Towards regional knowledge-based economies: did Structural Funds matter? A comparative case study of the English West Midlands and Polish Silesia

With the approaching end of the current financial perspective (2007-2013) and the changes brought forward by the new programming period of the Cohesion Policy it is worth re-examining the effects which the policy’s measures have had in the previous years, especially with regard to regional aspect. The paper is set to investigate the nature of the relationship between the knowledge-based economy, which sprung into significance after announcing the Lisbon Agenda in the year 2000, and the Structural Funds, which are the key tool of implementing the Cohesion Policy and are very often considered as one of the prime sources of financing regional KBE development. Despite a significant amount of studies regarding KBE both in the scholarly environment and official publications of the EU and the OECD, there is no commonly agreed definition of the Knowledge-Based Economy and how it could be measured. Although the Knowledge-Based Economy is a concept that has gained significant popularity since naming it as the aim for EU development, the initial idea of KBE was introduced much more recently than the last two decades. Concepts of knowledge/information economy/industry, information society etc. have confirmed the importance of defining the role which is played in contemporary societies by knowledge-rich products, leading to the development of economies on regional and national level. Also, there is no common agreement as to the methods used for measuring the KBE, with individual scholars as well as various organisations proposing their own measurements and indicators for evaluating the Knowledge-Based Economy. Furthermore, most of the literature on European Funds concentrates on Structural Funds and does that in a particular way – focusing on assessing the impact of Structural Funds on the development of the whole economy, be it its national or regional aspect not on chosen topics “within” the economy. However, in most cases Issues such as patterns of employment or changes in the proportion of population in education are taken into account, but only as macroeconomic factors, i.e. parts of assessing the changes in economy as a whole (e.g. Dall’erba, Le Gallo, 2008). What is more, despite there being studies focusing on comparing regions within the EU (e.g Sinn, Westermann, 2000; ), what has most often been taken into consideration was the general economic growth within given regions (e.g. Puigcerver-Peñalver, 2007; Mohl, Hagen, 2010). The regions of West Midlands (UK) and Silesia (Poland) share many features, notably being both being very coaland manufacturingdependant economies, which have to en extent struggled with the transition to the new, knowledge-based economical environment. One of the other reasons behind the choice is that it allows comparison between one of the “old” member states’ region with one of the regions of a state relatively new to European funding. Taking into consideration all of the above mentioned points, this is an original study which reviews the impact of Structural Funds on a very particular issue: the development of the regional Knowledge-Based Economy. The uniqueness of the study stems firstly from devising the original methodology which allows quantitative assessment of the Knowledge-Based Economy on a regional level; secondly the study provides a comprehensive overview of the KBE-Structural Funds relation paying special attention to two EU regions which have not been compared before in the literature and does it in a particular time-scale: the years 1999 to 2009. This is methodologically addressed by firstly establishing a new way of calculating the General Indexes of the Knowledge-Based Economy of the two regions and, secondly, applying a number of statistical methods to measure the influence of the Funds on the changes in the regional KBE over time. The paper is ultimately designed to establish whether the allocations of the Structural Funds provided adequate measures for the development of Knowledge-Based Economies in Silesia and the West Midlands – in other words: did the Funds at all matter for the development of the regional Knowledge-Based Economies in the West Midlands and Silesia.