Opinion of the Economic and Social Committee on "The regions and the new economy: Guidelines for innovative actions under the ERDF in 2000-2006"
Date: 2001-05-30
Institutions: European Economic and Social Committee
Subjects: European Development Fund, action programme, regional policy

7.8.2001

EN

Official Journal of the European Communities

C 221/97

Opinion of the Economic and Social Committee on ‘The regions and the new economy:
Guidelines for innovative actions under the ERDF in 2000-2006’

(2001/C 221/16)

On 24 and 25 January 2001, the Economic and Social Committee, acting under Rule 23(3) of its Rules
of Procedure, decided to draw up an opinion on ‘The regions and the new economy: Guidelines for
innovative actions under the ERDF in 2000-2006’.

The Section for Economic and Monetary Union and Economic and Social Cohesion, which was
responsible for preparing the Committee’s work on the subject, adopted its opinion on 15 May 2001.
The rapporteur was Mr Vinay.

At its 382nd plenary session (meeting of 30 May 2001), the Economic and Social Committee adopted
the following opinion with 122 votes in favour, no dissenting votes and one abstention.

1.

Introduction

1.1.
The Committee, which represents many of those called
upon to play a significant role in devising and implementing
the new innovative actions,
intends this opinion to be a
practical contribution, looking in detail at the interconnections
between the programme and policies on cohesion, employ-
ment and, obviously, innovation.

There are a number of changes in the approach taken
1.2.
for the new innovative actions with respect
to previous
priorities and arrangements for financial management. The
strategic themes have been reduced from eight to three with
an approach based no longer on individual projects but rather
on programmes. These must tie in with Objective 1 and
2 programmes part-financed by the ERDF, while also comp-
lementing measures financed by the ESF under the same
objectives.

1.2.1.
The budget is 0,4 % of annual ERDF funding, which
is equivalent to approximately EUR 400 million for 2000-
2006, not including potential funding for the same period
under the flexibility instrument.

1.3.
The themes of the innovative actions in the 1994-
1999 period centred on: the promotion of technological
innovation (RIS — Regional Innovation Strategies); the infor-
mation society (RISI — Regional Information Society Initiat-
ive); new sources of employment; culture and heritage; urban
pilot projects; spatial planning (Terra); internal interregional
cooperation (Recite); and external interregional cooperation
(Ecos-Ouverture).

The new themes, reduced by the Commission to
1.3.1.
three for reasons of simplification and with a view to
concentrating resources, are designed to promote innovative
methods and practices in the fields of: regional economies
based on knowledge and technological innovation: helping
less-favoured regions to raise their technological
level; e-
EuropeRegio: the information society at the service of regional

development; and regional identity and sustainable develop-
ment: promoting regional cohesion and competitiveness
through an integrated approach to economic, environmental,
cultural and social activities.

The resources are divided among three strands: the
1.4.
part-financing of regional programmes of innovative actions
and of the pilot projects deriving from them; accompanying
measures to support exchange of experiences and the creation
of interregional networks; and the organisation of compe-
titions aimed at identifying and developing best practice.

2.

The basic elements of the Commission’s choices

The priority themes chosen tie in with the European
2.1.
Union’s strategy as defined by the Lisbon European Council,
the aim of which is to develop an economy based on
knowledge, competitiveness, innovation and full employment.
In the most under-privileged regions, promoting programmes
that combine research and experimentation, especially in
the sphere of the new economy with all its technological
implications, can be crucial for sparking a virtuous circle of
development, all the more so since these regions invest least in
the three strategies chosen.

2.2.
The Commission also stresses the importance for
companies, especially SMEs, of knowledge, know-how, and
the ability to anticipate or adjust to technological changes in
the new economy. Investing in the human factor and promot-
ing and supporting training and lifelong learning are indispens-
able for fuelling regional innovation and competitiveness and
sustaining it in the longer term.

Although they are consistent and tie in with the
2.3.
programmes part-financed by the ERDF, the innovative actions
should not duplicate those measures but rather influence them

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positively in a context of experimentation which, though in
essence more risky, can be the way to identify new strategic
markets in the regional economy. It is important to be aware
that the programmes under the innovative actions could have
a knock-on effect on the entire region, even in areas not
covered by Objectives 1 and 2.

2.4.
In the Commission’s view, one fundamental aspect of
the innovative actions is the creation of a stronger partnership
the
involving the authorities responsible in the regions,
authorities responsible for the programmes under Objectives 1
and 2, the ERDF and the private sector.

2.5. When describing possible programmes for the first
theme, the communication makes the point that, with increas-
ingly strong demand for competitive development, in relation
to the more advanced European regions and in the context of
market globalisation,
innovation can offer the competitive
advantage so crucial to the more vulnerable regions.

2.6.
The second theme focuses on promoting the wide-
spread use of information technologies to serve companies,
the public and administrations, using an approach that ties in
with the strategy and objectives of the eEurope initiative. In
short, this means providing on-line access for individuals,
households, businesses, schools and administrations, introdu-
cing the digital culture, strengthening consumer confidence in
on-line commerce, furthering social integration and boosting
social cohesion.

— the potential

influence on programmes under Objec-

tives 1 and 2 part-financed by the ERDF;

— the feasibility of the proposal and consistency between

the goals set and the resources allocated;

— the expected impact in the Objective 1 and 2 areas;

— the private-sector contribution to the financing of the

programme;

— the commitment and quality of the regional public-
private partnership in preparing the regional programme
of innovative actions and ability to enlist other regional
and local agents, particularly small firms;

— arrangements for cooperation between the competent
authorities in the region responsible for the preparation
and implementation of
the regional programmes of
innovative actions and the managing authorities for
programmes under Objectives 1 and 2 part-financed by
the ERDF;

— expected sustainability of the actions when the regional

programme of innovative actions has finished;

— transferability of the results to other regions;

such as

research,

— synergy and compatibility with the other Community
the information society,
policies
enterprise, the environment, rural development (common
agricultural policy), equal opportunities and competition;
consistency with the Commission guidelines for pro-
grammes in 2000-2006.

The third priority is designed to encourage the regions
2.7.
to turn their strengths to account and develop a sustainable
and competitive economy, by drawing on cultural, environ-
mental and infrastructural features, or specific skills.

2.9.
From 2002, the Commission is to present an annual
report on progress with innovative actions to the European
Parliament, the Committee for the Development and Conver-
sion of Regions, the Committee of the Regions and the
Economic and Social Committee.

2.8.
The various programmes will be submitted to the
Commission with a strategy agreed in advance between the
various regional operators, to provide the frame of reference
for launching individual projects. They may be based on one
of the three strategic lines or a combination of them. A region
may present no more than two programmes in the 2000-
2006 period, and the second only after the first has been
completed.

2.8.1.
co-financing on the basis of ten specific elements:

The Commission will appraise the programmes for

3. General comments

3.1.
The Committee welcomes the latest proposals for
a programme of innovative actions and fully agrees that
programmes promoting the widespread introduction of inno-
vative capacity and the technologies of the new economy to
all sectors of production and society are crucial to regional
development. Moreover, it stressed only recently (1) that the
capacity to use information and communication technologies
can determine the success of a possible development or the
loss of further jobs in a particular area.

— the quality of the proposal, in particular the clarity of the
approach, the innovative nature of the work programme
and the targeting of resources on a limited number of
actions;

(1) Opinion on the Commission Communication ‘Acting locally for
employment — A local dimension for the European Employment
Strategy’, OJ C 14, 16.1.2001.

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3.1.1.
In addition, the best focus for innovative action
programmes in the three main source areas of growth —
entrepreneurship, training, and the proactive involvement of
public bodies, cultural and research institutes and the social
partners — is the local
level, especially in disadvantaged
regions. Geographical proximity, closer understanding of the
difficulties inherent in the social and productive fabric, and the
increased responsibility of local authorities arising from the
decentralisation policies being applied in all EU countries, are
all
factors that contribute directly to forms of effective
participation. The Commission’s innovative action programme
provides another major opportunity for such participation.

Participation is invaluable in basic organisational
3.1.2.
terms and also economically and socially:
it expands the
resources available, increases the flow of ideas, and fuels social
cohesion.

3.2.
The new requirement of consistency with the other
forms of ERDF action in the same areas and complementarity
with programmes part-financed by the ESF acts as a further
stimulus rather than a restriction. It provides an opportunity,
on the one hand, to take on the risk factor always inherent in
an experiment and, on the other, to put an idea into practice
with faster results, while fitting in with other local development
initiatives.

3.3.
The Commission states that it was largely if not totally
successful
in its innovative actions during the 1994-1999
in-depth evaluation of their
period. However, a complete,
impact or of the durability of their results would be useful. The
communication gives details, as mentioned above, of the
programme appraisal criteria, but there are no indications of a
similarly detailed final evaluation. This is one point on which
the Committee intends to make a few proposals.

3.4.
Although reducing the number of strategic themes is
beneficial in ensuring the various pilot actions are not too
thinly spread and in linking up very closely with EU technologi-
cal innovation, information society, and research and develop-
ment policies, it has meant giving less than due attention to a
theme which is now mentioned just briefly in one of the
programme appraisal criteria: ‘expected impact in the Objec-
tive 1 and 2 areas … creation of long-term quality jobs …’.

The employment issue is mainstreamed into all EU
3.4.1.
policies and is in essence the final objective of every develop-
ment initiative, whether creating employed work or supporting

entrepreneurial
initiatives. Therefore, although the new
approach has done away with the previous strategic theme
‘new sources of employment’, the theme of creating new job
opportunities through the innovative actions nonetheless
deserves fuller attention than is given in the communication.
Moreover, the Commission recently stated that it wanted to
promote pilot measures to integrate the employment dimen-
sion into all local policies, and to assess their value added in
terms of jobs created (1).

3.4.2.
This is even more important for regions and areas
that are largely cut off from the new technologies and the new
economy, regions where there is sometimes the fear that the
end of the old system of work organisation may mean the end
of work full-stop.

3.5.
The decision to favour an approach that supports
programmes rather than projects and to entrust responsibility
for managing the innovative actions to the same bodies
managing ERDF and ESF funding is justifiable from an
organisational point of view. Politically, however, it does away
with the minimal opportunity for a direct link between the
public and the European institutions that was one of the
advantages of past practice.

3.6. When the last programme of innovative actions was
launched, the Committee welcomed the initiative but felt
that the appropriation of MECU 270 (2) was too low. The
Commission, which financed 350 projects
in around
40 regions during the funding period, has stated unofficially
that from 2001 to 2006 it intends to finance programmes in
approximately 100/150 regions. The current overall appropri-
ation is, as mentioned above, EUR 400 million and the various
programmes will be granted support ranging from EUR 0,3 to
3 million.

On this occasion too, given the potential importance
3.6.1.
of
innovative actions for trying out new approaches to
development in a context that is by definition critical, this sum
seems somewhat inadequate; and the danger is that the lack
of resources allocated and the complementarity with other
structural measures (though justifiable), will mean in practice
that these innovative actions will be treated as a mere accessory
to the other programmes.

4.

Specific comments

4.1.
On the subject of innovation, the Commission stresses
that SMEs form the basis of the regions’ productive fabric and

(1) Communication from the Commission on the implementation of
Innovative Measures under Article 6 of the European Social Fund
Regulation for the programming period 2000-2006, COM(2000)
894 final.

(2) Opinion on local development initiatives and regional policy, OJ

C 18, 22.1.1996.

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that their chance of success is determined largely by their
capacity for innovation. Later, on the subject of the potential
generated by the information society, it states that companies,
and SMEs in particular, must be able to harness that potential
in order to grow more competitive.

4.1.1.
Obviously, no one would argue with those state-
ments, but the generic definition of SMEs conceals one of
the basic features of the Union’s entrepreneurial make-up.
Approximately 98 % of private non-agricultural companies
are small enterprises and 93 % of them are micro-companies
(fewer than 10 employees) (1). Together they employ approxi-
mately two thirds of the entire EU work force and every year
they create between 60 and 80 % of new jobs.
In the
communication, micro-companies are just one possible objec-
tive of the programmes under the third theme, but in the ESC’s
view it is unacceptable to side-line them in this way.

4.1.2.
In June 2000, the European Council meeting in Santa
Maria da Feira adopted the European Charter for Small
Enterprises, implicitly signalling an end to the catch-all concept
of the SME. In past years, the Committee has issued several
opinions on the strong, vital and specific role of small
companies that do not fit neatly into the pattern traced by
policy initiatives for companies jumbled together by a generic
definition of SMEs(2).

As it is often the more structured companies, and
4.1.3.
medium-sized companies in particular, that exploit Com-
munity funding, special and more focused practical attention
on small companies would be useful, especially under the
innovative action programmes. More specifically, the Com-
mittee has already proposed that business and entrepreneur-
ship policies should make explicit reference to the European
Charter for Small Enterprises (3). The communication mean-
while includes consistency with Commission guidelines for
programmes in 2000-2006 among the criteria for evaluating
programmes for selection.

4.2.
Among the players to involve, the communication
mentions the public sector, bodies responsible for RTDI,
businesses, universities, advisory services, financial markets
and other technology partners. Throughout the text, the term
‘private sector’ is used to indicate the business sector. It is not
clear whether this definition is intended to include what is
commonly known as the social economy, which not only is
very dynamic in pinpointing and offering new additional,
alternative or accompanying services alongside those provided
by the public sector, but is also specifically active in fields that
have a major impact on social cohesion and are often linked
to the information society and new technologies, as well as
environmental sustainability (1).

4.3.
The poorest sections of the public in the various EU
countries (without going deeper into the commonly accepted
technical definition of poverty) are oppressed by problems
linked to the employment situation, demography and housing.
However, as the recent report on economic and social
cohesion (4) points out, in the information society revolution
it is likely that low levels of education, i.e. a lack of training in
the use of ICTs, will become a more critical factor than poverty
measured in economic terms.

4.3.1.
Lifelong learning is extremely important and valuable
for employment, both in the new economy and in the
economy as a whole, but great care must be taken to ensure
that the information society does not effectively marginalise
older people who no longer work and therefore miss out on
the opportunities offered by school and employment. The
Committee has already recommended developing methods
and strategies to promote digital literacy among specific age
groups (5).

4.3.2.
Furthermore, the partnerships needed for regional
information society development strategies are broader than
those indicated in the communication. Discussing the RISI
innovative actions under way at the time, the Commission
itself once stressed (6) that the most innovative aspect was the
institutional mechanisms through which the strategy was

(1) Commission Communication ‘Acting locally for employment —
A local dimension for the European Employment Strategy’,
COM(2000) 196 final.

(2) Additional own-initiative opinion on ‘SMEs and craft businesses

in Europe’.

(3) Opinion on the ‘Communication from the Commission —
Challenges for enterprise policy in the knowledge-driven economy
— Proposal for a Council decision on a Multiannual Programme
for Enterprise and Entrepreneurship (2001-2005)’, OJ C 116,
20.4.2001.

(4) Second report on economic and social cohesion. January 2001,

COM(2001) 24 final.

(5) Opinion on ‘eEurope 2002 — An information society for all —

Draft Action Plan’, OJ C 123, 25.4.2001.

(6) Communication from the Commission on ‘Cohesion in the

information society’, COM(97) 7 final.

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developed,
i.e. the partnership between regional and local
institutions and the associations most representative in the
sphere of training and education bodies, unions, chambers of
commerce, cooperative movements and the voluntary sector.

mental role to play, but it is necessary to analyse how the
innovative actions financed by the ERDF tie in with the EU’s
overall policy on innovation.

In the same communication,

in relation to the
4.3.3.
development of practical applications of information tech-
nologies and other information and training activities, the
Commission stated that new forms of work organisation
should be developed, which, accompanied by training and
retraining measures, were vital steps in the process of ushering
in the information society.

In another recent document (1), on the subject of
4.3.4.
education for an entrepreneurial society and high-quality new
jobs,
it pointed out that training and continuous training
programmes should be custom made, in cooperation with the
social partners, especially where SMEs are concerned.

Nowhere in the Commission communication are the
4.3.5.
social partners given a part
to play. The promotion of
equal opportunities (incidentally, always mentioned alongside
competition), in-company training, and new forms of work
organisation are seemingly areas void of consultation or
negotiation. The Committee clearly hopes that the practical
application will differ from the letter of the provision. In the
above-mentioned report on cohesion (2),
the Commission
emphasised the active role of the social partners in lifelong
training and social integration policies, but now that role is
completely ignored. Since the success of this initiative will
depend largely on the breadth and quality of partnerships at
local level, this mistake will have to be put right when the
schemes are implemented.

The fifth RTD framework programme, which closes
4.4.2.
at the end of this year, named innovation as its basic objective
and included a horizontal programme specifically designed
to promote innovation in SMEs. The recent Commission
communication ‘Innovation in a knowledge-driven econ-
omy (4)’ states that a broad strategy is required with firm links
to other Commission initiatives, notably regional policies and,
in the light of the recently approved European charter, it calls
for the best possible environment for small companies and
entrepreneurship. Lastly, it states that on average only 13 % of
companies cooperate with universities or research institutes.

4.4.3.
In response to these communications, the Committee
hopes that the programme evaluations will pay attention
to the potential
link with innovation policy as a whole.
Furthermore, in view of the objectives and given the rareness
of interactions between academic centres and companies, the
scale of the overall financing for innovative actions at regional
level appears very limited and restrictive.

5.

Proposals and recommendations

4.4.
Obviously, innovation is at the core of the objectives
set by the provision. It is also central to the kind of EU
development outlined by the Lisbon European Council and is
all the more crucial for under-developed regions, be the reason
for their situation economic, geographical or other.

5.1.
In the light of the limited resources available, there is a
danger that extending access to funds for innovative actions to
all regions could weaken the impact of the measures.

It is useful to note that the official definition of
4.4.1.
innovation comprises ‘the renewal and enlargement of the
range of products and services and the associated markets; the
establishment of new methods of production, supply and
distribution; the introduction of changes in management, work
organisation, and the working conditions and skills of the
workforce (3)’. Once again, the social partners have a funda-

In the Committee’s view it is therefore especially
5.1.1.
important to define final quantitative and qualitative assess-
ment criteria for all the programmes financed, analysing
success stories but also the negative results that may be
inevitable given the risk margin but that can also stem from
management and organisational limitations.

(1) Commission Staff Working Paper ‘Report on the implementation
of the Action Plan to promote Entrepreneurship and Competi-
tiveness’ SEC(2000) 1825 vol. I.

(2) Second report on economic and social cohesion. January 2001,

COM(2001) 24 final.

(3) Bulletin of the EU, supplement 5/95.

In addition to including an analysis of the impact in
5.1.2.
terms of increased competitiveness in the ex post evaluation

(4) COM(2000) 567 final.

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criteria, it would be useful to conduct a second evaluation, at
a later point, of the lasting nature of the results and their
locomotive effect in relation to the amount of funds earmarked.

5.2.
The Commission lists many factors relating to regions’
specific characteristics, but the development of skill centres
should be based on social, health and environmental consider-
ations in addition to economic, cultural and social potential.

5.3.
In the area of sustainable development, reference
to Agenda 21 would have been appropriate. Of course,
sustainability is not just an environmental issue: ‘social sus-
is another factor that has a major impact on
tainability’
development prospects. However,
is equally important
it
always to reaffirm commitments and obligations to counter
environmental decline.

5.4.
Training initiatives too can be innovative, not only in
the area of the new economy but also in traditional production.
The piloting of new training arrangements in micro-enterprises
can provide a particular opportunity for organisational inno-
vations. Developing the professional identity of workers and
certifying new skills are basic means of promoting positive
flexibility and adaptability, both subjectively and objectively.
This requirement is all the more important in the areas that
fall under Objectives 1 and 2 and it would be useful to include
specific training measures among the possible innovative
actions.

5.5.
The previous innovative actions financed interesting
teleworking projects in various regions. There is a trend
towards on-line working, either from home or from telecen-
tres, but its development is affected by various elements, the
first being the level of use of the new technologies, which
still differs enormously from one Member State to another.
Another crucial point is the establishment of criteria for
governing on-line employment at a distance from company
headquarters.

transport policies and promote regional cohesion by halting
the trend towards depopulation in less privileged areas.
Furthermore, it is proving to be of major use in increasing
employment levels among women and young people.

5.5.2.
The Commission is obviously well aware of these
factors, but specific reference to teleworking as a potentially
innovative element would have been a useful addition to
the indicative selection criteria for which the regions are
responsible, not least in the light of the procedural changes
introduced (programmes as opposed to projects).

5.6.
The Committee believes that interregional networks
for the dissemination of good practice are highly valuable, but
it would also have liked to see the possibility for joint
programmes spanning several regions, potentially generating
synergy between regions at differing levels of development. At
all events, care must be taken to ensure that the best practice
gleaned from the innovative actions is circulated as widely as
possible, so that new and effective methods do not remain the
preserve of the few.

5.7.
In view of the different regional structures in the
various Member States, a more precise definition of the
authority responsible would have been useful. The Com-
mission should publish and disseminate the precise list of
authorities responsible in the various regions. In addition, as
the emphasis on programmes means that
the authority
responsible has to assess and select individual projects, the
initiative must be widely publicised, not only at institutional
level but also among business, scientific and civil society
associations.

In the management of the innovative actions, the
5.8.
Committee recommends that the Commission keep a constant
watch on their consistency with basic mainstreaming policies,
especially as regards employment and equal opportunities,
which must be integral elements in all EU initiatives.

5.5.1.
In addition to the technological and economic con-
notations, teleworking also has other significant social and
environmental effects that should be highlighted with regard
to the innovative actions. It can contribute to sustainable

5.9.
Lastly, the innovative actions should also be weighed
up in the light of the preaccession policies and special attention
paid to the launch of programmes in the island and peripheral
regions of the Member States.

Brussels, 30 May 2001.

The President

of the Economic and Social Committee

Göke FRERICHS