Regional Development in Ukraine - best practice
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Kom verder. Saxion.
Regional DevelopmentA best practice from The Netherlands
Jacques BazenLecturer Entrepreneurship / International Economic Relations
Kom verder. Saxion.
Overview of the presentation
I. Example of regional development in The Netherlands: Case study Region Twente
II. Regional development in Ukraine: conditions
III.Discussion
Kom verder. Saxion.
Regional development: Focus on Enschede
The story of the making of a regional innovation hub:
From a mono-industrial city to a diversified innovation driven economy.
Kom verder. Saxion.
Location of Enschede
Enschede
Number of inhabitants:
Enschede: 158 004Network city: 365 414Twente region: 625 840
Kom verder. Saxion.
How was the economy diversified?
• Long term approach of the government, no quick fix
• Strong investment in education & high tech
• Took several decades to reform the economy
Three ingredients for Enschede
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2. Entrepreneurial universityManagement policy:Supporting entrepreneurshipamong students and staff
Rector Van den Kroonenberg
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•Twente region is cooperating with the region Osnabrück and Münster for a long time.•The regions created a new cooperation platform called EURegio in 1958. The first of its kind.•Now, almost 100 Euroregions
Alfred Mozer
3. International cooperation
Kom verder. Saxion.
• – Positive correlation between innovation and internationalisation in enterprises
• – New enterprises that export are an important factor for regional economic growth
• – International start-ups are more ambitious than non international start-ups
• – Positive correlation between internationalisation and succesful entrepreneurs
Research into International cooperation
Kom verder. Saxion.
• – Attention for internationalisation: support international institutions like WTC and internationalisation of the Chamber of Commerce
• – Support cooperation in international clusters
• – More attention for the link between internationalisation and entrepreneurship
• – Open the networks of government and higher education for SMEs
Implications for regional policy
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Enschede today
1960 1970 1980 1990 2000 2005 2010 20120
2
4
6
8
10
12
14
16
18
20
Population growth Enschede, Twente and The Netherlands
Nederland Region TwenteEnschede
per
10
00
2009 2010 2011 2012 2013-4
-3
-2
-1
0
1
2
3
4
Growth of number of jobs in NL, Twente and Enschede (in %)
The Netherlands Region TwenteEnschede
Kom verder. Saxion.
Regional policy in Ukraine
Would the Enschede approach work for smaller cities in Ukraine?
These three ingredients are no rocket science…Shouldn’t be too difficult in itself, just takes time.
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Prerequisites
However, for real and long term sustainable development, there are some conditions:
Most important: Stable and fair political system and institutions that provide opportunities for everyone, regardless of their social background.
Kom verder. Saxion.
Institutional theoryTo illustrate this I would like to speak about the idea of Extractive and Inclusive institutions.
Theory of Acemoglu & Robinson, Why nations fail, 2012
Kom verder. Saxion.
Inclusive versus Extractive institutions
Inclusive countries: Extractive countries:- Rule of law - Rule of elite- Equality for all: - Some are more equal
Solid property rights than others- Aimed at effectiveness - Aimed at interests of
and efficiency the ruling class- Encouragement of - Encouragement of
clientelism:Entrepreneurship: incentive to be government Incentive to invest official or politician.
Kom verder. Saxion.
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
2014
-50
-40
-30
-20
-10
0
10
20
Economic growth (%) of four countries (Worldbank)
GEO NLD RUS UKR
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2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014-5
-3
-1
1
3
5
7
9
11
13
Economic growth (%) in three post-Soviet countries
Georgia Russian Federation Ukraine
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Regional development in Ukraine
Real reforms are needed before real development:- Building of a meritocracy based on the Rule of
Law, not on the Rule of Money: Building a non-clientalistic state
- Fighting monopolies that block competition and new entries to the market
- Giving people real incentives to innovate: Solid property rights and intellectual property protection.
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