Assembly of European Regions @ European Business Summit 2014: The European regions on the path to recovery

Written by Marian-Constantin Vasile, President of AER Committee on ‘Economy and Regional development’

Marian-Constantin, President of Assembly of European Regions’ Committee for ‘Economy and Regional development

The European Union is emerging from a lasting crisis. This longest-ever recession seems to end, while the EU28 GDP grew by 0,2 in the third quarter of 2013. The upturn in business sentiment and confidence indicators suggests that structural reforms, macroeconomic governance improvements and measures in the financial sector have succeeded in stabilising Europe’s economy. Europe is on the right track, but the recovery remains nevertheless modest, with Commission forecasts of 1.4% GDP growth for the EU28 in 2014 and unemployment rates close to 11% for the next two years. That is why fostering growth and competitiveness to sustain and strengthen recovery and to achieve the goals of the Europe 2020 agenda have become the top priority for the Commission and EU Member States.

Growth or even better growth is one of the current buzzwords of our time: the objectives here encompass fostering a positive change in terms of the economic social and territorial cohesion of Europe’s regions, through smart sustainable and inclusive policies leading to the creation of jobs, industrial reforms and overall wealth and prosperity. 

To make these objectives happen, the EU has emphasized a series of crucial reforms to reinvigorate the industrial landscape. This renewed industrial policy will be based on an efficient multi-level governance cooperation framework between European institutions, Member States and regions. It will rely on a combination of strategic European priorities and a bottom-up approach based on smart specialisation strategies at national and regional levels, giving place to the necessary entrepreneurial discovery process.

In this quest for survival, largely framed by the Europe 2020 Strategy, it is the competitiveness of a whole continent that is in the crosshairs. To carry out this new challenge, the contribution of the regions proves to be essential. A key to success will be the implementation of a constructive and positive dialogue between the regions on one hand, and the new Commission and Parliament on the other. Regions are spaces where universities and talents, entrepreneurial spirit, attractive lifestyle and innovative funding schemes can come together. Today, with the focus shifting from the crisis to recovery, regions are more than ever catalysts for innovation, growth and competitiveness. Thus, they can effectively offer demand-driven and supply-stimulated innovative solutions to many of the challenges we are currently facing.

Indeed, globalisation of the world markets has changed the rules of the game for our regions: economies and companies, big and small alike, are operating in a global environment. Globalisation has accelerated the entry of developing economies into global supply chains, which in turn puts a lot of pressure on our ageing societies. Europe’s industrial fabric must find its place in this global context. Supporting the internationalisation of businesses is a key element, where regions can act as a platform for SMEs to meet, share information and innovate together in order to access new markets. The Incubators, the organisation of business delegations and the participation in trade missions can boost SMEs in becoming internationally active.

Regions can also play a large role in promoting entrepreneurship. Entrepreneurs generate 4 million new jobs every year in Europe and regions play a key role in encouraging and promoting economically sound ideas to be turned into business ventures. The fear of failure is one of the main obstacles, and a higher acceptance of failure needs to be fostered across Europe and support systems for a fair second chance need to be available for entrepreneurs. AER recommends a holistic approach better matching the regional needs and ensuring entrepreneurs to get the adequate support. A visible interface between these entrepreneurs and support organisations should be set up to attract the skills. An adapted range of financial instruments and intermediaries that take the diversity of enterprises into account must be available to all, and throughout the whole enterprise’s life cycle. In addition, the funding possibilities should be more accessible. At last, regions must ensure sufficient business infrastructure and facilitate clustering and incubation processes, make use of public procurements for the acquisition of innovative solutions and provide further support for SMEs to internationalise and get access to new markets.

Since the economic crisis, dramatically reduced levels of investment in innovation are a major concern for Europe’s industrial future. The European Commission has put an increasing share of its policy, regulatory and financial levers at the disposal of Member States, regions and industry to foster investment in innovation. But promoting the access to finance of businesses and SMEs must remain a permanent concern. Regions should consider the creation of regional investment funds. They can provide the access to this information and ensure the link with the citizens. Through information sessions on funding and its Training Academy for regional politicians and civil servants, AER has been supporting this information and knowledge chain for several years. 

To ensure the success of these processes, regions must grow and attract talent by identifying their competitive advantage and developing policies that maximise the knowledge-based development potential of their territory. To circulate ideas, stimulate partnerships and generate mutual understanding, a positive environment is crucial. Such conditions can also facilitate exchanges between the major stakeholders to avoid a mismatch between curricula and the market. Creativity, responsibility, risk-taking, problem solving and team-working should be promoted within the education and throughout lifelong learning. Technical and vocational should be valued, as well as specific training for teachers to ensure adequate entrepreneurship education. Finally, international mobility of students and professionals should be supported to foster the creation of international networks and knowledge transfer and the cross-fertilisation of ideas.

Beyond the improvement of policies through concrete proposals and leavers, it is essential that regional actors continue to work together through interregional cooperation. As the official regional partner of the European Business Summit, the Assembly of European Regions demonstrates the importance of taking into account the regional actors and strengthening the dialogue with them, which are the cornerstone of European policy and the effective place where Europe 2020 can meet success. With the objective of promoting economic subsidiarity, the AER session at EBS will bring together a delegation of a hundred regional stakeholders including elected representatives, civil servants and heads of businesses in order to exchange good practices and recommendations on successful branding strategies to become a prime destination for investors, start-ups, entrepreneurs and emerging talent. The discussion between the public and private sectors will allow participants to consider how to build successful policies in order to stimulate and create a competitive business ecosystem capable of accelerating regional growth and bringing about a smart, sustainable and inclusive regional economy. 

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