Regional Competitiveness in Central European Countries: In Search of a Useful Conceptual Framework

ABSTRACT

The goal of this discussion paper is to examine the relevance of selected influential theoretical and conceptual approaches to regional competitiveness for specific geographical and institutional contexts of Central European (CE) regions. We argue that strategic documents and policies (both nation- and region-wide) in CE countries are based on un-critical applications of a few popular concepts of competitiveness that were originally proposed and mainly applied in Western European and US regions. Existing empirical evidence documents a strong role of exogenous factors of competitiveness in CE regions, the in-house character of firm innovations and weak demand for innovations, and other impediments of R&D collaboration. We suggest that these (and other factors) limit the applicability of concepts such as regional innovation systems and Porterian clusters in the context of many CE regions. On the other hand, we argue that some other concepts such as the global production networks perspective or related variety and economic complexity can provide some relevant and inspiring frameworks for analysing regional competitiveness in CE countries.

Acknowledgement

The authors acknowledge support from the Czech Science Foundation, research grant: “International division of labour and the competitiveness of Czech economy, regions, and firms” (P402/11/1712).

Notes

1. In addition to other experience, it includes an extensive survey amog 680 Czech companies (all industries including services, various vertical positions in supply/production networks) in terms of in-depth interviews (mostly with the CEOs) conducted in 2008–2012, which addressed numerous issues directly related to the topics discussed in this paper (e.g. the corporate governance and ownership structures, supply chain, future strategy and key challanges, products and the trends on a given product market, management of innovations and R&D activities).

2. For example, in the personal experience of one of the authors, when the Karlovarsky and Vysocina regions (as two NUTS3 Czech regions) began with their attempts to conceptualize their strategic development policy, local opinion leaders and politicians were persuaded that it is impossible to restore the competitiveness of their regions without establishing a technical college or even a university.

3. Not incidentally, the Global Competitiveness Index, perhaps the most popular measure of competitiveness at national level, considers a very broad range of proxy variables, of which many are microeconomic determinants, though the interpretation of the index is mostly macroeconomic when mapping the positions of countries regarding their prospects in the scramble for productivity (WEF 2012).

4. WE NUTS3 regions are extremely diverse in terms of population size. Moreover, especially in Germany and Austria NUTS3 regions are split into the regional centres and their commuting hinterlands, which are, therefore, hardly mutually comparable regions.

5. The median value for the number of patent applications recorded by Eurostat over 2005–2007 in Western European NUTS2 regions is almost 20 times higher than the median for CE regions, and other available regional level indicators of internal creation of knowledge differ similarly.

6. For epistemological discussion, see Kofroň (2012).

7. In 2009, the share of foreign firms in manufacturing value added for Czechia, Slovakia, Hungary, Poland and Slovenia was, respectively, 57%, 63.8%, N.A., 45% and 25.4% (Eurostat 2012). Their average shares in the manufacturing R&D expenditures in 2003–2007 were 65.9%, 57.2%, 58.7%, 26.4% and N.A (ZEW 2010).