Promoting Growth in all Regions Enrique Garcilazo Regional Development Policy Division Directorate for Public Governance and Territorial Development OECD 4 th September 2012, Wellington
Outline 1. Trends in regional growth 2. Factors of regional growth 3. Policy lessons 2
OECD Territorial Reviews: a series of case studies of regional policy Among 34 member countries: 18 National Reviews (+1 ongoing) 21 Metropolitan Reviews (+1 ongoing) 2 National Urban Policy Review (+1 ongoing) 13 Rural Reviews (+1 ongoing) 4 Regional Reviews (+2 ongoing) 5 Regional Innovation Reviews Recent National Territorial Review s (+2 ongoing) : 3
Thematic projects Understanding drivers of Regional Competitiveness: (1) Empirical evidence (2) Identifying driving factors: – Theory – Econometric modelling 3) Implementation • Policy implications: Governance
OECD Regional Data-Base (RDB) The RDB includes regional statistics on 5 major topics: – Demographic – Regional accounts – Labour – Social and environmental indicators – Innovation To facilitate comparability, regions are: Classified in 2 Territorial Levels (TLs): • TL2 Territorial Level 2 (337 regions) • TL3 Territorial Level 3 (1708 regions) • New regions: China, Brazil, South-Africa, Chile etc.. Classified by regional type: (PU, I, PR) Database can be directly accessed from the OECD Statistical portal: http://stats.oecd.org OECD eXplorer: http://stats.oecd.org/OECDregionalstatistics OECD MDB: www.oecd.org/gov/regional/statisticsindicators
Promoting Growth in All Regions •“How Regions Grow” (OECD 2009) •“Regions Matter” (OECD 2009) •“Regional Outlook” (OECD 2011) •“Promoting Growth in all Regions” (OECD 2012) Is broader based growth economically viable? Does growth potential exist is some regions? Does it matter for national and aggregate growth? 6
There is no single/unique path to growth… Opportunities for growth exist in all types of regions. Rural not synonymous with decline 7
Convergence forces in rural regions 8
Convergence forces in intermediate regions 9
Convergence and divergence forces in urban regions 9.5% OECD average GDP per capita growth in PPP 1995-2007 8.5% Agglomeration 7.5% forces 6.5% 5.5% 4.5% 3.5% 2.5% 1.5% OECD average 0.5% -0.5% Convergence -1.5% forces -2.5% -3.5% 0 10 000 20 000 30 000 40 000 50 000 60 000 predominanty urban Initial GDP per capita in current PPP 1995 Agglomerations and sustainable development? 10
The most dynamic OECD regions over 1995-2007.. pop and GDP growth pop density and GDP growth pop and GDPpc growth 220 average rank 210 (1== highest) 200 population pop density 190 180 170 160 150 140 11 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
10000 20000 30000 40000 50000 60000 0 NAPLES DEAGU BERLIN MONTREAL Concentration high levels of GDP pc 21% VANCOUVER LILLE TAMPA BAY FUKUOKA MANCHESTER LEEDS VALENCIA BIRMINGHAM ANKARA SEOUL KRAKOW MIAMI PHOENIX OSAKA RHINE-RUHR ST.LOUIS PITTSBURGH TORONTO IZMIR ISTANBUL GDP per capita PUEBLA MELBOURNE AUCKLAND BUSAN COPENHAGEN GUADALAJARA BALTIMORE SYDNEY RANDSTAD-HOLLAND TURIN DETROIT PORTLAND MEXICO CITY national GDP per capita HANBURG BARCELONA CLEVELAND ZURICH TOKYO DUBLIN AICHI LOS ANGELES FRANKFURT LYON BRUSSELS HELSINKI CHICAGO LISBON 79% OSLO SAN DIEGO STUTTGART MADRID VIENNA PHILADELPHIA ATHENS ATLANTA MILAN MONTERREY MUNICH ROME PRAGUE LONDON BUDAPEST STOCKHOLM DALLAS MINNEAPOLIS NEW YORK DENVER SEATTLE HOUSTON WARSAW PARIS BOSTON SAN FRANCISCO WASHINGTON
Agglomeration tends to be associated with and higher value added, productivity and employment… higher GDP per capita… higher productivity… higher employment… . -50% 0% 50% 100% -50% 0% 50% 100% 150% -30.0% -20.0% -10.0% 0.0% 10.0% 20.0% WARSAW WARSAW BUSAN MINNEAPOLIS BUDAPEST SAN FRANCISCO BARCELONA PARIS WASHINGTON BUDAPEST PRAGUE NEW YORK KRAKOW MEXICO CITY AUCKLAND TURIN HOUSTON BUDAPEST VALENCIA ATHENS WASHINGTON BOSTON ROME ZURICH SEATTLE MINNEAPOLIS BRUSSELS PARIS STOCKHOLM WARSAW ATHENS MILAN ST.LOUIS PRAGUE DALLAS SYDNEY DENVER VIENNA TAMPA BAY LOS ANGELES GUADALAJARA PHOENIX SAN DIEGO HELSINKI AICHI ATLANTA DETROIT LONDON AICHI OECD AVERAGE SAN DIEGO SAN DIEGO BRUSSELS BALTIMORE BARCELONA CLEVELAND VANCOUVER OECD AVERAGE MADRID DALLAS DUBLIN ZURICH PHILADELPHIA ISTANBUL FRANKFURT OECD AVERAGE PUEBLA HANBURG LEEDS TURIN OSAKA ATHENS PORTLAND PORTLAND MONTREAL RANDSTAD-HOLLAND LONDON ANKARA BUSAN MILAN COPENHAGEN COPENHAGEN STUTTGART LOS ANGELES MELBOURNE BARCELONA STUTTGART PITTSBURGH PARIS MIAMI ST.LOUIS NEW YORK PHOENIX PHOENIX VIENNA MELBOURNE KRAKOW HOUSTON ST.LOUIS ANKARA BIRMINGHAM FUKUOKA VALENCIA FUKUOKA TAMPA BAY MANCHESTER MONTERREY LILLE TAMPA BAY OSAKA VANCOUVER LILLE PUEBLA BERLIN MONTREAL RHINE-RUHR DEAGU LEEDS NAPLES NAPLES 13
…but not necessarily faster growth Only 45% of metro--regions grow faster than the national average. Metro-regions appear to have entered in a process of convergence. 60000 San Francisco II II I I Washington Atlanta Initial GDP per worker in PPP San Diego 40000 Detroit Phoenix Osaka 20000 Prague Dublin Berlin Busan Monterrey Warsaw Budapest Istanbul Ankara Naples Deagu IV IV III III Puebla Izmir Krakow 0 -3.0% -2.0% -1.0% 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% 8.0% Average annual growth rates in GDP per capita 1995-2005 …signs of inefficiencies appear in significant number of metro-regions… 14
“Concentration = growth” …in practice, many other paths to growth emerge… Poland Labour Productivity Economic Density GDP per square kilometre GDP per worker Economic Growth Real GDP per capita growth
Mexi xico co Economic Density Labour Productivity GDP per square GDP per worker kilometre Economic Growth Real GDP per capita growth
Concentration is not synonymous with growth Concentration not sufficient nor necessary Benefits of concentration not linear nor infinite Diseconomies of scale and congestion costs can hinder growth in agglomerations
Links between regional and aggregate Where growth actually occurs is also critical: Contributions to growth Contribution to growth over the a given period (n, n+t): Initial size of a given territory GDP share (n) Its growth rate between (n, n+t) 18
Contributions to growth OECD TL2 regions 7% California 6% 32% of growth driven by 4% (or 14) regions... 5% Contribution toOECD growth Texas 4% Kanto Florida 3% New York London Virginia ...and 68% of growth by the remaining Capital Region (KO) 2% Georgia North Carolina Illinois Ontario Ile de France 1% Lombardia y = 0.6509x -1.311 0% TL2 regions 19
0.01 0.02 0.03 0.04 0.05 0.06 0.07 0.08 0.09 0.1 0 United States California 43.2% Japan Italy United Kingdom Korea Texas France Spain Canada Germany Mexico Kanto Florida New York Australia Poland Capital region Virginia London Georgia North Carolina Illinois Ontario Ile de France Regions vs. countries Lombardia New Jersey Pennsylvania Arizona Ireland Washington Alberta South East Turkey Netherlands Colorado Bayern Sweden Ohio Massachusetts Maryland Southern and Eastern Minnesota Michigan Toukai Gyeongnam region Lazio Madrid New South Wales Hungary Tennessee Cataluna Mazowieckie Distrito Federal Nevada Baden Wurtermberg Norway Indiana Chungcheong region Louisiana Veneto Wisconsin Czech Republic Andalucia Switzerland Quebec Connecticut Attiki Missouri Nordrhein-Westfalen Eastern Kyushu West-Nederland Soth West Victoria Queensland Finland Emilia-Romagna Gyeonbuk region Oregon Belgium Kinki Greece Portugal Rhone-Alpes Oklahoma Alabama North West Austria 20
Contributions to growth OECD TL3 regions 5% 27% of growth driven by 2.4% (or 20) regions... Tokyo 4% Contribution toOECD growth 3% Gyeonggi-do ...and 73% of growth by the remaining Attiki 2% Miasto Warszaw Seoul Dublin Madrid Hauts-de-Seine Stockholms län London West Roma Inner London -- East Milano Chungcheongnam-do Aichi Barcelona Gyeonsangbuk-do 1% Paris München Gyeonsangnam-do y = 0.5031x -1.201 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% 55% 60% 65% 70% 75 % 80% 85% 90% 95% TL3 regions 21
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