Competitive position of the Baltic Sea Region.
Tomasz Brodzicki et al.
Abstract:
Located in peripheries of the European Union the Baltic Sea Region (BSR) has a tremendous endogenous potential to become one of the key regions of the enlarged European Union capable of facing up to challenges of the globalizing economy. Furthermore, the BSR could be considered as a leader with reaching the goals of the modified Lisbon Strategy. This great endogenous potential characterized by high degree of internal heterogeneity is however not utilized to acceptable extent. The degree of internal heterogeneity is in fact a major impediment to establishment of cooperative linkages. A common Baltic identity is actually missing despite frequent statements of national and regional leaders and a lot of time will pass till it actually develops. It will develop through actions and not blunt words however.
The diversity of the BSR is beneficial despite significant difficulties in cooperation. It is beneficial because it creates significant opportunities for reaping actual benefits related to higher degree of specialization, better allocation of resources (improved division of labor), higher productivity and knowledge generation. Regional cooperation could be beneficial from the perspective of both national and regional authorities as well as of particular sectors or even individual profit-seeking entrepreneurs if it can enhance the competitive position of the region on a global arena. In order to do so national and regional authorities should facilitate establishment of cooperative linkages among business communities or even within the triple helix setting. This should apply in particular to sectors of strategic importance to regional economy. It is worth to note that the Baltic Sea Region taken as a whole could be said to have relevant competencies to successfully compete with other European as well as global regions in a number of industrial and services sectors. Due to their strategic importance to the overall prosperity of the region the economic performance of the sectors should be constantly monitored and appropriate steps but only if economically viable should be made. However, these key prosperity drivers should be identified.
The aim of the present repot is to give objective opinion on the key drivers of competitive position of the BSR. In order to so we will analyze the regional economy (regional manufacturing industry) from both a traditional sectoral perspective as well as the relatively novel cluster-perspective. It is worth to note that the recent report by Ketels and Solvell (2005 - State of the Region Report) adopted cluster-approach to analysis of the regional economy as well. It is to us the step in the right direction . The main conclusion of the Report is that the Region has a strong cluster base with a rich portfolio of regional clusters and overlaps in cluster-export specialization. As to policy recommendations the authors suggested: more cooperation between related clusters, benchmarking of cluster policies as well as creation of consistent data on clusters and clusters across the region.
Despite its obvious merits, the analysis by Ketels and Solvell (2005) in the area of clusters is unsatisfactory was unsatisfactory. A lot more could and should be done in order to better inform the policy-making process. Our report despite its obvious drawbacks goes one step further. From this perspective the present study is both complimentary and supplementary to the analysis by Ketels and Solvell (2005).
We would like to note, furthermore, that several reports have recently identified major shifts in location of manufacturing industries as well as services within the European Union. These trends seem to extend to or encompass the Baltic Sea Region. Moreover, accession of the Baltic States and Poland to the European Union has created a unique opportunity for reallocation of manufacturing industry as well as services sectors to occur within the region itself. All the economies of the BSR with an exception of two Russian oblasts constitute a part of the internal market were the freedom of movement of goods, services, labor and capital are guaranteed (with an exception of temporary transition periods provided by accession treaties). This could bring important benefits to the region taken as a whole allowing for more efficient and productive specialization to occur thus strengthening or allowing to retain competitive advantage over other European or even global subregions (a policy target stressed in the recent State of the Region Report). Furthermore, apart from reallocation this constitutes an opportunity for establishing globally competitive value added chains within the Baltic Sea Region. The secondary objective of the present study is to investigate the potential for reallocation of industry and services within the Baltic Sea Region. The cluster-perspective seems to be beneficial as well.
Keywords: Baltic Sea Region, industrial clusters
JEL: L60, R11, R12
