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Functional regions: Which regions and what

functions?

By Lewis DijkstraDeputy Head of UnitEconomic and Quantitative Analysis Unit

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Overview

• Metro regions• Remote regions • Rural regions• Labour Market Areas

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Metro regions: Why and how?

• A better understanding of the role and performance of large agglomerations in the EU

• A basis for comparisons with metropolitan regions outside the EU

• Based on the Urban Audit’s larger urban zone and a sensitivity analysis

• Agreed with the OECD• Based on a joint analysis of Eurostat,

REGIO and OECD

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Growth is more concentrated in less developed Member States

Change in GDP per head in metros, 2000-2007

SI

IT

ES

FR BE DE

UK DK

FISE

AT

NL

IE

CZ

EE

SK

HU

LT

LV

PL

RO

BG

GR

PT

-30

-25

-20

-15

-10

-5

0

5

10

15

20

25

30

Cha

nge

in G

DP/

head

rel

ativ

e to

the

nati

onal

leve

l in

inde

x po

ints

Capital Metro

Second Tier Metro

Smaller Metro

non-metro regions combined

63

-32

EU countries ranked by GDP per head in PPS, 2007

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Capital metros play an bigger role in less developed Member States GDP per head in metros compared to national level, 2007

IT ESFR

BE

DE UK

FI

DK

AT

SE

NL

IE

BG

RO

PL

LV

LT

HU

SK

EE

PT

MT

CZ

SIGR

0

25

50

75

100

125

150

175

200

225

250

GD

P p

er h

ead

in P

PS

in 2

007

, n

atio

nal=

100

Capital Metro

Second Tier Metro

Smaller Metro

non-metro regions combined

national

EU countries ranked by GDP per head in PPS, 2007

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Metro region conclusions• The difference in GDP per head between

the capital metro and the rest of a country is likely to shrink in the medium term

• This means that growth is likely to spread to other regions and will become higher in non-metro regions than in metro regions

• Public policies can facilitate this process• OECD has adopted this approach and

applied it to the US, Mexico and Canda• See Regional Focus 1/2009

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Remote regions: Why and how?• Predominantly rural regions cover a wide

variety of situations• New classification creates more

homogeneous groups• The proximity to cities is critical. Cities can

offer access to public services such as higher education and health care, a more diverse economy, a potential market

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Step 1:All cities UA + UMZcalculate travel time

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Step 2: Apply to 45 minute threshold

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Remote rural region conclusions• Remote rural regions are less productive

than non-remote regions• Remote rural regions are more likely to

face population decline• Economic growth favours rural regions

close to cities• Lower access to services such as

universities and hospitals• An analysis in North America finds the

same trends

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Rural regions: Why and how?

• OECD classification in predominantly urban, intermediate and predominantly rural is contested

• Methodology leads to distortions: – cities in large municipalities become rural – villages in small municipalities become urban

• New approach used a clustering of high density grid cells which avoids distortions

• Is being developed in close cooperation with DG AGRI, Eurostat, JRC and the OECD

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Objective of rural regions

• Create a more comparable definition of rural regions

• Create classification with less extremes i.e. avoid that Member States are entirely urban or rural

• Create a new classification of LAU2 which could be used in surveys in a similar manner as the Labour Force Survey level of urbanisation classification

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Labour Market Area Simulations• Variation in the size and approach to defining

NUTS 3 regions which reduces comparability• Commuting distorts GDP per head at NUTS 3

level• Labour market areas are a better unit of

analysis• Many Member States have defined their own

Labour Market Areas• LAMAS are NUTS 3 groupings based on metro

regions and national labour market areas

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LMAs: available geometry

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LAMAS

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LAMAS next steps

• Analysis of the LAMAS to assess their socio-economic situation and performance

• Eurostat will develop a harmonised labour market area definition which can be applied to the entire EU

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Functional regions and Cohesion Policy• In the current period, functional regions

can be addressed in a variety of ways:– Global Grant – Multi-regional programmes (but not

between RCE and Convergence)– Macro regions– European Grouping for Territorial

Cooperation

• The 5th Cohesion Report will include the proposals for the next period.