Are	  EU	  regional	  digital	  strategies	  evidence-­‐based?	  	                 An	  analysis	  of	  the	  alloca8on	 ...
Outline	  •    IntroducFon	  •    Research	  objecFves	  •    Regional	  digital	  strategies	  &	  EU	  Cohesion	  policy...
Introduc4on	  (1/2)	  •  ICT	  diffusion	  foster	  producFvity	  and	  growth	  •  	  “Digital	  Agenda	  for	  Europe”	  ...
Introduc4on	  (2/2)	  •  Regional	  planning	  for	  IS	  must	  be	  guided	  by	     effecFve	  Regional	  “digital	  str...
Research	  objec4ves	  1.  InvesFgate	  the	  existence	  of	  different	  regional	      digital	  strategies	  2.  Verify...
Regional	  digital	  strategies	  &	  	                the	  EU	  Cohesion	  policy	  •  European	  Cohesion	  (or	  Regio...
Regional	  digital	  strategies	  &	  	                  the	  EU	  Cohesion	  policy	  The	  EC	  has	  put	  a	  great	 ...
"                Fig. 5. Structural funds dedicated to Information Society development in 2007-13 period.Source: Own elabo...
Regional	  digital	  strategies	  &	  	                the	  EU	  Cohesion	  policy	                 POLICY	  RECOMMENDATI...
Regional	  digital	  strategies	  &	  	                the	  EU	  Cohesion	  policy	                 POLICY	  RECOMMENDATI...
Data	  &	  methodology	  (1/3)	  •  The	  data	  on	  the	  allocaFon	  of	  EU	  Structural	  Funds	  are	      based	  o...
Data	  &	  methodology	  (2/3)	  A	  two	  step	  procedure	  is	  adopted.	  	  1.  EU	  regions	  classified	  into	  hom...
Data	  &	  methodology	  (3/3)	  Our	  analysis	  is	  limited	  to	  the	  lagging	  regions	  belonging	  to	  the	  CON...
"""""""""""""""""""""""                           Results:	  1st	  step	  –	  PCA+CA	  Fig. 4. Identifying three strategie...
Results:	  2nd	  step	  	  -­‐	  logit	  model	  •  We	  esFmate	  three	  logit	  models	  separately	  for	  each	     c...
Results:	  2nd	  step	  	  -­‐	  logit	  model	  MODEL	  REGRESSORS:	  Eurostat	  variables	  on	  IS	  local	  developmen...
Results:	  2nd	  step	  	  -­‐	  logit	  model	  Table 5Determinants of regional strategies on IS and e-services: Logit re...
Discussion	  (1/3)	  •  Lagging	  Regions	  seek	  to	  further	  improve	  their	     strengths	  rather	  than	  focus	 ...
Discussion	  (2/3)	  1.  Inadequate	  analysis	  of	  local	  context	        •  qualita4ve	  tools	  prevailing	  in	  po...
Discussion	  (3/3)	  2.  Path	  dependence,	  the	  idea	  that	  insFtuFonal	      life	  is	  ooen	  characterized	  by	...
In	  conclusion...	                                      	      EU	  Regions	  need	  to	  rebalance	  most	  of	  their	 ...
Future	  research	                                      	  –  Compare	  the	  allocaFon	  of	  programmed	  resources	    ...
 ..Thank	  you	  for	  your	  aNen(on!	  	               Luigi	  Reggi	         luigi.reggi@tesoro.it	        luigi.reggi@...
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Are EU regional digital strategies evidence-based?

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The ambitious goals of the European “Digital Agenda” need active involvement by regional innovation systems. Effective regional “digital strategies” should be both consistent with the European framework and based on available evidence on the needs and opportunities of local contexts. Such evidence should be used to balance the different components of the Information Society development (e.g. eServices vs. infrastructures; ICT supply and demand), so as to ensure that they can all unleash their full potential. Therefore, EU regions should spend more money to overcome regional weaknesses than to improve existing assets. In this paper we explore the different strategies of the EU’s lagging regions through the analysis of the allocation of 2007-13 Structural Funds. Then, we verify whether such strategies respond to territorial conditions by comparing strategic choices made with the actual characteristics of local contexts. Results show that EU regions tend to invest more resources in those aspects in which they already demonstrate good relative performances. Possible causes of this unbalanced strategic approach are discussed, including the lack of sound analysis of the regional context and the path dependence of policy choices.

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Are EU regional digital strategies evidence-based?

  1. 1.  Are  EU  regional  digital  strategies  evidence-­‐based?     An  analysis  of  the  alloca8on  of  2007-­‐13  Structural  Funds       Luigi  Reggi  and  Sergio  Scicchitano   Ministry  of  Economic  Development,  Department  for  Development  and  Economic  Cohesion,  Italy  *   EIBURS-­‐TAIPS  team,  University  of  Urbino   luigi.reggi@tesoro.it    sergio.scicchitano@tesoro.it     Regional  Innova4on  and  Compe44veness  Policy  Workshop     15  November  2012   UK-­‐Innova4on  Research  Centre  -­‐  University  of  Cambridge   *  The  views  expressed  here  are  those  of  the  authors  and,  in  parFcular,  do  not  necessarily  reflect  those  of  the  Ministry  of  Economic  Development  
  2. 2. Outline  •  IntroducFon  •  Research  objecFves  •  Regional  digital  strategies  &  EU  Cohesion  policy  •  Data  and  methodology  •  Results  •  Discussion  and  Conclusions  
  3. 3. Introduc4on  (1/2)  •  ICT  diffusion  foster  producFvity  and  growth  •   “Digital  Agenda  for  Europe”  >  a  strategic   framework  for  Informa(on  Society  (IS)   development  (2010)  •  A  “sustained  level  of  commitment”  at  the     regional  level  is  required     –  increased  powers  in  the  field  of  InnovaFon  policy   (OECD,  2011)   –  Regional  InnovaFon  Systems     (Cooke  and  Morgan,  1998;  EC,  1998)   –  Within  IS  >  regions  play  an  intermediaFng  role   between  EU  frameworks  and  local  intervenFons   (Ca^aneo,  2004)  
  4. 4. Introduc4on  (2/2)  •  Regional  planning  for  IS  must  be  guided  by   effecFve  Regional  “digital  strategies”,  that   should  be  both:   1.  consistent  with  the  EU  policy  framework   2.  place-­‐based,  i.e.  based  on  available  evidence  on   the  characterisFcs  of  local  contexts  in  terms  of   IS  development  (Barca,  2009;  Tsipouri,  2002)  
  5. 5. Research  objec4ves  1.  InvesFgate  the  existence  of  different  regional   digital  strategies  2.  Verify  whether  such  strategies  respond  to   local  territorial  condiFons  
  6. 6. Regional  digital  strategies  &     the  EU  Cohesion  policy  •  European  Cohesion  (or  Regional)  Policy  offers   an  ideal  opportunity  to  explore  the  key   elements  of  regional  digital  strategies  with  a   quanFtaFve  approach    shared  rules  and  regula(ons  =>     funding  is  allocated  and  classified  through   common  categories  and  definiFons,  and  that   data  on  the  financial  distribuFon  of  resources  is   fully  comparable.    
  7. 7. Regional  digital  strategies  &     the  EU  Cohesion  policy  The  EC  has  put  a  great  emphasis  on  the  need  to  adopt  comprehensive  and  balanced  regional  strategies  for  the  InformaFon  Society  development  •  1994-­‐1999  >     Regional  InformaFon  Society  IniFaFve  (RISI)    •  2000-­‐2006  >  5.5  billion  €  (Vincente  and  Lopez,  2011).    •  2007-­‐2013  >  15.3  billion  €  (Reggi  &  Scicchitano,  2012)  
  8. 8. " Fig. 5. Structural funds dedicated to Information Society development in 2007-13 period.Source: Own elaboration from European Commission - DG for Regional Policy data Source: Own elaboration from European Commission - DG for Regional Policy data 27" 27" "
  9. 9. Regional  digital  strategies  &     the  EU  Cohesion  policy   POLICY  RECOMMENDATIONS   FROM  THE  LITERATURE    1.  Regional  digital  strategies  should  adopt  a   holis4c  and  integrated  perspecFve  (e.g.  public   &  private  actors)  (Tsipouri,  2002)  2.  Regional  digital  strategies  should  be  based  on  a   sound  analysis  of  the  implementa4on  context   and  the  territory-­‐specific  condiFons,  needs  and   opportuniFes  (Tsipouri,  2002,  Technopolis,  2006)  
  10. 10. Regional  digital  strategies  &     the  EU  Cohesion  policy   POLICY  RECOMMENDATIONS     FROM  THE  LITERATURE    3.  A  well-­‐balanced  approach  is  needed,  since  “IS   development  involves  parallel,  mutually   reinforcing  developments  in  a  range  of   fields”  (Taylor  and  Downes,  2001).           Examples  >       Telecommunica(on  infrastructures  vs.   eServices  development     Supply  vs.  Demand  of  ICT  
  11. 11. Data  &  methodology  (1/3)  •  The  data  on  the  allocaFon  of  EU  Structural  Funds  are   based  on  financial  resources  programmed  by  each   2007-­‐13  Opera4onal  Programme  (OP)  of  the  EU   Cohesion  Policy.    •  The  dataset  is  provided  by  the  European  Commission  –  22 DG  Regional  Policy  and  includes  data  on  the  amount  of   L. Reggi and S. Scicchitano programmed  financial  resources  by  “category  of  Table 1 Categories of expenditure dedicated to IS and public e-Services and financial resources expenditure”:  allocated in both CONV and COMP objectivesN. Name A.V. %10 Broadband networks 2,257,722,464 15%11 þ 12 Information and communication technologies 4,121,115,554 27% (interoperability, security, etc.)13 Services and applications for citizens 5,225,072,351 34%14 Services and applications for SMEs 2,144,358,160 14%15 Other measures for improving use of ICT by SMEs 1,537,162,147 10% Total 15,285,430,676 100% 11  
  12. 12. Data  &  methodology  (2/3)  A  two  step  procedure  is  adopted.    1.  EU  regions  classified  into  homogeneous  groups   through  a  Principal  Component  Analysis  (PCA)   followed  by  a  hierarchical  Cluster  Analysis  (CA),   on  the  basis  of  the  allocaFon  of  Structural  Funds   (in  %)  to  strategic  IS  objecFves  in  2007-­‐13  period.    2.  logit  model  to  examine  the  link  between  the   strategic  choices  idenFfied  in  the  first  step  and   the  characterisFcs  of  regional  contexts  in  terms  of   socio-­‐economic  development  and  IS  diffusion.  
  13. 13. Data  &  methodology  (3/3)  Our  analysis  is  limited  to  the  lagging  regions  belonging  to  the  CONV  objec4ve      where  Structural  Funds  can  be  considered  as  a  proxy  of   the   total   amount   of   financial   resources   that   a  region  can  invest  in  IS  development.       –  CONV   regions   benefit   from   a   unprecedented   amount   of   2007-­‐13  EU  Cohesion  resources  dedicated  to  innovaFon   (Bonaccorsi,  2010;  Reggi  &  Scicchitano,  2012)   –  CONV   regions   tend   to   spend   the   few   locally   available   resources   to   maintain   the   current   levels   of   basic   public   services   13  
  14. 14. """"""""""""""""""""""" Results:  1st  step  –  PCA+CA  Fig. 4. Identifying three strategies in allocating financial resources for IS evelopment in CONV Regions Dimension 2 - 27.21 % 3.0 e-Services 1.5 CLUSTER 2 29%     0 SME2 29%     CLUSTER 1 broadband ICT CLUSTER 3 41%     SME1 -1.5 -3.0 -1.5 0 1.5 Dimension 1 - 36.90 %
  15. 15. Results:  2nd  step    -­‐  logit  model  •  We  esFmate  three  logit  models  separately  for  each   cluster.    •  The  observed  dependent  variable  is  binary,  taking  the   value  of  one  if  a  region  belongs  to  one  of  the  three   clusters  and  zero  otherwise.    •  Most  of  the  variables  (with  2  excepFons)  are  at  the   NUTS2  (regional)  level  •  Depending  on  data  availability,  most  of  regressors  are   from  2006,  the  year  when  regional  strategies  were   approved;  from  2007  otherwise.      
  16. 16. Results:  2nd  step    -­‐  logit  model  MODEL  REGRESSORS:  Eurostat  variables  on  IS  local  development   i)  Households  with  broadband  access     ii)  Households  with  access  to  the  Internet     iii)  Individuals  who  ordered  goods  or  services  over  the  Internet  for  private   use     iv)  Individuals  using  the  Internet  for  interacFon  with  public  authoriFes     v)  Enterprises  who  have  ERP  sooware  package  to  share  informaFon  on  sales/ purchases  with  other  internal  funcFonal  areas      CONTROL  VARIABLES:   vi)  Gross  DomesFc  Product  (GDP)  per  capita     vii)  Number  of  local  units     viii)  Number  of  employees  in  local  units     ix)  Total  intramural  R&D  expenditure  in  the  higher  educaFon  sector     x)  Rate  of  unemployment  
  17. 17. Results:  2nd  step    -­‐  logit  model  Table 5Determinants of regional strategies on IS and e-services: Logit resultsVar Cluster 1 Cluster 2 Cluster 3 Coef. Std. Err. z Coef. Std. Err. z Coef. Std. Err. zBroad_house -1.143005 0.4492695 -2.54** 0.0564842 0.1604883 0.35 0.4275693 0.1313482 3.26***Internet_house 1.142004 0.448562 2.55** -0.1895048 0.1902209 -1 -0.3502617 0.1241232 -2.82***Order_indiv -0.3475656 0.124287 -2.8*** 0.1648801 0.107555 1.53 0.1935861 0.0728091 2.66***Interact_indiv 0.5869741 0.2845014 2.06** 0.3405171 0.2055405 1.66* -0.4194555 0.1579136 -2.66***Integr_process -1.371032 0.5737002 -2.39** 0.406413 0.1739903 2.34** 0.2302201 0.098529 2.34**GDP_percapita 0.0000899 0.0002822 0.32 -0.000795 0.0003868 -2.06** 0.000012 0.0001531 0.08Local_units 0.0030452 0.0013319 2.29** 0.0029206 0.0023873 1.22 -0.0035533 0.0011161 -3.18***Employees -0.0008222 0.0003594 -2.29** -0.0008053 0.0007944 -1.01 0.0009812 0.0003352 2.93***R&D 0.0448095 0.0290908 1.54 0.0209459 0.026945 0.78 -0.0387537 0.0197503 -1.96**Unemp 0.4254679 0.2084043 2.04** -0.2785523 0.1644312 -1.69** 0.0813006 0.0633516 1.28Cons -6.153135 4.415426 -1.39 -1.577808 3.686809 -0.43 2.023108 2.100155 0.96Number of obs. 70 70 70LR chi2(10) 57.68 30.16 37.17Log likelihood -14.734982 -11.777133 -29.475342Prob> chi2 0.0000 0.0008 0.0001Pseudo R-sq 0.6618 0.5615 0.3867Note: Significance levels are as follows: * p<0.10, ** p<0.05, *** p<0.01.                
  18. 18. Discussion  (1/3)  •  Lagging  Regions  seek  to  further  improve  their   strengths  rather  than  focus  on  the  weaknesses   that  emerge  from  the  regional  IS  context.  •  This  seems  to  explicitly  contradict  policy   recommenda4ons  in  the  literature   -­‐  WHY?  -­‐  
  19. 19. Discussion  (2/3)  1.  Inadequate  analysis  of  local  context   •  qualita4ve  tools  prevailing  in  policy   evaluaFon,  no  quanFtaFve  impact  analysis   •  no  real  benchmarking     •  few  available  relevant  indicators  on  IS  at   regional  level  
  20. 20. Discussion  (3/3)  2.  Path  dependence,  the  idea  that  insFtuFonal   life  is  ooen  characterized  by  posiFve  feedback   processes  that  make  change  costly.  Example:   mulF-­‐annual  investment  decisions  to   implement  large  telecommunicaFon   infrastructures  3.  Rules  of  Structural  Funds  (“N+2”)   Concentrate  resources  on  on-­‐going  projects   that  ensure  immediate  spending  
  21. 21. In  conclusion...     EU  Regions  need  to  rebalance  most  of  their   current  “digital  strategies”    This  is  parFcularly  important  considering  that,  according  to  the  current  proposal  of  the  European  Commission,  a  balanced  strategy  for  the  IS  is  now  an  “ex-­‐ante  condiFonality”  for  accessing  2014-­‐2020  Structural  Funds    
  22. 22. Future  research    –  Compare  the  allocaFon  of  programmed  resources   with  actual  expenditure  –  Extend  the  analysis  by  including  Structural  Funds   allocaFon  to  Research  &  InnovaFon,  Human  Capital   and  CompeFFveness  
  23. 23.  ..Thank  you  for  your  aNen(on!     Luigi  Reggi   luigi.reggi@tesoro.it   luigi.reggi@gmail.com   www.luigireggi.eu    

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