Competitiveness, productivity and economic growth across the European regions

During the last few years, there has been a significant interest by both academics and policy-makers in the notion of regional competitiveness. Yet, despite the relative popularity of the term, there is a surprisingly lack of consensus about what is meant by the competitiveness of regions and cities. The paper discusses some of the key issues that arise in operationalizing the concept and it focuses on the central relevance of productivity in the debate about regional competitiveness. It then examines the pattern and dynamics of regional productivity across the European Union (EU) including the new Central and East European Enlargement (CEEE) enlargement states, and in particular it addresses the issue of whether, and to what extent, there has been regional convergence in productivity levels over the past two decades. Regional convergence in the EU-15 has been remarkably slow, and while recent regional productivity growth has been rapid in CEEE Member States, suggesting possibilities for catch-up in those countries, it seems to have been accompanied and, indeed, in part achieved by falls in regional employment rates, a combination hardly sustainable in the long run. The persistence of regional disparities in productivity across the EU clearly raises key issues for policy at the very time that intense debate surrounds the scale and allocation of the Structural Funds.