analysis with remi policy insight in nordrhein westfalen – including sensitivity experiments

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Rheinisch-Westfälisches Institut für Wirtschaftsforschung 1 8. 6. 2004 Rüdiger Budde Analysis with Remi Policy Analysis with Remi Policy Insight in Nordrhein Insight in Nordrhein Westfalen – Including Westfalen – Including Sensitivity Experiments Sensitivity Experiments Rüdiger Budde Rüdiger Budde RWI-Essen RWI-Essen

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Analysis with Remi Policy Insight in Nordrhein Westfalen – Including Sensitivity Experiments Rüdiger Budde RWI-Essen. Introductory remarks Specifia of the "Nordrhein Westfalen" modell Selecting an industrial strategy Quantifying the potential effects Conclusions. Agenda. - PowerPoint PPT Presentation

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Page 1: Analysis with Remi Policy Insight in Nordrhein Westfalen – Including Sensitivity Experiments

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Analysis with Remi Policy Insight Analysis with Remi Policy Insight in Nordrhein Westfalen – in Nordrhein Westfalen –

Including Sensitivity ExperimentsIncluding Sensitivity Experiments

Rüdiger BuddeRüdiger BuddeRWI-EssenRWI-Essen

Page 2: Analysis with Remi Policy Insight in Nordrhein Westfalen – Including Sensitivity Experiments

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Agenda

• Introductory remarks• Specifia of the "Nordrhein Westfalen" modell• Selecting an industrial strategy• Quantifying the potential effects• Conclusions

Page 3: Analysis with Remi Policy Insight in Nordrhein Westfalen – Including Sensitivity Experiments

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Northrhine - Westphalia

Ruhr area

Federal Republic of Germany

Neighbouringcountries

Specifis of the "Nordrhein Westfalen" Model

Oberhausen

Page 4: Analysis with Remi Policy Insight in Nordrhein Westfalen – Including Sensitivity Experiments

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List of Projects with the REMI model

“Effects of the Metrorapid Railway in Nordrhein-Westfalen”

3 Studies on the impact on new industrial sites on the local economy and its neighbourhood

Page 5: Analysis with Remi Policy Insight in Nordrhein Westfalen – Including Sensitivity Experiments

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City of Oberhausen (current situation)

• 220 000 inhabitants• Lies in the heart of the Ruhr-area• In 1987 7% of the employees were occupied in the steel

industry• In 2002 90% of the jobs in the steel industry were

vanished• Due to industrial changes huge brown fields emerged• First successful settlements while restructuring the

service sector• High unemployment rate (11%)• Objective 2 area up to 2006

(This status might be prolonged.)

Page 6: Analysis with Remi Policy Insight in Nordrhein Westfalen – Including Sensitivity Experiments

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The Regional Economic Strategy

To develop the new industrial site

• Maximize the potential employment that can be settled on the available brown field.

• Prevent harmful competition between old industries and new settlers.

Page 7: Analysis with Remi Policy Insight in Nordrhein Westfalen – Including Sensitivity Experiments

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Alternative facilities of operating a commercial site

 

stores specialized in

retail trade

industrial park with a focus on

traditional services

industrial park with a focus on

services for enterprises

industrial park with a focus on

health-care including

manufacture

  jobsshare of the total jobs

share of the total jobs

share of the total jobs

share of the total

sum of all jobs 2010 4200 9000 9700

retail stores 510 25% 210 5%research and development 900 10% 970 10%

services for real estate property 900 10% 485 5%

computing services 2700 30% 970 10%

logistic 600 30% 420 10%

healthcare 2250 25% 2910 30%other services 900 45% 2520 60% 2250 25% 2425 25%manufacture 1050 25%medical technology 1940 20%

Page 8: Analysis with Remi Policy Insight in Nordrhein Westfalen – Including Sensitivity Experiments

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• The results refer to the average of the first four years of production after achieving the aimed degree of efficiency

• Year of reference is 2008

Page 9: Analysis with Remi Policy Insight in Nordrhein Westfalen – Including Sensitivity Experiments

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Sensitivity analysis

Scenario 1 The model is used with all standard implications. Furthermore it is implied that there will be no regional or industry reaction in competition due to undertaking the investment.

Ruhr-area

Rest of Northrhine-Westphalia

Northrhine-Westphalia as a whole Ratio of Occupation

Scenario 2 The model is used with all standard implications. The investment finds itself in the position of regional or industry competition.Ruhr-areaRest of Northrhine-WestphaliaNorthrhine-Westphalia as a whole Ratio of Occupation

Scenario 3 Input-Output Analysis.the Ruhr-areaRest of Northrhine-WestphaliaNorthrhine-Westphalia as a whole Ratio of Occupation

jobsdirect

indirectdirect

jobsdirect

indirectdirect

jobsdirect

indirectdirect

Page 10: Analysis with Remi Policy Insight in Nordrhein Westfalen – Including Sensitivity Experiments

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Expected effects in the Ruhr-area (in absolute figures)

  Scenario 1 Scenario 2 Scenario 3

Stores specialized in retail trade

2.850 1.600 2.510

Industrial park with a focus on traditional services 5.900 3.580 5.610

Industrial park with a focus on services for enterprises

13.850 6.780 12.520

Industrial park with a focus on health-care including manufacture)

14.070 7.690 12.590

Page 11: Analysis with Remi Policy Insight in Nordrhein Westfalen – Including Sensitivity Experiments

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Expected effects in the remaining part of NRW (in absolute figures)

  Scenario 1 Scenario 2 Scenario 3

Stores specialized in retail trade

370 -550 160

Industrial park with a focus on traditional services 800 -880 430

Industrial park with a focus on services for enterprises

1.780 -2.250 890

Industrial park with a focus on health-care including manufacture

1.800 -2.040 860

Page 12: Analysis with Remi Policy Insight in Nordrhein Westfalen – Including Sensitivity Experiments

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Expected effects in whole State (in absolute figures)

  Scenario 1 Scenario 2 Scenario 3

Stores specialized in retail trade

3.220 1.050 2.670

Industrial park with a focus on traditional services 6.700 2.700 6.040

Industrial park with a focus on services for enterprises

15.630 4.530 13.410

Industrial park with a focus on health-care including manufacture

15.870 5.650 13.450

Page 13: Analysis with Remi Policy Insight in Nordrhein Westfalen – Including Sensitivity Experiments

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Expected occupational effects in whole Northrhine-Westphalia (in relative figures)

  Scenario 1 Scenario 2 Scenario 3

Stores specialized in retail trade

1.60 0.52 1.33

Industrial park with a focus on traditional services 1.60 0.64 1.44

Industrial park with a focus on services for enterprises

1.74 0.50 1.49

Industrial park with a focus on health-care including manufacture)

1.64 0.58 1.39

jobsdirect

indirectdirect

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On the basis of the research results

The elaborated concept • The Industrial park with a focus on health-

care including manufacture • In order to attract potential customers as

well as potential investors a theme park on healthcare is implemented within the industrial park

Future Park O.Vision

Page 15: Analysis with Remi Policy Insight in Nordrhein Westfalen – Including Sensitivity Experiments

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Future Park O.Vision

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Evaluation of “O.Vision”

themepark (public funding where possible)

industrial park (private funding only)

phase of construction

buildings

Infrastucture

Exhibitions

buildings and the infrastucture

used methodI-O tables,

(due to international tendering procedures, there was no way to regionalize the figures)

phase of operating

operating Themepark

operating all settled enterprises

used method Remi –Standard Model

Page 17: Analysis with Remi Policy Insight in Nordrhein Westfalen – Including Sensitivity Experiments

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  dimensiontheme-

park(1)

industrial park(2)

relation (2) /( 1)

direct potential of occupation

workingyears

1322 5636 4.3

indirect potential of occupation

workingYears

929 3975 4.3

contribution to the GDP

Mill. € 110.9 437 3.9

Expected developement while building the themepark and the industrial park

Page 18: Analysis with Remi Policy Insight in Nordrhein Westfalen – Including Sensitivity Experiments

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Occupational effects of the themepark (sensitive analysis)

Direct employees in the Themepark 175Scenario 1

No regional or industry reaction in competition due to undertaking the investment.

Direct and indirect jobs

Ruhr-area 290

Rest of Northrhine-Westphalia 39

Northrhine-Westphalia as the whole 329 Ratio of Occupation: 1,8

Scenario 2 Strong regional or industry competition.Ruhr-area 205Rest of Northrhine-Westphalia -34Northrhine-Westphalia as the whole 171

Ratio of Occupation: 0,98Scenario 3 Input-Output Analysis.

the Ruhr-area 219Rest of Northrhine-Westphalia 18Northrhine-Westphalia as the whole 237

Ratio of Occupation: 1,35

Page 19: Analysis with Remi Policy Insight in Nordrhein Westfalen – Including Sensitivity Experiments

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Occupational effects of the industrial park (sensitive analysis)

Direct employees in the inustrial park 7.089

Scenario 1No regional or industry reaction in competition due to undertaking the investment.

Direct and indirect jobs

Ruhr-area 10.318

Rest of Northrhine-Westphalia 1.985

Northrhine-Westphalia as the whole 12.303 Ratio of Occupation: 1,74

Scenario 2 Strong regional or industry competition.Ruhr-area 5.590Rest of Northrhine-Westphalia -1.216Northrhine-Westphalia as the whole 4.432

Ratio of Occupation: 0,62Scenario 3 Input-Output Analysis.

the Ruhr-area 9.650Rest of Northrhine-Westphalia 1.012Northrhine-Westphalia as the whole 10.662

Ratio of Occupation: 1.50

Page 20: Analysis with Remi Policy Insight in Nordrhein Westfalen – Including Sensitivity Experiments

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Conclusions

• Distinct positive impact on employment in the Ruhr area

• Success of the strategy as a whole, highly depends on situation investment finds itself in market conditions

– Inter-regional competition

– Inter-industrial competition