Furthermore, entrepreneurs from Val-de-Loire cannot always recruit because the profile they are seeking does not exist in the area. According to the French agency Pôle Emploi engineers and computer technicians will be the most in-demand jobs. In this sense, the pilot project in this French region is also oriented towards promising jobs.

One-year deadline

Along with East North Finland and Centre-Val de Loire, ten pilot members have up to one year to test their new approaches to industrial transition and to provide the European Commission with evidence to underpin post-2020 policies and programmes. Cohesion Policy 2021-2027 will allow member states and regions to achieve industrial transition in a comprehensive and flexible way, with special attention to smart specialization strategies, energy, climate and environment. In this regard pilot members have the final say. They can follow EU’s instruction, which is investing in innovation and skills, or remain unchanged. Regardless of their choice, time is running out and the call for a sustainable industry and more labor opportunities will increase among Europeans. 

Miguel Durán Díaz-Tejeiro, young journalist participating in the Youth4Regions programme