This is the presentation on Financing regional and local government investments: Case examples on ways to build the base for regional development and welfare, delivered by Antti Moisio, Economist and Policy Analyst at CFE/OECD, at the Joint seminar by OECD and Regional Development Office of the Deputy Prime Minister of Slovak Republic on January 30, 2020.

1. FINANCING REGIONAL AND LOCAL
GOVERNMENT INVESTMENTS: CASE
EXAMPLES ON WAYS TO BUILD THE BASE FOR
REGIONAL DEVELOPMENT AND WELFARE
Antti Moisio
Antti.Moisio@oecd.org
Economist/Policy Analyst
Decentralisation, Public Investment and Subnational Finance
Centre for Entrepreneurship, SMEs, Regions and Cities
OECD
Joint seminar by OECD and Regional Development Office
of the Deputy Prime Minister of Slovak Republic
Financing of development at regional and local level
Thursday 30th January 2020
Hotel Bôrik, Bratislava

2. • Integrated territorial development: what, why
and how?
• OECD recommendations: Principles for Action
for Effective Public investment across Levels of
Government
• Case example: Implementing Territorial
Approaches in Finland
– The Six Cities (6Aika) ITI project
2
Outline

3. INTEGRATED TERRITORIAL
DEVELOPMENT

4. What is integrated territorial development?
• The concept of an integrated territorial approach has been used for
several decades by various international organisations, including the
OECD, World Bank and the European Commission. From policy
perspective this has meant:
– Linking urban centres and rural areas, and creating integrated system of
settlements (instead of single growth poles)
– Emphasizing integrated rather than single sector development
approaches, in order to promote sustainable and balanced territorial
development (a strategic approach)
→Multi sectoral approach
→Multilevel governance approach
→Multi stakeholder approach
• Territorial is defined as an geographic area with common challenges,
development needs and growth potentials, and can, for example, be a
combination of:
– Functional areas (across administrative boundaries)
– Sub regional administrative entities (NUTS 3 and below)
– Local communities

5. • Old and new challenges faced by governments at global, EU, national,
regional and local levels, such as
– Geographies of…
• Population and employment dynamics,
• Economic disparities,
• Digitalisation,
• Social and political fragmentation,
• Climate change…etc
– Territorial mismatch between “functions” and “jurisdictions”
→ Need for solutions to govern fragmentation and interdependencies:
→ Several ongoing/planned policies and programmes in EU countries
→ Slovak Republic’s thematically and territorially integrated development
programs
5
Why integrated territorial development?

6. • Link with EU 2020 Stategy.
• Coordinated use of five European Structural & Investment Funds.
• Target resources at key growth sectors.
• Set clear objectives and measure results.
• Ensure the right conditions for investment.
• Enhanced role for the European Social Fund.
• Stronger role for partners in planning, implementation and control.
• Integrated approach to territorial development.
• Reinforce cooperation across borders.
6
EU Cohesion Policy 2014-2020: The key
elements

7. Integrated territorial development is a key
concept of EU cohesion policy
• What are the main policy tools in EU for integrated territorial
development?
– Community Led Local Development (CLLD)
– Integrated urban development
– Integrated Territorial Investment (ITI)
• Bundling funding to ensure the implementation of an integrated strategy for a
specific territory.
– a designated territory and an integrated territorial development strategy;
– a package of actions to be implemented;
– and governance arrangements to manage the ITI.

8. 8
Elements of integrated development
Source: https://ec.europa.eu/regional_policy/sources/conferences/etc2019/ws2_presentation.pdf

9. 9
OECD recommendations
Principles for Action for Effective Public investment across Levels of Government
Territorially and thematically
integrated investment
Coordination across
national, regional and
municipal governments
Interconnection and
cooperation across
regions and cities
Evidence collection and
modelling
! Stakeholder engagement
throughout the whole process
! Strengthen capacities for
external finance! Reinforce expertise
especially on transversal
and emerging policy areas
Pilot testing
https://www.oecd.org/effective-public-investment-toolkit/

10. 10
Slovakia’s thematically and territorially integrated
development programs
• Creating conditions
for the development
and quality of life of
each all citizens.
• Creating a quality
environment for a
healthy and full
individual and
community life.
• Applying the
principles of open
governance and
protecting citizens'
rights.
• Increasing the efficiency
and transparency of public
administration and public
policies.
• Switching from operative
to strategic planning and
management and
increasing investment
management efficiency.
• Efficient and sustainable
development finance.
• Transformation into
innovative economy.
• Validation of internal
resources and
potentials of regions
in efficient and
resilient regional
economies.
• Strengthening the
environmental and
social sustainability
of the economy.
• Protection and
sustainable use of
natural resources,
taking into account
climate change.
• Human resources
development in line
with the European
pillar of social rights.
• Development of
cultural potential
and cultural capital
of Slovak regions.
Program 1:
Protection and
Development of
Natural, Human
and Cultural
Resources
Program 2: An
innovative and
sustainable
economy
Program 3:
Quality of life for
all
Program 4:
Multilevel
governance
closer to citizens

11. 11
Example: enabling co-operation
Source: https://ec.europa.eu/regional_policy/sources/conferences/etc2019/ws2_presentation.pdf

12. Municipal spending power indicator (OECD
countries 2017)

13. • Smart specialisation aims to boost growth and jobs in Europe,
by enabling each region to identify and develop its own
competitive advantages.
• Smart specialisation aims to bring together local authorities,
academia, business spheres and the civil society, working for
the implementation of long-term growth strategies supported
by EU funds.
– SMART: Identify the region’s own strengths and comparative assets
– SPECIALISED: Prioritise research and innovation investment in competitive area
– STRATEGIC: Define a shared vision for regional innovation
13
Smart specialisation in Europe

14. 14
Budget allocations on cohesion policy per
EU member state (2014-2020)
Total EU allocations of cohesion policy 2014-2020* (billion €, current prices)
0
100
200
300
400
500
600
700
800
AT BE BG CY CZ DE DK EE EL ES FI FR HR HU IE IT LT LU LV MT NL PL PT RO SE SI SK UK
* breakdown by category of allocations subject to transfers between categories at the request of the Member States
Source: https://ec.europa.eu/regional_policy/sources/docoffic/official/regulation/pdf/2014/presentation_final_en.ppt

15. IMPLEMENTING TERRITORIAL
APPROACHES IN FINLAND,
A CASE EXAMPLE:
THE SIX CITIES PROJECT

16. 16
Finland, a quick desciption

17. • The project was based on joint
ambitions and challenges of the six
biggest cities in Finland.
– The six biggest cities in Finland
have similar challenges related to
urbanisation, climate change and
ageing population.
– In the Six City Strategy aimed to
combine forces of the main cities
to find new digital solutions for
these problems.
• The Six City Strategy is
implemented via projects which
vary thematically from smart
mobility to learning, circular
economy, using the tools of
digitalisation, open data and
interfaces and bottom-up oriented
co-creation methods.
• No investments for infrastructure
are carried out in this project,
instead the idea is to boost new
business, knowhow and jobs.
17
Example of ITI and smart specialisation in
Finland: The Six Cities (6Aika) project

18. • Six Cities project is carried out as
part of Finland’s structural fund
programme for sustainable
growth and jobs 2014-2020
• Cities operate as
experimentation environments
for new products and services.
• Six Cities project was awarded in
2018 by International Board of
Entrepreneurs & Business People
• Six Cities project was selected by
EU as Finland’s flagship project
for the 30th anniversary of the
EU’s cohesion policy.
18
The Six Cities (6Aika) project

19. • Companies as a target group
19
The Six Cities (6Aika) project
• Companies are both target
groups and partners in Six Cities
projects.
• Companies use urban
environments as platforms for
testing and developing new
products and services.
• Cities enable knowledge
building in businesses (e.g.
trainings in smart city
development).
• Over 4200 companies have
participated in 6Aika projects.
• 513 developed and piloted
new or improved products or
services have been created.
• 85 new innovation platforms
have been created.

20. 20
The Six Cities (6Aika) project: the pilots

21. • A video on the Six Cities (6Aika) project
21
The Six Cities (6Aika) project

22. • The main results and impacts
22
The Six Cities (6Aika) project
• Deeper and more systemic
collaboration between the cities and
companies
• A stronger developer network within
and between the city organization
• Strengthening the culture of
innovation and collaboration
between public and the private sector
• Cities operating as platforms for
collaboration with companies
• New tested operating models,
platforms, and praxis for innovation
policies
• Agile experimentation models
scaled to different use cases

23. • Share leadership and embed it
in the governance structure.
• Spend enough time building a
common vision in the beginning.
• Reflect together on the findings
as the work is progressing.
• Update action plans frequently
and re-focus, if needed.
• Involve openly the quadrable
helix actors (public, private,
citizens, academia) from the start.
23
Most important findings on the Six Cities
project

24. THANK YOU !