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EU local and regional authorities contribute

to the mid-term review of Europe 2020

Assessment of the flagship initiative

An industrial policy for the globalisation era

Almost three years after the launch of Europe 2020, the Committee of the Regions has launched a broad assessment of the Strategy in preparation for its mid-term review, expected in 2014.

As part of this assessment, the replies to this questionnaire on the state of play of the flagship initiative An industrial policy for the globalisation era will be discussed at a conference to be held on 10 April 2013 in Brussels.

This conference will be the third in a series of CoR events and monitoring initiatives on the Europe 2020 Flagship Initiatives, preparing the mid-term review in 2014[1].

By participating in this survey, you will:

  • ensure that your views are taken into account in the debate held during the conference;
  • contribute to the CoR's consultative activity over the coming months, to include an opinion drafted by Claude Gewerc, President of Picardy Regional Council (PES/FR), scheduled for adoption at the CoR plenary session on 10-11 April 2013;
  • contribute to the fourth CoR Monitoring Report on Europe 2020, to be published in October 2013;
  • contribute to the mid-term review of Europe 2020 in 2014.

If you wish to participate in this survey, please complete this questionnaire in any eu language, using the spaces provided, and return it in text format to:

by 1 March 2013

The questionnaire will be available in all languages in mid January

For more information on this survey and for details on how to join the Europe 2020 Monitoring Platform, go to:

CDR1718-2013_00_00_TRA_TCD

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Contributor information[2]

Name of sender:
Contact details: (address, telephone, email)
On behalf of:
(name of local or regional authority) / Czech invest (Pardubice)
Type of organisation / City/Town/Municipality Region
County/Province Association of local and/or regional authorities
Other (please specify)
Country: / Czech Republic
Member of the EUROPE 2020 Monitoring Platform: / Yes. No

Current policy challenges and responses at regional and local level

1)What are the main challenges faced by industry in your region/city?
Please answer with respect to competitiveness (market trends; positioning in the market; competitors) and employment (finding the necessary workforce with the right skills; ability to create new jobs).
Industry in the Pardubice region is encountering the same problems as the businesses sector throughout the Czech Republic:
- Quality of the institutional environment – fragmentation of institutions and agendas in the regions, red tape, lack of business confidence in public institutions and their staff
- Infrastructure – failure to use available research, development and innovation capacity, absent or poor-quality important road links: a barrier to the development of local companies and to the influx of foreign investments
- Labour market, training and education – dissatisfaction of the business sector with the education system, lack of suitably skilled school-leavers in technical subjects, low labour force mobility
- Access of businesses to funding – continuing barriers, especially for SMEs in start-up and growth phases (underdeveloped venture capital market, some rigidity in the banking sector and shortcomings of Czech businesses in drafting business plans and pitching these to potential financial partners)
- Technological environment – limited demand for innovation in the business sector and limited involvement of the research, development and innovation sector (despite ample expenditure from EU funds), inadequate support for "smart specialisation" and for establishing clusters in regions, and the region’s heavy involvement in low added value sectors in the productive value chain
- Regional economic structure – persistent structural problems in the regional economy (chemical industry) despite transformation
- Impact of the US-European financial and economic crisis – budget/fiscal savings + cleaning up balance sheets of private businesses – investment cut backs and lost demand; global growth and demand shifting to the BRICS countries
2)Do these challenges differ from those being faced in 2010 (when the Europe 2020 strategy was launched)? If yes, in what respect?
Please make a distinction between structural problems and problems resulting from the impact of the economic and financial crisis.
The problems remain basically the same since they are generally long term in nature. A series of specific problems has been identified since 2010. High-level discussions have been started on these and some of them are being addressed.
The most important support instrument for industry in the region, which helps to tackle the problems mentioned in BOX 1, is the Operational Programme Enterprise and Innovation (OPEI) implemented by CzechInvest. This targets a broad spectrum of activities from supporting research and development (Potential and Prosperity programmes) through acquisition of new technologies (Innovation and Development programmes), the introduction of new IT equipment (ICT in Enterprises programme), reconstruction of manufacturing plant (Real Estate programme), building new training centres (Training Centres programme) to the development of a new software or building new shared servicecentres (ICT and Strategy Services programme). The OPEI helps to increase the competitiveness of Czech companies.
As at 20 January 2013, a total of 473 projects had been supported in Pardubice region, to the tune of CZK 4 06 billion. Projects are prepared and consulted with staff of the CzechInvest regional office in Pardubice. The network of regional CzechInvest offices is the agency’s first point of direct contact with its clients and comprises specialist offices devoted primarily to providing advice on every phase of implementing programmes jointly funded from the EU budget (the offices’ remit includes aftercare services, where staff look after the funded investment projects of selected companies in the regions, and collaborating with major regional organisations in creating the concept and strategic goals for the development of the regions).
Industry also receives direct or indirect support from other operational programmes run by other institutions, such as the North East Operational Programme, the Research and Development for Innovations Operational Programme, the Operational Programme Education for Competitiveness and the Operational Programme for Transport.
At its finance fora, CzechInvest advises businesses on how to actively seek out sources of funding, how to master presenting projects and how to convince financial partners of the feasibility of their
projects. Other sources of the information that businesses need include the regional chambers of commerce, which run information points for businesses (Informační místo pro podnikatele – InMP).
One good point is that Pardubice region supports technical education at secondary schools, for which it is responsible.
The new Centre for Technology and Knowledge Transfer (CTTZ) at Pardubice university (recipient of a grant of CZK 45 million from the Research and Development for Innovations Operational Programme) has a remit to increase the use of intellectual property rights protection at the university and to market its research, development and innovation outputs (the necessary transfer of technology).
The modernisation of Pardubice airport has improved transport infrastructure. However, the economic development of the east of the region is very much dependent on the building of the R35 and R43 motorways.
3)How are your regional/local policies addressing these challenges?
Please make clear whether you are (i) working on the basis of a local/regional industrial strategy; (ii) providing direct support to firms and networks/clusters; (iii) encouraging stronger relationships between firms, universities, public and private research institutions; (iv) improving the business environment, including through administrative simplification; (v) undertaking a proactive industrial policy, focusing on certain activities or sectors; or a mix of these actions.
Please provide examples (or at least web references[3]).
i) Yes – The Pardubice region development plan, the region’s innovation strategyand the city ofPardubice’s strategic development plan, which are currently being drafted/updated with the help of the regional CzechInvest agency. These plans are partly based on national strategies such as the Czech Republic’s economic growth strategy for 2005–2013 or its international competitiveness strategy 2012–2020 (produced by the trade and industry ministry).
ii) Direct support to businesses and networks/clusters is provided primarily by CzechInvest through the OPEI and other support programmes. Pardubice region provides a limited amount of support for development projects in problematic microregions.
iii) Support for technology transfer is in the hands of the Ministry of Education, Youth and Sports, which partly funded the creation of the Centre for Technology and Knowledge Transfer at Pardubice university (see response to question 2). OPEI also contributes greatly to strengthening the ties between companies, universities and private research institutes.
iv) The needs of business are regularly accommodated in strategy documents (see i). These form the basis for, among other things, decisions on creating new or expanding existing industrial zones, introducing new regional or municipal public transport links and ways of linking education and the world of work. The presence of the CzechInvest regional office in the regional capital is without doubt one of the important elements in improving the business environment. These regional offices should gradually be transformed into one-stop shops for businesses bringing together the areas of state support to business, investment and exports.
v) CzechInvest actively seeks out new investment in selected key sectors – the automotive, aerospace and space industries, engineering, electrical engineering and electronics, life sciences, IT and software development, shared services, nanotechnology and clean technologies – and fosters their development in the Czech Republic. The list of priority sectors was compiled using detailed analysis of the Czech economy and the prospects of these sectors. The OPEI supports projects of companies in the manufacturing industry, technology centres and strategic services centres.
BOX 1 – An Industrial Policy for the Globalisation Era
The Europe 2020 flagship initiative An integrated industrial policy for the globalisation era, adopted by the European Commission on 28 October 2010, sets out a strategy that aims to boost growth and jobs by maintaining and supporting a strong, diversified and competitive industrial base in Europe, offering well-paid jobs while becoming more resource-efficient[4]. The flagship initiative highlights ten key actions for European industrial competitiveness: They are:
  1. "competitiveness proofing" i.e. analysis of the impact on competitiveness of all policy proposals;
  2. "fitness checks" of existing legislation aimed at reducing the cumulative effects of legislation in order to cut costs for businesses in Europe;
  3. making it easier for SMEs to access credit and facilitating their internationalisation;
  4. a strategy to strengthen European standardisation;
  5. more efficient European transport, energy and communication infrastructure and services to serve European industry;
  6. a new strategy on raw materials creating the right framework conditions for sustainable supply and management of domestic primary raw materials;
  7. addressing sector-specific innovation performance with specific actions, in such areas as advanced manufacturing technologies, construction, bio-fuels and road and rail transport, particularly with a view to improving resource efficiency;
  8. actions to improve framework conditions and support innovation in energy-intensive industries;
  9. a space industrial policy creating a solid industrial base and covering the whole supply chain;
  10. reporting on Europe’s and Member States' competitiveness, industrial policies and performance on an annual basis.
These actions are implemented through more than 70 measures, whose state of play can be found on DG Enterprise and Industry's website[5].
You can find more information on An industrial policy for the globalisation era, seen from the point of view of local and regional authorities, in the Committee of the Regions' publication Delivering on the Europe 2020 Strategy. Handbook for Local and Regional Authorities[6]). General information on Europe 2020 can be found on the strategy's official website[7].

How is the Europe 2020 flagship initiative An industrial Policy for the Globalisation Era relevant to your city or region?

4)With respect to industrial policy, how would you evaluate the support your city/region has received from EU policies so far? Was it sufficient in view of the challenges you are facing in this area? As concerns EU-financed investments, in which area has more added value been created (e.g. infrastructure, skills, innovation, etc.)?
Please answer with reference to the various existing strands of EU policy (Europe 2020 flagship initiative "An industrial policy in the globalisation era", Structural Funds, 7th Framework Programme, Competitiveness and Innovation Programme, etc.).
Please comment both on the policy tools used and on funding.
The OPEI, which is 85% financed from the ERDF, is effective in helping to improve the competitiveness of Czech firms. Positive feedback from businesses shows that the ability to secure OPEI funds and effective management by CzechInvest are important factors in the development of the Czech economy.
Given the high take-up capacity of (not only) our region, it is worth considering raising the allocation of the OPEI and/or other operational programmes run by the trade and industry ministry for the period 2014–2020.
Investment cofunded by the EU has delivered the greatest added value in the area of (technological) innovation and infrastructure.
5)The Europe 2020 flagship initiative An integrated industrial policy for the globalisation era[8] (see Box 1 above), as reviewed by the Commission Communication A stronger European industry for growth and economic recovery[9] of 10 October 2012, sets out a "renewed industrial policy" based on the four pillars presented in Box 2 below.
Which of these pillars are more relevant to your specific local/regional situation?
Pillars 1, 3 and 4.
BOX 2 - An industrial policy for the globalisation era: 2012 update
The flagship initiative on industrial policy, as reviewed by the Communication of 10 October 2012, places more emphasis on short-term, growth-enhancing measures resulting from the economic crisis and its impact on EU industry. The flagship initiative is based on an extensive consultation of stakeholders carried out in the first half of 2012, which highlighted the impact of the crisis in terms of job losses, the decline of industrial production and very low business confidence. Those short-term problems go hand in hand with EU industry's structural competitiveness problems. The European Commission's response is based on these four “pillars of the reinforced industrial policy”, to be addressed through partnership involving the EU, its Member States and industry: These are:
Investments in innovation, with a focus on six priority areas with great potential (advanced manufacturing technologies for clean production; key enabling technologies; bio-based products; sustainable industrial and construction policy and raw materials; clean vehicles and vessels; smart grids).
Better market conditions, both in the internal market, with special reference to goods, entrepreneurship and the protection of intellectual property rights, and in international markets.
Access to finance and capitals, through better mobilising and targeting of public resources, including from the EIB, and by unlocking private funds.
Human capital and skills, to promote job creation and better anticipation of, and investments in, the skills needed to promote industry's competitiveness[10].

Are your country's policies relevant to your city or region?

6)To help meet these objectives, your country has set its own targets, which you can find at Are your country's targets appropriate to your local (regional) situation?
Please explain, bearing in mind that "An industrial policy for the globalisation era" can potentially contribute to at least the following Europe 2020 targets:
in a quite direct manner: 75% of the 20-64 year-olds to be employed; 3% of the EU's GDP to be invested in research and innovation (public and private investment);
in an indirect manner: 20% less than in 1990; 20% of energy from renewables; 20% increase in energy efficiency.
An unqualified yes.
7)Do you think that the industrial competitiveness policies set in your country's current (2012) National Reform Programme[11] meet the needs of your city or region?
If not, how would you change your National Reform Programme next year?
Yes. Nevertheless, from Pardubice region’s perspective, we would highlight transport infrastructure, which is particularly important for industry (especially the construction of the key R35 motorway from east Bohemia to Moravia).
8)Which measures in the field of industrial competitiveness policy could be more helpful in the short term?
Increasing allocations for OPEI or a new sectoral programme run by the trade and industry ministry. Launching a seed fund to be run by the ministry. Other possibilities, such as: changing the system for supporting HEIs in building research, development and innovation capacity – incentivise them to work with industry (technology transfer), speeding up construction of key road links, and enacting new legislation to boost the commitment of companies to training future employees (collaboration with schools).

Managing and funding issues

9)Is industrial competitiveness policy in your region/city adequately funded? Apart from EU funding (which you described in your reply to question 4) to what extent did you have recourse to other sources (e.g., PPPs, financial engineering)? Do you think you will have enough funds to run your policy programmes in this field in the future?
Difficult to say. When it comes to creative innovation, we recommend considering setting up a regional innovation fund and launching a competition for innovation vouchers for SMEs based on the model in Hradec Králové Region. Another possibility for effectively supporting the competitiveness of regional SMEs is to establish a fund that could provide companies with advantageous loans through the Českomoravská záruční a rozvojová banka (Czech-Moravian Guarantee and Development Bank). This system of support in the form of advantageous loans to carry out business plans is already operating successfully in South Bohemia Region.
10)What kind of cooperation/coordination takes place between your region/city and the national and EU levels in the fields of industrial competitiveness policy?
Do you see any room for even stronger cooperationbetween different tiers of government in this field? If so, please explain.
The cooperation/coordination system is running correctly within the area of competence of those involved. The key body in supporting industry at national and regional level is the trade and industry ministry and its CzechInvest agency. The role of the city or region in industrial competitiveness policy is primarily to create the right environment in terms of quality of administration, land-use planning, developing transport infrastructure, support for technical education, and so on.
There is a further opportunity to strengthen cooperation between administrative levels in relation to the European Commission’s requirement for all EU regions to have their own Regional innovation strategies for smart specialisation (RIS3). Identifying high added value activities that offer the best chance of strengthening regional competitiveness and can then get support from public funds will require the active involvement of all the key players in the development of the region.
11)Are theforthcoming Partnership Agreements/Contracts (under the new 2014-2020 cohesion policy) an opportunity for better coordinationbetween different tiers of government in the field of industrial policy? If so, why? And what could be the role of the different stakeholders (other levels of government and other stakeholders)?
Yes. It is important to frame a communications platform to support the collaboration of institutions in the regions (horizontal level).
Support programmes (areas) in the structural funds for the period 2014+, together with the policies of cities and regions, should be based primarily on national strategic plans such as the International Competitiveness Strategy for the Czech Republic 2012–2020 and Export Strategy of the Czech Republic 2012–2020 (vertical level).
A higher level of coordination will make it possible, among other things, to carry out integrated projects (a batch of interlinked projects that can be funded from various OPs or funds. The right mix of schemes from a number of sources helps increase the added value of investments).
12)Please add any further comments you might wish to make on the matters dealt with in this questionnaire.
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SHARE YOUR GOOD PRACTICE
With a view to the CoR conference to be held on 10 April 2013 and the exhibition of good practices in the fields covered by An industrial policy for the globalization era, you might wish to submit an example of good practice. To do so, please complete the form available on our website:

/ JOIN THE EUROPE 2020 MONITORING PLATFORM
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