Regional competitiveness in the EU

Briefing 03-07-2017

Competitiveness has been an important issue on the EU’s agenda for several decades. Understood in a more comprehensive way – as including both productivity and prosperity – it can be seen as a way to create favourable business conditions for companies and to increase the standards of living of the population. Supporting competitiveness, especially in the case of nations and regions, requires creating framework conditions to develop the necessary infrastructure, human capital, technology and efficient markets that can help attract talent and investment. In the 2016 edition of its Regional Competitiveness Index, the European Commission presents a ranking of regions according to their attractiveness for both firms and residents. This broader vision of competitiveness can have implications for policy decisions and the choice of investment priorities. Data on the diverse dimensions of the Index, such as innovation, education and institutions, can help authorities to identify respective regional strengths and aspects to be improved. Increasing regional competitiveness is also a task relevant to EU cohesion policy. While the main role of EU regional funding is to ensure cohesion and reduce disparities between regions, competitiveness is important for supporting dynamic regional development. Therefore, the right balance in the policy mix between supporting competitiveness and convergence is required.