Chapter 2. Assessing the implementation of the recommendations

This chapter assesses the extent to which Småland-Blekinge has met the recommendations of the 2012 OECD Territorial Review of Småland-Blekinge across the 12 thematic areas. It focuses on where the region has seen the greatest accomplishments since 2012; where there is need for further progress; and where there has been a change in regional priorities.

    

The 2012 OECD Territorial Review of Småland-Blekinge provided a diagnosis and analysis of key social and economic trends in the region and assessed both the enabling factors for growth and well-being and the bottlenecks to development across a range of policy areas and domains – e.g. governance, transportation, education and skills. On the basis of this analysis, the territorial review forwarded 31 recommendations across 12 main thematic areas (see Table 2.1). This monitoring review assesses the progress that has been made in meeting these recommendations either in whole or in part across the four counties. This assessment is summarised in Annex Table 2.A.2.

Overall, it is found that the counties in Småland-Blekinge have made either notable progress or have met the recommendations in 12 of the 32 recommendations (around 38% out of total). This demonstrates great progress and commitment in a relatively short amount of time. Promisingly, the majority of these recommendations relate to key actors in Småland-Blekinge developing improved co-ordination mechanisms and a more cohesive identity and common priorities. These improved governance frameworks and networks set the region on course for more effective co-ordination in the future.

Of the remaining recommendations, it is assessed that the region's future direction has been well defined but that implementation has not yet started or that results are mixed in counties in the case of 10 of the recommendations (around 30% out of total). This monitoring review identifies a need for the region to improve its efforts to connect skills and education with labour market demand and for employers to be better linked with education providers. Furthermore, transportation connectivity remains a major challenge for the region. However, it is noted that the four counties have promisingly developed a cohesive strategy and common voice with which to lobby the national government. This growing cohesion bodes well for the region's future development.

Across 7 recommendations, it is assessed that no progress has been made (22% out of total). In some instances, this lack of progress is reflective of changing priorities. For example, the large wave of migration to the region starting in 2011 shifted a number of priorities such as youth engagement in regional development efforts. While youth engagement efforts continued to some extent in the interim, the need to rapidly mobilise resources to address migration made this a focused priority. Beyond this, it is noted that significant transportation challenges remain in such areas as air and freight transport. Some recommendations contained in the 2012 territorial review, such as the recommendation to strengthen the legal framework for public-private partnerships (PPPs), lay in part outside of the purview of the region's responsibilities. Finally, there are three recommendations that no longer remain relevant because conditions have changed (for example in the case of regionalisation reforms).

The following chapter presents an assessment of how Småland-Blekinge has met the recommendations across the 12 thematic areas. The chapter is organised in four parts. It first describes the areas where the region has seen the greatest accomplishments since 2012 and following this, areas of further progress. Next, the chapter discusses where the region has seen shifting priorities and finally, it examines the progress that has been made to date on the need for regional planning.

Table 2.1. Summary of recommendations: Territorial Review of Småland-Blekinge, 2012

#

Theme

Recommendations

1

Developing a knowledge-based economy

● Develop knowledge-intensive businesses

2

Addressing labour market mismatches

● Strengthen the links between the regional education system and regional business

● Educate local communities about the importance of young entrepreneurs and provide support for their initiatives

● Increase the involvement of young people in regional development efforts

● Work with local industry to open up employment opportunities for foreign students

● Improve co-ordination and collaboration in supporting migrant integration (including the labour market, training, social assistance and housing) and addressing the limited capacities of smaller municipalities

● Strengthen support and incentives for migrant entrepreneurship

● Improve the social recognition of female entrepreneurs and facilitate networking opportunities for them

3

Quality of life

● Better promote the regions natural and cultural assets to local people and potential migrants

4

Tourism

● Place tourism at the forefront of development efforts

5

Small and medium-sized enterprises

● Further promoting knowledge-intensive service activity firms, particularly those which are attracted to amenity-rich areas

● Design and implement strategies for business retention

● Better facilitate business succession amongst small and medium-sized enterprises (SMEs) through local business facilitators who can support business owners and broker solutions between sellers and buyers

6

Improving accessibility to the region

● Remove the main bottlenecks and improving road and railway connections to Malmö and Gothenburg

● Improve connectivity between larger towns/nodes and more sparsely populated rural areas

● Improve air transport from each of the four county capitals by improving scheduling that enables same-day travel to and from other European capitals via Stockholm and Copenhagen

● Improve freight transport infrastructure to take advantage of opportunities for trade with the Baltic States, the Russian Federation and China

● Improve co-ordination between counties and the private sector in prioritising transport and communicating a single voice to the national government about them

7

Better co-ordination of business development efforts

● Engage in more cross-border interaction and co-operation to avoid the territorial fragmentation

8

Regionalisation reform

● Undertake a cost-benefit analysis to determine the potential advantages and disadvantages of reform

● Clarify roles and competencies of agencies involved in regional development and how they interact

● Transition toward a model whereby a directly elected regional council is responsible for regional development

● Strengthen the bridging role of County Administrative Boards between central government and the regions, and simplifying the territorial boundaries of national agencies

9

Regional Development Programmes (RDPs)

● Develop more concrete and institutionally reinforced programmes with clear targets and measurable outcomes

● Establish an enforcement framework to link investment priorities with the objectives of RDPs

● Integrate rural and general development programmes into a single comprehensive regional development strategy

10

Strengthen inter-county planning

● Strengthen inter-county planning arrangements by including clear initiatives with funding and accountability and monitoring arrangements

11

Further develop public-private interactions

● Build institutional frameworks for public-private co-operation like public-private partnerships or industry advisory groups

● Enable the legal framework for public-private partnerships

12

Municipal co-operation and reform

● Initiatives and mechanisms that show co-ordination across municipalities around common projects

● Establish place incentives and support to encourage inter-municipal co-operation

● Conduct an in-depth assessment of municipal competencies identify opportunities for regional or national institutions to take on responsibilities, and/or develop an asymmetric approach (larger municipalities have responsibilities that smaller ones do not)

Accomplishments since 2012

Co-ordination between governmental institutions and regional actors has significantly progressed – this is central to meeting all other recommendations

Cross-institutional and county-wide co-operation has improved…

The most consequential progress of the past five years lies in the increased cross-institutional and county-wide co-operation and co-ordination on all issues related to business and territorial development. Improvement in this area is the highlight of the monitoring exercise: it is a positive achievement that carries the potential to enable some of the changes further suggested in the 2012 OECD Territorial Review of Småland-Blekinge.

Five years ago, regional development and business promotion efforts were hindered by the fragmented actions of the different actors involved in regional and local development (i.e. the Regional Council, County Councils, Community Administrative Boards, municipalities, private, civic and business organisations). In 2017, all counties have reported greater alignment between those actors in seeking to build complementarities and work together toward a comprehensive vision for regional development. Substantive progress has been achieved through:

  1. 1. The establishment of an Innovation Council in Kalmar County.

  2. 2. Monthly consultations in Kronoberg County (networks for different managers).

  3. 3. Multi-stakeholder platforms in Blekinge County.

  4. 4. A corporate incubator in Kronoberg (företagsfabriken), which supports start-up companies to be developed with the support of senior business developers. The incubator also runs the Bravo entrepreneurial hub – a business development hub for entrepreneurs in start-up companies.

  5. 5. Jönköping County has established quarterly meetings with 2017 with all the actors involved in the business support system in order to increase co-operation. New project ideas are also raised in the council. In addition, in spring 2018, the council has initiated a network on co-operation on digitalisation of the business sector.

  6. 6. A cross-county agreement on infrastructure priorities for southern Sweden which feeds into Sweden's national infrastructure development strategy.

More precisely, the county of Kronoberg has progressed vis-a-vis strategic planning and administrative co-ordination efforts. The county now holds monthly exchanges with municipalities and representatives from different sectors (e.g. school network), as well as bi-annual strategy meetings with politicians. Blekinge is showing important cohesion around migrant integration measures and business development projects such as the collaboration platform Blekinge Council. This platform involves the Blekinge Region, its five mayors, the County Administrative Board (CAB), Blekinge University of Technology, the Employment Service and business support agency (Almi) working together to strengthen the co-ordination and implementation of Blekinge's regional development strategy. Similarly, Kalmar County which in 2012 exhibited divisions between the northern and southern parts of its county, has made significant progress in “unifying” the different municipalities around a county-wide vision. The recent process with the new Regional Development Strategy (adopted by the board in January 2018) is a confirmation of this; it has been a much smoother process anchoring the discussion with the municipalities and achieving consensus. There has also been more strategic co-ordination through the creation of new platforms. The Kalmar Innovation Council – a network of innovation promoters – is one such platform: it meets once a month and involves representatives from different sectors who define action plans in order to boost and support the business environment. In Jönköping County, there are monthly meeting with all the directors from the municipalities, region, university and the CAB. The leading politicians from the region and municipalities meet to discuss these issues every second month.

With respect to infrastructure development since 2012, the counties of southern Sweden have strengthened the manner in which they communicate their priorities and concerns to the national government. They have adopted a unified voice in a number of areas including infrastructure, public transport, culture and regional development. The integration of 20 priorities of South Sweden into the recent national infrastructure development plan is a clear illustration of how greater levels of cross-county co-operation can help the region carry forward objectives to the national level.

In all counties, the progress achieved in cross-institutional and county-wide co-operation has been dependent on soft instruments for co-operation. This co-operation is based on personal relationships and the goodwill and interest of different actors to work on common issues through dialogue, networking and information exchange. Such collaboration is in line with Sweden’s notable consensus-building culture (Bergström, Magnusson and Ramberg, 2008[1]). While such mechanisms can translate into stronger co-operation as observed in this case, there remains a risk that co-operation will deteriorate when opinions diverge and conflicts of interest arise. In a context such as Sweden's, where municipalities are granted a large degree of autonomy, moving towards a greater institutionalisation of such meetings and designing incentive mechanisms could help to counter the potential negative scenarios driven by (poor) personal relationships between a small number of individuals. Furthermore, it may incentivise the organisation of meetings in which different sectoral representatives are gathered to discuss the interconnectedness of certain challenges – allowing for greater synergies to emerge in regional actions and initiatives. At present, in several counties, sectoral representatives do regularly meet with municipalities and cross-sectoral participation is not promoted. This is a missed opportunity.

…and so, has municipal co-operation and reform

Inter-municipal co-ordination has also improved. In 2012, it was found that municipalities – particularly larger ones – did not generally share a county-wide vision and saw few benefits in collaborating with their respective Regional Councils on the regional development strategy. Similarly, with the exception of infrastructure issues, the benefits resulting from building policy complementarities through inter-municipal collaboration were unclear. There continues to be no legal incentive for municipal co-operation in the region of Småland-Blekinge, but the dynamics for collaboration have shifted in recent years. This has been driven in part out of the necessity to mobilise greater cross-municipal capacity to address the challenges linked to migrant integration, and partly because the regionalisation project was dropped.

Inter-municipal planning co-operation in the different counties has most commonly been reported in the areas of infrastructure and housing (e.g. residual water and waste). Such an approach has been adopted in Jönköping, where four municipalities (Gislaved, Gnosjö, Vaggeryd and Värnamo) have voluntarily co-operated in order to achieve economies of scale. Business development is another area in which shared municipal functions in some counties are evident. The four municipalities of Gislaved, Gnosjö, Vaggeryd and Värnamo co-operate in business development in the form of Business Gnosjö Region. Kalmar County has manifested much greater inter-municipal co-ordination – the two former sub-county municipal groups in the north and south of the county have merged into one unique county-wide co-ordinated group. Now, since large regions are off the table, the unity among these actors has improved. In the upcoming merger forming Region Kalmar County, the 12 municipalities will form a formal federation for common interests and collaboration on issues like social welfare, education and environmental monitoring. In Kronoberg, the three municipalities of Kalmar, Karlskrona and Växjö have adopted a leadership stance in the drive for county-wide inter-municipal actions primarily related to infrastructure in the three municipalities.

While gains have been made in recent years, increasing capacity at the municipal level remains an essential concern across the four counties of Småland-Blekinge. The direct benefits of inter-municipal co-operation tend to be more greatly felt by the smaller municipalities who share the same obligations as the larger ones but who may lack the competencies and capacity required to effectively meet their responsibilities. For instance, while central to any regional development strategy, spatial planning is an area of municipal responsibility that demands varying competencies and cross-sectoral considerations (e.g. housing, transportation, environment), often prompting the smaller municipalities to devolve this task to a third party. By doing so, municipalities risk losing an opportunity to build policy consistency with neighbouring municipalities and the county regional development strategy. Potential conflicts of interest could also arise that may guide the intentions of the external agents that the responsibility is devolved to. As such, while there is a long tradition of consultation with municipalities to work toward common priorities in the case of infrastructure investments, a similar formalised co-operation is needed for skills capacity-building. As recommended by the OECD in 2012, conducting an in-depth assessment of municipal competencies in the four counties remains relevant but it is recognised that the options to rebalance responsibilities across levels of government or adopting asymmetrical solutions remains sensitive.

Business development and tourism branding: Where the dynamics of improved collaboration are most visible

Tourism branding among the three counties in Småland has increased

The three counties in Småland have made significant steps towards a cohesive tourism branding with the establishment of a common digital platform (visitsmaland.se) and have through this effort have developed consensus on which brand values should be promoted; a discussion which continues to evolve. The brand tagline is “Småland – Sweden for real”. This collaboration, if not friction-free, with its triumphs but also setbacks, is a major improvement compared to ten years ago, especially when Kronoberg and Jönköping Counties claimed the brand Småland. However, the collaboration only relates to branding and e-marketing/sales. The regions and destination do not co-operate on development issues or combined offers. Blekinge is not included in this co-operation as the county has its own tourism branding which is quite strong and with good public recognition. It operates its own digital platform (visitblekinge.se). Kalmar County has a separate challenge since a large part of its tourism is in fact not in Småland but in the landscape of Öland (Sweden’s second largest island), which has a unique brand with comparatively good public recognition in many parts of Sweden and key markets like Germany. The brand value of Öland is arguably the highest in all Småland-Blekinge but the possibilities of collaborating with other destinations are limited since the brand values are quite diverse. There is however a strong link in target groups since both Öland and Astrid Lindgren's interpretation of Småland (most clearly manifested in Vimmerby) are both very strong amongst families with young children, in Scandinavia as well as in Germany.

Public support for value-added creation in firms has increased but developing a knowledge-based economy remains a slow process

The four countries have enhanced the levels of assistance that they provide in order for local industries to generate greater value in their products and services. Cost efficiency in traditional industrial processes has improved over the past five years. There has been a concerted effort to improve products, service quality and business processes. Examples of such practices are evident in the local processing of dairy products in Jönköping County; Kalmar County's integrated food strategy which benefits from research and development investments from companies; product internationalisation; and the business incubation centres in Kronoberg County.1

A number of local actors lie behind those efforts, including counties (e.g. Kalmar Innovation Council), municipalities, business support organisations (e.g. Almi) and higher education institutions (HEIs). For instance, Linnaeus University has recently adopted new university postgraduate programmes focusing on innovation in such areas as design, business and engineering. It has also enhanced its relationships with large employers such as the global furniture retailer IKEA (based in Älmhult, Kronoberg County), with whom it is creating a “life at home” niche. There is also co-operation in forestry with the company “Södra”. The HEIs of the region have a central role to play in supporting this innovation promotion dynamic across a wider range of economic activities and in supporting the development of knowledge-intensive businesses. In 2018, Jönköping University launch its first MSc course in the field of industrial product design.

At the heart of those initiatives lay the opportunity for Småland-Blekinge to build on the competitive advantages of its counties to create market specialisation across the region. The relocation of the eHealth national agency in Kalmar County and the development of the bioeconomy sector in Jönköping County can foster productive gains, possibly facilitated through local smart specialisation strategies. Smart specialisation favours an integrated approach to economic development. In the case of Jönköping, it may help better integrate its forestry, climate and food strategies for the development of the bioeconomy sector, while in the case of Kalmar it may help better co-ordinate IT sector innovation with public service delivery capacity. Likewise, in Kronoberg County where the IT sector has been steadily growing since the late 1990s and which today has one of the highest growth rates in Sweden, the adoption of local smart specialisation strategies could more effectively promote knowledge spill-overs from Växjö to the rest of the local economy. At present, many activities continue to be concentrated in one or two urban poles. The region should consider how smart specialisation strategies may have application in rural areas as well (see Box 2.1 for a discussion).

One recent positive development is that in April 2017 Jönköping University opened a research and education environment for knowledge-intensive product realisation (known as SPARK). The initiative aims to help manufacturing companies adopt more knowledge-intensive products and processes. SPARK is being developed in co-operation with the Swedish Knowledge Foundation during the period 2017-26. The ten-year collaboration aims to create a nationally leading and internationally competitive research and education environment within knowledge-intensive product realisation, based on continuous co-production between the university and partner companies.

Another significant and rather unique example of ambitious co-operation is Småland China Support which was established in 2012. Kalmar and Kronoberg Counties together with the Linnaeus University then established their own permanent support office in Shanghai (China). The office has three full-time employees (one based in Småland and two in China) who work on two objectives: i) to support SMEs in the early stages of business in China: and ii) to recruit East/Southeast Asian students to the Linnaeus University (LNU). The business side of the operation currently focuses on four regionally strategic areas (wood industry, tourism, food industry and digital business). The office has been operative for almost 6 years with more than 200 clients and has proven itself to be highly efficient, contributing not only a considerable amount of actual business but also a greater knowledge and awareness of the opportunities in China amongst SMEs. The work mainly involves developing networks and personal relationships in China and connecting individual or groups of companies to these networks. The office also co-operates with other Swedish public and private business promoting agents. Permanent representation in China with staff who know the conditions in both markets and who speak both Swedish and Chinese has been critical to the success of this initiative. The office has also recruited more than 1 000 tuition-paying students from China and other countries in East Asia, increasing the brand value of LNU in China and deepening the network of partner universities in Asia. Blekinge and Jönköping Counties have at different stages considered engaging in this initiative but have eventually chosen other priorities. Despite Småland China Support’s successes, its main weakness is the number and limited diversity of SMEs in the regional target group. There are many opportunities in China and a broader and larger base of companies in Sweden would increase the offers on the Chinese market.

Box 2.1. Smart specialisation for rural areas

It is not about technologies but about knowledge and its application

A smart specialisation strategy in rural regions is conceptually different than that of urban ones. In urban regions, smart specialisation approaches focus on expanding formal research in high-technology industries in order to increase the role of these fast-growth sectors in the local economy. Rural regions, in general, are not ideal candidates for this approach. Most lack a university or any other formal research centre. Very little of their economic base could be characterised as high-tech, advanced manufacturing or information and communications technology (ICT)-related. Furthermore, a relatively small share of the local workforce has an advanced degree or even a tertiary education. Low population density, small and dispersed settlement over a large geographic area limit interaction among people and firms. Similarly, small local markets and a small labour force make diversification and the opportunity for “related variety” innovations limited.

However, in a rural context smart specialisation can become a way to facilitate a stronger exogenous growth process. In a broad sense, smart specialisation is really a process that searches for evolving comparative advantage – as such it is useful in all regions. It is fundamentally a “bottom-up” development approach where the region determines its strategy on the basis of local capabilities. If the scope of the opportunities for support is expanded beyond the usual format of export-oriented high-technology products and formal research, then the concept becomes more generally applicable.

As noted by Charles, Gross and Bachtler, “Smart specialization should not be seen as being about technologies as such, but about knowledge and its application, and this applies to all sectors, even agriculture and craft-based industries” (2012, p. 6[2]). A large share of the firms in rural regional economies are small and medium-sized enterprises with no formal research and development activity, but in some cases considerable ability to innovate, although in ways that are not easily detected, since no patent is filed. Process innovations or innovations protected by trade secrets, or innovations that remain hidden because the firm is far from competitors, can be locally significant but do not neatly fit into a smart specialisation strategy. Innovations in the delivery of services or in goods that are not export-oriented are also not captured but can lead to increased productivity and an improved quality of life.

Strategies for rural smart specialisation

Charles, Gross and Bachtler provide five important reminders when developing regional smart specialisation strategies that are particularly relevant for rural regions (2012, pp. 45-46[2]):

  1. 1. The selection should reflect an existing competency, not simply an aspiration. It is also important that the projected demand for a particular good or service be large enough that providing it will have a noticeable impact on regional output and employment. There need not be an immediate increase, but there should be clear potential for significant growth over time.

  2. 2. It is important not to focus on the level of technology when identifying target sectors but on sectors that have future growth potential in the region. This could be in primary industries, such as forestry, fishing, mining or agriculture; in manufacturing, whether it is traditional heavy industry, boat building or specialised components; or in services including tourism, healthcare delivery or job training.

  3. 3. Regions should look for synergies that build on existing capabilities. By extending the local demand for an input, or by using a by-product from the production of a current output, the local economy can grow organically without having to establish a completely new production process.

  4. 4. Fostering innovation is a key function of smart specialisation strategy, but support for innovation should be applied where the potential benefits occur broadly and are not restricted to one or two specific firms. If an innovation is valuable to multiple firms in an important sector of the regional economy, then there will be stronger contributions to regional growth than is the case if the innovation only benefits a few firms with a narrow and small niche market.

  5. 5. In choosing sectors or activities to support, regions must be aware not only of their capability but also the potential of other regions. The underlying logic of smart specialisation is to support activities that result in tradable goods or services and while each region focuses on its opportunity to export, it must also assess the possibility that other regions may be better positioned, and are more likely to capture market opportunities.

These points reinforce the idea that smart specialisation has to do with expanding the competitiveness of regions through investments that increase productivity in those sectors that are ongoing regional strengths.

Source: Charles, D., F. Gross and J. Bachtler (2012[2]), “Smart specialisation and cohesion policy: A strategy for all regions?”, www.eprc-strath.eu/public/dam/jcr:ca04731c-2d7b-490f-a51e-3e368b7ecfb6/ThematicPaper30%25282%2529Final.pdf.

In comparison to 2012, the local innovation ecosystem in Småland-Blekinge has become increasingly organised. New science parks and business incubators have opened in most of Småland-Blekinge’s counties (e.g. Blue Science Park in Blekinge and the Techtank technology cluster) and complementary institutional structures such as Kalmar’s Innovation Council have emerged to develop and implement local development strategies in business and innovation and there is collaboration between municipalities, the region, county councils, and Blekinge Institute of Technology (BTH) and science parks through the Tillväxtforum. After talks with many actors in the regional innovation system, Jönköping has developed a draft regional innovation strategy.

The common instruments used to support technology and knowledge diffusion indeed include physical infrastructure such as science or technology parks, incubators, although the quality and impact of these instruments depend on their design and implementation. The proximity factor is important for the latter. Physical proximity is an advantage which Småland-Blekinge can make use of for building and maintaining relationships given the generally small size of counties. Kronoberg is one of the most successful Swedish examples of how to leverage this advantage to promote an innovation system; horizontal co-ordination has been achieved across economic areas and the ten organisations involved. The value generated in the innovation process by geographic proximity and face-to-face interaction also continues to be supported by evidence from OECD research, despite the widespread use of ICT to connect individuals (OECD, 2016[3]).

Despite improvements in Småland-Blekinge’s local innovation ecosystem, knowledge-transfer from HEIs to businesses remains weak and technology upgrading in local industries has been lagging behind as a result. In all counties, HEIs experience difficulties in liaising with local businesses due to a widespread lack of understanding of the value generated by the integration of postgraduate students and researchers in firms. This reluctance from firms, of small and medium-size most often, limits their capacity to successfully manage technology upgrading. In turn, a poor understanding of the pertinence of university-led research and innovation for private sector development continues to be shared by firms from, for example, the rural sector. In this context, innovation vouchers are instruments that can be used to promote further the use of academic expertise for business development in this era of technological change.

More systemic initiatives such as clusters, networks or competency centres are effective to support specific types of firms (start-ups or existing SMEs), while innovation vouchers or brokerage systems help firms access consulting services and knowledge (OECD, 2016[3]). Innovation vouchers are presently used in Blekinge, Jönköping and Kalmar Counties. For example, Kalmar County has developed a system with innovation vouchers which is not limited to finding support in universities but can also be used for acquiring innovation support from commercial actors or, preferably, one of the national industrial research institutes. The voucher covers 50% of the costs and contra-financing can, if the project meets certain conditions, include the innovators own time (as a defined hourly rate) for prototyping, etc. The terms are quite generous and the process time is normally around a week; despite this, the utilisation of these instruments is surprisingly low. This could be due to a lack of time on behalf of firms to undertake this work or perhaps a lack of knowledge.

Box 2.2. Supporting innovation in SMEs: The use of innovation vouchers

Innovation vouchers are small lines of credit provided by governments to small and medium-sized enterprises (SMEs) to purchase services from public knowledge providers with a view to introducing innovations (new products, processes or services) in their business operations. Innovation vouchers normally target SMEs in light of the contribution (normally below EUR 10 000) they provide for the introduction of small-scale innovations at the firm level. SMEs tend to have limited exposure to public knowledge providers such as universities and research organisations as they may see such institutions as irrelevant to their business activities or be unwilling to invest in the search costs necessary to identify relevant providers. On the other hand, staff in public knowledge providers may see little incentives in working with small firms when the latter have lower absorptive capacity and guarantee lower returns as compared to large companies and other public agencies.

The main purpose of an innovation voucher is to build new relationships between SMEs and public research institutions which will: i) stimulate knowledge transfer directly; ii) act as a catalyst for the formation of longer-term more in-depth relationships. In a snapshot, innovation vouchers are intended as pump-priming funding through which initial industry-university relationships can be established.

The issuing of the voucher has two main impacts, both of which overcome major incentive barriers to the usual engagement between SMEs and knowledge providers:

  1. 1. The voucher empowers the SME to approach knowledge providers with their innovation-related problems, something that they might not have done in the absence of such an incentive.

  2. 2. The voucher provides an incentive for the public knowledge provider to work with SMEs when their tendency might either have been to work with larger firms or to have no industry engagement at all.

Success factors for the use of innovation vouchers

The wide recourse to innovation vouchers (e.g. Ireland, the Netherlands, the West Midlands in the United Kingdom, etc.) demonstrates that, thanks to its simplicity, the measure can be easily adopted by countries and regions worldwide, provided that small firms have a minimum “absorptive capacity” towards university research and that universities and public research institutions are willing to co-operate with industry. Innovation vouchers are traditionally used to solve minor technological problems or scope out larger technological issues. As such, they are useful instruments but need to be integrated into a wider innovation strategy in which voucher recipients can refer to other policies for further stages of business innovation. Examples include collaborative research programmes, incentives for internal research and development, clusters and networks for innovation, etc.

Limited evaluation evidence suggests that output additionality for this measure is high, i.e. a large share of firms that are granted vouchers would not have undertaken the project without public support. However, the impact on longer-term SME-university collaboration is more limited and questionable. On their own, innovation vouchers appear too small a tool to change the embedded attitude of SMEs towards research organisations.

A few conditions make this tool more feasible and likely to succeed. First of all, the voucher should be directly administrated by a public agency, whereas there are some cases in which it was also managed directly by a university. Whilst this causes more costs for the public sector, it presents three main advantages: i) it avoids any potential conflict of interest between the university as a scheme operator and knowledge provider; ii) it may allow a more dedicated approach to the operation of the scheme than the wider mission of a university may permit; iii) there may be greater scope for follow through with other supports for innovation if the scheme is administered by a development agency.

Second, brokering is crucial to the feasibility of the programme. There is a need both to minimise the application burden on firms and to provide cost-effective matching to appropriate academic expertise. For instance, too much an arm’s length approach by the delivery agency may lead to difficulties for firms in finding appropriate academic partners and for knowledge providers in responding to a relatively high volume of unco-ordinated enquiries. Developing an enhanced brokerage service is crucial to the effectiveness and popularity of the programme by enabling firms to more quickly identify possible partners and reducing the load on knowledge providers.

Source: OECD (2018[4]), Innovation Vouchers, OECD International Migration Statistics (database), http://www.oecd.org/innovation/policyplatform (accessed on 15 February 2018).

Småland-Blekinge’s current favourable economic climate may explain the disincentive for companies to engage in more technology-intensive activities (see Chapter 1) and the lower prioritisation by local actors of the OECD recommendation on supporting the development of a knowledge-based economy. Yet, continuous efforts should be mobilised in this direction. Such actions remain critical because the industrial base of most counties in Småland-Blekinge remain dominated by manufacturing and characterised by low-value creation within the regional economy. The local business community should seize upon these strong local conditions to engage in the strategic changes that will contribute to increasing their knowledge intensity, their value added and competitiveness, making them and the local economy more resilient to any future economic slowdown.

Lastly, it is noted that certain actors in the local economy may have interpreted the OECD’s recommendation in this area as a call for the development of new industries rather than support for the existing business fabric to transition toward higher-knowledge intensive activities. With the growing organisation of the region’s innovation system, it is important to take a broad view of innovation. As Wintjes and Hollanders note (see 2.3), innovation is fundamentally about the ability to adopt and adapt new knowledge (Wintjes and Hollanders, 2010[5]). This pertains as much to existing industries and processes as it does to newly emerging ones and should encompass a broad range of activities, including public service provision, government organisations and administration.

Building diversity in the economy and exploring new avenues in knowledge-intensive activities can only strengthen the economic profile of the region, but such an endeavour should not be pursued at the detriment of the local industrial business community which may be left behind. A deviation of the attention and prioritisation to support existing industries in their growth development is not advisable. Efforts should continue to be oriented toward improving the competitiveness and processes of the prevailing local economic capacity.

Box 2.3. Beyond technology-driven innovation

Focusing on “demand-driven” innovation

While national governments largely continue to emphasise technology-driven innovation as the core of smart specialisation strategies, academic research is increasingly arguing for a more nuanced approach that includes “demand-driven” innovation in the form of applications, entrepreneurship, user-driven innovation, and innovation in services and organisations (Wintjes and Hollanders, 2010[5]). The shift includes a recognition that while the production of inventions may continue to be concentrated in a small number of metropolitan regions, all regions can benefit from adopting these inventions in the form of regional innovations. It is the ability to adopt and adapt new knowledge that separates higher growth regions from slower growth ones (Wintjes and Hollanders, 2010, pp. 17-19[5]).

In a survey of experts on the most important sectors for future regional economic development and the most important technologies, Wintjes and Hollanders find hotels and restaurants; health and social work; and agriculture, forestry and fisheries were the 5th, 6th and 7th highest ranked, ahead of computer and data services, pharmaceuticals, software, and aircraft and spacecraft (2010, p. 29[5]). The high rank of traditional industries suggests that the experts believe that innovation in these sectors can have a much larger impact across regions than is the case for the more advanced industries because they are so pervasive in many countries (Wintjes and Hollanders, 2010, p. 28[5]). Similarly, when the experts were asked to pick the most important technologies for the future, the most mentioned was ICT, but alternative energy was second and process control and agricultural and food technologies were in the top 20 (Wintjes and Hollanders, 2010, p. 30[5]).

The larger point made in the study is that there is considerable opportunity in traditional industries for future economic growth and that regions, where there is a strong comparative advantage in these industries, should carefully assess how they can invest in increasing the competitiveness of local firms as a central element of their smart specialisation strategy. While these sectors may not benefit from the push effect of formal research and development investments, they can benefit from the demand for product or process improvement, and there are opportunities for small-scale innovations by entrepreneurs and existing SMEs based on local knowledge. Finally, the importance of regions importing inventions and knowledge developed elsewhere and using it for local innovations cannot be overemphasised as a way to increase the competitiveness of local firms.

A broader understanding of innovation (beyond new technologies alone) is needed in order to apply smart specialisation policy in low-density areas. Almost by definition, low-density areas lack vital parts of the usual way that smart specialisation processes are described. They are too small and open to trade effects to have an endogenous growth process. They lack formal research capability in the form of large universities, government research facilities and corporate research centres. They lack the dense networks of firms, organisations and other institutions that are thought to be central to innovation. However, when innovation is extended to include a broader range of activities, including public service provision, government organisations and administration, tourism and the creation of “third-sector” solutions to social concerns, there are obvious examples of these forms of innovation occurring in large metropolitan regions and in small remote rural regions.

Sources: Wintjes, R. and H. Hollanders (2010[5]), “The regional impact of technological change in 2020”, http://ec.europa.eu/regional_policy/en/information/publications/studies/2010/the-regional-impact-of-technological-change-in-2020; Wintjes, R. and H. Hollanders (2011[6]), “Innovation pathways and policy challenges at the regional level: Smart specialization”, United Nations University, Working paper series 2011-027.

Box 2.4. Rural innovation: The case of Nordland, Norway

Nordland is a region located in northern Norway and has 240 000 inhabitants, and the largest city, Bodo, has a population of close to 50 000. The land and topography of the region are diverse with fjords, high mountains, narrow peninsulas and islands. Nature-based attractions such as the Lofoten Islands are critical for the region’s tourism industry. Forestry and agriculture have also developed in the valleys and coastal areas. As a result of this physical environment production is dispersed across the region – some in locations which are remote and difficult to access.

Nordland has a rich endowment in terms of water resources, landscapes, productive land and mineral resources. These resources provide the foundation for mining, agriculture, forestry, fisheries and aquaculture, and tourism. These industries are performing strongly and are integrated into global markets. They make an important contribution to the economic prosperity of Norway. However, these highly productive and export-oriented industries are not generating significant new jobs for the region (with the exception of tourism). How the region overcomes this “growth paradox” to capture greater value added and jobs in the region will be critical to the future of the region.

In terms of skills and innovation, the region has a number of key strengths and challenges. The region has one university, two university colleges and three research institutions. These institutions are increasingly engaged with local businesses and research and development investment is rising. The county has recognised the importance of innovation and was the first region in Norway to have its own research and development strategy, which has provided a platform to forge closer links with local businesses. However, the region has an ageing population and lower educational attainment than the rest of the country. Although research and development activity is increasing, it still lacks scale and there is not a strong culture of innovation amongst smaller businesses in traditional industries.

Enhancing the competitiveness of tradable sectors outside of oil and gas is challenging in Norway, which has a high-cost base.

The region has adopted smart specialisation as a framework to promote innovation within the region’s tradable sectors. The county’s smart specialisation strategy – Innovative Nordland – has identified the process industry, seafood and tourism as key opportunities for future growth. The county has three key strategies to shape innovation outcomes:

  • supporting co-operative projects between business and research and development institutions

  • brokering education projects within clusters

  • supporting competency building in universities and research and development institutes that aligns with cluster development in the region.

The development of this strategy involved close collaboration between the public sector, business, and research, education and training organisations in the region. Priorities were identified using techniques such as Strength, Weaknesses, Opportunities and Threats (SWOT) analysis and foresight planning to reveal the region’s comparative advantages. The design and delivery of this strategy also involve co-operation and peer review with the region of Österbotten, Finland. Collaboration, consistent and transparent methodologies to identify strengths and peer-review have all been identified as success factors within smart specialisation strategies in a European context (OECD, 2013[7]).

Sources: OECD (2017[8]), OECD Territorial Reviews: Northern Sparsely Populated Areas, http://dx.doi.org/10.1787/9789264268234-en.; OECD (2013[7]), Innovation-driven Growth in Regions: The Role of Smart Specialisation, https://www.oecd.org/innovation/inno/smart-specialisation.pdf (accessed on 30 January 2018).

Formal public-private partnerships have not materialised but public-private co-operation is more widespread than before

Public-private co-operation has grown over the past five years, in the counties of Blekinge and Kronoberg particularly. The improved public-private co-operation is reflected by the increased involvement of Almi, Sweden’s business support agency, in public initiatives in the four counties and the stronger collaboration between HEIs, local science parks and incubators. Unlike in 2012, the obstacles in the legal framework for the formation of public-private initiatives for regional development therefore no longer seem to be prevailing.2 However, public-private co-operation does not go beyond business development initiatives. Encouraging greater participation and contribution of the private sector may yet benefit other areas of strategic regional development in Småland-Blekinge. In Jönköping County, the Science Park has local representatives in all 13 municipalities, which may promote public-private co-operation.

Three of the counties co-operate in tourism with a common brand (Visit Småland) and all four have their own more operational strategies as well

Over those past five years, tourism has expanded in Småland-Blekinge. Hotel revenues went up in all counties between 2008 and 2016 (Figure 2.1). Jönköping remains the most popular county of the region and is the county in which revenues have increased the most. Private cottage and apartment rentals also picked up in recent years, although not reaching pre-crisis levels yet (Figure 2.2). In the same period, there has also been an overall increase in the creation of establishments (i.e. hotels, holiday villages, youth hostels) to serve the tourism sector in Småland-Blekinge (Tillväxtverket, 2018[9]). Kalmar, followed by Jönköping, is the county that registers the highest number of establishments and it is also one of the two counties, with Kronoberg, in which the increase has been most visible; thereby showing the commitment of those counties to strengthening infrastructure quality and the tourism industry in the region more generally (Tillväxtverket, 2018[9]).

An additional development since the 2012 Territorial Review is that each of the four counties now possesses its own county brand for the international tourism market.3 With “Blekinge Wonderful Water”, the county of Blekinge recently defined its tourism identity in relation to the element of water, which links directly to the promotion of its coastline assets. The strategy in Blekinge led to the formalisation of the organisation Visit Blekinge with the mission to market Blekinge outside of the county´s borders. Kronoberg County has been the main instigator of the “Småland” brand which encompasses a larger inter-county geographical scope. Similarly, Jönköping County chose to follow the strategy it had prior to 2012 with a county-wide promotional focus essentially targeted at the “nature-loving” foreign Dutch tourists. Kronoberg's approach is similar to Jönköping's while Kalmar – the most tourism-intensive region of the four – to a large extent uses a fragmented approach where the five major destinations (private/public) take full responsibility for their own development and domestic marketing. Kalmar is, for instance, developing a niche tourism market attracting Chinese visitors which likely results from the increase in foreign direct investment projects with China in recent years (involving Småland China Support). The regional level is responsible for international marketing and certain competencies and development projects. Since 2018, the regional level has been better-resourced to develop the regional competitiveness in the tourism industry.

Figure 2.1. Hotel revenue in Småland-Blekinge
Total revenue in SEK thousand between 2008 and 2016
picture

Source: Swedish Agency for Economic and Regional Growth (2018[10]) (2018), Tourism Statisticshttps://tillvaxtverket.se/statistik/turism.html.

Figure 2.2. Commercially arranged private cottage and apartment rentals in Småland-Blekinge counties
Total revenue in SEK thousand between 2008 and 2016
picture

Source: Swedish Agency for Economic and Regional Growth (2018[10]) (2018), Tourism Statisticshttps://tillvaxtverket.se/statistik/turism.html.

While tourism in Småland-Blekinge has been gaining traction, the international outreach of the region needs to be further developed. Significant steps have been taken in Småland since 2012 to create joint branding under the brand name “Sweden for real” and a common marketing and sales platform (visitsmaland.se). Synergies should be built across the different counties’ tourism strategies to enhance the regional brand. With the exception of Kalmar County, investments in the tourism industry are seen as carrying a lighter weight for local development than investments in ICT or industrial projects. Yet, the importance and contribution of the tourism sector to the local economy of the region is not negligible and can be boosted through a strategic territorial branding campaign as developed by French and German regions (Box 2.5).

Box 2.5. Territorial branding strategies: Experiences from Brittany (France) and Nuremberg (Germany)

Territorial branding can be an effective strategy for regional development, if well-articulated and well-promoted. One lesson from place-branding is that a clearly identifiable brand is more beneficial than many different segmented ones. Investing in several different brands for the same place can limit the impact of the marketing strategy and create market confusion.

Produit en Bretagne

The case of the brand Produit en Bretagne (Made in Brittany) in France shows how shared values and collective efforts to expand and solidify the brand can yield positive results. The oldest regional food brand in Europe, Produit en Bretagne was created in 1986 to strengthen the solidarity and employment of the region. Since then, an association of producers was created, which includes today members of the service sector such as hotel, restaurants and cultural and creative sectors. The association facilitates the engagement of an array of stakeholders, who exercise quality controls over products and agree on the marketing strategy. The association successfully created a business incubator to support innovative projects, too.

This example also signals the importance of participatory territorial branding, i.e. of involving local stakeholders in brand development and consolidation. Promoting synergies and consensus among regional stakeholders has been identified as one of the key elements in keeping a brand alive and well in the long run.

Nuremberg Metropolitan Region

In the Nuremberg Metropolitan Region, creating a common identity was instrumental to develop the territorial brand of the region (OECD, 2013[7]). Building territorial identity can involve a process of identifying local strengths and weakness, creating trust and defining directions for future change. This process further enables common action and strategies to take place.

One step in this process was to promote internal tourism, by encouraging residents to “rediscover” their own territory, with the Discovery Pass. The metropolitan authority also invested in the accessibility of the regional transport system, with broader coverage and an integrated fare system. Increased daily commuter traffic contributes to regional economic cohesiveness.

The territorial branding process in Nuremberg was further backed up by a strong cluster policy. It includes comprehensive projects of renewable energy production, innovation and entrepreneurship in healthcare, regional trade fairs and a knowledge-sharing and network-building platform called Original Regional (OECD, 2013[7]). The branding policy can showcase the Nuremberg region as having “original” products and assets whilst also being able to develop research and generate innovation.

Sources: OECD (forthcoming[12]), Productivity and Jobs in a Globalised World: (How) Can All Regions Benefit?, OECD Publishing, Paris; OECD (2013[7]), Innovation-driven Growth in Regions: The Role of Smart Specialisation, https://www.oecd.org/innovation/inno/smart-specialisation.pdf.

The multi-functionality of tourism for rural areas, if well managed, can create positive externalities by opening up access to local amenities that will not only make sites attractive to foreign visitors but also improve the quality of life of local residents. Service-based businesses and entrepreneurial ventures linked to tourism can create social and economic opportunities. The OECD Rural Policy 3.0 framework emphasises the importance of a diversified rural economy (Box 2.6). Rural policies should consider the specific features of diverse territories and should promote new economic opportunities for rural communities (i.e. in non-farm employment, alternative products and services) (OECD, 2016[11]). In this vein, the Rural 3.0 framework encourages a bottom-up approach that mobilises the diverse set of actors contributing to the development of rural areas. The tourism sector can be a central pillar to any country or region’s rural development strategy but tends to be more strategically developed when integrated into a framework that considers important the alignment with other policy areas (e.g. road, rail, supply of accommodation facilities, public services, etc.).

Box 2.6. The OECD rural policy framework: Rural Policy 3.0

In 2006, OECD member countries adopted the New Rural Paradigm as a core approach to developing better rural policy. The main principle of this approach was that rural territories can be places of opportunity but, for these places to achieve their potential, a spatially sensitive development approach is required. The key elements of the approach are:

  • Recognition that rural areas are now much more than only agriculture.

  • A shift in philosophy from supporting rural areas through subsidies or entitlements to focusing support on investments to increase competitiveness.

  • Belief that rural people have a better sense for their local development opportunities than national governments, which leads to a “bottom-up” approach.

  • Recognition that there are multiple actors that must be engaged in the rural development process, not just national governments and farmers (OECD, 2006[13]).

Since 2006, the OECD has engaged with a number of member countries to conduct rural policy reviews in order to gauge how existing rural policies in each country conforms with the principles of the New Rural Paradigm and to offer advice on how to reform those policies to make them more effective (Freshwater, 2014[14]). Policy advice is based on evolving academic and practitioner research and on the identification of effective rural policies in member countries. In addition, the OECD has investigated some key thematic topics in co-operation with member countries, including rural service delivery, the role of renewable energy in rural development and the nature of the linkages between urban and rural areas.

In 2016, the New Rural Paradigm was updated with the Rural Policy 3.0, which reflects the new knowledge acquired in the intervening decade (OECD, 2016[15]). This approach builds upon the New Rural Paradigm with the intention of moving from a “paradigm” towards more specific policy recommendations that can help countries with policy implementation (Garcilazo, 2017[16]). The core idea in Rural Policy 3.0 is that economic growth occurs in different ways in rural areas than it does in urban ones. The rural growth process takes place in a “low-density economy” where agglomeration effects do not occur and distance plays an important role in production costs and the lives of the people. Moreover, because the opportunities and constraints in different types of rural places vary, so does their economic function. Rural economies tend to have niche markets because they are small and specialised, except for those places producing natural resources, such as agricultural commodities, minerals or forest products.

Table 2.2 illustrates the evolution of OECD thought on rural policy. The advice for policy implementation is fairly abstract, reflecting the fact that, for any country, variability in regional conditions and in national objectives makes it impossible to provide specific policy advice. Even for specific rural policy reviews, it is difficult for the OECD to develop policy advice that goes much beyond basic principles. To do so would require more information and analysis than is available and a far better understanding of how rural policy fits into the larger set of policy concerns for that national government.

The value of the OECD approach remains its potential to apply a coherent analytical framework to thinking about rural policy. A country that engages in the process receives some basic advice on how to think about policy but must still develop specific policies on its own. Because the OECD policy framework emphasises the importance of a bottom-up approach and the inherent diversity of rural areas, national governments have to be willing to engage in joint development strategies with local counterparts. It is in only through this process that specific policies are developed.

Table 2.2. Rural Policy 3.0

Old paradigm

New Rural Paradigm (2006)

Rural Policy 3.0: Implementing the New Rural Paradigm

Objectives

Equalisation

Competitiveness

Well-being considering multiple dimensions of: i) the economy; ii) society; and iii) the environment

Policy focus

Support for a single dominant resource sector

Support for multiple sectors based on their competitiveness

Low-density economies differentiated by type of rural area

Tools

Subsidies for firms

Investments in qualified firms and communities

Integrated rural development approach – spectrum of support to the public sector, firms and third sector

Key actors and stakeholders

Farm organisations and national governments

All levels of government and all relevant departments plus local stakeholders

Involvement of: i) public sector – multi-level governance; ii) private sector – for-profit firms and social enterprise; iii) third sector – non-governmental organisations and civil society

Policy approach

Uniformly applied top-down policy

Bottom-up policy, local strategies

Integrated approach with multiple policy domains

Rural definition

Not urban

Rural as a variety of distinct types of place

Three types of rural: i) within a functional urban area; ii) close to a functional urban area; iii) far from a functional urban area

Sources: OECD (2016[15]), “Rural Policy 3.0”, in OECD Regional Outlook 2016: Productive Regions for Inclusive Societies, https://doi.org/10.1787/9789264260245-7-en; Freshwater, D. and R. Trapasso (2014[14]), “The disconnect between principles and practice: Rural policy reviews of OECD countries”, http://dx.doi.org/10.1111/grow.12059; Garcilazo, E. (2017[16]), “Rural Policy 3.0 productive regions for inclusive societies: Low density economies: Places of opportunity”, https://enrd.ec.europa.eu/sites/enrd/files/s4_rural-businesses_rural-policy_garcilazo.pdf; OECD (2006[13])The New Rural Paradigm: Policies and Governancehttp://dx.doi.org/10.1787/9789264023918-en.

Internal mobility and broadband connectivity improvements will benefit regional well-being and attractiveness

A strong emphasis is placed on expanding public transport

Within the realm of infrastructure and connectivity works, internal mobility is the domain in which most progress has been made across the region. In the counties of Småland-Blekinge, the focus has been put on increasing the efficiency of the public bus system. This new infrastructure not only improved accessibility within the county but it also changed commuter behaviour. In Kalmar and Kronoberg Counties, a new corridor system was created which increased the frequency of public buses; all buses being 100% climate neutral, functioning on biogas or HVO biodiesel.4 Fossil CO2 is virtually eliminated from all public transport operated by the regional public transport company KLT. This includes also all minibuses, public transport taxis, etc. (almost all private buses and taxis are also biofueled or electric/hybrid since this is a common customer demand). Blekinge also has a large share of renewable fuels in its public transport system and has emphasised a corridor system for public transport; the modal share of public transport has increased in the county in recent years.

The counties of Småland-Blekinge are taking a strong environmental stand which is also emphasised through the development of new bike lanes in all counties. The importance of internal mobility and the prioritisation of more sustainable modes of transportation has thus increased since 2012 and marks a shift from the mostly rail and road (i.e. private cars) focus in infrastructure planning that predominated five years ago. Measures such as those can both contribute to positively raising the well-being levels of residents, mainly through greater proximity to services from remote areas and by increasing the attractiveness of counties and the overall region. It is noted that there remains a strong focus on improving rail infrastructure in the region since little progress has been made on making road transport more sustainable. The need for better, more efficient and safer road infrastructure remains. However, better road infrastructure will inevitably increase demand and correspondingly CO2 emissions. Since the possibilities to regionally influence the share of CO2-neutral road vehicles are very limited, the only possibility that remains is to increase bio-fuelled and electric public transport.

Nonetheless, data collection on travel inflows by road, bike ownership and bike use for going to work journeys, as well as data capturing the shift toward more electrified modes of transportation which are currently unavailable would be welcome so as to develop a better understanding of the economic and social returns from adopting more sustainable and efficient internal transport systems. Some data collection on these topics is initiated and done regionally but some gaps remain.

There is a unanimous commitment towards enhancing digital connectivity

How to bring digital connectivity to rural areas and a country’s most remote places is debated across all OECD countries and regions. In a recent strategy document, the Swedish government set the national target of at least 95% of all households and companies having access to broadband with at least 100 Mbit/s by the year 2020. This national target has influenced each county in Sweden to set and meet similarly ambitious goals and the national government has assigned broadband co-ordination to the counties. In Småland-Blekinge, county targets vary from 90% to 100% coverage. All counties of Småland-Blekinge show significant increases in broadband connectivity at 100 Mbits deployed both in the home and work environments (Chapter 1).

Digital connectivity was not a primary subject of recommendation in the 2012 territorial review, but it certainly was pointed out as an essential piece of infrastructure to improve service provision and business attraction in the region. In some aspects, access to broadband can help overcome physical distances, road and rail infrastructure challenges by giving people the possibility of having a full-time professional activity working from home and living close to the natural amenities that constitute the wealth of the region and a key point of attraction for those residents. Digital connectivity is an instrument that can significantly help strengthen labour markets, skills to jobs matching and the local entrepreneurial business environment.

As in the rest of Sweden, interest in telemedicine has gone up in the region over the past few years. One factor driving the increasing interest in telemedicine is the difficult access to health facilities, qualified physicians and specialists, particularly. As telemedicine relies on high-speed Internet services to connect patients with healthcare providers, pushing for its development may well be the secret to advancing broadband itself in underserved communities, both rural and urban. Telehealth is not a specific service but a variety of technologies and tactics to deliver virtual medical care, wellness, health awareness and education in a holistic manner. Broadband is a major part of that delivery mechanism.

There is a large potential for Småland-Blekinge to develop a “continuum of care”; that is, a system providing a comprehensive array of healthcare spanning all levels and intensity of care. The presence of a strong IT cluster concentrated in Blekinge and Kronoberg Counties and the relocation of the National Health Agency in Kalmar County are all factors that can support the creation of new technologies and services in Småland-Blekinge and help raise the profile of the region in the field of eHealth. Blekinge’s success with the e-healthcare project “Sicaht” is a case in point; it has led to a permanent focus area on eHealth within Blue Science Park. A “healthcare hub” that uses broadband to link a city’s or county’s hospitals, clinics, other healthcare providers and private practices can strengthen and expand the continuum of care. Healthcare institutions in Småland-Blekinge could align with schools and libraries that have telemedicine applications and services into a healthcare hub. By doing so, the infrastructure available to communities may not only be further strengthened but community funding may also be more easily mobilised.

The cost-benefit analyses driving decision-making on the question of whether to provide digital connectivity to sparsely populated areas most often underline the costly engagement that it will represent for any given local economy. In Småland-Blekinge, the speed by which each county will be able to meet its target will largely depend on the responsiveness of private providers to market incentives in a first stage and, in a second stage, on the capacity of public companies, community associations and municipalities to finance such a service to the areas that lack critical mass and remain underserved. In the counties that set a target of 100% successful county-wide coverage, considerations around the establishment of public-private partnerships or the mobilisation of county resources were also expressed as the potential solution to remedy remaining gaps in coverage. While counties’ perspective may differ on how to best finance digital connectivity, the economic and social value generated by the provision of such a service even to the most remote areas is recognised unanimously. There is a growing concern that the gap between the most and least connected areas will further increase in the roll-out of 5G networks. Accessibility to 5G is critical to the development of IoT (Internet of Things) for all kinds of purposes, autonomous vehicles, high-automation of industry, virtual reality, augmented reality and many services just waiting to be created.

Box 2.7. Deployment of fibre optical networks through collaborative approaches

As an increasing amount of economic and social activity is undertaken over communication networks, it becomes more challenging to be restricted to low-capacity broadband when living in some rural or remote areas. Given that most countries have regions that are sparsely populated, it raises the question of how to improve broadband access in these areas.

There is a growing “grassroots movement” in Sweden to extend optical network fibre coverage to rural villages. There are around 1 000 small village fibre networks in Sweden, in addition to the 190 municipal networks, which on average connect 150 households. These networks are primarily operated as co-operatives, in combination with public funding and connection fees paid by end users. People in these communities also participate through volunteering their labour or equipment as well as rights of way in the case of the landowners. The incumbent telecommunication operator, as well as other companies, provides various toolkits and services for the deployment of village fibre networks in order to safeguard that these networks meet industry requirements. As the deployment cost per access in rural areas can be as much as four times what it cost in urban areas, such development may not attract commercial players and rely on such collaborative approaches. Aside from any public funding, Sweden’s experience suggests that village networks require local initiatives and commitment as well as leadership through the development of local broadband plans and strategies. They also require co-ordination with authorities to handle a variety of regulatory and legal issues, and demand competency on how to build and maintain broadband networks. The most decisive factor is that people in these areas of Sweden are prepared to use their resources and contribute with several thousand hours of work to make a village network a reality.

In the United Kingdom, Community Broadband Scotland is engaging with remote and rural communities in order to support residents to develop their own community-led broadband solutions. Examples of ongoing projects include those in Ewes Valley (Dumfries and Galloway), Tomintoul and Glenlivet (Moray), which are inland mountain communities located within the Moray area of the Cairngorm National Park. Another example of a larger project can be found in Canada and the small Alberta town of Olds with a population of 8 500, which has built its own fibre network through the town’s non-profit economic development called O-net. The network is being deployed to all households in the town with a number of positive effects reported for the community.

Sources: Mölleryd, B. (2015[17]), “Development of high-speed networks and the role of municipal networks”, http://dx.doi.org/10.1787/5jrqdl7rvns3-en.; OECD (2016[11]), OECD Regional Outlook 2016: Productive Regions for Inclusive Societies, http://dx.doi.org/10.1787/9789264260245-en.

Areas for further progress

Poor labour market skills matching continues to be a drag on the region’s economy

Strong linkages between the regional education system and the business community are a necessary condition for achieving a better match of skills supply with skills demand. Over the past five years, in Småland-Blekinge, those links have been strengthened. The better co-ordination of HEIs and vocational education and training (VET) schools with the business community has resulted in the creation of new programmes, curriculum design and updating with, in some cases, local companies sitting on the board of educational institutions. In the different counties, educational institutions have thus made efforts to become more responsive to local labour market needs. In Blekinge, VET institutions have been co-operating with the military to develop a new programme that would meet their long-term labour market need for airport technicians; whereas the Linnaeus University (LNU) of Kalmar and Kronoberg recently created an eHealth postgraduate programme, in response to the relocation of the National eHealth Agency from Stockholm to Kalmar County. Through its Information Engineering Centre, LNU is also working with ICT companies to develop more relevant education programmes. The concern of retaining existing businesses with a high-growth potential in the region is associated with the objective to achieve good employment outcomes.

The availability of skilled human capital is central to enabling the growth of any company’s products and operations. The lack thereof may prompt firms to relocate to neighbouring business hubs such as Stockholm or Malmö or even lead to their closure. It bears noting that there is also demand for skills in the public sector in several occupations, for example, qualified teachers, school managers, qualified social workers, city planners (architects, engineers), all kinds of nurses. The French CIFRE convention (Conventions Industrielles de Formation par la Recherche) is a best practice that may be replicable and adapted at the local level and which could effectively boost the hiring of young talent by local businesses. Fostering synergies between education and the labour market contributes not only to ensuring that businesses find individuals with the right skills to meet their need, but it should also be sought as part of a strategy to generate greater spillovers from university, research across a diverse set of economic activities in the region in order to support its knowledge-based transition. Knowledge spillovers, which are knowledge benefits that firms, researchers and other agents receive by being co-located, are typically measured by patent citations and the distance decay associated with citations in the same technology areas (i.e. after a particular distance, citations are significantly less likely, commonly found to be within a 150-200 km radius) (OECD, 2016[3]).

Linnaeus University (LNU) has generally been perceived as successful in disseminating and reaching a cross-county and labour market impact.5 A beneficial change at LNU driving this positive evolution has been the greater co-ordination and local involvement of this institution with regional and business planners. Linnaeus University is a greater part of the regional strategic fabric than was the case five or six years ago. LNU is increasingly involved in a number of local learning centres such as Campus Västervik. LNU actively participates in Småland's focus on the wood industry. For example, through ProWood (prowood.se), researchers work directly with companies in the industry. Furthermore, LNU has increased its participation in the regional dialogue on competency provision with both Kalmar and Kronoberg and has also taken the lead creating a regional network of school/education development specialists. In the case of Jönköping University (JU), the labour force and business influence remain largely local. Jönköping University was also reported to need to strengthen its efforts to equip students with the technical skills required in the forestry and green industries, which are at the base of much of the counties’ labour demands and skills mismatch and could likely be well delivered by vocational training institutions. It is noted that JU has a host company programme based on the idea of proximity between the university and the surrounding community. Further, the newly established SPARK environment is a clear example of collaboration between universities and regional companies in co-production research. As such, this issue is being increasingly tackled. In Blekinge, the Blekinge Institute of Technology has diverted its attention away from potential partnerships and collaboration with other Småland-Blekinge HEIs to focus on the Skåne region’s Lund University. A recent reduction in budget and admission numbers (i.e. minus 1 000 students) is a loss to the Småland-Blekinge region. The Blekinge Institute of Technology continues to be recognised as a high-reputation and differentiated technical institution which has been and still plays a major role in stimulating the competitiveness of the local industry and its labour market.

Box 2.8. Facilitating student hiring by the local industry: A good practice from France

The CIFRE convention (Conventions Industrielles de Formation par la Recherche), created in 1981, is one of the key mechanisms linking French businesses with universities and doctoral students. The student is granted a research mandate within the business, supervised by the university laboratory. A CIFRE contract has a term of 3 years, with a minimum gross salary of EUR 23 484 per year, on which the partner business receives a subsidy of EUR 14 000 per year from the National Association for Technological Research (ANRT, L'Association nationale de la recherche et de la technologie).

CIFRE agreements cover all scientific disciplines and sectors of activity and are concluded with large companies as well as with SMEs. They operate primarily in the sectors of electronics, communications and information technology, transport and energy, and to a much lesser extent in the construction, banking and insurance sectors.

Measured in terms of publications, CIFREs are a force to be reckoned with in research (at least 1 037 highly ranked international publications in 2012) and development (2 000 patents filed between 1981 and 2012). The thesis defence rate is 90% across all disciplines. Employment rates for CIFRE students are 96% within a year and 70% within a month after graduation (ANRT data).

By hosting a doctoral student, the business is a location for and an ally in the student’s training. The agreement creates or reinforces strong links between these two worlds, with their sometimes-differing methods and cultures. CIFRE doctoral students receive recurrent funding and are able to combine their scientific and professional development.

Source: OECD (forthcoming[12]), Productivity and Jobs in a Globalised World: (How) Can All Regions Benefit?, OECD Publishing, Paris.

However, the mismatch of skills to jobs presents a persistent bottleneck across the four counties. Despite the presence of quality higher education institutions (HEIs), the region remains mostly characterised by a low stock of skills; higher-skilled youth continue to leave the region after completing their studies. The region thus faces the same obstacles as five years ago. Likewise, as was the case in 2012, the local industry and the work opportunities it provides continue to bear a negative image amongst young people but no new programme has been implemented with the objective to increase attractiveness.

Skill mismatches in OECD countries present a drag on the growth potential of the economy. Mismatches between the educational requirements of jobs and educational qualifications are common and result in lower productivity than that which could be achieved if workers were all employed in jobs that matched their skills. The issue of retaining high-skilled youth into the region after the completion of their studies also has important productivity implications: for a 10-percentage point increase in a city’s share of university graduates, the productivity increases by around 3% (Ahrend and Lembcke, 2015[18]).

Local labour market forecasting needs to be improved and career guidance strengthened

To achieve a good responsiveness of education to the labour market, Småland-Blekinge should not only seek to successfully meet existing labour market needs but it should also make better use of labour market forecasting to understand future needs and be able to orient the development of new programmes and start equipping young people with the skills that will be growing in demand as technology continues to evolve and influence job requirements. At present in Sweden, Statistics Sweden and the Public Employment Service (PES) are the main actors developing skills assessment and anticipation exercises (SAA) in the country but trade unions and employer’s organisations are also actively engaged in the dialogue on skill needs and skills development (OECD, 2016[19]). Information is scaled down to the regional level but capacity-building at the local level would be needed to support the local authorities in charge of education provision (the municipalities) in making good use of this information and disaggregating it further to their municipal level; which is what exploiting it better would also entail. Labour market forecasting at the regional level is a practice that can be instrumental to developing a good understanding of the type of occupational profiles sought-after by businesses in the short-, medium- and longer-term, as well as identifying the qualifications necessary to meet those needs (OECD, 2016[19]).

In relation to this, weak career guidance has also been identified as an issue in Småland-Blekinge. Developing a good handle of evidence-based information on the region’s (potentially) high-growth sectors and the necessary credentials to enter those would also contribute to providing better career orientation in schools by showcasing the diversity of labour market opportunities and career profiles existing in the region and advising on study tracks in relation to those. But previous OECD research on Sweden (OECD, 2016[19]) highlighted that the interaction between the PES and the municipalities that provide career and counselling advice to students tend to be ad hoc with PES input sought late in the decision-making process. The weak link between SAA information and municipal career advisors is especially troubling for municipalities with limited analytical capabilities, those that would benefit the most from being able to use the SAA information produced by the PES and Statistics Sweden (OECD, 2016[19]). Further involving the county level would be beneficial to tackle this issue and could lead to instrumentalising county level or a regional initiative such as those created by the French regions of Provence-Alpes-Côte d’Azur and Auvergne-Rhône-Alpes, as exemplified below.

Box 2.9. Career advice websites: Best practices from French regions

Provence-Alpes-Côte d’Azur

In addition to providing the detailed occupational description of career advice services Onisep, the career advice portal of the Provence-Alpes-Côte d’Azur region also provides key data for each occupation, links to job offers from employment centre Pôle Emploi and to the relevant education and training options in the region. The key data is presented as an interactive tool that enables a better understanding of the occupation in the region. A map is provided showing the regions in which employment in the specific occupation is highest. Information is also provided regarding which sectors use the occupation most, including links to employer contact details in the specific sectors (through the pages jaunes directory). The tool also shows an age and gender profile of the occupation in the region. To allow individuals to better understand the demand for the occupation, information is provided on employment growth in the last two years, recruitment projects from Pôle Emploi, the share of recruitments on permanent contracts, and whether or not the occupation is mainly a seasonal activity. This information is shown in a user-friendly way, using three types of smiley faces (good, neutral and bad). The average wage in the occupation is also displayed. Finally, a list of related occupations is provided. Data can be displayed for the entire region and for specific parts of the region.

Auvergne-Rhône-Alpes

The career advice portal from the Auvergne-Rhône-Alpes region contains detailed labour market information for all occupations in the form of weather forecasts. Using typical weather forecast symbols (e.g. rainy, cloudy, sunny), the website visualises the situation in the region and its departments in terms of employment and job opportunities. The occupational profile also presents information on educational attainment, gender, employment type and working hours in a visually attractive way, as well as the most important sectors for the occupation. A short description provides information on short-term and long-term recruitment trends. The typical information on tasks, skills, and education and training requirements is also provided, together with links to training options and job offers in. the region. The portal also contains a separate option to look at the occupations that are recruiting in the region. For each regional department, three interactive lists are available: i) occupations with a high number of recruitments; ii) occupations with strong growth in the number of recruitments; iii) occupations that have a shortage of available candidates

Source: OECD (2016[19]), Getting Skills Right: Sweden, http://dx.doi.org/10.1787/9789264265479-en.

As the question of local labour market skills forecasting, regional data analysis and information dissemination highlights, the Swedish education and training system faces a multi-level governance issue that hinders its effectiveness. In Småland-Blekinge, as in the rest of Sweden, municipalities play a crucial role in the delivery and implementation of national skills policies. Among other areas, education provision at the upper secondary level is under their responsibility. As earlier stated, the smaller municipalities are likely to possess less technical capacity in the design and implementation of training programmes and have reported a difficulty in getting new programmes approved at the national level (only around 20% do). Alongside the issue of competency, municipalities may be suffering from a fragmented understanding and vision of the labour market, its growing sectors and the skill requirements that emerge from those. Sweden has set up Regional Competence Platforms for this very purpose to bring together education and labour market planning. County-wide skills strategies – such as those used in Gothenburg – facilitate the involvement of the business sector at all levels of education. This type of approach reduces the extent to which such engagement and collaboration are dependent on individual relationships between business leaders and municipal representatives. However, a broader issue is that Swedish regional actors, unlike municipalities or national bodies, do not have extensive powers to plan or implement skills policies (OECD, 2016[19]). They have no mandate to tell schools and universities how to organise the delivery of education and have almost no say in the design and implementation of policies to spur the development of skills to match labour market needs. As such, schools and universities have little incentive to respond to the demands of the regional labour market (OECD, 2016[19]). As noted by the 2016 OECD report Getting Skills Right: Sweden, the mandate of Regional Competence Platforms is often vague and they have scarce resources and analytical capabilities (OECD, 2016[19]).

A renewed role for regional actors to plan skills development could be inspired by the functioning of state-region contracts that exist in other OECD countries. These bilateral agreements between national and sub-national governments clearly define stakeholders’ mutual obligations, the assignment of powers of decision, the financial commitments (possibly in a multi-year budgeting perspective) and the enforcement and accountability mechanisms. Other international examples of how to do skills planning at a regional level include:

  • Local Enterprise Partnerships in the United Kingdom. Local Enterprise Partnerships are locally-owned partnerships between local authorities and businesses. They play a central role in deciding local economic priorities and undertaking activities to drive economic growth and create local jobs. These are less focused on education and more on skills (as it relates to adult education). They are active in doing skills planning and looking at emerging industry requirements. They often play a role in promoting apprenticeships to employers and aim to co-ordinate public services.

  • Workforce Investment Boards in the United States. These boards bring together local employers (over 50% of the membership) with community colleges, local county governments and the non-profit sector to do regional workforce planning and policy. There are 600 such boards across the United States.

  • Local Associations of Labour, Management, Government, and Community in Korea. Korea has been moving to a more decentralised model of labour market policies and they have established four party committees in many regions to bring together labour market planning and training with employers.

  • Regional Employment Trials Program in Australia. This recently established programme has introduced the Regional Employment Trials programme in ten selected disadvantaged regions (Australian Government, 2018[20]). In these regions, the Department of Jobs and Small Business Employment Facilitators works with Regional Development Australia (RDA) committees to develop local employment projects. Projects bring together stakeholders and employment services providers to tackle employment challenges. This includes such activities as: using mature aged residents and local business leaders in a mentoring programme; preparing job seekers for an up-coming infrastructure project; and work experience programmes that provide local employment opportunities.

Box 2.10. Learning from a peer region: Gothenburg’s framework of co-operation to tackle skills imbalances at the local level

The Gothenburg region has been able to gather different municipalities around collective and shared skills objectives through a framework that could well be strengthened and exported to other regions in Sweden. This led to a co-ordinated planning of the educational offer (as opposed to the unco-ordinated response prompted by local competition) and to an extremely effective response to skills challenges at the regional level. The establishment of a regional platform for co-operation implied that resources were used in a more rational way and enabled smaller education providers (some of them private ones) to benefit from reaching a critical mass which, for instance, allowed to apply for European Social Funds (ESF) with larger project proposals eventually increasing the chance of receiving funds. Building trust across local actors has been fundamental in this process as was the ability to collect and share SAA information to all stakeholders involved.

Source: OECD (2016[19]), Getting Skills Right: Sweden, http://dx.doi.org/10.1787/9789264265479-en.

Effectively managing business succession and promoting youth entrepreneurship

A comprehensive strategy should be developed to better manage business succession

In 2012, improving business succession amongst local SMEs was a priority area for the four counties of Småland-Blekinge. However, over the past five years, little has been done. Stakeholders reported that solving this challenge requires the implementation of complex measures and policies which have been delaying progress in this area. To be more precise, the personal, family and social aspects involved in business succession mean that regional and municipal administrations are often ill-equipped to successfully manage and facilitate such a process.

Yet, there is a continuous pressing need for the region to get better at addressing this challenge as, for instance, Kalmar County records the oldest business owner population in all of Sweden. The county benefits from Almi’s collaboration (the business support agency), for it seeks to identify potential business takers for retiring owners. But other complementary actions could be envisioned to make this process work. For instance, an avenue to look into would be that of mobilising the two independent incubators loosely connected to LNU – one in Växjö (Företagsfabriken) and one in Kalmar (Kalmar Science Park Incubator) – in order to see how they could facilitate contact between retiring business owners and entrepreneurs. Not all entrepreneurs aspire to develop their own project: some are more eager to put their entrepreneurial mindset to use by taking over someone else’s.

One notable activity in this regard is the role of Jönköping County's Science Park in matching existing businesses with driven entrepreneurs. This applies both to matching the right team when it comes to a new company/business idea as well as addressing business succession. As a countywide Science Park with nodes in every municipality, individuals can be matched throughout the county.

Ensuring effective business succession also has implications for the geographic economy of the counties. Given that most young entrepreneurs tend to locate their activities in the urban centre or city that is the economic heart of the county, the risk is that, with poorly managed business successions, a great number of companies currently in the outskirts of the urban centres, dispersed in rural areas particularly, will soon disappear.

Box 2.11. Reempresa: A business transfer marketplace for SMEs in Catalonia, Spain

The Centre de Reempresa de Catalunya (Reempresa) is an innovative initiative that gained international recognition being recently distinguished with the EU’s 2017 European Enterprise Promotion Awards (EEPA) within the category of “Improving the business environment”. With this award, Reempresa’s contribution is recognised as an innovative policy supporting SMEs safeguarding the business fabric of a region and fighting against unemployment.

Reempresa is the market for the sale of small and medium-sized businesses in Catalonia. It is a new entrepreneurial and growth model: a professional mechanism by which one or more newcomers access the property of another company, in operation, to make it grow without having to go through the phase of creating it. In most SMEs, and in all personal companies, this process means the assumption of the tasks of management and management by the re-entrepreneur.

By structuring the Reempresa process, all the assets of the company are maintained and this continues in operation, maintaining jobs, facilities, customers and suppliers, and giving value to the whole story, an effort developed in the initial creation and development of the company. In addition, with the transfer of companies, the current and future business fabric is reinforced and a market susceptible to economic growth is promoted.

Reempresa’s initiative stems from the belief that a company in ordinary operation has many more possibilities to generate resources than a new company that starts from scratch. Business transfer can help to avoid the conflict and judicialisation that so often comes along with business closure.

Source: Reempresa (2018[21]), But, What is Reempresa?, http://www.reempresa.org/eng/Reempresa/But-What-is-Reempresa (accessed on 30 January 2018).

The previous youth and female entrepreneurship support priorities have been put on hold…

Young people make a decisive contribution to the local economy, shaping communities and creating new opportunities not only for themselves but in many cases also for their peers. Retaining local youth, especially entrepreneurial and high-skilled individuals, should be at the cornerstone of any regional development strategy. While identified as a priority at the time of the 2012 report, the emphasis that was placed on supporting young people, and especially women, to develop their own initiatives and be more involved in regional development planning has declined somewhat. It is also worth noting that there is in many cases a policy preference to integrate women and migrants into existing programmes, as opposed to developing targeted initiatives. In support of inclusion, projects may, for example, be designed in order to lower barriers to access for women and minorities.

To complement the Young Entrepreneurship initiative that existed in 2012, a few other measures have been implemented by the different counties with the objective to strengthen youth entrepreneurship support and raise young entrepreneurs’ profile in the local community. Jönköping University has a Corporate Partners Programme with approximately 350 participating companies that enables students to solve authentic problems derived from business reality as part of their education. However, a stronger role could have been expected from Jönköping International Business School (JIBS) in developing more applied initiatives and generating spillover benefits into the region’s entrepreneurial landscape. The JIBS is not only recognised as a leading European institution in entrepreneurship studies and research but it is also one of the world’s most renowned institutions in family business research. Consequently, there is scope for innovative, county-adapted initiatives to emerge in close alignment with local development and smart specialisation strategies, and taking advantage of the region’s increasingly well-co-ordinated local innovation ecosystems. Parallel efforts should be invested in better promoting entrepreneurship to young people from an early age. Stakeholders have reported certain reluctance in wanting to understand the potential benefits of engaging in an entrepreneurial track and developing entrepreneurial skills by, for instance, introducing entrepreneurship education in primary and/or secondary school.

Youth entrepreneurship can not only be a motor for the local economy by creating new jobs and opportunities, it can also play a determining role in keeping current economic activities alive, especially when it comes to taking over businesses that would cease to exist if a successor to the retiring business owner is not found and the entire process of succession not well managed.

Over the past five years, the emergence of new female entrepreneurship promotion initiatives has been limited by national and EU funding rules which do not support the consumer-based services often promoted by women entrepreneurs. The regional support programmes should, therefore, aim to fill this gap, especially because consumer services are those that directly contribute to improving proximity service availability and, as such, the quality of life of the local population (even more so when living outside of metropolitan areas). Moreover, consumer-based services tend to be the most accessible entrepreneurial projects to women with less labour market adapted human capital or experience, as may be the case for many migrant women arriving in the region. Because consumer services entail a close contact with the local population, supporting women entrepreneurs, from a migrant background particularly, could significantly contribute to speeding up their integration into the local communities and generating greater empathy and acceptance by them. While regions are prohibited by law from using their own funds to support companies, they can develop projects aimed at a particular group and provide indirect support.

The uneven gender distribution across the geographic and industrial landscape of the Småland-Blekinge region is an issue that was identified in 2012 and that persists today. The outcomes from the National Equalised Regional Growth project implemented between 2012 and 2014 were reported by participants in the monitoring review meetings as being unclear. The national Equal Opportunities for Regional Growth project that followed and is currently being implemented in all counties has a focus on gender mainstreaming, working with norms and attitudes at work, with the underlining objective that women and men enjoy the same access to regional growth employment opportunities.

…But employment opportunities have opened up for foreign residents

Mixed progress can be reported about the recommendation on working better with the local industry to increase employment opportunities for foreign students. The Blekinge Institute of Technology appears as the institution that has had the most success in this area while Jönköping University and Linnaeus University have reported a number of administrative and red-tape obstacles coupled with a lack of responsiveness from local employers.

Although the recommendation in 2012 focused on attracting and integrating southern European students into the local economy, Småland-Blekinge HEIs have mainly been concentrating their efforts on non-European students. To illustrate, the Blekinge Institute of Technology has been co-operating with telecommunications company Ericsson on a work placement programme targeted at attracting 20-30 young Indians annually. While there can be many benefits to increasing the international image of the region, there are certainly also clear advantages in attracting mostly European students. Their mobility is administratively easier to manage, their preparation often more in line with Swedish requirements and their integration to Swedish lifestyle smoother, despite the inevitable language barrier.

Transport infrastructure continues to be an obstacle rather than a catalyst to the development of the region

Major accessibility and infrastructure projects take time to plan and materialise. Five years is a short period to observe concrete results in this area. Nonetheless, the improvements that have been made in inter-county co-ordination amongst the counties of Småland-Blekinge, together with Halland and Skåne, have resulted in the identification and prioritisation of common needs and have increased the bargaining power of southern Sweden as one unified entity when negotiating with the national administration.

The Swedish National Transport Plan for 2014-25 aims to upgrade the transport system to promote jobs and growth. Resources are to be increased by 20% relative to the previous plan period (OECD, 2017[22]). The plan will improve road and rail maintenance and further develop transport infrastructure. More than 150 investment projects are identified, including road upgrades, new high-speed railways, an expansion of the Stockholm underground railway system and mining-related infrastructure (OECD, 2017[22]).

Twenty priorities from South Sweden have been consolidated and intend to feed into this recent national transport plan. Out of those 20, some of the counties identified the 7 first as being of utmost priority for the greater region, with the high-speed train connection to the south being number 1. Better collaboration and joint prioritisation have thus allowed the counties of southern Sweden to develop a more integrated perspective on their infrastructural needs and an understanding of how those often depend on investments falling outside of their administrative territory. Several actors in counties also reported that this unity proved particularly beneficial in developing a common voice and strategy for EU-funded investments (Interreg and TEN-T projects).

Building this type of bargaining power, especially for negotiations with the national administration, was one of the main benefits motivating the regionalisation process, a dominant issue in the 2012 territorial review. The inter-county collaboration that since then developed amongst southern Sweden counties has permitted that they secure a similar bargaining power, without the disadvantages that establishing new administrative boundaries would have potentially engendered. This positioning and the infrastructural synergies currently being envisioned would have likely been difficult to achieve should the previous state of territorial competitiveness that existed during the regionalisation process prior to the 2012 OECD report had been maintained.

However, despite the institutional unity, greater collaboration is not benefiting all counties of south Sweden alike. Kalmar County may be the county that has the least to gain from such an arrangement, for none of the infrastructural projects prioritised fall within its realm. The current focus on the north to south axis bypasses Kalmar’s eastern peripheral location within the geography of the region. On the other hand, it is unlikely that Kalmar County would have succeeded in obtaining approval for its infrastructure needs as a stand-alone case in the face of the national government.

The different counties have made distinct progress on the different dimensions of connectivity. Those will be seen in the short sections as follows.

Railway

The construction of a high-speed train has been an object of debate since the 1990s. A planning decision was recently taken favouring the western over the eastern stretch of the Småland-Blekinge region, which naturally serves the interest of some counties at the expense of others. The western orientation of the railway investment project has been very positively received by Jönköping County as, with it, emerges the opportunity to establish an important hub with excellent communication to Stockholm/Goteborg and Malmo/Copenhagen. The rail would also serve to connect Jönköping City and Värnamo (also in Jönköping County), two of Sweden’s 60 functional urban areas, thereby allowing the formation of a greater labour market. In Kronoberg too, the high-speed train may help consolidate the local labour markets and attract new investments, despite only crossing the western part of the county and missing its economic heart, Växjö. In contrast, Blekinge and Kalmar Counties will not be served by the new high-speed train and there are concerns that their existing poor railway infrastructure may deteriorate further as high-speed train-related investments shadow other infrastructure investment needs. However, the southwestern orientation is prompting those counties to focus on building other competitive connections. For instance, Blekinge County intends to strengthen the connections of the TEN-T core network in Sweden to Lithuania and Poland as well as improve their connection further within Sweden and Scandinavia – e.g. towards the Öresund Region, Jönköping and further. In this case, efficient connections to a high-speed rail network are critical.

Air transportation

The past few years have been marked by a competition between the four counties to establish new routes. While all counties with an airport facility have direct connections to Stockholm airports, some have been more successful than others in establishing connections with European hubs, such as Jönköping County with Frankfurt. Ronneby Airport in Blekinge County is the only of Småland-Blekinge airports that showed an increased number of landings. Over the indicated time period, there has been a shift away from Växjö in Kronoberg County to Ronneby, as landings have decreased in Växjö as much as they have increased in Ronneby. Overall, the number of landings in the region of Småland-Blekinge has decreased by 2%. However, the number of passengers increased by 24%, in Jönköping and Kalmar especially (both in absolute and relative terms).

Figure 2.3. Number of landings at Småland-Blekinge airports
Scheduled and non-scheduled traffic, 2010 and 2016
picture

Note: Domestic and international flights.

Source: Transportstyrelsen (2018[23]) Flygplatsstatistik [Airport Statistics]https://www.transportstyrelsen.se/sv/luftfart/Statistik/Flygplatsstatistik-/ (accessed on 09 May 2018).

Figure 2.4. Arriving and departing passengers in Småland-Blekinge airports
Scheduled and non-scheduled traffic, 2010 and 2016
picture

Source: Transportstyrelsen (2018[23]) Flygplatsstatistik [Airport Statistics]https://www.transportstyrelsen.se/sv/luftfart/Statistik/Flygplatsstatistik-/ (accessed on 09 May 2018).

Road transportation

In Småland-Blekinge, public transportation as a tool and focus of regional development has increased since 2012. Emphasis is drawn on sustainable commuting modes and alternative transportation in an attempt to reverse a strong dependency of the population on cars. Public bus lines have been increased, walkability and bicycle riding further promoted. A project of electric roads for lorries has been designed and will soon be implemented in some counties.

While road connectivity has been deemed relatively good in all counties, long commuter flows and average travel times from home to work continue to be a concern. The challenge, in other words, is how to facilitate public transportation in order to create a better geographic equilibrium between counties’ most populated areas and those where the industries are located. The demand for increases in road capacity is highest in terms of connecting the bigger cities. A functional approach is essential to addressing those challenges.

Freight transportation

The strong focus on freight transportation that was expressed in the 2012 territorial review has somewhat lost importance over the past few years in most counties, with the exception of Blekinge. In Blekinge, freight transportation growth has doubled since 2012. This growth prompted operators in ports to increase their capacity and bears implications in terms of railway technical capacity for serving both ports. In Kalmar, progress was made in better connecting Oskarshamn to Gotland, but not other ports.

Little focus has been given to raising the quality of life and attractiveness of the region

The recommendation on quality of life has been the least well understood of all recommendations provided in the 2012 territorial review. While formulated to encourage measures and policies that could raise the well-being of local residents, the recommendation has been interpreted as a call to improve the attractiveness of the region to increase the number of short-term foreign visitors. Most efforts that have been reported in line with the original meaning of the recommendation focused on better promoting the region’s natural and cultural assets to local people and potential migrants have thus been associated with the promotion of the region for the tourism market. Some exceptions include “Kalmarsundsregionen” (kalmarsundsregionen.com) – involving co-operation between the Kalmar, Mönsterås, Mörbylånga, Oskarshamn and Torsås municipalities – in order to brand and market the region as an attractive place to live and work. This initiative also served as a valuable platform lobbying for the decision to move the national eHealth agency from Stockholm to Kalmar.

The recommendation in its original sense yet continues to be of pertinence to the development of a more holistic regional strategy and county development strategies. It highlights the need to increase different indicators of well-being which would contribute to generating a greater sense of pride and belonging amongst local residents. The recommendation also seeks to encourage more efforts from regional and local actors in better communicating the attractiveness of the four counties to local, national and foreign individuals, especially families, in order to attract, recuperate and/or retain residents into the region. A number of elements could contribute to building the region’s attractive profile, ranging from cultural events (i.e. theatre, music and dance) to the possibility of enrolling children in an international school; a potentially determining factor for foreign families who consider moving to the region. High-skilled individuals, in particular, tend to be relatively mobile and sensitive to the local quality of life and amenities available when choosing a place to live. As such, a better promotion of the four counties’ natural and cultural endowments should be integrated into the regional development strategy not only to improve quality of life for current and future residents but also as contributing indirectly to increase the knowledge intensity of the local business fabric.

Promoting an integrated approach to regional development

Rural development is yet to find its place in regional development strategies…

Rural policies are governed at the regional level by county administrative boards (or the new Regional Councils and the County Councils forming regions of Jönköping and Kronoberg). There are currently three different models for implementing regional policy in Sweden, which include county administrative boards, directly elected county councils and indirectly elected county co-ordination bodies. In all counties, co-ordination amongst the different local and regional actors around a single regional development strategy has increased.

Enhanced efforts may be required to better integrate rural development into county-level regional strategies and to bring the EU’s Rural Development Programme policy measures (especially those implemented through Local Action Groups – LAGs) closer to the strategies developed by the Regional Councils and other county administrations. It is noted that the EU Common Agricultural Policy (Pillar II) measures continue to be largely dissociated from locally driven efforts and strategies. LAGs are established at the initiative of local governments, entrepreneurs and civic associations within a certain territory or community in order to implement objectives related to the EU LEADER programme. This community-led approach to rural development was first adopted by the EU in the 1990s and has played a critical role in reorienting rural development beyond agricultural policies only. The approach has been so successful in rural areas that it was subsequently expanded to three additional EU funds under community-led local development (CLLD) (these are the European Social Fund, the European Maritime and Fisheries Fund and the European Regional Development Fund). LAGs were seldom mentioned in monitoring review meetings, but in relation to the situation in 2012, a greater issue of disco-ordination between LEADER-based actions and Regional Council was reported.

Improved links between regional and rural development efforts can be hindered in some cases due to how territories are classed in order to access funding. For example, Blekinge County is neither considered an urban nor a rural area, which disqualifies the county from accessing certain EU funds and national priorities.

…this is a common problem faced by OECD countries

How to connect rural and regional development efforts from the national down to the local levels is a co-ordination problem faced by all OECD countries – and even more so for those within the EU: not only do national policies have to be managed, but so too do applications for regional and Cohesion Funds that have rural dimensions and for the EU Common Agricultural Policy (CAP) which has Pillar I and Pillar II components. This is multi-level governance challenge. Finland has adopted a unique approach to co-ordinating rural policy across sectors – one that combines elements of broad rural policy along with forms of vertical and networked governance.6

An alternative approach is “rural proofing”. This entails considering the likely impact of policy decisions on rural areas, and, where necessary, adjusting the policy to take into account the particular needs of those who live in, work in or enjoy the countryside. This approach encourages the early assessments of expected, or likely, impacts in rural areas. The effectiveness of such approaches is a matter of debate, with some arguing that it can act as a form of tokenism that does not in fact adequately inform policy development at an early stage.7 There is no one best solution to overcoming inherent divisions between regional, rural and agricultural policies. The network approach that Finland has adopted is enmeshed in its culture of decentralisation and multi-level governance. Similarly, rural proofing does not offer a one-size-fits-all model. However, beyond governance structures, the inherent silos between these policy domains can be addressed at an organisational level as well.

Within Kalmar County, rural development is regarded as a horizontal question (akin to environmental issues, gender equality, etc.). This approach is evident in the new RDS. Beyond this, the county’s yet-to-be-adopted Smart Specialisation strategy is based on values that originate from the rural structure of the county. This is a promising strategy. It does, however, raise the question of how this horizontal approach it linked up to vertical (multi-level) governance for rural and regional development.

Youth engagement in regional development planning has been slow to materialise

In 2012, greater youth involvement in regional development planning was recommended as clear differences were observed in the four counties in the assessment and visions of local youth on regional development compared to the rest of the participants. Local youth tend to express a more positive and creative approach to regional challenges that regional strategy discussions could benefit from. Their involvement could both enhance a sense of belonging to the county and influence its development as somewhere they could settle for the long-term.

However, promoting greater involvement of young people is no easy task. Over the past five years, two counties have established a youth board (Kalmar County) or reference group (Kronoberg County) to serve as a platform for engaging with them, while the two remaining counties did not take any new initiative to address the recommendation.8 Young people can give a certain dynamic to regional development that should be capitalised on, for the result of their involvement in regional development planning discussions has the potential to contribute directly to another recommendation: that is, increasing the attractiveness of the region for current and future residents, including new businesses.

In Kalmar County the most important tool for developing better youth policy has been the data obtained in the “Local Follow-up on Youth Policy” (LUPP). Every 3 years since 2007, almost all 14-15 year-old and 17-18 year-old pupils in Kalmar County have answered a large number of questions in a survey covering the conditions for growing up, opportunities to influence the conditions, sense of security, stress levels, thoughts about the future and other aspects of youth. The data has been analysed and scrutinised by academic researchers and policymakers. LUPP was originally developed in Kalmar County but has since spread across Sweden (and also in the Baltic Sea Region through an EU Strategy for the Baltic Sea Region EUSBSR project) and has been adopted by the governmental Swedish Agency for Youth and Civil Society. Partly as a result of the findings in LUPP ten of the municipalities in Kalmar County and a number of youth organisations collaborate in the organisation Kumulus that initiates and operates several youth projects, like youth democracy, youth mobility (i.e. volunteer exchange), online security, anti-racism, etc.

Shifting priorities

A new south-west orientation influences infrastructure planning

At the time of the 2012 territorial review, Småland-Blekinge was focusing on the expansion of its transport infrastructure for new markets to the east, acknowledging the opportunities in trade that could be seized with the Baltic States, the Russian Federation and China. Those countries were opening up to Swedish industry and firms in Småland-Blekinge seemed particularly well positioned, geographically, to take advantage and expand on these incipient opportunities.

However, geopolitical changes over the past five years have taken much out of the attractiveness of the Russian market. Likewise, initial experiences with the recently developed China to Europe land routes have reduced the high expectations linked to the importance of the eastern-looking trade routes. The orientation shift favouring a south- and western-looking development perspective has decisively reduced the importance of Kalmar County in infrastructure planning for the whole region. While Kalmar County was viewed as a bridge to access eastern markets, with the new configuration looking west, the county no longer plays a strategic role in the development strategy of the Småland-Blekinge region. As such, in the region, the importance of freight connectivity towards the east has also been reduced while the high-speed train project to the west has gained priority.

In Blekinge, eastern connections remain high on the agenda of both public and private organisations and the geopolitical situation seems not to have affected the development negatively. Several trends indicate that eastern trade continues to increase.9 Developments in several of the new member states in the EU show regional growth (EU Espon 2014, GDP growth 2001-11) that is larger than in the West and trade between Asia, China and Europe is increasing.10 China’s investment on The Silk Road, One Belt, One Road, may be redirected to Lithuania and the port of Klaipeda, one of the largest ports in the Baltic Sea. Correspondingly, the TEN-T corridor Baltic-Adriatic will become increasingly important for trade between Asia and Europe. The corridor’s connection in Gdynia, whose harbour is larger than any Swedish harbour, has a ferry connection with Karlskrona. There are therefore significant links to Blekinge and Scandinavia. However, the Swedish priorities in infrastructure do not yet reflect this development, the government and the Swedish Transport Administration continues to focus investments on the traditional routes.

Although the eastern markets and trade routes may not currently represent strategic areas of investment opportunity, it is likely that this will change over the coming years and that the importance of this eastern corridor will grow again. Planning should not get caught up in what the current situation dictates. On the contrary, it should try to visualise what the outlook will be in the future, especially because major infrastructural investments are slow to get approved and implemented. By taking a proactive stance in infrastructural needs, Kalmar and the Småland-Blekinge region could better prepare to accommodate the future eastern trade as it develops. However, it is likely that such infrastructure investments will get little support from two influential counties in the consortium of South Sweden counties (Skåne and Halland), of which Kalmar is a part. Those counties may not see the benefits and, therefore, show interest in new eastern trade routes developing outside of their territory. Pledging a proactive stance to the national administration may be equally as difficult in a context in which infrastructure investments tend to be reactive, focused on meeting existing needs.

The business retention strategy focus has shifted from supporting new businesses to helping existing ones

An important shift in attitudes has been revealed in relation to the recommendation on designing and implementing strategies for business retention. While in 2012 the focus of such efforts was centred on new business creation and entrepreneurship promotion initiatives, nowadays the attention has shifted to supporting existing businesses. This change is determining for it is likely to further encourage local businesses to stay and grow in the county in which they are located rather than envision better development prospects in another county or region. Such a strategy puts in evidence the more holistic approach to regional development that has been developing in Småland-Blekinge and the four counties whereby direct (e.g. labour market, infrastructure, complementary industries) and indirect factors (e.g. proximity services, quality of life) play a decisive role into people and businesses’ willingness to establish and remain in a certain location.

This shift is in part a result of shifting governmental responsibilities. Promoting new businesses is mainly seen as a local issue; municipalities all engage in such work and co-operate with Almi and other parts of the system. In contrast, the region is more focused on improving conditions for entrepreneurship, support growth in existing firms but also support new entrepreneurs who target other markets than the local. This can be achieved through Science Parks where, for example, Kalmar Science Park Incubator’s geographical coverage has changed from just Kalmar Municipality (the majority owner) to all of Kalmar County. To date, companies from four other municipalities have been accepted in the incubator and more municipalities are expected to follow. This work has exceeded expectations; the number of business ideas has been analysed and found suitable for development in the incubator has been far greater than expected. Another factor that has affected the need for regional efforts is the national effort on verksamt.se – a national portal for business information and contact links.

Inter-county collaboration has taken on new forms

The regionalisation reform is no longer on the agenda. The perspective of undergoing a regionalisation process was a driving factor for conducting the previous OECD 2012 Territorial Review of Småland-Blekinge. The 2012 study aimed to analyse the merits of establishing a union of the four counties that would have been composing the region of Småland-Blekinge. The lost idea of a regionalisation reform puts into question the justification for conducting a single monitoring report delimited to the four counties, as strong inter-linkages can also be found with neighbouring counties. However, despite the regionalisation reform project having been abandoned, unlike what could be sensed in 2012, the current dynamic within and amongst the four counties was much more collaborative than before. The climate of uncertainties that accompanied the regionalisation process may have created obstacles to reaching the level of co-ordination, shared engagement and goals that the counties are currently achieving.

In the context of the planned regionalisation reform, the four counties of Småland-Blekinge (especially the regional councils) were attempting to strategically advance their interest through a new regional geographic and administrative configuration which they would present to the national administration. The intention was to avoid any imposed regional boundary that may not be beneficial for the interests of the different counties involved. However, the Småland-Blekinge regional configuration was not unanimous with some counties and municipalities, preferring an annexation with other neighbouring counties. As an example, Blekinge would have seen greater benefits by getting closer to Skåne, while Kronoberg’s south-western municipalities may have preferred to join in with Halland County and Kalmar’s northern municipalities would have seen a natural configuration bringing them closer to Östergötland instead of the southern Kalmar County municipalities.

As they were faced with a future that involved cross-county mergers into new administrative regions, many counties initiated several exchanges and inter-county project collaborations which then lost strength with the abandonment of the regionalisation reform. Nonetheless, an area in which those envisioned inter-county collaborations remained strong is that of infrastructural planning and negotiation with the national administration. Blekinge County has also significantly increased its collaboration with neighbouring Skåne County in the area of business promotion with the science parks and tertiary education (through the Blekinge Institute of Technology and Lund University). While there may be other inter-county initiatives and collaborations, we have not heard of in the monitoring review meetings, an observation that may be made when comparing the situation in 2012 is that today’s priority is much more focused on improving in-county inter-municipal collaboration and co-ordination.

The need to enhance regional planning: A (not so) new issue

The existing framework for regional planning is weak…

Sweden’s planning system is characterised by a “municipal planning monopoly” (Pettersson and Frisk, 2016[24]). Municipalities prepare comprehensive plans and detailed plans and issue building permits based on those plans and other relevant regulations. In order to make their comprehensive plans more strategic, municipalities are supposed to consider a regional perspective. In support of this, County Administrative Boards represent the national government’s interests in the planning process; provide municipalities with data and advice; and co-ordinate in the case of conflicts between municipalities. At the regional level, the legal framework allows County Councils to prepare regional plans, but this is not mandatory (except in the case of Stockholm).

There are growing calls for enhanced regional planning in Sweden and several recent reforms have sought to improve the co-ordination between different levels. In 2011, changes to the Planning and Building Act introduced new requirements for comprehensive plans to incorporate national and regional objectives. In 2013, the government established a committee to further investigate the need for regional spatial planning and to improve the co-ordination of planning at the regional level. Furthermore, Sweden’s national strategy for sustainable regional growth and attractiveness 2015-20 emphasises the need to better co-ordinate local comprehensive planning and regional development efforts. The strategy states that by 2020 each county should have integrated a spatial perspective in its regional development policies. At present, a dialogue-based process is used between municipalities in order to reach consensus on planning priorities such as densification and public transport accessibility. However, there are limits to this approach. For example, in a study of ten municipalities in Skåne, it was found that while there may be consensus around strategic objectives, their operationalisation within municipal planning practices varies – thus limiting its effectiveness and demonstrating week implementation (Pettersson and Frisk, 2016[24]).

…. but is evolving to take on a stronger form

The administrative mergers at the county level in Jönköping and Kronoberg have led them to develop new competencies and a new administrative culture. Kronoberg County Council and the Regional Council of Southern Småland (Södra Småland) merged to form Region Kronoberg on 1 January 2015, and the same process occurred in Jönköping. The new authorities are responsible for healthcare, culture, public transport and regional development. With this change, the county council has taken over responsibility for regional development and the Regional Development Council has ceased to exist. Incorporating regional development into the directly elected county council structure is meant to better promote policy complementarity across the region. This new structure is intended to be better placed to address development in an integrated fashion, grounded in local conditions. The merger process is expected to commence in Blekinge and Kalmar Counties in 2019 after the next regional elections take place. There is no set structure for these reforms; Blekinge and Kalmar will be able to craft their own and drawing on the experiences of their predecessors.

The OECD has long called for the delegation of all tasks concerning regional development to County Councils and for government agencies to increase their co-operation on regional issues (OECD, 2017[22]). Regional actors have expressed that while the regional level has been strengthened and a number of issues have been devolved, regions do not feel like they necessarily have the mandate to act on them. For example, the national government has forwarded the importance of strategic integrated regional plans – planning not just for the physical environment but for society as a whole, integrating infrastructure, culture, environment, etc. But there is a limited mandate for the regions to implement such a vision, as this is largely the purview of local governments to act upon. Moreover, local actions can undermine regional objectives in such areas as reducing carbon dioxide emissions.

The newly formed regions are thus in a challenging position as they seek to fulfil their new mandates, but with limited authority over some elements of their policy portfolios, particularly as related to regional planning. In order to overcome these challenges, the regions will need to work very closely with municipalities and other actors in order to align priorities on the basis of “sermons” and “carrots” in the absence of “sticks”.

Developing the regional planning competency

Enhanced regional planning co-ordination is important for the counties across Småland-Blekinge. There are some good spatial planning practices to note in Småland-Blekinge. For example, Blekinge has ongoing co-operation (Strukturbild Blekinge) between actors on all public decision-making levels and has developed regional maps and accessible statistics on planning issues that are used in public engagement. In some areas (e.g. Jönköping), there is a growing need to manage urban expansion and the protection of high-quality agricultural land. A regional plan could help to co-ordinate on these issues. The first step towards this is developing a comprehensive picture of spatial trends and land use plans across the region. Jönköping is presently working towards this; the region is compiling all municipal and comprehensive plans in order to develop a comprehensive understanding of spatial planning in the region. The goal is to adopt a spatial development vision for the region in the coming years.

One key element of this has been to highlight cross-border functional connections rather than focus on specific municipal borders. A broader question is how to operationalise this concept within planning priorities. For example, while Jönköping County has identified functional regions (defined by commuter flows), there are no planning frameworks based on this at the moment. While the region can provide critical support to municipalities with analytical skills and data knowledge, it is also critical that county administrative board are involved due to their governance of environmental issues. Going forward, structures need to be in place to bring together both the regional strategic vision, environmental concerns and municipal plans.

Counties are now working with municipalities to establish a common knowledge base in the form of regional maps and functional relationship analysis. In Kronoberg, a network has been established with the aim of strengthening border-municipal planning; the region will be assisting with planning documents and provide regional insights/monitoring. While the CAB has most of the data necessary, it is not presently shared in a public manner. Beyond this, there is a need for a higher level of knowledge in the regional council and a regional network for using geographical data and GIS to create better grounds for regional planning. Furthermore, in the next year, regions may gain new responsibilities for the spatial planning of housing. How this can be deployed without intervening in the municipal monopoly of spatial planning is subject to an ongoing national investigation. As many municipalities in Småland-Blekinge are experiencing a housing shortage (e.g. Jönköping), the regions will play an increasingly important role in addressing this issue and could help to ensure that new housing investments are well co-ordinated with infrastructure investments and protect high-quality agricultural soils. A stronger regional role could further enhance the planning capacities of municipalities in key areas such as planning for future sea level rise. In a recent study of such considerations among coastal municipalities in Kalmar and Blekinge Counties is was found that practices differ considerably, with many municipalities not employing sea-level rise scenarios in their planning – thus demonstrating a need for improved and more consistent practices (von Oelreich et al., 2015[25]).

With limited statutory authority over municipalities, regions will need to rely on dialogue and engagement

Growing competencies for regional planning offer a unique opportunity for regions to adopt a strong spatial vision for development that can help to target strategic investments, manage growth, enhance inter-municipal co-ordination and build local planning capacity. Regional planning is a new competency, with the exception of infrastructure planning.

While the regions are pursuing a stronger co-ordinating role for integrated strategic planning, they have very limited statutory authority to ensure conformity by municipalities. Therefore, the effectiveness of this approach will need to rely in large measure on ongoing dialogue and engagement. As regional competencies for planning are developed, there are several key issues that should be addressed:

  • Collecting and sharing data for improved community planning. Consolidation of data, plans and indicators at the regional level has the potential to provide a comprehensive picture of land uses and spatial trends that can be used to improve decision making. For example, Jönköping is presently compiling all municipal and comprehensive plans in order to understand it for the whole region. While municipalities have purview over zoning and housing development; there is a need for a comprehensive regional understanding of these spatial trends and the public investments that will be needed in the short and medium terms. As a first stage, this is a technical matter to combine plans. Going forward it will be important that this is constructed in a format that it is accessible and useful for municipal planners and decision makers, including communities that are smaller and have more limited planning capacities.

  • Linking indicators to the strategic regional plan. The regional plans should include a set of key indicators to monitor spatial quality. These should serve two purposes. First, to monitor and communicate objectives to municipal decision makers/planners and secondly to express and demonstrate to citizens whether spatial objectives at the regional level are being met. As such, a different set of indicators may need to be developed to cater to these two uses.

  • Pursuing regional and inter-municipal co-ordination across functional territories. It is critical that regional level planning consider the functional spaces across which people live, travel and work in order to develop integrated planning strategies. At present, some counties have expressed that border areas can be neglected despite their importance to those living in or travelling across them. There should be a strategy to address integrated spatial planning across functional territories. There are many approaches to this across the OECD. France’s territorial coherence plans offer one illustration. While Sweden’s regulatory framework at the regional level is very different than France’s, the process by which plans of territorial coherence are elaborated across many municipalities as well as well as the integrated nature of the plans may be of interest to Småland-Blekinge.

  • Establishing dialogue to co-ordinate between the regional and local levels on planning issues. Currently, many countries lack the structures to achieve the required co-ordination between levels of government on spatial planning issues. Both Austria and France have established regular conferences that provide such structure, but at different scales and for different topics. The Austrian Conference on Spatial Planning assembles representatives from all levels of government and is specifically targeted to address spatial planning issues whereas France’s territorial conferences for public action focus on dialogue between regions and local authorities and are open to a range of thematic areas. In Småland-Blekinge’s case, the French model may be of greatest interest and could be targeted to key issues facing the region (e.g. housing) (see Box 2.12).

  • Helping smaller municipalities develop planning capacity. Municipalities have the same planning obligations regardless of their size. Smaller municipalities inherently have a more limited capacity when it comes to technical planning skills. Many rural municipalities in Småland-Blekinge have to buy these services from consulting firms; in some cases, they also purchase them from larger municipalities. There are presently no programmes at the regional level to help smaller municipalities, but it is a function that the regions could do well to expand.

Increased regional planning capacities across Småland-Blekinge has the potential to link up multiple actors working on sustainable development to developing common actions. For example, linkages with the work of Sustainable Småland (est. 2011) – a regional environmental network with a special focus on knowledge sharing and development of innovative and challenging environmental solutions – and that of the Blekinge Institute’s Sustainable Development Solutions Network (Sustainable Småland, 2018[26]; Blekinge Tekniska Högskola, 2018[27]). The regional planning function can provide an encompassing lens on sustainable development if properly structured – i.e. where there are opportunities for engagement to develop shared priorities and regular reporting on their progress. It can also be used to champion the ambitions of local actors – for example, the municipality of Växjö which has the ambition of becoming the Greenest in Europe. This type of networked governance should be a goal as the regional spatial planning competency evolves.

Box 2.12. Strategic spatial planning: France’s territorial coherence plans

Over the past two decades, there has been a significant rise in the number of strategic spatial plans across urban agglomerations in the OECD. In France, as in many other countries, it is the notion of cohesion that underpins this joint spatial development project. The territorial coherence plan (schéma de cohérence territoriale, SCoT), created in 2000, is a key mechanism for intercommunal planning using a sustainable development framework. It covers the “local labour market” or “urban area” (basin de vie or aire urbaine) for parts of the country. This type of plan was established by the Solidarity and Urban Renewal Law (Loi solidarité et renouvellement urbain, 2000, SRU).

A SCoT links housing, urban planning and transportation plans more effectively than they otherwise would be and supports cohesive development strategies for the entire area. There is no compulsory requirement for communes or groups of communes to participate in a SCoT, but there are incentives to do so. For example, according to national law, natural areas can be developed only if the area is covered by a SCoT. Such incentives have been further strengthened by the requirement that developed areas that are not covered by a SCoT cannot be expanded starting from 1 January 2017 onwards. To encourage the adoption of SCoTs, since 2010 the state has been setting up annual calls for proposals to increase participation in rural territories with limited human and financial resources to draw up SCoTs.

The plan establishes a reference framework for territorial planning over a time frame of 20 years. As such, it does not give granular detail on land-use development – that task falls to plans and planning decisions at the scale of the commune (the Plan local d’urbanisme [PLU] for instance), but these must align with the principles or fundamental guidelines. Every municipality covered by the same SCoT commits itself to integrated and joint development, which can help mediate and settle territorial issues for the whole area. In total, 448 SCoTs have been approved or are presently in the process of being developed. This covers 25 137 communes (nearly 70% of total), 50.5 million inhabitants (77% of the French population) and almost 60% of the national territory (Government of France, 2015[28]).

SCoTs have become the reference strategic planning documents for urban planning and development in large residential zones or urban areas. They constitute plans that go beyond commune, intercommune or across département administrative boundaries. The SCoT must, for example, set statistical objectives regarding the consumption of agricultural, natural and woodland spaces. It must also create a link between development and other policies; for example, the SCoT specifies conditions that favour the development of urbanisation as a priority in areas already served by public transport but it can also promote creating new public transport services in locations that require them to improve access. However, it should be noted that this policy is not always successfully implemented. Many city regions in France have not succeeded in setting up a SCoT even though attempts have been made (Hoggart, 2016, p. 74[29]).

Sources: OECD (2016[30]), The Governance of Land Use in France: Case Studies of Clermont-Ferrand and Nantes Saint-Nazaire, http://dx.doi.org/10.1787/9789264268791-en; Government of France (2015[28]), Overview of SCoT, http://www.logement.gouv.fr/schema-de-coherence-territoriale-scot (accessed 2 May 2016); Hoggart, K. (ed.) (2016[29]), The City’s Hinterland: Dynamism and Divergence in Europe’s Peri-urban Territories.

References

[18] Ahrend, R. and A. Lembcke (2015), What Makes Cities More Productive? Agglomeration Economies and the Role of Urban Governance: Evidence from 5 OECD Countries, http://www.spatialeconomics.ac.uk/textonly/SERC/publications/download/sercdp0178.pdf (accessed on 07 December 2017).

[20] Australian Government (2018), Regional Employment Trials Program, Department of Jobs and Small Business, https://www.jobs.gov.au/node/7656 (accessed on 13 May 2018).

[1] Bergström, T., H. Magnusson and U. Ramberg (2008), “Through a glass darkly: Leadership complexity in Swedish local government”, Local Government Studies, Vol. 34/2, pp. 203-220, http://dx.doi.org/10.1080/03003930701852278.

[27] Blekinge Tekniska Högskola (2018), BTH - Blekinge Tekniska Högskola [Blekinge Institute of Technology], https://www.bth.se/ (accessed on 18 September 2018).

[2] Charles, D., F. Gross and J. Bachtler (2012), “Smart specialisation and cohesion policy: A strategy for all regions?”, http://www.eprc-strath.eu/public/dam/jcr:ca04731c-2d7b-490f-a51e-3e368b7ecfb6/ThematicPaper30%25282%2529Final.pdf.

[14] Freshwater, D. (2014), “The disconnect between principles and practice: Rural policy reviews of OECD countries”, http://dx.doi.org/10.1111/grow.12059.

[16] Garcilazo, E. (2017), “Rural Policy 3.0 productive regions for inclusive societies: Low density economies: Places of opportunity”, https://enrd.ec.europa.eu/sites/enrd/files/s4_rural-businesses_rural-policy_garcilazo.pdf.

[28] Government of France (2015), Overview of SCoT, http://www.logement.gouv.fr/schema-de-coherence-territoriale-scot (accessed on 02 May 2016).

[29] Hoggart, K. (ed.) (2016), The City’s Hinterland: Dynamism and Divergence in Europe’s Peri-urban Territories.

[17] Mölleryd, B. (2015), “Development of high-speed networks and the role of municipal networks”, OECD Science, Technology and Industry Policy Papers, No. 26, OECD Publishing, Paris, http://dx.doi.org/10.1787/5jrqdl7rvns3-en.

[4] OECD (2018), Innovation Vouchers, OECD International Migration Statistics (database), http://www.oecd.org/innovation/policyplatform (accessed on 15 February 2018).

[8] OECD (2017), OECD Territorial Reviews: Northern Sparsely Populated Areas, OECD Territorial Reviews, OECD Publishing, Paris, http://dx.doi.org/10.1787/9789264268234-en.

[22] OECD (2017), OECD Territorial Reviews: Sweden 2017: Monitoring Progress in Multi-level Governance and Rural Policy, OECD Territorial Reviews, OECD Publishing, Paris, https://doi.org/10.1787/9789264268883-en (accessed on 07 December 2017).

[19] OECD (2016), Getting Skills Right: Sweden, Getting Skills Right, OECD Publishing, Paris, http://dx.doi.org/10.1787/9789264265479-en.

[11] OECD (2016), OECD Regional Outlook 2016: Productive Regions for Inclusive Societies, OECD Publishing, Paris, http://dx.doi.org/10.1787/9789264260245-en.

[15] OECD (2016), “Rural Policy 3.0”, in OECD Regional Outlook 2016: Productive Regions for Inclusive Societies, OECD Publishing, Paris, https://doi.org/10.1787/9789264260245-7-en.

[30] OECD (2016), The Governance of Land Use in France: Case Studies of Clermont-Ferrand and Nantes Saint-Nazaire, http://dx.doi.org/10.1787/9789264268791-en.

[3] OECD (2016), The Productivity-Inclusiveness Nexus - Preliminary Version, http://www.oecd.org/publications/the-productivity-inclusiveness-nexus-9789264258303-en.htm (accessed on 07 December 2017).

[7] OECD (2013), Innovation-driven Growth in Regions: The Role of Smart Specialisation, OECD, Paris, https://www.oecd.org/innovation/inno/smart-specialisation.pdf (accessed on 30 January 2018).

[13] OECD (2006), The New Rural Paradigm: Policies and Governance, http://dx.doi.org/10.1787/9789264023918-en.

[12] OECD (forthcoming), Productivity and Jobs in a Globalised World: (How) Can All Regions Benefit?, OECD Publishing, Paris.

[24] Pettersson, F. and H. Frisk (2016), “Soft space regional planning as an approach for integrated transport and land use planning in Sweden – challenges and ways forward”, Urban, Planning and Transport Research, Vol. 4/1, pp. 64-82, http://dx.doi.org/10.1080/21650020.2016.1156020.

[21] Reempresa (2018), But, What is Reempresa?, http://www.reempresa.org/eng/Reempresa/But-What-is-Reempresa (accessed on 30 January 2018).

[31] Shortall, S. and M. Alston (2016), “To rural proof or not to rural proof: A comparative analysis”, Politics & Policy, Vol. 44/1, pp. 35-55, http://dx.doi.org/10.1111/polp.12144.

[32] Sørensen, E. and J. Torfing (2007), “Introduction Governance Network Research: Towards a Second Generation”, in Theories of Democratic Network Governance, Palgrave Macmillan UK, London, http://dx.doi.org/10.1057/9780230625006_1.

[26] Sustainable Småland (2018), About Us, http://www.sustainablesmaland.se/natverk-som-stodjer-tillvaxt-i-exportinriktade-miljoteknikforetag (accessed on 18 September 2018).

[10] Swedish Agency for Economic and Regional Growth (2018), Tourism Statistics, https://tillvaxtverket.se/statistik/turism.html.

[9] Tillväxtverket (2018), Inkvarteringsstatistik [Accommodation Statistics], https://tillvaxtverket.se/statistik/turism/inkvarteringsstatistik.html (accessed on 30 January 2018).

[23] Transportstyrelsen (2018), Flygplatsstatistik [Airport Statistics], https://www.transportstyrelsen.se/sv/luftfart/Statistik/Flygplatsstatistik-/ (accessed on 09 May 2018).

[25] von Oelreich, J. et al. (2015), “Planning for future sea-level rise in Swedish municipalities”, Local Environment, Vol. 20/4, pp. 459-473, http://dx.doi.org/10.1080/13549839.2013.834881.

[6] Wintjes, R. and H. Hollanders (2011), Innovation pathways and policy challenges at the regional level: Smart specialization, United Nations University.

[5] Wintjes, R. and H. Hollanders (2010), “The regional impact of technological change in 2020”, http://ec.europa.eu/regional_policy/en/information/publications/studies/2010/the-regional-impact-of-technological-change-in-2020.

Annex 2.A. Monitoring progress at a glance: Småland-Blekinge

The monitoring table (below) summarises the progress made to date on each of the sub-recommendations of the OECD 2012 Territorial Review of Småland-Blekinge. It indicates the changes, identifies bottlenecks and presents future actions to be undertaken. The assessment is based on the analysis of questionnaire data, field interviews, social and economic trends and desk research. It further reflects a consensus by the OECD team and peer reviewers who have partaken in the study.

Progress on meeting each one of the sub-recommendations is reported on a scale of 0-3 (as described below). A measure of 3 indicates that the recommendations have been met by all counties while a measure of 0 indicates that no progress has been made in any of the countries. Some recommendations are also reported as “not applicable”, where conditions have changed and they are no longer relevant. The table specifies the timeframe in which the recommendations could be implemented: in short-term (0-1 year), medium- to long-term (3-5 years) and long-term (more than 5 years) perspectives. Many of the recommendations made in the 2012 territorial review of the region will require medium- to long-term actions. As such, efforts to meet these recommendations may be underway but not yet entirely realised.

Annex Table 2.A.1. Progress indicators

3

Recommendation met by all counties

2

Notable progress has been made in all counties, but ongoing efforts necessary

1

Way forward well defined, but implementation has not started yet or mixed results in counties

0

No progress, by any of the counties

N/A

The recommendation is no longer applicable to the region because conditions have changed

ST

Short-term perspective (0-1 year)

MT

Medium- to long-term perspective (3-5 years)

LT

Long-term perspective (more than 5 years)

Annex Table 2.A.2. Monitoring progress at a glance: Småland-Blekinge

Progress reported on sub-recommendations

Time-frame

Ran-king

Nature of the change

Bottlenecks identified

The way forward

Recommendation # 1: Developing a knowledge-based economy

1.1 Develop knowledge-intensive businesses

MT

2

Jönköping and Kronoberg have made the most progress in meeting this recommendation, by supporting the creation of new businesses. Kalmar County has also partnered in most activities, especially those involving Linnaeus University.

- Limited financial and skills resources for low-technology firms to engage in innovation.

- Skills mismatching: difficulty finding employees with the right skills, particularly in the case of high-skilled individuals.

- Organisations need to focus more on lifelong learning.

- Business activities are booming, which creates a low motivation to up-scale and innovate.

- Immaturity of SMEs to address complex challenges.

- Efforts should equally focus on how to support value-added activities in existing businesses.

- Create project funding requirements dependent on HEIs-business collaboration (also valid for 2.1).

- Establish a regional programme promoting the integration of postgraduate/PhD students in local firms (also valid for 2.1).

- Build more awareness among local businesses about the importance of innovation and product development.

- Strengthen SME network to support knowledge-sharing between local firms.

Recommendation #2: Addressing labour market mismatches

2.1 Strengthen the links between the regional education system and regional businesses

MT

1

Jönköping University is strengthening international linkages, but there remains a need to focus on skills demand for local businesses. Linnaeus University is notable for its extension services and cross-geographical coverage.

- Training and education curriculum are slow to adapt to the emerging needs of employers and labour market demand.

- National curricula provide little space for regional adaptation and the development of curricula relevant to the local labour market.

- Weak collaboration between education and training institutions and the private sector.

- Difficult to get vocational and education training courses approved by the national authorities, and short-term financing gives limited opportunity to build knowledge and networks.

- Absence of a regional level of authority in the education system.

- There remains a need to better assess demand for labour market skills both now and in the future.

- Strengthen vocational training; this would enhance the capacity for adaptable curriculum.

- Strengthening career guidance is important to achieve better links between the education system and businesses.

- Involve companies more actively in planning and recruiting for VET in order to meet labour market needs.

2.2 Educate local communities about the importance of young entrepreneurs and provide support for their initiatives

ST

1

Youth entrepreneurship has been given higher prominence in policy agendas. Specific initiatives promoting youth entrepreneurship have been developed in Kalmar and Kronoberg Counties..

- Youth is not necessarily interested in entrepreneurship.

- Resistance from educational institutions to promote entrepreneurship tracks as viable career options.

- Weak co-ordination amongst the organisations working to support youth entrepreneurship.

- Programmes are needed to address business succession, due to the older profile of business ownership. Almi seeks to identify potential business takers for retiring owners. But other complementary actions should be taken, e.g. mobilising entrepreneurship incubators.

- Also continued focus and resources on young entrepreneurship initiatives in schools (e.g. Ung Företagsamhet). Jönköping University's international business school could develop applied projects with the community that address youth entrepreneurship.

2.3 Increase the involvement of young people in regional development efforts

ST

0

Over the past five years, two counties have established a youth board (Kalmar County) or reference group (Kronoberg County) while the two remaining counties did not take any new initiative to address the recommendation.

There have been some efforts to involve young people more in regional development have started recently. e.g. an “attraction index” has been developed with interviews of young people in order to get their views and opinions on regional development issues.

- Lack of knowledge on how to proceed to involve young people (e.g. instruments to use, format to adopt).

- Attention has shifted from youth (and female) engagement to migrant integration challenges.

- The new Regional Development Programme in Kalmar County is promising in this regard – it prioritises youth issues. It is seen as one of four central policy areas for regional growth. This is a major step forward from the current RDP and was supported by the knowledge obtained since the years of the Local Follow-up on Youth Policy (LUPP) tool.

2.4 Work with local industry to open up employment opportunities for foreign students

MT

1

Blekinge (BTH) has demonstrated advancements on this action through their student internship and placement programmes. The other higher education institutions in the region have not manifested specific progress.

- Recommendation was interpreted as a means to give local labour opportunities to recent arrivals, perhaps due to immigration trends, whereas it originally meant to answer the human capital requirements of the local industry.

- Actions in this area over-rely on personal relationships; there is a need for a more institutionalised and longer-term approach.

- Jönköping and Linnaeus Universities indicate that regulatory bottlenecks remain an obstacle.

- There may have been a lack of responsiveness of local employers to such initiatives.

- Need for greater labour-force “need finding” amongst local firms.

- Need for ongoing labour-market integration programmes for foreign students.

- There must be a commitment from the upper echelons of the higher education institutions and the local business community in support of such programmes.

- Potential recruits should be identified amongst the foreign students studying in local higher education institutes early in their programmes, even prior to arriving in Sweden. This may more directly attract students with intentions of establishing themselves in the region, and/or clearly signal the possibility of doing so. This is likely to encourage intention.

- Target European students for local business recruitment.

2.5 Improve co-ordination and collaboration in supporting migrant integration (including labour market, training, social assistance and housing), and addressing the limited capacities of smaller municipalities

ST

2

There has been major capacity building to address the recent wave of humanitarian and family reunification migration. Progress is needed to better address labour market migration. Ronneby Municipality has shown the greatest amount of progress on this issue. County Administrative Boards now tasked with organising early measures for asylum seekers; this may improve multi-level governance co-ordination in the future.

- Unclear information system for migrants to access public services.

- Misunderstanding from migrants of the benefits of some activities organised by public authorities.

Overall, a stronger labour market integration approach needed to support migrants. What could be done:

- Strengthen/adopt: flexible educational pathways.

- Work with key sectors to meet labour market demand.

- Build a locally accessible database of newcomers’ competencies.

- Adopt special strategies and designing resources to assist younger migrants.

- Design programmes and services for women.

- Offer language training relevant for specific professions.

2.6 Strengthen support and incentives for migrant entrepreneurship

MT

1

Progress has been made. In Småland-Blekinge, the municipalities of Ronneby and Olofström have made special efforts to fast-track foreign-born entrepreneurs in order to help them start their own business and establish themselves more quickly. At the national level, Sweden has developed a new fast-track for recently-arrived migrant entrepreneurs.

Fast tracking is a good step, but enhanced supports for migrant entrepreneurs are needed, such as:

- Strengthen connections between universities and colleges and support for migrant entrepreneurship.

- Offer integrated packages for entrepreneurship support (coaching, microfinance and strengthening of business networks).

- Broaden the reach of the existing initiatives focusing on migrants (e.g. through Almi).

2.7 Improve the social recognition of female entrepreneurs and facilitate networking opportunities for them

ST

2

National regionalised economic growth project – this was a renewal of the previous project. Projects for female entrepreneurship linked to EU funding.

Gender equality criteria are now being used to influence the distribution of public project funding. This is complemented by several county-level initiatives and projects aiming for gender equality in business and industry.

- Attention shifted from female (and youth) focused recommendations to migrant integration challenges.

-The promotion of the entrepreneurial initiatives women is said to be limited by the national and EU rules that do not support the consumer-based services often promoted by women entrepreneurs.

- Consumer-based services are often the entrepreneurial projects most accessible to women with less labour market adapted human capital or experience, such as migrant women.

- Champion successful female entrepreneurs; strengthen networks.

- Local support programmes should support consumer services and, in this way, fill the gap left unattended by National and EU entrepreneurship support.

Recommendation #3: Quality of life

3.1 Better promote the region's natural and cultural assets to local people and potential migrants

MT

0

Limited or no actions on this front.

In Kalmar County, this has been addressed to some extent by Kalmarsundsregionen.com and in Blekinge by such initiatives as public transport focused on adding destinations of great cultural and natural values, new projects on developing and promoting hiking trails and canoe trails have been implemented since 2012.

- The recommendation aimed to improve the socio-economic well-being of the local population, Unfortunately, the recommendation was interpreted as tourism promotion; but quality of life is equally important to local residents.

- Invest in culture (i.e. theatre, music and dance).

- Give residents the possibility to enrol their children in an international school.

Recommendation #4: Tourism

4.1 Place tourism at the forefront of development efforts

LT

3

All four counties have their own brand for the tourism market and the three counties of Småland have a common brand and digital platform (visitsmaland.se).

- Weak co-ordination in counties amongst actors involved in regional development and tourism.

- Limited resources of tourism agencies to invest in product development and innovation.

- Limited resources of public authorities at county-level to upgrade infrastructure and public service delivery to improve the quality of tourism experiences.

- Blekinge and Öland operate their own visit-platforms, do not have the common brand-challenge.

- Strategic territorial branding campaign (example of French and German regions, Box 2.4).

- Encourage multi-functionality of tourism for rural areas.

- Explore growth opportunities for service-based businesses and entrepreneurial ventures (also valid for 2.6 and 2.7).

- Increase the quality of tourism products and experiences, further developing smaller and part-time actors into more sustainable businesses.

- Co-operate with some of the region’s international consumer brands in order to promote the attractiveness of the region as a touristic destination.

Recommendation #5: Small and medium-sized enterprises

5.1 Further promoting knowledge-intensive service activity firms, particularly those which are attracted to amenity-rich areas

ST

2

There is an increasing focus on SME promotion. Kalmar invests in research and development for its integrated food strategy and Blekinge supports local brand development and product internationalisation. Jönköping and Kronoberg also have initiatives related to innovation in production processes and business incubators.

- Focus on promoting new industries; need to strengthen initiatives focusing on value added of existing industries/firms.

- Low motivation levels of local companies to grow their activities due to the positive current economic climate.

- Poor infrastructure, such as digital connectivity, although important progress is being made in this area

- Few investors in the region.

- Continue to strengthen digital connectivity.

- Consider instruments such as innovation vouchers.

- Promote and prioritise the creation and development of local knowledge-intensive business services (KIBS) in the counties as they are a main transmitter of knowledge and innovation across local firms and manufacturers.

5.2 Design and implement strategies for business retention

MT

1

Attention has shifted to supporting existing businesses (as opposed to new business creation only).

- Need for a better understanding of this issue and the growth dynamics of local businesses.

- Business retention efforts should be better linked to quality of life and increase the attractiveness of the region.

- Need for holistic assessment of the local obstacles affecting the business community that includes both direct (labour market, infrastructure, complementary industries, etc.) and indirect factors (proximity service, quality of life, visibility, etc.).

5.3 Better facilitate business succession amongst SMEs through local business facilitators who can support business owners and broker solutions between sellers and buyers

ST

1

In 2012 there was a focus on entrepreneurship and business creation; now there is more of an emphasis on existing businesses.

- Reluctance of business owners to pass on the company.

-·Difficulty in finding interested candidates to take over local businesses.

- Enhance education about business succession (project work, business succession plan).plan);

- Support practical experience (working in enterprises, entry/take-over strategy).ssistance with business succession (ownership transfer process, competencies transfer process, management transfer process).

- Need for business consolidation to form stronger companies (regardless of family relations).

Recommendation #6: Improving accessibility to the region

6.1 Remove the main bottlenecks and improving road and railway connections to Gothenburg and Malmö

LT

1

Improved collaboration between regions and agreed priority list of investments present a single voice to the national government. There are new efforts to upgrade the road network.

- Difficult for Småland-Blekinge counties to influence national infrastructure investments.

-·Poor railway infrastructure.

-·High-speed train project still in the planning phase (as it has been for the past ten years).

- Less of a focus on eastward connections (with the exception of Blekinge).

- Continue the promotion of the development of eastern-oriented commercial routes and infrastructure for the future.

- Prioritise the inter-county connections between Blekinge and Kalmar.

6.2 Improve connectivity between larger towns/nodes and more sparsely populated rural areas

LT

1

Progress shown and efforts to improve and co-ordinate rural bus system.

- High cost of high-speed railway project could divert resources from infrastructure investment projects (note: financing of high-speed railway not decided as yet).

- At present, some counties have expressed that border areas can be neglected despite their importance to those living in or travelling across them.

- Enhanced rural-urban linkages are needed at a functional level (and not by county). An integrated perspective is needed to better map and understand these linkages and propose service solutions. Particular attention should be given to border areas.

6.3 Improve air transport from each of the four county capitals by improving scheduling that enables same-day travel to and from other European capitals via Copenhagen and Stockholm

LT

1

- Increasing competition between the four counties to establish new routes.

- New connection between Jönköping County and Frankfurt.

- Ronneby Airport (Blekinge County) has increased the number of landings over the past five years.

- Difficult to build profitable new partnerships with European hubs.

- Lack of awareness of some EU grant rules which have the potential to increase opportunities.

- Developing new routes also depends upon the available infrastructure in airports of other countries (example of connection Kalmar-Berlin being discontinued).

- Optimise the use of county airport infrastructures and facilities in order to better cater to local business and industry needs so as to make them more than just places where flights land and depart.

- Make these airports and their surroundings active places of work, logistics and leisure.

6.4 Improve freight transport infrastructure to take advantage of opportunities for trade with the Baltic States, the Russian Federation and China

LT

1

This is a low priority for most counties with the exception of Blekinge. In Blekinge, two major infrastructure projects related to taking advantage of eastern trade were finished in 2013 and 2014. They were financed through TEN-T, Motorways of the Sea programme, developments on port infrastructure and rail network in Blekinge (and Kronoberg). As such, the network organisation Baltic Link is still actively working to connect the Baltic TEN-T corridor to the Mediterranean Adriatic corridor. The pace of engagement has slowed down but has not stopped.

- Trade connections with Russia hindered by Russia’s trade embargo as a response to EU economic sanctions.

- Develop a long-term strategy for infrastructure investments eastwards.

- Pursue the promotion of greater development of eastwards routes and infrastructure.

- Promote the establishment of an effective and efficient land to sea logistics platform.

6.5 Improve co-ordination between counties and the private sector in prioritising transport and communicating a single voice to the national government

MT

3

Counties have agreed on a priority list of investments to present a single voice to the national government. There have been new common efforts to upgrade the roads.

- Develop an integrated territorial perspective to assess transport needs alongside other sectoral policy areas such as infrastructure investments and the delivery of public services.

Recommendation #7: Better co-ordination of business development efforts

7.1 Engage in more cross-border interaction and co-operation to avoid the territorial fragmentation

ST

3

Strong sense of cohesion across the institutions involved, including the CABs. Inter-county and intra-county fissures seem to have been greatly remedied.

- Overlapping scopes and responsibilities across local, county and/or regional institutions and administrations.

- EU-funded measures and policy have created a system of territorial development strategies and structure that runs parallel to those developed at the county/regional level.

- There are still efforts required in bringing the measures and development strategies rooted within the EU’s Rural Development Policy, especially those implemented through the Local Action Groups of the old LEADER initiatives, with those developed and implemented by the Regional Council and other administrations within the county.

- Learn from the regionalisation process to avoid competitive postures.

Recommendation #8: Regionalisation reform

8.1 Undertake a cost-benefit analysis to determine the potential advantages and disadvantages of reform

N/A

N/A

This recommendation is no longer relevant.

No bottlenecks to report: Regionalisation reform abandoned.

N/A

8.2 Clarify roles and competencies of agencies involved in regional development and how they interact

ST

2

Current project of mergers involves counties of Jönköping and Kronoberg, and in 2019, Blekinge and Kalmar Counties.

- Although the ongoing process will formalise roles, communication of the roles and responsibilities are needed towards other organisations and even the general public in some cases in order to achieve efficiency in regional development.

8.3 Transition toward a model whereby a directly elected regional council is responsible for regional development

N/A

N/A

This recommendation is no longer relevant.

No bottlenecks to report: recommendation being met through the mergers that are carried out.

N/A

8.4 Strengthen the bridging role of County Administrative Boards between central government and the regions and simplifying the territorial boundaries of national agencies

N/A

This recommendation is no longer relevant.

No bottlenecks to report: recommendation being met through the mergers that are carried out.

N/A

Recommendation #9: Regional Development Programmes

9.1 Develop more concrete and institutionally reinforced programmes with clear targets and measurable outcomes

MT

2

Food programme well- elaborated. Co-ordination has increased across all four counties; need to improve the co-ordination with the CAP.

- Difficulty positioning county development strategy documents as a pillar of county development given municipalities’ strong self-governance and autonomy in many areas.

- Increase the involvement of municipalities in the development of county-level strategies and programmes to promote ownership of those and vertical co-operation.

9.2 Establish an enforcement framework to link investment priorities with the objectives of RDP

MT

0

Although much has been done in all four counties to increase the co-ordination of the different actors, a concerted regional development strategy has not yet emerged and by consequence investments remain fragmented.

- Funding tools linked to regional strategies are national, not regional.

- Local Action Groups (LAGs) are not well linked to the regional and county councils’ efforts.

- Better link locally driven efforts and strategies with the initiatives and measures rising from EU-agri’s CAP Pillar 2.

- Greater collaboration is needed between the Regional Council and LAGs.

- Include the LAGs in the co-ordination efforts towards a single regional development strategy.

9.3 Integrate rural and general development programmes into a single comprehensive regional development strategy

ST

1

Mixed outcomes across counties. Kronoberg County is involved in cross-transversal governance. Efforts less co-ordinated in Jönköping and Kalmar Counties.

- Local Action Groups (LAGs) are not well linked to the regional and county council efforts.

- Encourage the setup of more institutionalised mechanisms for collaboration in county-wide strategies.

- Better linking regional programmes, plans and strategies together, including the rural development programme given assignation by national government of different strategies to different organisations in the public sector.

- Voluntary collaboration of those different organisations.

Recommendation #10: Strengthen inter-county planning

10.1 Strengthen inter-county planning arrangements by including clear initiatives with funding and accountability and monitoring arrangements

MT

1

There has been progress on this front in terms of infrastructure issues in all counties. There are efforts to join with counties outside of the study area in order to have greater bargaining power with Stockholm. Blekinge, for instance, is increasingly co-operating with Skåne.

- Tools and funding mostly linked to the national level and distributed through national authorities.

- Delimitation of the responsibilities and roles of the national, regional and municipal governments remain often unclear.

The new role of the region in spatial planning is promising. Future efforts could improve/entail:

- Collecting and sharing data for improved community planning.

- Linking indicators to the strategic regional plan.

- Pursuing regional and inter-municipal co-ordination across functional territories.

- Establishing dialogue to co-ordinate between the regional and local levels on planning issues.

Recommendation #11: Further develop public-private interactions

11.1 Build institutional frameworks for public-private co-operation like public-private partnerships or industry advisory groups

ST

2

The participation and contribution of the private sector within the wider discussions of the strategic and socio-economic development of the region was more developed.

- Always the same players around the table.

- There is little culture of private involvement in areas considered of public domain, such as development and local services.

- Give priority to the development of public-private partnerships (PPP) investment projects at senior political level.

11.2 Enable the legal framework for public-private partnerships

MT

0

No new actions undertaken.

- Legal obstacle to providing funding directly to companies – a legal framework for PPPs has not yet been created.

- Reluctance of the private sector to engage in large work such as infrastructure projects because deemed as a public sector responsibility.

- Develop clear, impartial, transparent and enforced regulation to better frame PPP agreements and projects.

Recommendation #12: Municipal co-operation and reform

12.1 Initiatives and mechanisms that show co-ordination across municipalities around common projects

MT

3

There is much more active inter-municipal co-ordination today than at the time of the original territorial review in 2012. The management and integration of the recent migrants into the different counties is a good example of collaboration. The regional councils play an increasingly important role.

- Although to a lesser extent, certain larger municipalities do not always have a county-wide vision, they often do not perceive the potential synergies that could result from greater inter-municipal collaboration and co-ordination beyond infrastructural issues.

- Place incentives and support mechanisms that encourage inter-municipal co-operation and joint initiatives that go beyond those orchestrated by the Regional Council.

12.2 Establish place incentives and support to encourage inter-municipal co-operation

ST

2

There are new examples of inter-municipal co-ordination which are promising; e.g. with the food strategy in Kalmar. The recent growth in humanitarian and family reunification related migration has increased co-operation.

- System continues to be reliant on personal relationships rather than institutionalised incentive mechanisms.

- It was not obvious that inter-municipal co-ordination in certain counties stretches much beyond the infrastructural and migrant issues that seemed most pressing.

- Inter-municipal co-ordination has progressed more as a result of the removal of past disincentives than from the establishment of true incentives to do so. True incentives that encourage greater co-operation in the search for common higher-order interests and benefits are still required.

12.3 Conduct an in-depth assessment of municipal competencies; identify opportunities for regional or national institutions to take on responsibilities, and/or develop an asymmetric approach (larger municipalities have responsibilities that smaller ones do not)

MT

0

No new actions undertaken.

- Political sensitivity of discussing asymmetrical solutions because it would interfere with municipal autonomy.

- Limited funding to commit to competency platform.

- A national investigation of municipal competencies is ongoing. It is expected that the results of this investigation will allow the region to identify opportunities to take on responsibilities and/or develop an asymmetric approach, as the recommendation had indicated.

Notes

← 1. Blekinge’s strategy for tourism led to the development of “Visit Blekinge” for branding Blekinge outside of Blekinge.

← 2. For example, each co-production project within SPARK starts with a workshop between participating companies and researchers under Science Park management. The aim is to bring initial thoughts about commercialisation of research results into the project, either directly through participating companies or through the academy. Jönköping University is also one of the shareholders and joins several million in operating contributions to the regional science park; this offers an example of the proximity between academy and business development/entrepreneurship.

← 3. The counties in Småland work separately on the domestic market but together internationally through “Masterplan Småland” which is a four-party agreement also including Visit Sweden. The masterplan contains a strategy for prioritised markets (Denmark. Germany, the Netherlands and Norway) and co-ordinates the three counties’ investments in international marketing.

← 4. Investments have both increased frequency and reduced travel time through fewer stops, better commuter stops and better connection to local traffic. Also, all buses have been replaced with modern, more environmentally friendly, safer and more comfortable vehicles with free on-board Wi-Fi, etc.

← 5. However, there are objections from some municipalities who have tried to interest LNU in establishing on-site satellite-education in municipal learning centres, which has only offered traditional distance learning (which may not meet the needs of all students). In some cases (e.g. Production Engineering in Västervik), other Swedish HEIs have filled the gap. This may serve the purpose of the municipality but is perceived as diminishing the relationship between the region and Linnaeus University.

← 6. Finland’s Rural Policy Committee is a 35-member co-operation body appointed by the Finnish government which draws its membership from national ministries, regional co-operation bodies, trade unions, the federation of higher education and training institutions, the association of local authorities, the ombudsman for the LEADER programme, associations of producers of agriculture and forestry products, and the Village Action Association of Finland. The committee is presently led by a representative of the Ministry of Agriculture and Forestry. There are also seven thematic networks that support the work of the Rural Policy Committee and the realisation of Finland’s National Rural Policy Programme 2014-20. Given that Finland’s Rural Policy Committee involves multiple levels of government from the European Union to decentralised local government and several non-governmental actors, it can be described as a form of new governance or governance networks (Sørensen and Torfing, 2007[32]).

← 7. In an assessment of rural proofing in England and Northern Ireland, Shortfall and Alston (2016[31]) find that it has had limited effectiveness due to a lack of commitment to the policy across government; that the tendency for policymakers is to argue that rural proofing is not pertinent to the policies reviewed; and that it has led to little consideration of appropriate targets, outcomes or goals. In effect, rural proofing is only as effective as underlying commitments to rural development. It is also connected to the nature of the social welfare state in the country in question and its commitment to the territorial redistribution of public resources. As such, it may have greater utility in some counties than in others (Shortall and Alston, 2016[31]).

← 8. Kalmar County has established yearly fora/meeting places for young people and youth politicians in connection to the annual regional development conferences. These have been called “Youth Boards” but are not a permanent network.

← 9. Blekinge has Roll-on/roll-off connections to both Lithuania and Poland. The annual growth during the last ten years has been at around 7% to 8% (in relation to the Swedish Transport administration’s prognosis of 2.4% annually). The ferry operators Stena-Line (operating the Karlskrona-Gdynia crossing) and DFDS Seaways (operating Karlshamn-Klaipeda) have increased the size and number of ferries as well as departures per day. Stena-Line currently has 4 ferries with 44 trips a week to Gdynia and DFDS has 3 ferries with 18 trips a week to Klaipeda. The development supports the Swedish Transport Administration’s forecasts that the eastern oriented trade can go past the traditional western trade already in 2030.

← 10. The Baltics show strong economic growth; in the World Bank’s competitive rankings, it is greater than in Sweden.

End of the section – Back to iLibrary publication page