I. Drawing mainly on the example of the three new Member States
(Austria, Finland and Sweden), I would like to describe how regional development
finance is being used to support information society applications. Based
on this overview of the present situation, I will conclude with some remarks
on possible future directions in the next generation of programmes starting
from the year 2000 (millenium bug permitting!).
II. First though, some remarks about the characteristics of these
three Member States, which we should bear in mind when discussing both
their ambitions and the results achieved.
All three countries can be characterised as high cost, high welfare
societies (the European social market economy). They need to maintain and
improve their competitiveness in the global economy and in the EU’s internal
market. They are all pursuing tough policies to rationalise and reduce
public sector expenditure but as far as possible while maintaining or improving
welfare and social services. They are all ‘greying’ societies, with a growing
percentage of elderly whose pensions and health care have to the funded.
In terms of job creation, however, this is potentially an opportunity as
much as a challenge, provided that the growth in ‘caring’ jobs can be funded
in a sustainable fashion.
All three countries, like most countries in the European Union, attach
importance to maintaining the fabric of rural society despite the continuing
decline in agricultural activity and employment. Sweden and Finland have
a special interest in the viability of very sparsely populated areas especially
those in the Far North.
To maintain and build competitiveness, regional strategies are generally
based on promoting economic specialisation in specific market segments.
To make a success of this strategy, a dense networking of interrelated
activities (clusters) is deliberately encouraged. Firms are stimulated
to work together to build the capability to supply systems and integrated
services rather than single products. They build partnerships to better
control the risks of rapid innovation and the costs of marketing in the
wider economy. They are able to provide new standards of just in time delivery
and of flexibility in design to meet each customer’s needs. In general
they are better able to participate in sophisticated systems of production
and marketing logistics.
Networking within the region is supported by networks with the wider
European and global economy. Regional co-operation facilitates the ability
to assess the relative competitiveness of the region and its firms benchmarking.
It is a means of stimulating the absorption of new concepts and technologies
and of accelerating cultural and social adjustments. It is a means of complementing
local capabilities and know-how by access to other, more distant capabilities
and know-how, and in this way to avoid the need for a wasteful duplication.
Naturally, as a general rule, the strong in search of global competitiveness,
prefer to co-operate with the strong. It is the aim of regional economic
policy to encourage a co-operation culture in weaker regions and to get
them effectively involved in networks between the successful.
As regards the public sector, the preparation for Monetary Union
has further underlined the need for fiscal discipline and prudent budgeting.
There is a sharp decline in transfers from central government to regional
and local government in all three countries. At the same time, the quality
of the services provided needs to be maintained and indeed improved to
the maximum extent possible. Major productivity and efficiency gains are
being achieved especially in the health and education sectors, and action
in relation to services and support for the elderly and socially excluded
is a rapidly growing field. Finally, much is to be done to improve the
provision of information and to develop customer orientated services provided
by government administrations to citizens.
It is the aim of regional economic policy to put on a sustainable
basis the part of the local and regional economy which is sheltered from
global competition, and to explore fully the potential for job creation
in a manner consistent with fiscal prudence. Information society applications
make it easier to consider quite radical innovations in the provision of
services of collective interest, and to improve the linkages between this
sector with the rest of the local economy.
There is a special difficulty in rural and very sparsely populated
areas. The cost and difficulty of providing public sector services is still
greater. This is compounded in the Far North of Scandinavia by the rigours
of the climate. The continuing outmigration of young people weakens still
further the economic and social fabric. It reflects the lower standard
of public services but also a wider dissatisfaction with the quality of
life and personal opportunities available. The small size and unbalanced
character of the local labour markets makes it very difficult to attract
and maintain new private sector activities. Again, the hope is that information
society applications can provide a part of the solution to these problems:
by an integrated delivery of public services; by distance learning and
other remote services, for example for medical diagnostics or legal services;
by the remote provision of cultural and other personal and leisure services;
and by teleworking to compensate for narrow labour markets.
In similar ways therefore the link between regional policy goals
and information society applications is well understood in all three Member
States. They share similar kinds of ambition. They are fortunate in that
all benefit from a generally high standard of telecommunications infrastructure,
with a good coverage of the whole territory including regions in difficulty.
Standards of education and the degree of awareness in the general population
and amongst opinion leaders of the potential of the information society
are generally high.
Tariffs for telecommunication services vary from country to country
(and sometimes from region to region). But, in all three cases, it can
be said that they are on a declining trend, and are not a significant barrier
today for most businesses, and most sections of the population.
In short, both the ambition and the enabling conditions for developing
information society applications are broadly in place – and not only amongst
national opinion leaders, but also at the regional and local level, and
amongst not only administrations and businesses, but also the general population.
Where enabling conditions need to be further reinforced – for example in
the field of education – action is envisaged in the framework of a national
programme, sometimes very ambitious action as in Finland.
III. These, then, are the aims and the capabilities. But what has
been achieved in practice since the Accession of these countries to the
European Union in 1995, and in particular what has been achieved with the
support of the Structural funds of the EU?
In the next two days, when we have a joint meeting with the LOCREGIS
project, you will get a good idea, I believe, of the reality of what is
happening, especially in the public sector. This afternoon, I would like
to set the scene.
As I have said already this morning, one of the basic aims of the
LOCREGIS project was to collect accurate and reliable information on information
society actions now underway especially in Finland and Sweden, but as far
as possible also in Austria. We have paid special attention to the Far
North – the Objective 6 areas in the jargon of the Structural funds - because
of the special importance attached to such actions in the regional strategies
for those areas.
The LOCREGIS data base in total represents some ¼
¼ MECU of projects of which around ¼
..% are in the Far North. It is probably complete as far as the Far North
is concerned, and reasonably complete concerning projects involving local
and regional administrations or supported by Structural Fund finance across
the whole territory of Finland and Sweden. So we believe that the conclusions
that can be drawn from it are probably fairly representative of the wider
picture – subject, of course, to confirmation by other analyses as soon
as they are available.
A first observation is that information society applications
do not involve large amounts of development funds, at least at this stage.
As can be seen from the tables (overhead) most projects are under
1 MECU in size.
One of the consequences is that the amount of regional development
finance used to promote information society applications is quite small
– in this generation of programmes it is estimated to be some ¼
¼ ¼
. MECU over five years (1995-99) in Finland, and some ¼
¼ . MECU over five years in Sweden. In
per capita terms, this represents a range of between ¼
.. ECU per head and ¼ ¼
ECU per head in the Far North, where regional development expenditure is
probably the highest.
I stress that I am referring here to promoting applications or the
use (as distinct from the provision) of telecommunications infrastructures.
Very much larger sums are of course required to establish the enabling
conditions I referred to earlier, for example in terms of telecommunications
infrastructure or education.
Regrettably, I do not have figures for public and private expenditure
in Finland and Sweden on the enabling conditions, nor on the extent to
which the Structural funds have been supporting this– it would be useful
to try to have this information.
However we can take as an example Burgenland in Austria – which is
also an active participant in the LOCREGIS project. In addition to promoting
applications, of which you will be hearing more in the next two days, the
strategic aim of the Burgenland programme is to develop a telecommunications
backbone (ISDN lines) across the territory of the region and to establish
a competence centre in IT applications within the higher education system.
This involves expenditure in the period 1995-99 of about 70 to 80 MECU
(the exact estimate for the training and education part is hard to make),
relating to a population of some 270,000 people.
Returning to the support of applications in Finland and Sweden, and
looking at the figures by county in Sweden or by region in Finland (overhead),
we can see that there are quite considerable differences in the number
of projects being approved for funding – clearly even within the generally
enthusiastic environment of these two countries, there are the more active
and the less active.
In terms of topic areas, the focus is very much on applications in
the field of education and networks between local and regional administrations
(overhead). The health sector follows, but a long way behind. Telework
has a significant place in publicly supported projects in Finland – much
less so in Sweden. However this may be because some projects have been
classified under other headings that could have been classified as telework
projects. It is, I think, also striking to note that relatively little
activity has been registered so far in the tourism sector, despite its
apparent potential, especially for the economy of the rural and sparsely
populated regions.
Finally, we should note that in both countries, at this stage, financial
support for information society projects in the business sector is very
limited. I do not believe this is because the business sector is not active.
On the contrary, this may be due at least partly to the difficulty of making
applications for public support. IT projects often involve expenditure
eligible for several different aid schemes, run by different parts of the
administration. If the project owner has to split his project into several
pieces and manage several applications each with its own timetable, this
is clearly very unattractive, especially for relatively small amounts.
If the administration is not able to deal quickly and simply with applications
that do not fall neatly into a single area of administrative competence,
this is equally discouraging. To be more effective in supporting business
projects, the public sector will need to address these concerns.
