ECONOMIC COMPETITIVENESS IN SMÅLAND-BLEKINGE (Ch.2) Yancy Vaillant Regional Development Policy Division Directorate for Public Governance and Territorial

ECONOMIC COMPETITIVENESS IN SMÅLAND-BLEKINGE (Ch.2)

Yancy VaillantRegional Development Policy DivisionDirectorate for Public Governance and Territorial DevelopmentOECD

10 November 2011

Competitiveness in Småland-Blekinge

Småland-Blekinge development paradox:

The region has continued to compete successfully in sectors which in other OECD countries have largely lost out to developing countries.

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Development of knowledge-intensive businesses is a promising route for ensuring the maintenance and growth of the region’s prosperity

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“knowledge-based economies”

- economies which are directly based on the production, distribution and use of knowledge and information (OECD 1996).



The four counties have a promising firm structure,

but an urgent need of new skills to make the most of that structure.


Old and New Industrial Paradigm

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Old Approach New Approach

Strategic focus Efficiency-driven Knowledge-driven

Competitive strategy Cost LeadershipInnovation-based

differentiation

Source of competitive advantage

Tangible resources,

Market Power

Human and intangible resources

Keys for competitivenessScale efficiencies,

Process innovation

Flexibility,

Strategic innovation

Productive objectives Quantity Quality

Capital focus Financial capital Social and human capital

Organisational StructureRigid organisational

structureFlexible organic structure

Preferred leadership style

Managerial Entrepreneurial

Dominant firm size Large corporations SMEs

Ronneby Seminar


The adjustment of the local industrial fabric will require:

A prior shift in the characteristics and availability of the local labour supply,

But, this will not occur unless skilled workers find Småland-Blekinge an attractive place to live and work.

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Need for simultaneous change:

Shift in local industry

and

in the local labour markets

Must change together to successfully transition towards a more strategic and competitively sustainable future.



Three main targets for closing labour-market mismatches in the transition towards a knowledge-driven economy are:

i. Better integrate young people in the regional economy;

ii. Attract talent from outside; and

iii. Better integrate women in the private sector.


OPPORTUNITIES FORYOUNG PEOPLE


Opportunities for Youth

• Young people may well be a leading indicator of a region’s future trajectory…

• …but youth in Småland-Blekinge tend to leave the region


Opportunities for Youth

Steps to retain and regain skilled youth:

• Assure a good match between the educational system and local business;

• Promote a favourable framework for the personal and entrepreneurial development of youths; and

• Engage youth in the development of the region.


OPPORTUNITIES FOR IMMIGRANTS


Opportunities for Immigrants

Immigrant labour may also play an essential role in filling the existing skilled labour gap

Foreign students should be encouraged to stay

Opportunities for immigrant entrepreneurship should also be promoted


OPPORTUNITIES FORWOMEN


Opportunities for Women

A knowledge-based economy will help change the labour market gender bias, and vice versa

Better integration of women in the private sector should be favoured

Through entrepreneurship the human capital potential of women can be more effectively utilised


Attractiveness of Småland-Blekinge

Things that can help make Småland-Blekinge an attractive place:

i. The region’s natural and cultural amenities;

ii.A stronger and more diversified business framework;

iii.Improved regional connectivity to better promote regional development.


AMENITY-BASEDDEVELOPMENT


Amenity-Based Development

• Natural Amenities,• Cultural Amenities,• Systems Amenities

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From To

Sectoral approach → Territorial approach

Subsidies → Investments

Place of production and extraction (resources)

→ Place of consumption (amenities)

Export goods → Import people, ideas and

investments


Amenity-Based Development

ABTD requires agreement on how to promote, protect and make productive use of local amenities

Good public and private services can complement the attractive power of natural and cultural assets


FRAMEWORK FOR COMPETITIVENESS


Framework for Competitiveness

Local businesses need to modernise and diversifyShare of workers in professional and scientific

activities



Need for quality entrepreneurship:

Allows a territory to commercialise its endogenous resources and capabilities efficiently and sustainably through an optimal use of the region’s human capital, whether as entrepreneur or as employee.



However, business retention and expansion are as important as business creation.

For this, authorities must have clear and unbiased knowledge of the local business fabric.

(public-private relationship, trust and better coordination)


BETTER CONECTIVITY


Improving Regional Connectivity

Increasing regional attractiveness, competitiveness and interactions requires better connectivity,

but, Småland-Blekinge’s existing Regional Connections are in need of improvement…



New strategic role of south-east in a new eastern-oriented trade context.

Firms in Småland-Blekinge may be particularly well situated to take advantage of these opportunities,

which fall in line with the region’s need for a new diversified client base.



However, better connectivity requires better territorial co-ordination…

Improvements in infrastructure are necessary, but not enough!


CONCLUSIONS


Conclusion

A shift is needed in Småland-Blekinge’s labour force to encourage the transition towards a greater value-added and knowledge-intensive business model.

There is a need to better promote the area’s strong endowments and improve connectivity in the region,

Strong SME structure and managerial capabilities are a good basis for establishing a modern knowledge-based economy.


ECONOMIC COMPETITIVENESS IN SMÅLAND-BLEKINGE (Ch.2)

Yancy VaillantRegional Development Policy DivisionDirectorate for Public Governance and Territorial DevelopmentOECD

10 November 2011

Documents

ECONOMIC COMPETITIVENESS IN SMÅLAND-BLEKINGE (Ch.2) Yancy Vaillant Regional Development Policy Division Directorate for Public Governance and Territorial