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  1. Heading EUROISLANDS – some outsider observations Jouko Kinnunen Statistics and Research Åland 7 October 2011

  2. First impressions • Extensive work, voluminousreports • A lotofeffortputinto data gathering and processing • Relies on earlier policy studies and evaluations – as required in terms ofreference • Put a lotof (toomuch?) efforts in creatingnew waysofaggregating and presenting EU-widearchipelago data

  3. Descriptionof the islands • General picture(a viewshared by the EU bodies?): remote, peripheral, small, vulnerable, notattractiveto new firms or inhabitants • Cannotcompetewithcontinental Metropolitan European Growth Areas (MEGAs) – lack of agglomeration economies, varietyofsupply etc. • On averageloweducationalcontentof human capital (Nordic islandsexception) • Accessibility and transport costs a common problem

  4. But… • A lotof variation in the conditionsof the islands: someisland regions havehigher GDP per capita than EU27 average (including Åland) • The diversityof the successofislandsbegs for explanations: • Åland: tax free • Shetland: oilproduction • Islas Baleares, Cyprus: tourism and other services • Channel Islands: international tax competion, banking • In sum: successexplained by special policy environment or by useofnaturalresources POLICIES ARE IMPORTANT

  5. About the methodology • Construction ofseveralindices • Scalingofvariables in relation to EU27 =100 • Construction ofordinal-scaleclasses from the index values • Takingaverageofordinal-scale information ofseveralindicators That gives us State Index, Change Index, Direct, Indirect and Asset AttractivenessIndices Attractiveness is a keyconceptof the study: butcancauses and effectsofsuccess (or failure) be clearlydefinedwiththisconcept? The roleof EU, state and locallevelpolicies? Theseindicesproducenicemaps and convey a general picture, butshould be usedonly for descriptivepurposes (not monitoring nor evaluation)

  6. The problem withindices • Unresolvedquestionofweighting • Lots of information is lost in the process ofcreating the indicesof the study (data from intervaltoordinalscale) – not possibletodiscernanyeffectof EU programs • The variablescomprisingindicesmay be more informative whenpresentedseparately (GDP, unemployment, population growth) • State Index correlateswith GDP per capita • Construction of new indices – the original sin ofgeographers?

  7. Methodology, cont. • The central yard stick is EU27 average • Alternative idea #1: comparisonwithother, peripheral, small, insular (island-like) regions • Alternative idea #2: Importanceof transport costswithinislandcontext, whathappenstoislandsthat get a fixedlinktomainland? What is the pure insularityeffect?

  8. Analysisof EU policies • Island ImpactAnalysis (IIA): A literaturereviewofprevious studies coupledwith an interpretation ofresultswithinislandcontext? Whyintroduce a new concept? • EU policieshave mixed impactson territorial cohesionofislands, rather negative general outcome • Programs with (potentially) positive effects: LEADER, R&D subsidies, structuralfunds • Goodpoint: Reportraisesthe importanceofbeingawareof the impactsofsectoral and EU-widepolicies on islands

  9. Place-basedpolicies on the rise • The policiesof the national and regional decision-makingbodies is being given a greaterrole in the new cohesion policy (even OECD promotesthis, Finland’s KOKO-initiative) • EU: Barca report and European Parliament’s post 2013 study • Finland’s KOKO initiative • OECDs LEED programme • A more in-depthanalysisofcurrentpoliciesofislandswouldhavebeen an importantcontribution • Local decision-making is constrained by manyfactors: what kind ofindustrial policy is possiblewithin EU?

  10. Recommendationsof the study • Transport infrastructureimprovementswithin the EU: asks for increasedawarenessofislandimpacts • Enhancedlocal-level administrative strengthtoparticipate in EU programs • Improvedcoordinationbetween EU programs • Positive discriminationof small islandswith less than 5.000 inhabitantstoday - > even for biggerislands, buthowbig? • Support toentrepreneurship and networking • Compensationof ”insularitycosts”; OK in caseof public sector, for private sectorcompetitionrules & effectsneedto be taken intoaccount

  11. Concludingreflections • Roleof EU programs is limitedcomparedto national and localpolicies • The islandimpactsofFinnish (industrial) state-levelpolicies? Finnishisland studies? • Weneedtolearnmore on the localpolicies: interplaywithcompetitionregulations and industrial policy (Itidenexample) • Less compensatoryand redistributing and moreenablingprogrammemeasures in the future? • Relation betweensubsidiarityprinciple and cohesionpolicies? Whoshould be doingwhat? • Åland is doingratherwell.Future actions?

  12. Åland issues • Tax-free basedferrytraffic: continued loss ofimportance? Need for new jobs • Firms: barrierstoentry? • People: barrierstoentry (and exit), social requirementoflinguistic & culturalconformity? • Åland’s ownpolicieshaveuneven regional effects: moreroom for regional (archipelago) solutions e.g. for land ownership?

  13. Thankyou for your attention!