Research on Regional Competitiveness

ZAGREB, 7 July 2014 – The National Competitiveness Council has presented for the third consecutive year the results of research for the “Regional Competitiveness Index of Croatia, 2013” (RIK 2013). The Regional Competitiveness Index is a continuation of the measuring of the competitiveness of Croatia’s counties that began in 2007. It provides an exhaustive and high-quality basis for the continued monitoring of Croatia’s regional competitiveness in terms of the quality factors upon which the attractiveness of a particular region for business and life depends. It entails research that provides a clear picture of the strengths and weaknesses of Croatia’s 21 counties and makes recommendations to strengthen competitiveness at the local level. The Regional Competitiveness Index can be a good “investment” guide, but it also is a stimulus to many institutions, especially in education, to participate in the improvement of individual factors that affect the productivity of local economies and/or the public sector in a specific region.

Changes have occurred in the competitiveness profiles of individual counties, but the least competitive counties have remained the same and the most competitive ones have retained their previous position. The City of Zagreb, Varaždin, Istria, Međimurje and Primorsko-Goranska Counties occupy the first five places according to the Regional Index of Overall Competitiveness. Compared to the previous research on regional competitiveness, Zagreb County has slipped five places to seventh position, with Primorsko-Goranska County taking its place. Varaždin County and the City of Zagreb have switched positions from 2010. At the bottom of the rankings are Požeško-Slavonska, Vukovarsko-Srijemska, Sisačko-Moslavačka and Virovitičko-Podravska Counties, which suffered the greatest consequences from the war.

“The findings of this research confirm that changes in the counties have not been fast enough, so that there has been no visible improvement in their competitiveness. All of the counties have a right to equal uniform development; the strengthening of competitiveness in the counties will translate into a growth in national competitiveness. This can be achieved only with everyone’s cooperation through the use of local advantages and resources, the stimulation of potential sources and the removal of obstacles to growth. In this effort the cooperation between the educational and research systems and the business sector will play a key role because without giving people competencies in pro-activeness and innovativeness, which will help them to recognize opportunities and transform them into a competitive venture on the global market we will continue to be faced with the most dangerous problem for any country, and that is high, long-term unemployment, especially unemployment among the young,” emphasized Ivica Mudrinić, President of the National Competitiveness Council.

A comparison of RIK 2013 with the results of the research carried out in 2007 demonstrate how the strengthening of competitiveness of the counties required a long-term strategy of regional development, consistent policies and programs, timeliness and cooperation in implementation, and a continuous monitoring of results. The long period of time necessary for these processes to close the competitive and development gap requires an understanding of the importance of consistency, timeliness, synchronization, of the implementation of various policies, programs and instruments, and the need for cooperation among all who participate in these processes.

Based on an analysis of competitiveness at the county level in 2013 and an analysis of the priorities and recommendations from 2007 and 2010, the majority of the priorities and recommendations still have not been realized and it is necessary to make them reality and to begin to:

1. Develop monitoring tools that should be based on the three-year research of regional competitiveness index and work on the strengthening of local ability to participate in the management of development.
2. Strengthen leadership capacity for building up regional competitiveness through the Quadruple Helix concept of cooperation of the business sector, local administration, the academic community, and civil society in resolving regional development problems and strengthening regional competitiveness.
3. Strengthen operational capacities for using EU financial instruments that stimulate regional development.
4. Analyze the effectiveness of the territorial divisions of Croatia and aim to optimize territorial organization so that the administrative and financial capacity in all levels of organization and with all participants in the regional development process can be achieved.
5. Intensify the communication that has been opened with government ministries for the purpose of strengthening the consistency of government policies in removing the gap between counties (NUTS 3).
6. Develop regions of knowledge. Regions (linking of counties) must put knowledge in the focus of their activities and manage them carefully.
7. Use financial and non-financial instruments to restructure economic structures in the regions and counties.
8. Strengthen the entrepreneurial capacities of the regions and counties.
9. Strengthening investment in the regions and counties.
10. Strengthen regional infrastructure capacities.
11. Raise the quality of life in the counties.

A panel discussion, “How to raise the competitiveness of the counties in Croatia,” was held at the meeting. It considered concrete measures for increasing the competitiveness of counties in Croatia and the opportunities for using resources from EU funds for regional development.

The research was carries out according to the methodology of the World Economic Forum (WEF) and Institute for Management Development (IMD). The measuring and ranking of regional competitiveness was based on analyses of quantitative and qualitative data on the business sector (enterprises) and the business environment. The statistical sub-index was comprised of eight pillars of competitiveness and the perception index was made up of nine pillars.

Statistical sub-index
1. Demographics, health and culture
2. Education
3. Basic infrastructure and public sector
4. Business infrastructure
5. Investment and entrepreneurial dynamic
6. Development of entrepreneurship
7. Economic results – level
8. Economic results – dynamic

Perception sub-index
1. Location advantages
2. Local administration
3. Infrastructure
4. Rights of government
5. Education
6. Financial market and local competition
7. Technology and innovation
8. Clusters
9. Marketing i management