The benefits of improving regional competitiveness are clear. On average, the EU’s more competitive regions gain significant advantages in economic development and more – such as offering better opportunities for young workers – as shown by the EU’s latest Regional Competitiveness Index (RCI) report.
In more competitive regions on average, GDP per capita is higher, women have better achievement rates and lower rates of unemployment. Recent graduates find such regions more attractive, as it is easier for them to find a job.
“This index is a precious tool for better policymaking,” the Commissioner for Cohesion and Reforms Elisa Ferreira said. “The Regional Competitiveness Index looks beyond the competitiveness of firms at attractive and sustainable living conditions for citizens in Europe’s regions. Because each region is unique, we provide tailor-made support to empower them and help them capitalise on their strengths and assets.”
Around one-third of the EU’s budget is invested in Europe’s regions under cohesion policy funding, which is overseen by the Directorate-General for Regional and Urban Policy (DG REGIO). Most of the investments are for the development of underperforming regions and aim to reduce regional disparities, including in competitiveness.
DG REGIO’s RCI report shows that less developed regions have improved their competitiveness between 2016 and 2022. Improvements were made in some key components of competitiveness, such as a more skilled workforce and better infrastructure. Advances were also made on average in areas more linked with innovation.
Competitiveness in the EU
However, wide gaps in development between regions highlight the need for targeted policy actions and funding for underperformers.
Among the lowest performers are regions of eastern EU countries, followed by those in the south. In eastern and southern EU countries, only some of the regions that host the capital city, or a large city, score above the EU average.
Meanwhile, all regions in Austria, the Benelux, Germany and the three Nordic EU countries score above the average. France and Ireland’s regions show a more mixed experience, with regional competitiveness ratings below and above the EU average.
Among the top 10 most competitive regions, those in the Netherlands lead the pack. Utrecht and Zuid-Holland rank as the two most competitive regions in the EU, followed by the French capital region of Île-de-France. The Netherlands regions of Noord-Brabant, the Amsterdam area, and Gelderland also rank in the top 10 performing EU regions for competitiveness.
Stockholm in Sweden, Hovedstaden in Denmark, and Brussels and Oost-Vlaanderen in Belgium make up the rest.
Those ranked at the bottom of the EU’s average for competitiveness include six regions in Romania, two in Greece and two in Bulgaria.
Gaps in competitiveness are apparent not just across the EU, but also within a country. Capital city regions tend to be the most competitive in a country. The exceptions are Germany, Italy and the Netherlands.
Particularly large gaps in competitiveness between the capital and other regions occur in France, Spain and many eastern EU Member States.
Reducing these regional differences matters for a country’s competitiveness. More competitive countries tend to have a smaller gap between their capital city region and its other regions. They also have smaller differences between all of their regions.
What does the index measure?
Launched in 2010 and published every three years, the index allows the EU’s regions to monitor and assess their development over time and in comparison with other regions. It aims to help identify strengths, weaknesses and investment priorities when shaping development strategies.
The composite index measures competitiveness as the ability of a region to offer an attractive environment for firms and residents to live and work. This definition balances the goals of business success with personal well-being.
It also takes into account current debate that gross domestic product is insufficient by itself in measuring development and should be complemented by a broader range of measures.
The 2022 edition compares the competitiveness of regions based on 68 indicators and provides comparable scores from 2016 and 2019 editions.
DG Regio’s online interactive allows for a detailed analysis and comparison between regions on competitiveness, innovation, governance, transport and digital infrastructure, and measures of health and human capital.
Event launch
The Regional Competitiveness Index 2022 edition was launched on 27 March at the European Committee of the Regions in Brussels). Commissioner Ferreira opened the event, followed by Peter Berkowitz, Director for Policy at DG REGIO, who presented the main results of the 2022 edition.
Panel debates featured regional representatives and policy experts. A recording of the event is available here.
Find out more:
https://ec.europa.eu/regional_policy/information-sources/maps/regional-competitiveness_en
