Growing regions, growing Europe : fifth progress report on economic and social cohesion.
Date: 2008-08-27
Institutions: Directorate-General for Regional and Urban Policy
Subjects: EU policy, economic and social cohesion, economic convergence, economic growth, governance, regional economy, report

EN

Growing Regions,
growing Europe

Fifth progress report on economic and 
social cohesion

Communication from the Commission 

June 2008

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European Commission
Communication from the Commission to the European Parliament and the Council
Fifth progress report on economic and social cohesion – Growing regions, growing Europe
COM(2008) 371 ﬁ nal
2008 – 36p. – 21X29.7 cm

More information on the European Union is available on the Internet at 
http ://ec.europa.eu/comm/dgs/regional_policy/index_en.htm

Luxembourg: Oﬃ  ce for Oﬃ  cial Publications of the European Communities, 2008.
© European Communities, 2008
ISBN: 978-92-79-08889-6
ISSN: 1683-1144
DOI: 10.2776/64460
The text of this publication is not legally binding.
Reproduction is authorised provided the source is acknowledged.
Editor: Raphaël Goulet, European Commission, Directorate-General for Regional Policy, Unit B1, Communication, 
Information, relations with third countries.  

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Foreword

The  publication  of  the  fourth  Cohesion  Report  and  the  Cohesion  Forum  last  year 
launched a wide public consultation on European Cohesion Policy and the key chal-
lenges it will have to face in the years to come. 

This ﬁ fth Progress Report provides me with the opportunity to present an overview of the 

many responses to the consultation. It has been a very rich and remarkable debate indeed.

The importance attached to our policy throughout the European Union is reﬂ ected in the more 
than one hundred contributions addressed to the Commission. Many Member States, regional and local authori-
ties, economic and social partners, the civil society, European interest organisations, and academic and research 
institutes have provided their ideas, suggestions and sometimes useful criticisms. They all contribute to the current 
debate, led by the Commission, on the future of Cohesion Policy.

The  content  of  all  these  contributions  demonstrates  the  impressive  support  for  European  Cohesion  Policy  and 
the clear demand for its continuation after 2013. Our policy is perceived not only as an instrument to address the 
signiﬁ cant disparities in the enlarged European Union, but also as a policy to develop the competitiveness of all the 
European regions and promote sustainable development throughout the European territory. In other words, the 
consultation conﬁ rms that European Cohesion Policy is probably more than ever at the centre of some of the main 
strategic priorities for the Union for the coming decades.

This debate has just started and other important occasions will mark the preparation of the proposal for the reform 
of the policy, which the Commission will present within the context of the EU budget review.

This progress report also provides, for the ﬁ rst time, an analysis of the sectoral composition of regional economies, 
spotlighting those sectors that are driving growth and regional convergence.

The analysis shows that the poorest regions of the Union are going through a dramatic restructuring process that 
is  shifting  employment  and  economic  activity  to  more  productive  and  competitive  sectors. These  sectors  typi-
cally achieve their highest growth rates in Convergence regions. European Cohesion Policy is supporting this shift 
towards higher value-added activities and more knowledge-based work through investments in better business 
infrastructure  and  services  and  training  of  the  labour  force.  A  similar  process  is  operating  in  those  regions  that 
receive  transitional  support  under  European  Cohesion  Policy,  with  clear  shifts  to  the  sectors  where  the  EU  as  a 
whole is generating the highest growth.

Finally, European Cohesion Policy supports key investment, particularly in R&D and innovation, in the most devel-
oped regions of the Union, which face their own competitive challenges in global markets. Although these regions 
invest three times as high a share of GDP in R&D as the less developed regions do, they continue to lag behind their 
world competitors in terms of both public and private R&D expenditure.

European Cohesion Policy has undergone a signiﬁ cant transformation in recent years, reaﬃ  rming its role as a key 
allocative tool at European level in support of growth, competitiveness and job creation. While it is too early to draw 
conclusions for the policy beyond 2013, the ideas emerging from the public consultation and the way the policy is 
accompanying economic modernisation in the regions of the EU point to some of the main issues for the future.

Danuta Hübner
Commissioner for Regional Policy

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Table of contents

1. 

Introduction  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5

2.  Cohesion policy: the state of the debate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5 
2.1.  Objectives and priorities  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

2.2.  The governance of cohesion policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 

2.3.  Next steps  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

3.  Convergence, growth and economic restructuring among EU regions . . . . . . . . . . . . . . . . . . . . . .8
3.1.  Regional distribution of European high growth sectors  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.1.1.  Convergence regions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8 
3.1.2.  Transition regions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8
3.1.3.  Regional competitiveness and employment regions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9 

3.2. 

The contribution of high growth sectors to convergence  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

3.3. 

Education, skills and knowledge workers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 

3.4. 

Conclusions  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

Annex  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

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Introduction

1In September 2007, the Commission launched a public con-

sultation on the challenges with which cohesion policy will be 

A further important milestone in 2008 will be the adoption by 

the Commission of a Green paper on territorial cohesion, whose 

confronted in the coming years to collect ideas on the priorities, 

main purpose is to launch a wide, public debate on the implica-

organisation and governance of the policy.

tions of the introduction of the notion of territorial cohesion in 

Cohesion policy is anchored in Article 158 of the EC Treaty, 

the Treaty, particularly in the context of cohesion policy.

which states that the Community aims to promote harmonious 

In 2008, the Commission will also adopt a Communication on 

development and that with this purpose it shall develop and 

the renewed social agenda. Building on the results of a wide 

pursue its actions leading to the strengthening of economic 

public consultation on Europe’s “social reality”, it will outline 

and social cohesion. The Lisbon Treaty, which is at present in the 

ways in which Europe can respond to changing social realities, 

ratiﬁ cation process, adapts this text in referring to economic, 

in particular how the Union’s policies can be harnessed to 

social and territorial cohesion.

promote opportunities, access and solidarity.

The consultation has to be seen in the larger framework of the 

The ﬁ rst part of this report provides a synthesis of the con-

ongoing budget review, to which it contributes. It has been 

tributions received between September 2007 and February 

complemented by other important events such as the informal 

2008. This ﬁ rst phase of the debate helps to identify issues for 

meeting of the Ministers responsible for regional development 

discussion and direction for reﬂ ection, which the Commission 

which took place in the Azores on 23-24 November 2007; the 

will take into serious consideration in the context of the budget 

high level conference organised by the Slovenian presidency in 

review.

Maribor on 7-8 April 2008; and the opinions which the European 

Parliament1, the Committee of the Regions2, and the European 

Economic and Social Committee3 have adopted on the Fourth 

Cohesion Report.

The second part of the report provides a more in-depth analysis 

of major regional trends. The theme of this progress report is 

European growth sectors, whose performance in the regions 

will, to a large degree, determine the level of regional economic 

development in the years to come.

  2

Cohesion policy: 
the state of the debate

The Commission received more than one hundred contribu-

tions4, mainly from stakeholders close to the management of 

the policy, representing more than half the Member States 

(accounting for almost 80% of the EU population); a large 

number of regional authorities; a majority of regional and 

local associations; economic and social partners; civil society 

organisations; academic and research institutions; and some 

citizens.

given the early stage in the debate and the wider discussion 

on the EU budget review.

The public consultation conﬁ rms that interest in cohesion 

policy remains pronounced. Indeed, the ﬁ rst general conclu-

sion which can be drawn from the discussion is the recognition 

by stakeholders of the important role cohesion policy plays in 

the construction of the European Union and the support for 

continuation of that policy. Any attempt to re-nationalise the 

Most  of  the  responses,  and  particularly  those  of  national 

policy is almost unanimously rejected. 

governments, do not represent ﬁ nal positions. This is normal 

1  A6-9999/2008 adopted on 21 February 2008.
2   COTER IV-011 adopted on 29 November 2007.
3  ECO/209 adopted on 13 December 2007.
4  See http://ec.europa.eu/regional_policy/conferences/4thcohesionforum/

all_contrib_en.cfm?nmenu=6

Many  contributions  conﬁ rm  that  cohesion  policy  guides 

and fosters growth across Europe; promotes investments 

that would not have been undertaken otherwise; supports 

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competitiveness in the most vulnerable regions; enhances 

Concerning  the  content  of  cohesion  policy,  a  consensus 

social progress and solidarity; upgrades physical, social and 

seems to emerge at this stage on the following cross cutting 

human capital as drivers of growth, innovation potential, ad-

themes:

ministrative capacity and modernisation of the administration; 

encourages multi-annual strategic and ﬁ nancial management; 

promotes transfers of know-how and best practices between 

regions and Member States; and fosters an evaluation and 

monitoring culture. Similarly, most contributions value the 

partnership culture that the policy promotes. In line with the 

results of a recent Eurobarometer5 survey, the consultation 

conﬁ rms the role of cohesion policy in increasing the visibility 

of the EU to European citizens.

2.1. 

Objectives and priorities

• 

Competitiveness is at the heart of cohesion policy. The 

requirement of “earmarking” a signiﬁ cant share of the 

ﬁ nancial resources for the key investments linked to the 

renewed Agenda for growth and jobs is clearly supported. 

In particular, research, innovation and upgrading skills to 

promote the knowledge economy, development of human 

capital through education and training, adaptability, sup-

port for business activities (especially, small and medium 

enterprises), strengthening of institutional capacity and 

development of an entrepreneurship culture are deemed as 

key areas in which investments should be concentrated.

All contributions agree that the main objective of cohesion 

• 

Active labour market policies are also at the heart of the ac-

policy is the reduction of economic and social disparities 

tions proposed to boost employment, strengthen social co-

between the levels of development of European regions. 

hesion and reduce the risk of poverty. A signiﬁ cant number 

Lagging regions must thus remain the focus of the policy. 

of participants consider that cohesion policy should con-

Yet, a majority of contributions – along with the European 

tribute to Europe’s social dimension by improving employ-

Parliament – argues that the policy should cover the whole 

ment prospects of the most vulnerable groups such as 

territory of the EU, considering that cohesion policy is not a 

youth, elderly, disabled, immigrants and minorities. 

simple mechanism of solidarity, but also aims at fostering the 

Social and economic partners and civil society organisa-

endogenous development potential of European regions.

tions stress the important role of the social economy in 

The large majority of stakeholders recognises territorial co-

operation as an essential part of cohesion policy and appreci-

ate that it is now a “fully-ﬂ edged” objective. They underline 

that territorial cooperation is one of the best examples of 

the added value of this policy and, for this reason, should be 

strengthened.

The Fourth cohesion report identiﬁ ed a series of challenges 

with which regions and Member States are and will increas-

ingly be confronted: globalisation, demographic change and 

social tensions, climate change, and increased energy prices. 

While it is widely admitted that cohesion policy should also 

address such challenges, most of the contributions point out 

that cohesion policy cannot be the only instrument, not even 

the principal one. Some consider that these challenges are 

already being addressed through the delivery of the Lisbon 

and Gothenburg Agendas. Others recall that tackling these 

challenges should not overshadow the main objectives of 

cohesion policy as enshrined in the Treaty.

Some contributions urge the Commission to complement 

GDP per head in PPS with other measures of well-being and 

standards of living.

5  http://ec.europa.eu/public_opinion/ﬂ ash/ﬂ _234_en.pdf

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Fifth progress report on economic and social cohesion - Growing regions, growing Europe

producing quality jobs, enhancing innovation, contributing 

to the development of rural areas and providing a number 

of services of general interest. They also point out the 

contribution of capacity building to the enforcement of 

principles of good governance and partnership. Finally, 

some voices representing civil society argue that cohesion 

policy should support groups that have special diﬃ  culties 

entering the labour market. 

• 

The third cross cutting theme is sustainable development. 

Many contributions consider that cohesion policy should 

strengthen its orientation towards the delivery of the ob-

jective of the Gothenburg Agenda. In particular, the policy 

could contribute to reducing greenhouse gases emissions 

through mitigation policies aimed at improving energy 

eﬃ  ciency and promoting the development of renewable 

energies. 

In addition to the above themes a number of other issues 

received considerable attention. 

The inclusion of territorial cohesion in the Lisbon Treaty is 

generally welcomed. Some contributions however urge the 

Commission to develop a deﬁ nition of territorial cohesion and 

indicators for better understanding this concept. At the same 

time, several national governments consider that territorial 

cohesion is already integrated within cohesion policy, and that 

the economic, social and territorial dimensions of cohesion 

cannot be separated. 

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Territorial cohesion is seen, notably by regional and local ac-

Another important matter frequently mentioned concerns 

tors, as an opportunity to strengthen the role of regional and 

the coordination between the ERDF, the ESF and the Cohesion 

local authorities and other actors in the implementation of the 

Fund. Some contributions call for their integration into a single 

policy. Several contributions stress the role of urban areas and 

Fund for the sake of a more coherent strategic development. 

their interdependence with rural areas as important dimen-

sions of economic, social and territorial cohesion. Cities are 

often identiﬁ ed as places characterised by signiﬁ cant social 

exclusion, poverty and unbalanced development. Existing 

mechanisms  in  favour  of  some  speciﬁ c  areas  such  as  the 

outermost regions or the northern sparsely populated areas 

Opinions seem to be divided regarding the opportunity to 

use cohesion policy as an instrument to react immediately to 

asymmetric shocks or important crises triggered by processes 

of restructuring: while some advocate more ﬂ exibility, others 

point out that cohesion policy is ﬁ rst and foremost a structural 

policy characterised by strategic planning with a medium and 

are not questioned.

long-term perspective. 

Many are also conﬁ dent that the notion of territorial cohesion 

will help to better integrate a territorial dimension in the design 

and implementation of European sectoral policies.

A number of contributions insist on further exploring the use 

of means of ﬁ nancing other than grants such as bank loans, 

micro-credits, risk capital instruments or public-private part-

A consensus seems to emerge in favour of more ﬂ exibility 

nership instruments.

under territorial cooperation so that regions can cooperate with 

regions other than neighbour regions or regions belonging to 

the same geographical area. Cooperation with regions and 

countries neighbouring the EU is also considered essential.

The governance of 

2.2. 
cohesion policy

A ﬁ nal, important issue raised by the consultation concerns 

coordination between cohesion policy, other Community 

policies, and national policies. Many contributions consider 

that Community sectoral policies should take better account 

of regional aspects. In addition, many stakeholders consider 

important to develop coherent, integrated approaches, par-

ticularly between cohesion policy and rural development.

The reform of cohesion policy towards a more strategic ap-

Coordination with national policies is also considered critical. 

proach is supported by the majority of the contributions. 

Some stakeholders, for example, consider that the principle 

Many  mention  that  programme  implementation  has  just 

of additionality should be strengthened. Moreover, some 

started and a comprehensive assessment cannot be made 

economic and social partners believe that cohesion policy 

until the results of evaluations become available.

should be driven by the Integrated Guidelines for Growth and 

Yet, a signiﬁ cant majority of stakeholders calls for further clariﬁ -

Jobs and the National Reform Programmes.

cation in the allocation of responsibilities between the diﬀ erent 

institutional levels (Commission, Member State, regions and 

2.3. 

Next steps

other players). Many stakeholders, particularly at the regional 

The debate on the future of cohesion policy has just started and 

and local level, would appreciate further decentralisation of re-

will continue in the coming years. Among the many important 

sponsibilities. They also underlined, especially for the European 

events which will mark this debate, it is worth mentioning the 

Social Fund (ESF), the importance of delivery at the local level. 

ongoing public consultation on the budget review, the public 

Similar statements came from the economic and social partners 

consultation on the Green Paper on territorial cohesion which 

and the civil society. These stakeholders also insist on a more 

the Commission will launch in autumn 2008, and the ministe-

inclusive deﬁ nition of the partnership principle.

rial and high-level events which will be organised under the 

Simpliﬁ cation is another demand that emerges from a major-

diﬀ erent Presidencies.

ity of contributions. Many contributions expressed concern 

The Commission will report on the progress of this reﬂ ection 

as regards the newly introduced “one programme-one fund” 

in the Sixth progress report on economic and social cohesion 

principle, which may not facilitate the implementation of the 

in spring 2009. 

policy. 

In  due  course,  the  Commission  will  present  its  report  on 

There are many complaints about “red-tape” and auditing re-

the 2008/2009 budget review setting out its overall vision 

quirements related to the implementation of the policy. These 

for the structure and direction of the EU’s future spending 

are perceived as discouraging many potential beneﬁ ciaries 

priorities.

and hindering the implementation at local level of important 

projects. The Commission is urged to simplify the existing 

procedures at least for small programmes.

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3

Convergence, growth and economic 
restructuring among EU regions

Convergence among European regions has remained strong 

in recent years, leading to a marked narrowing of disparities 

and business services is especially low. Growth of GVA and es-

pecially of employment in this sector, however, is much higher 

in GDP per head, employment and especially unemployment 

than in other sectors. Trade, transport and communication 

rates. This trend is largely driven by improvements in the least 

also experienced a strong increase in both employment and 

prosperous regions (See Figure 1). 

GVA, while the growth rates in Construction are similar to 

For the purpose of the analysis which follows, regions have 

the EU averages.

been grouped into three categories: Convergence, Transition6, 

Industry is more important in Convergence regions than 

and Regional Competitiveness and Employment (RCE) regions, 

in the others and recorded the highest GVA growth rate. 

each with a distinct socio-economic proﬁ le. 

Employment in industry declined but less than in the other 

Convergence regions still have a considerably lower GDP per 

head, at 58% of the EU average while Transition regions are 

getting closer to the EU average. Between 2000 and 2005, both 

regions. Nevertheless, industrial productivity is still a third of 

that in RCE regions. Employment in high and medium-high-

tech manufacturing, however, grew by 1% between 2000 

groups of regions reduced the gap with the EU average by 

and 2005.

around 5 percentage points (see Table 1 and ﬁ che on GDP). 

Agriculture remains an important sector in Convergence 

Employment rates are low at 58% in Convergence regions, 

compared to 68% in RCE regions. Since 2000, Convergence 

regions have not been able to reduce this gap. Transition 

regions, however, did reduce the gap and now have a 63% 

employment rate, but remain well below the RCE regions (see 

regions accounting for more than 15% of employment, ﬁ ve 

times the share in RCE regions. This happens in a context of 

falling employment in this sector accompanied by produc-

tivity increases7. This means that despite strong employment 

increases in the growth sectors, total employment declined 

Table 1). Unemployment rates are still four percentage points 

in the Convergence regions.

higher in Convergence than in RCE regions, but this gap was 

almost twice as big in 2000.

Regional distribution of 

3.1. 
European high growth sectors

This section discusses the sectoral structure of regional econ-

omies focussing on the EU growth sectors (see annex). At the 

regional level, three growth sectors are analysed: (1) Financial 

and business services, (2) Trade, transport and communication 

and (3) Construction. The growth sector, high and medium-high 

tech manufacturing, is part of the industry sector and thus can 

not be readily identiﬁ ed at the regional level. 

The three types of regions diﬀ er in terms of economic structure, 

growth trends and productivity. For example, productivity in 

Convergence regions is half that in RCE regions or less (see 

Table 3) and employment shrank in Convergence regions while 

it grew in the other two types of regions.

3.1.2. 

Transition regions

Transition regions have the same share of employment and GVA 

in the three growth sectors as RCE regions, but their share of 

Financial and business services is much smaller. With annual 

growth rates of 4% this sector has grown faster than any other, 

but the diﬀ erence remains large. 

The two other growth sectors, Trade, transport and com-

munication and Construction, also grew above average. In 

Transition regions, especially the share of the Construction sec-

tor is much higher than in the other regions. This can be partly 

explained by the strong economic growth, rising incomes and 

continuing need to upgrade some of the physical infrastructure. 

In some regions, the growth of construction is also partially 

due to demand for second homes and tourist accommodation. 

The highly cyclical nature of this sector, however, leaves these 

economies vulnerable.

The share of Industry is less important in Transition regions 

3.1.1. 

  Convergence regions

than in the other two types of regions. 

The three growth sectors are less important in Convergence 

regions, where they account for only 40% of employment 

compared to 50% in the other regions. The share of Financial 

6  Phasing in and Phasing out regions were grouped together as Transition 

7  See Commission Communication: Employment in rural areas, 

regions since both receive transitional support. 

COM(2006) 857.

8

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Regional competitiveness and 

3.1.3. 
employment regions

In RCE regions, Financial and business services experienced 

the highest growth in employment and GVA showing a grow-

EU has the strongest competitive advantage, is only 24% in 

Convergence regions as compared to almost 40% in RCE. Since 

2000, Convergence regions have only reduced this gap by 1 

percentage point.

ing specialisation. The two other growth sectors have a lower 

National data shows that GVA is growing faster in high and 

share of GVA and employment than in the other two regions 

medium-high tech than other manufacturing sectors in most 

and experienced growth rates close to the EU average. 

The GVA share of Industry in RCE regions is comparable to 

that of Convergence regions but employment in this sector 

is signiﬁ cantly lower in RCE regions, reﬂ ecting the results of a 

successful shift towards higher value added activities in this 

sector. Employment in this sector and in high and medium 

high-tech manufacturing declined.

R&D expenditure as a share of GDP is almost three times higher 

in RCE regions than in Convergence. However, competition in 

innovation is becoming global which means that the EU has 

to compete globally. RCE regions spend 2.1% of their GDP on 

R&D, but the US spends 2.5%. Also the share of GDP going to 

R&D in the top 10% US States is a quarter higher than in the 

equivalent EU regions. 

RCE is the largest of the three groups and as a result also more 

diverse. The economic structure varies considerably. Some 

are specialised in Financial and business services, such as 

Luxembourg and Île de France with at least 40% of their GVA 

in this sector. Other regions rely heavily on Trade, transport 

and communication such as for example Tirol, Praha and Illes 

Balears with at least 30% of their GVA in this sector. Economic 

performance also varies. Between 2000 and 2005, 17 RCE re-

gions experienced a decline in employment and 22 had a GDP 

growth rate below 0.5%.

The contribution of high 

3.2. 
growth sectors to convergence

The analysis above shows that the growth sectors have made 

an important contribution to convergence both in Convergence 

and Transition regions, but the pattern varies. 

In Convergence regions, the three growth sectors have con-

tributed to substantial employment creation, but not enough 

to oﬀ set the signiﬁ cant employment reductions in agriculture. 

GVA growth was also strong in the growth sectors especially 

in Financial and business services and Trade, transport and 

communication. 

GVA growth, however, was higher in Industry, leading to a 

high and growing share in this sector. Combined with a high 

share of employment, this trend may present a risk as several 

industrial sectors have been in decline at the EU level (see 

Member States. Yet some still have a low share of manufac-

turing GVA in high and medium-high tech, in particular in 

Romania, Bulgaria, the Baltic States, Greece and Portugal. 

This and their low productivity in the sector may leave them 

vulnerable to increased global competition.

Transition regions are catching up rapidly with RCE regions 

thanks to the strong performance of the three growth sectors 

and high and medium-high tech manufacturing. As a result, 

the economic structure of Transition regions is becoming more 

and more like that of RCE regions.

Education, skills and 

3.3. 
knowledge workers

Skills and qualiﬁ cations are an important determinant of indi-

vidual income and employability and a substantial contribu-

tor to labour productivity. They also indicate to what degree 

regional economies have shifted towards a more intensive use 

of knowledge. Yet, the EU invests only 1.2% of GDP in higher 

education where the US invests almost 2.9%.

The share of highly educated people aged 25-64 is consider-

ably lower in Convergence regions than in RCE regions, 17% 

and 25% respectively. Still, the share has increased equally 

between 2000 and 2006, with a slightly higher increase in 

Transition regions, which have now almost reached the same 

share as RCE regions.

The share of human resources in Science and Technology (HRST 

core)8 also lags in Convergence regions as compared to RCE 

regions, 12% compared to 17%. But Convergence regions have 

been able to reduce that gap since 2000 by one percentage 

point. The use of HRST core is particularly high in knowledge 

intensive services such as health and education and high and 

medium-high tech manufacturing.

The overall share in the Convergence regions in 2006 was still 10 

percentage points lower than in the RCE regions. Growth in the 

share of knowledge workers is nevertheless high. It increased 

by 3.4 percentage points between 2000 and 2006 and the 

increase was the same in Convergence and RCE regions.

The share of knowledge workers9 is particularly high in capital 

regions and other major metropolitan regions which host major 

headquarters and specialised services. The share of knowledge 

ﬁ gure 2). Within industry, the share of employment in high 

and medium-high tech manufacturing, the sector where the 

8  See SEC(2008) 2047 for deﬁ nition.
9  See SEC(2008) 2047 for deﬁ nition.

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workers tends to be low in Portugal, Spain, Greece and Bulgaria 

Convergence regions should facilitate the shift of employment 

even in their capital region. The share increased particularly in 

to services, especially to sectors which do not require high 

many regions in Spain, France, Greece, Austria and Slovenia, 

education levels, and continue to modernise their agriculture 

indicating that the shift to the knowledge economy is not an 

sector. As industry is and will remain an important sector in 

exclusive aﬀ aire of large metropolitan regions. 

Convergence regions, policy should facilitate a progressive 

3.4. 

Conclusions

This brief analysis has shown that European growth sectors 

have largely contributed to convergence. However, important 

reorientation of the industry towards high productivity and 

high value added activities to avoid specialisation in industrial 

sectors particularly exposed to international competition and 

oﬀ ering poor growth prospects. 

diﬀ erences in the economic structure of the three groups of 

Convergence regions should also aim to improve the edu cation 

regions remain and the pattern of catching-up diﬀ ers between 

level of the labour force as shifting to higher value added 

Convergence and Transition regions. This has several implica-

activities will increase the demand for such labour. This will 

tions from a policy point of view. 

also inﬂ uence the speed at which they adopt new technologies 

Eﬀ orts to foster European high growth sectors, i.e. those with 

and help to reduce the productivity gap. 

above average employment or GVA growth, seem justiﬁ ed. 

Finally, the high productivity levels in RCE regions give these 

Not only are these sectors the ones in which the European 

regions an edge not only in Europe but also in the world. In 

economy has its clearest global growth perspective, they can 

part, this high productivity is due to strong investments in 

also be powerful motors for the EU convergence process. 

R&D, which are much higher than in Convergence regions. 

Moreover, the analysis shows that Convergence regions are 

undergoing a major economic restructuring. Substantial em-

ployment is being created in the service sector, while agricul-

ture is shedding even more employment. GVA growth is high 

especially in industry and services and productivity growth 

is three times higher than in RCE regions. Such restructuring 

requires a tailored policy response.

Yet to maintain a global edge, these regions have to be able 

to  compete  with  other  world  competitors,  which  invest 

even higher shares in R&D and higher education. This clearly 

underlines the beneﬁ t of the increasing orientation of cohe-

sion policy in RCE towards more investments in innovation 

and human capital.

10 Communication from the Commission to the European Parliament and the Council

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ANNEX

1

Figures 
and Tables

FIGURE 1  CONVERGENCE OF GDP PER HEAD, EMPLOYMENT RATES AND UNEMPLOYMENT RATES, 20002006

Figure 1 - Dispersion of regional (NUTS2) key indicators (%) (coeﬃ    cient of variation)

%
n
o
i
t
a
i
r
a
v
f
o
t
n
e
i
c
ﬃ 
e
o
C

115

110

105

100

95

90

85

80

75

70

GDP/head

Employment rate

Unemployment rate

2000

Source: Eurostat.

2001

2002

2003

Year

2004

2005

2006

TABLE 1: MAIN CHARACTERISTICS FOR THE CONVERGENCE, TRANSITION AND REGIONAL COMPETITIVENESS AND
EMPLOYMENT REGIONS

Population share in 2005 in %

Average annual change in population 2000-2005 in % ***

Number of regions*

Employment rate in 2006 in %**

Change in employment rate 2000-2006 in percentage points **

Unemployment rate in 2006 in %***

Change in unemployment rate 2000-2006 in percentage points ***

GDP per head in 2005, EU27=100 ****

Change in GDP per head 2000-2005 in index points EU27=100 ****

R&D as % of GDP, 2004 or most recent year

Conv

Transition

RCE

31.4

-0.13

84

57.6

1.6

11.0

-2.9

58

4.3

0.77

7.2

0.75

28

62.8

5.2

8.8

-2.5

95

5.6

0.94

61.3

0.58

159

68.1

2.1

6.8

0.2

122

-3.7

2.07

EU27

100

0.37

271

64.4

2.2

8.2

-1,0

100

0

1.85

* DEE0 (Sachsen-Anhalt) taken into account as Convergence region / ** based on NUTS breakdown valid 1/1/2007 / *** Excluding two UK, PT, DE and one Finnish region (no data) /
*** excl. UKM5 and UKM6 (no data) / Source: Eurostat and DG REGIO calculations.

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TABLE 2: EMPLOYEMENT AND GVA SHARE AND CHANGE IN SIX SECTORS, 20002005

SHARE IN 2005 IN  %                                                                      EMPLOYMENT                                                                                                              GVA

CONV

TRANSITION

RCE

EU27

CONV

TRANSITION

RCE

EU27

Agriculture, hunting and ﬁ shing                          

Total industry, including energy

Construction

Trade, transport & communication

Financial and business services

Other services

Total  

Share of EU27

15.5

21.4

7.5

23.3

8.5

23.9

100.0

27.5

5.2

15.1

10.4

29.2

11.1

29.0

100.0

6.1

2.7

17.0

6.6

25.9

16.9

30.8

100.0

66.4

6.4

18.1

7.1

25.4

14.2

28.8

100.0

100.0

4.8

20.7

7.7

23.1

19.6

24.1

100.0

12.9

3.0

16.9

8.5

25.9

21.6

24.2

100.0

5.7

AVERAGE ANNUAL CHANGE                                                        EMPLOYMENT                                                                                                              GVA
2000 - 2005  IN  %

CONV

TRANSITION

RCE

EU27

CONV

TRANSITION

Agriculture, hunting and ﬁ shing                          

Total industry, including energy

Construction

Trade, transport & communication

Financial and business services

Other services

Total  

-6.8

-0.6

0.5

1.3

3.8

0.9

-0.7

-4.8

-0.9

2.0

1.3

4.0

1.2

0.9

-2.0

-2.0

0.8

0.6

1.9

1.3

0.5

-5.5

-1.5

0.8

0.8

2.3

1.2

0.2

0.9

3.3

0.9

2.8

2.9

1.8

2.4

-1.5

1.7

3.0

3.3

4.1

2.8

2.9

Note: Due to the lack of regional data in the UK, national data was used and all of UK was considered as RCE. Source: Eurostat and DG REGIO calculations.

1.4

20.4

5.5

21.0

29.4

22.4

100.0

81.5

1.9

20.2

6.0

21.4

27.7

22.8

100.0

100.0

RCE

-0.4

EU27

-0.1

0.6

1.1

2.1

2.5

1.4

1.6

0.9

1.2

2.2

2.6

1.5

1.8

TABLE 3: PRODUCTIVITY BY SECTOR IN 2005 BY TYPE OF REGION

2005 GVA PER PERSON EMPLOYED EU27=100

Agriculture, hunting and ﬁ shing                          

Total industry, including energy

Construction

Trade, transport & communication

Financial and business services

Other services

Total  

CONV

TRANSITION

RCE

EU27

15

46

49

47

111

48

48

54

106

77

83

183

78

94

65

150

105

101

217

91

125

30

112

84

85

192

79

100

Note: Due to the lack of regional data in the UK, national data was used and all of UK was considered as RCE. Source: Eurostat and DG REGIO calculations.

TABLE 4: SHARE OF KNOWLEDGE WORKERS AND POPULATION WITH HIGH EDUCATIONAL LEVEL BY TYPE OF REGION, 2006

Share of knowledge workers (ISCO 1,2,3) as % of total employment

Change in share of knowledge workers 2000-2006 in percentage points 

Share of population 25-64 with high educational level (% of total population 25-64)

Change in share of population 25-64 with high educational level 2000-2006 in percentage points

Share of Human Resources in Science and Technology (core) (% of active population) 2006

in share of Human Resources in Science and Technology (core) 2000-2006

The breakdown by category does not include FR9, DE41, DE42, UKM6 and UKM5.
Source: Eurostat and DG REGIO calculations.

12 Communication from the Commission to the European Parliament and the Council

Fifth progress report on economic and social cohesion - Growing regions, growing Europe

CONV

TRANSITION

RCE

EU27

30.6

3.5

17.0

3.1

12.4

3.1

34.1

1.9

24.0

4.1

15.7

2.5

41.3

3.4

25.6

3.0

17.0

2.2

37.7

3.4

22.8

3.0

15.5

2.6

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2

Identifying European 
high growth sectors

At the national and European level, total employment and 
GVA can be broken down into 301 NACE categories based on 
the national accounts data. Regional accounts also provides 

a breakdown of employment and GVA but only in a six sector 

breakdown for NUTS2 regions. 

the increasing importance of education for the competitiveness 

of the EU, as mentioned in the Communication.

The education and the health and social work sector, however, 

both share the characteristic that their performance cannot be 

determined from GVA or employment shares or growth. The 

Therefore, growth sectors are ﬁ rst identiﬁ ed at the EU27 level 

main goal of these sectors is to increase the health and the 

based on the 30 sector breakdown. In a second step, these 

education level of the EU’s population. Therefore, increases 

growth sectors are then related to the six sector breakdown 

in expenditure and employment in these sectors have to be 

at the regional level. 

At the European level, several sectors experienced high growth 

in GVA and/or employment. Figure 2 shows four quadrants ac-

assessed in the light of these goals. As such an analysis was not 

feasible within the conﬁ nes of this communication and they 

were not included in the analytical section.

cording to GVA growth (above and below average) and employ-

As a result, nine sectors were identiﬁ ed as EU growth sectors 

ment growth (above and below) average. The quadrant where 

(See Figure 2): 

both employment and GVA growth is above the EU average 

were selected. Two more quadrants were partially considered. 

In one quadrant, GVA growth was above average but employ-

• 

• 

ment growth was below. The sectors where GVA growth was 

suﬃ  ciently high to compensate for lower employment growth 

or in some cases even employment decline were selected. In 

the other quadrant employment growth was above average, 

but GVA growth was below. Again in this quadrant only the 

sectors where high employment growth compensated for 

low GVA growth were included as growth sectors. The line on 

ﬁ gure 2 shows this distinction.

Two services sectors with high productivity levels: Business 

activities (K) and Financial services (J).

Three services sectors with either high employment or GVA 

growth and average productivity: Trade (G); Hotels and 

restaurants (H); and transport and communication (I).

• 

Construction  which  experienced  strong  employment 

growth combined with a fairly strong, but below aver-

age, GVA growth (F).

• 

Three manufacturing sectors which achieved high GVA 

growth despite a decline in employment: Chemicals and 

man-made ﬁ bres, Electrical and optical equipment and 

The second step of the selection involved considering whether 

Transport equipment. These three sectors together con-

all these sectors are drivers of economic growth. Two sec-

stitute the so-called high and medium-high tech manu-

tors were considered to be more beneﬁ ciaries than drivers of 

facturing sector. (DG, DL, DM).

economic growth: Activities of households and Health and 

In order to ﬁ t the format of regional data, these sectors are 

social work. Activities of households were excluded because 

aggregated under broader categories. The ﬁ rst group falls 

it is a very small sector, especially in terms of GVA. The Health 

under the heading Financial and business services (J+K), the 

and social work sector was excluded as expenditure in this 

second under Trade, transport and communication (G+H+I), 

area contributes to well-being, but is not a main driver of the 

and Construction (F) remains (See Figure 1). 

economy. Nevertheless, due to the ageing of the EU population, 

the Health and Social work sector will continue to grow and 

cover an important and growing share of total employment. 

The  fourth  group  is  not  identiﬁ able  at  the  regional  level. 

Regional data combines the three manufacturing sectors 

with all other manufacturing sectors, several of which are in 

The Education sector, which was not retained as growth sector 

decline (see Figure 2), as well as Mining and Electricity, gas 

due to its low GVA growth, is also likely to continue to grow given 

and water supply under the heading Industry (C+D+E). As a 

result, this aggregate cannot be considered as a pure growth 

sector (See Figure 1).

1  One category “Q: Extra-territorial organizations and bodies” was empty 

both at national and regional levels and has thus been excluded from this 
analysis. So the breakdown is oﬃ  cially in 17 and 31 categories respec-
tively. To avoid confusion, as the graphs only show 16 and 30 categories, 
the text refers to 16 and 30 categories.

Communication from the Commission to the European Parliament and the Council
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FIGURE 1: TABLE LINKING THE NACE 30 SECTOR BREAKDOWN AT EU LEVEL TO THE 6 SECTOR BREAKDOWN AT REGIONAL LEVEL, 
IDENTIFYING GROWTH SECTORS

DATA AT NATIONAL AND EUROPEAN LEVEL 

NACE 
CODE

FULL NAME OF SECTOR

PRODUCTIVITY 
(EU27=100)

GROWTH 
SECTOR?

NACE CODE

FULL NAME OF SECTOR

GROWTH 
SECTOR?

Data at the regional level

A

B

C

D

DA

DB

DC

DD

DE

DF

DG

DH

DI

DJ

DK

DL

DM

DN

E

F

G

H

I

J

K

L

M

N

O

P

A+B

Agriculture, hunting and ﬁ shing                           No

Agriculture, hunting and forestry

Fishing

Mining and quarrying

Manufacturing

Manufacture of food products, beverages 
and tobacco

Manufacture of textiles and textile products

Manufacture of leather and leather products

Manufacture of wood and wood products

Manufacture of pulp, paper and paper 
products; publishing and printing

Manufacture of coke, reﬁ ned petroleum 
products and nuclear fuel

29

66

216

101

90

54

58

64

114

415

Manufacture of chemicals, chemical products 
and man-made ﬁ bres

205

Y

C+D+E

Industry

In part

Manufacture of rubber and plastic products

Manufacture of other non-metallic mineral 
products

Manufacture of basic metals and 
fabricated metal products

Manufacture of machinery and 
equipment n.e.c.

Manufacture of electrical and optical 
equipment

Manufacture of transport equipment

Manufacturing n.e.c.

Electricity, gas and water supply

Construction

Wholesale and retail trade; repair of 
motor vehicles, motorcycles and personal 
and household goods

Hotels and restaurants

Transport, storage and communication

Financial intermediation

Real estate, renting and business activities

Public administration and defence; 
compulsory social security

Education

Health and social work

Other community, social and personal service 
activities

Activities of households

94

100

94

106

108

120

63

271

85

77

66

122

207

189

95

74

77

88

29

Y

Y

Y

Y

Y

Y

Y

Y

F

Construction

G+H+I

Trade, transport 
& communication

J+K

Financial and 
business services

Y

Y

Y

L thru P

Other services

No

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FIGURE 2: CHANGE IN GVA AND EMPLOYMENT BY SECTOR IN EU27, 20002006

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3Sources of data and 

reference years

The data presented in the ﬁ fth Progress Report is derived 

• 

Change in employment by sector could not be calculated 

mainly from three sources: National accounts, Regional ac-

for the smaller sectors as the changes were almost always 

counts and the Labour Force Survey.

within the margin of error. Therefore, national employ-

ment data from national accounts was used instead. This 

is the case for Trade, Hotels and Restaurants and High and 

medium-high tech manufacturing. 

Share of Knowledge workers is complete.

High Education level is complete.

• 

• 

Due to the diﬀ erent rhythms at which these data sources are 

updated, the report contains a mix of end years. Below follows 

an overview of the availability of data by source:

I. 

National accounts 30 sector breakdown of GVA and 

employment

From this source GVA was available up until 2006, while em-

ployment was only available up until 2005.

II. 

Regional accounts 

Regional accounts provides data on employment and GVA by 

sector, population and GDP up until 2005. 

• 

Population and GDP are almost complete with only two 

new NUTS regions in Northern Scotland missing.

• 

GVA for the 6 sector breakdown is complete with the ex-

ception of the UK.

• 

Employment for the 6 sector breakdown is complete with 

the exception of the UK.

III. 

Labour Force Survey

This source provides a wide range of data including employ-

ment rates, unemployment rates, education levels, knowledge 

workers and employment by sector. Data is available up until 

2006. Due to changes in the NUTS boundaries, time series may 

not cover the entire period 2000-2006.

• 

• 

Unemployment rate is complete with the exception of two 

new NUTS regions in Northern Scotland. 

Employment by sector is complete. However to ensure a 

suﬃ  ciently large sample, the average of 2005-2006 was 

used for employment in Trade, Hotels and Restaurants, 

High and medium-high manufacturing and Knowledge 

intensive services. 

16 Communication from the Commission to the European Parliament and the Council

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4Deﬁ nitions

Human Resources in 
4.1. 
Science and Technology Core

Knowledge 

4.4. 
intensive services

The group is deﬁ ned by the OECD publication: “Manual on the 

Eurostat deﬁ nes knowledge intensive services as following:

measurement of human resources devoted to S&T “Canberra 

Manual” 1995

61 Water transport;

62 Air transport;

This indicator covers people who have successfully completed 

education at the third level in an S&T ﬁ eld of study and are 

employed in an S&T occupation. It is measured as a share of 

64 Post and telecommunications;

J: 65 to 67 Financial intermediation;

the economically active population.

K: 70 to 74 Real estate, renting and business activities;

4.2. 

Knowledge Workers

M: 80 Education;

N: 85 Health and social work;

This deﬁ nes employment by the type of occupation in all 

92 Recreational, cultural and sporting activities.

Due to the detailed breakdown of the NACE codes, only em-

ployment data based on the LFS is available. 

GVA can only be provided for a proxy which included 63 

(Supporting and auxiliary transport activities; activities of 

travel agencies) and excludes 92 (Recreational, cultural and 

sporting activities), which was not used in this report.

sectors. It covers the ﬁ rst three classes of the International 

Standard Classiﬁ cation of Occupations (ISCO) as deﬁ ned by the 

International Labour Organisation classiﬁ cation: (1) legislators, 

senior oﬃ  cials and managers, (2) professionals and (3) techni-

cians and associate professionals.

High and medium-high 

4.3. 
tech manufacturing

Eurostat deﬁ nes this group as the following NACE 2 digit 

codes: 

24 Manufacture of chemicals and chemical product, 

29 Manufacture of machinery and equipment n.e.c.;

30 Manufacture of oﬃ  ce machinery and computers;

31 Manufacture of electrical machinery and apparatus n.e.c.;

32 Manufacture of radio, television and communication equip-

ment and apparatus;

33 Manufacture of medical, precision and optical instruments, 

watches and clocks;

34 Manufacture of motor vehicles, trailers and semi-trailers;

35 Manufacture of other transport equipment, excluding 35.1 

Building and repairing of ships and boats

This group can be aggregated to the NACE codes DG, DL and 

DM with the only issue that it does not excluding 35.1 Building 

and repairing of ships and boats. This aggregation means that 

this sector can be identiﬁ ed in the 30 sector breakdown. This is 

also the deﬁ nition that was used to measure employment.

Communication from the Commission to the European Parliament and the Council
Fifth progress report on economic and social cohesion - Growing regions, growing Europe

17

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Share of Gross Value Added in ﬁ nancial 
and business services

Gross Value Added in ﬁ nancial intermediation and real estate, 

renting and business activities as a share of the regional Gross 

Country

Top ten regions 
movers

Value Added.

Why does this matter?

Gross Value Added (GVA) is the diﬀ erence between the value 

of goods and services produced and the cost of raw materials 

and other inputs which are used up in production. In other 

words, it is the value added in the production of goods and 

services. The share of ﬁ nancial and business services in total 

GVA measures the contribution of this sector to the region’s 

total GVA. The ﬁ nancial and business services sector includes 

activities such as ﬁ nancial intermediation, insurance, pension 

funding, real estate, business consultancy and research and 

development.

The ﬁ nancial and business services sector is a key sector of the 

European economy. It accounts for 28% of total GVA and 15% 

of employment. It is also its most dynamic sector. Between 

2000 and 2006, the average annual growth rate of GVA in the 

sector was 2.6% while employment grew at average annual 

rate of 2.5%. 

How do the EU regions score?

Country

Top ten regions 
in 2005

Share of  ﬁ nancial 
and business 
services in total 
GVA, %

LU

FR

DE

BE

NL

DE

DE

SE

NL

BE

Luxembourg 
(Grand-Duché)

Île de France

Darmstadt

Région de 
Bruxelles-Capitale 
/ Brussels 
Hoofdstedelijk 
Gewest

Utrecht

Hamburg

Oberbayern

Stockholm

Noord-Holland

Prov. Vlaams-
Brabant

45.7

42.1

40.8

38.3

37.8

37.2

37.1

36.7

35.4

34.5

Average annual 
change in  
ﬁ nancial 
intermediation 
and business 
services GVA, %

This table shows the ten regions in which  ﬁ nancial and 
business services GVA grew fastest between 2000 and 
2005

RO

RO

RO

IE

RO

EE

BG

RO

IE

Nord-Est

Vest

Sud-Est

Border, Midland 
and Western

Sud-Vest Oltenia

Eesti

Yugozapaden

Centru

Southern and 
Eastern

13.2

11.2

10.9

10.9

10.1

10.0

9.9

9.8

9.0

The share of GVA in ﬁ nancial and business services is the high-

est in regions located in Belgium, France, Germany, Italy, the 

Netherland and the United Kingdom. As reﬂ ected by the top 

ten regions, such activities are almost systematically hosted by 

urban and often capital city regions. The weight of the sector is 

much less in most regions of the new Member States but also 

in the old cohesion and Nordic countries. Regional disparities 

in terms of the share of GVA in ﬁ nancial intermediation and 

business services are important as illustrated by the distance 

between the highest share (Luxembourg (Grand-Duché) with 

45.7%) and lowest share (Moravskoslezsko with 10%).

Growth in ﬁ nancial and business services has generally been 

high in regions where its share of GVA is low. Five out of the top 

ten movers recorded are located in Romania. Nevertheless, its 

share in those regions’ GVA is less than 15%. This partly reﬂ ects 

the rapid catching-up process at work in this sector.  

A high share of GVA in ﬁ nancial and business services implies 

a relative specialisation of the economy in a high value added 

sector which employs a highly qualiﬁ ed and productive man-

power and generally constitutes a major source of economic 

growth. 

18 Communication from the Commission to the European Parliament and the Council

Fifth progress report on economic and social cohesion - Growing regions, growing Europe

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Canarias

Guyane

Guadeloupe
Martinique

Réunion

Açores

Madeira

Share of GVA in financial intermediation and business services, 2005

REGIOgis

% of total GVA
< 16.37
< 16.37

16.37 - 20.38
16.37 - 20.38

20.38 - 24.13
20.38 - 24.13

24.13 - 27.53
24.13 - 27.53

>= 27.53
>= 27.53

No Data
No Data

EU-27 = 27.7
NACE J and K
UK: national level
Source: Eurostat

0

500 Km

© EuroGeographics Association for the administrative boundaries

Communication from the Commission to the European Parliament and the Council
Fifth progress report on economic and social cohesion - Growing regions, growing Europe

19

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Share of 
employment 
in knowledge 
intensive services

Employment in knowledge intensive services as a share of 

regional total employment.

Why does this matter?

Knowledge intensive services (KIS) cover the following sec-

tors: Water and air transport (I.61 and I.62); post and telecom-

munications  (I.64);  ﬁ nancial  intermediation  (J);  business 

activities (K); education (M); health and social work (N); and 

recreational, cultural and sporting activities (O.92).

KIS include key sectors of activity for the European economy. 

Most of them have grown at a faster pace than other sectors, 

both in terms of GVA and employment. Almost a third of the EU 

Country

Top ten regions 
movers

Change in  the 
share of 
employment in  
KIS, percentage 
points

This table shows the ten regions where employment in 
KIS  increased fastest between 2000 and 2006

ES

ES

ES

RO

LU

FR

IT

PT

IT

PT

Ciudad Autónoma 
de Melilla

Ciudad Autónoma 
de Ceuta

Principado de 
Asturias

Bucureşti-Ilfov

Luxembourg 
(Grand-Duché)

Centre

Abruzzo

Região Autónoma 
da Madeira

Basilicata

Algarve

12.2

9.4

8.1

7.6

7.1

7.1

7.0

6.3

6.3

6.1

labour force is employed in KIS. These sectors generally feature 

Most regions with a high share of employment in KIS are either 

high productivity of labour and are particularly intensive in 

capital city regions or regions hosting an important urban 

high skilled labour.

How do the EU regions score?

Country

Top ten regions in 
2006

Share of  employ-
ment in  KIS, %

UK

UK

FI

NL

UK

DE

BE

NL

FR

UK

Inner London

Outer London

Åland

Utrecht

Surrey, East and 
West Sussex

Berlin

Région de 
Bruxelles-Capitale 
/ Brussels 
Hoofdstedelijk 
Gewest

Noord-Holland

Île de France

Berkshire, 
Buckinghamshire 
and Oxfordshire

57.0

50.8

50.7

49.3

49.2

48.4

47.6

47.1

47.0

46.8

area. For those regions, KIS sometimes account for more than 

50% of employment with Inner London topping at 57%. Share 

of employment in KIS is much lower in Cohesion countries, 

particularly in Romania and Bulgaria where for some regions 

it is slightly above 10%.

Around 90% of regions have experienced an increase in the 

share of employment in KIS which reﬂ ects the tendency of the 

European economy to specialise in these types of activities1.

High growth in the share of KIS employment is mostly observed 

within the EU-152 where regions with high growth in share of 

employment in KIS are not systematically located near a capital 

city region, which reﬂ ects a movement towards the dispersion 

of these sectors away from capital cities. On the contrary, in 

the new Member States, regions with high growth in the share 

of employment in KIS are generally either capital city regions 

or neighbouring the capital city region. In these countries, KIS 

therefore tend to concentrate in or around capital cities, which 

is well illustrated by the case of Bucureşti-Ilfov.

1  Due to lack of data, changes in the share of employment in KIS could not 

be calculated for Bulgaria and Poland. 

2  Ciudad Autónoma de Melilla and Ciudad Autónoma de Ceuta have 

recorded the highest growth but one must account for the small size of 
the regions and their peculiarities.

20 Communication from the Commission to the European Parliament and the Council

Fifth progress report on economic and social cohesion - Growing regions, growing Europe

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Canarias

Guyane

Guadeloupe
Martinique

Réunion

Açores

Madeira

Share of employment in knowledge-intensive services, 2005-2006

REGIOgis

% of total employment
< 23.67
< 23.67

23.67 - 28.82
23.67 - 28.82

28.82 - 33.47
28.82 - 33.47

33.47 - 39.14
33.47 - 39.14

>= 39.14
>= 39.14

No Data
No Data

EU-27 = 32.6
Source: Eurostat

0

500 Km

© EuroGeographics Association for the administrative boundaries

Communication from the Commission to the European Parliament and the Council
Fifth progress report on economic and social cohesion - Growing regions, growing Europe

21

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Share of 
employment 
in trade

Employment in wholesale, retail trade and repair of vehicles 

and goods as a share of regional total employment.

Why does this matter?

Trade has a considerable weight in the European economy. It 

accounts for 11.3% of the EU27 total GVA and 14.4% of EU27 

employment. Growth in the sector is slightly superior to the 

EU27 average, both in terms of GVA and employment with 

average growth rates of 2.2% and 0.8% between 2000 and 

PT

ES

GR

GR

GR

RO

UK

GR

ES

DE

2005. The sector remains a key reservoir of low qualiﬁ ed jobs. 

Country

Country

Top ten regions in 
2006

Share of  
employment in 
trade, %

Algarve

Ciudad Autónoma 
de Melilla

Notio Aigaio

Kentriki 
Makedonia 

Attiki

Bucureşti-Ilfov

Lincolnshire

Ionia Nisia 

Canarias

Mittelfranken

20.7

20.4

20.1

19.6

19.5

19.2

19.0

18.8

18.5

17.8

Top ﬁ ve countries 
movers

Annual 
average change in 
employment 
in  trade, %

As for hotels and restaurants, GVA per person employed is 

relatively low but it is not as exposed to international com-

petition as most of these services are local and not tradable 

over long distances. 

How do the EU regions score?

For some regions, trade accounts for a substantial proportion 

of employment, with regions like Algarve, Ciudad Autónoma 

de Melilla or Ciudad Autónoma de Melilla where its share in 

regional employment is more than 20%. However, most regions 

in Europe have a signiﬁ cant share of employment in trade. 

This is illustrated by the diﬀ erence between the highest and 

the lowest regional shares (Algarve with 20.7% and Sud-Vest 

Oltenia with 7.9%) which is much smaller than for other sectors. 

This relatively even distribution of employment in the sector 

is partly explained by the nature of its activities. They include 

This table shows the ﬁ ve countries in which employment 
in retail and wholesale grew fastest between 2000 and 
2005

SK

RO

BG

LV

IE

Slovensko

România

България / 
Bulgaria

Latvija

Éire / Ireland

7.3

5.0

4.9

3.4

2.9

Due to lack of data at the regional level, growth of the sector is 

examined at the national level1. For a large majority of countries, 

growth of GVA has been higher than growth of employment, 

which reﬂ ects the general trend towards productivity gains 

a number of proximity services that can only be produced 

within the sector.  

locally which limits the scope for geographical concentration 

Employment in trade has generally increased, except in the 

of the sector. 

Czech Republic, Denmark, the Netherlands, Germany and 

Poland.  It is mainly in the new Member States that growth of 

GVA and employment has been the highest, although coun-

tries like Ireland and Spain have also recorded high growth of 

employment in the sector. Overall high economic growth will 

beneﬁ t the trade sector as disposable incomes rise.

1  GVA data is not available for Cyprus, Greece, Ireland and Malta. 

Employment data is not available for Cyprus and Malta. Employment data 
for Romania is not available after 2002. Employment data for Austria and 
Greece are based on jobs rather than persons.

22 Communication from the Commission to the European Parliament and the Council

Fifth progress report on economic and social cohesion - Growing regions, growing Europe

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Canarias

Guyane

Guadeloupe
Martinique

Réunion

Açores

Madeira

Share of employment in trade, 2005-2006

REGIOgis

% of total employment
< 12.77
< 12.77

12.77 - 13.96
12.77 - 13.96

13.96 - 14.83
13.96 - 14.83

14.83 - 15.96
14.83 - 15.96

>= 15.96
>= 15.96

No Data
No Data

EU-27 = 14.4
NACE G
Source: Eurostat

0

500 Km

© EuroGeographics Association for the administrative boundaries

Communication from the Commission to the European Parliament and the Council
Fifth progress report on economic and social cohesion - Growing regions, growing Europe

23

DG REGIO 5th report_11-07-08.indd   23
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Share of 
employment 
in hotels and 
restaurants

Employment in hotels and restaurants as a share of regional 

total employment.

Why does this matter?

Country

Top ﬁ ve countries 
movers

Average 
annual change in 
employment 
in hotels and 
restaurants, %

This table shows the ﬁ ve countries in which 
employment in hotels and restaurants grew fastest
between 2000 and 2005

BG

ES

LV

IT

PT

Balgarija

España 

Latvija

Italia 

Portugal

5.1

4.7

3.4

3.3

3.0

The sector hotels and restaurants accounts for only 4% of 

EU27 total employment. However, it is a major sector for some 

regions where it provides a substantial number of mostly low-

qualiﬁ ed jobs. It is the second sector of the Union in terms of 

employment growth with an average growth rate of 2% per 

annum between 2000 and 2005. Labour productivity is rather 

low but, except for the sea and sun vacations, the sector is 

relatively sheltered from international competition. 

Due to lack of data at the regional level, growth of the sector 

is examined at the national level. Between 2000 and 2005, 

employment in hotels and restaurants has grown in every 

EU Member State. Employment growth is generally high in 

countries with an important tourism industry like Bulgaria, 

Spain, Italy and Portugal. 

However, in some countries, particularly in the new Member 

States, growth of GVA was very high and above growth of 

How do the EU regions score?
The  share  of  employment  in  hotels  and  restaurants  is 

employment, which implies that growth in the sector was 

accompanied by an increase in labour productivity. This is for 

obviously higher in regions featuring a particular tourist and/or 

instance the case of Latvija where between 2000 and 2005 

recreational interest, which is the case for all top ten regions. 

the annual average growth rate of GVA is 13.7% and that of 

In general, the share of employment in hotels and restaurants 

employment is 3.4%. On the contrary, for other countries mainly 

is higher in the regions of Southern Europe but also in some 

located in the EU15, growth of GVA has been lower than growth 

Northern regions like Cornwall and Isles of Scilly or Border, 

in employment, like for instance in Portugal were GVA in ho-

Midland and Western which have substantially developed their 

tels and restaurants decreased by 2.4% while employment 

tourism industry and where the sector accounts respectively 

increased by 3.0%. 

1  The International Standard Classiﬁ cation of Occupations (ISCO) classiﬁ es 

jobs according to the tasks and duties undertaken.

for 7.9% and 5.9% of total employment. 

Country

Top ten regions in 
2006

Share of 
employment in 
hotels and 
restaurants, %

GR

GR

ES

ES

PT

GR

AT

IT

PT

AT

Notio Aigaio 

Ionia Nisia 

Illes Balears

Canarias

Algarve

Kriti

Tirol

Provincia 
Autonoma 
Bolzano/Bozen

Região Autónoma 
da Madeira

Salzburg

19.8

17.7

17.5

14.4

13.8

12.0

11.5

11.0

10.6

9.7

24 Communication from the Commission to the European Parliament and the Council

Fifth progress report on economic and social cohesion - Growing regions, growing Europe

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Canarias

Guyane

Guadeloupe
Martinique

Réunion

Açores

Madeira

Share of employment in hotels and restaurants, 2005-2006

% of total employment

REGIOgis

< 2.8
< 2.8

2.8 - 3.69
2.8 - 3.69

3.69 - 4.26
3.69 - 4.26

4.26 - 5.64
4.26 - 5.64

>= 5.64
>= 5.64

No Data
No Data

EU-27 = 4.1
NACE H
Source: Eurostat

0

500 Km

© EuroGeographics Association for the administrative boundaries

Communication from the Commission to the European Parliament and the Council
Fifth progress report on economic and social cohesion - Growing regions, growing Europe

25

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Share of Gross 
Value Added
in industry

Gross Value Added in industry as a share of the regional 

Gross Value Added.

Why does this matter?

Gross Value Added (GVA) is the diﬀ erence between the value of 

goods and services produced and the cost of raw materials and 

other inputs which are used up in production. In other words, 

it is the value added in the production of goods and services. 

The share of industry in total GVA measures the contribution 

of this sector to the region’s total GVA. The industry sector 

Country

Top ten regions 
movers

Annual average 
change in industry 
GVA, %

This table shows the ten regions in which industry GVA 
grew fastest between 2000 and 2005

SK

SK

SK

LT

SE

EE

CZ

PL

BG

GR

Bratislavský kraj

Západné 
Slovensko

Východné 
Slovensko

Lietuva

Övre Norrland

Eesti

Moravskoslezsko

Lubuskie

Yugozapaden

Thessalia

11.4

10.9

10.5

10.3

10.2

9.5

8.8

7.9

7.5

7.4

includes mining and quarrying, manufacturing and electricity, 

In general, regions with a strong growth in the industry sector 

were the regions that had a relatively high share of industry 

within total GVA. Many of these regions had a share above 28% 

as compared to the EU average of 18%. This implies that the 

specialisation of Europe’s industrial regions is growing. The 

geographical dimension of this trend is also coherent with 

the fact that new Member Stares economies have a strong 

competitive advantage in industry based on a relatively highly 

qualiﬁ ed labour force but which is less expensive compared 

to the rest of the EU. Employment in the industry sector in the 

Cohesion countries remained roughly stable while it fell in the 

other EU Member States.

A high share in the industry sector can be an important source 

of employment and economic wealth. However, due to grow-

ing international competition in this sector, the regions and/or 

ﬁ rms with a low productivity should aim to move up the value 

chain and diversify their economy to become less vulnerable 

to globalisation.

gas and water supply.

Industry is a major economic sector in Europe as it accounts 

for 20% of total GVA and 18% of employment. However, since 

2000 overall GVA growth in this sector has been slow and 

employment growth was negative. 

How do the EU regions score?

Country

Top ten regions in 
2005

Share of industry 
on total GVA, %

NL

CZ

HU

GR

CZ

SK

CZ

CZ

DE

HU

Groningen

Moravskoslezsko

Közép-Dunántúl

Sterea Ellada 

Severozápad

Západné 
Slovensko

Severovýchod

Střední Čechy

Braunschweig

Nyugat-Dunántúl

44.7

44.3

42.4

41.1

39.8

39.1

38.2

38.1

37.6

37.5

Industry has a far larger share of economic activities in the new 

Member States than in the rest of the EU. Seven out of the top 

ten regions are located in the EU-12. Nevertheless, some regions 

in the old Member States also have an important share of their 

economic activities in that sector, particularly in Southern 

Germany, Northern Italy and the Nordic countries. Identical 

shares of industry may however hide very diﬀ erent situations as 

the sector covers a very wide range of activities some with very 

high levels of productivity such as manufacturing chemicals 

and others with very low levels such leather.

26 Communication from the Commission to the European Parliament and the Council

Fifth progress report on economic and social cohesion - Growing regions, growing Europe

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Canarias

Guyane

Guadeloupe
Martinique

Réunion

Açores

Madeira

Share of GVA in industry, 2005

% of total GVA
< 13.68
< 13.68

13.68 - 19.75
13.68 - 19.75

19.75 - 23.49
19.75 - 23.49

23.49 - 28.31
23.49 - 28.31

>= 28.31
>= 28.31

No Data
No Data

REGIOgis

EU-27 = 20.2
NACE C, D and E
UK: national level
Source: Eurostat

0

500 Km

© EuroGeographics Association for the administrative boundaries

Communication from the Commission to the European Parliament and the Council
Fifth progress report on economic and social cohesion - Growing regions, growing Europe

27

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Share of 
employment 
in high and 
medium-high tech 
manufacturing

Employment in high and medium-high tech manufacturing 

as a share of regional total employment.

Country

Top ﬁ ve countries 
movers

Annual average 
change in employ-
ment in high and 
medium high tech 
manufacturing, %

This table shows the  ﬁ ve countries in which
employment in high and medium high tech 
manufacturing grew fastest between 2000 and 2005

SK

CZ

EE

LT

HU

Slovenská 
Republika

Česká Republika

Eesti

Lietuva

Magyarország

3.3

2.6

1.9

1.3

1.2

Why does this matter?

High and medium-high tech manufacturing includes the fol-

The geographical distribution of high and medium-high tech 

manufacturing is characterised by the concentration of regions 

where it accounts for a large shares of employment in the cen-

lowing manufacturing sectors: chemical, chemical products 

tral part of Europe, notably in Germany, Northern Italy and the 

and man-made ﬁ bres (DG); electrical and optical equipment 

Czech Republic. Some regions in France, Hungary, Northern 

(DL); and transport equipment (DM). It designs and produces 

among others audio and video equipment, computers, air-

crafts, motor vehicles, precision and optical instruments and 

pharmaceuticals.

This sector uses sophisticated production techniques, invests 

heavily in R&D and innovation and uses highly skilled labour. 

Spain, Romania, Slovakia and the United Kingdom also have 

regions with high shares of employment in this sector but they 

are more geographically dispersed. 

Due to lack of data at the regional level, growth of the sector 

is examined at the national level . GVA in high and medium-

high tech manufacturing has been high in most EU countries, 

particularly in the new Member States where countries like 

Within manufacturing, it is the least vulnerable to globalisation 

Lithuania and Slovakia recorded average annual growth rates 

and may beneﬁ t from increased trade. High and medium-high 

exceeding 15%. Growth in employment has been much more 

tech manufacturing has grown at an average rate of 2.4% per 

limited and even negative in a number of countries like the 

United Kingdom where employment in high and medium high 

tech manufacturing fell at an average rate of 5.2% per year. 

One explanation for this pattern is that these sectors have out-

sourced the most labour intensive aspects of production and 

focussed on activities related to R&D which require high skilled 

labour and create the largest share of the value added. 

1  GVA data is not available for Cyprus, Estonia, Greece, Ireland, Latvia, Malta 
and Poland. Employment data is not available for Cyprus, Latvia, Malta 
and Romania.

year between 2000 and 2005. It employs 6.6% of the EU labour 

force but employment in the sector has declined at an average 

rate of 1% per year.  

How do the EU regions score?

Country

Top ten regions in 
2006

Share of  employ-
ment in high and 
medium high tech 
manufacturing, %

DE

DE

DE

DE

DE

DE

DE

DE

DE

HU

Stuttgart

Karlsruhe

Braunschweig

Tübingen

Niederbayern

Oberpfalz

Unterfranken

20.6

17.5

16.1

16.0

15.6

15.5

14.4

R h e i n h e s s e n -

13.8

Pfalz

Freiburg

Közép-Dunántúl

13.6

13.6

28 Communication from the Commission to the European Parliament and the Council

Fifth progress report on economic and social cohesion - Growing regions, growing Europe

DG REGIO 5th report_11-07-08.indd   28
DG REGIO 5th report_11-07-08.indd   28

8/5/2008   3:56:24 PM
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Canarias

Guyane

Guadeloupe
Martinique

Réunion

Açores

Madeira

Share of employment in high and medium high-tech manufacturing, 2005-2006

REGIOgis

% of total employment

< 3.31
< 3.31

3.31 - 5
3.31 - 5

5 - 6.44
5 - 6.44

6.44 - 8.67
6.44 - 8.67

>= 8.67
>= 8.67

No Data
No Data

EU-27 = 6.6
Source: Eurostat

0

500 Km

© EuroGeographics Association for the administrative boundaries

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29

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Country

Top ten regions 
movers

Change in GDP/
head (PPS), index 
points

This table shows the ten regions in which  GDP/head 
(PPS) increased fastest between 2000 and 2005

SK

GR

CZ

RO

LU

HU

EE

BG

UK

IE

Bratislavský kraj

Attiki

Praha

Bucureşti–Ilfov

Luxembourg 
(Grand-Duché)

Közép-
Magyarország

Eesti

Yugozapaden

Inner London

Southern and 
Eastern

39

25

23

21

20

18

18

16

14

14

Fast growing regions are often hosting important urban areas. 

All top ten movers are capital city regions. High growth rates 

are also observed in regions with a low level of GDP/head, 

like for instance Yugozapaden, Bulgaria whose GDP/head is 

only 52% of the EU average but whose index has grown by 16 

percentage points between 2000 and 2005. On the other hand, 

low growth rates are observed in regions with high GDP/head, 

particularly in Northern Italy or in some regions of Denmark, 

France, Germany, Sweden or Finland. For example, one of the 

lowest growth rate is in Provincia Autonoma Bolzano/Bozen 

where GDP/head decreased from 158% to 137% of the EU 

average over the period considered.

This suggests that poor regions are catching-up on the richest 

ones and is consistent with the fact that convergence among EU 

regions in terms of GDP/head has increased. Between 2000 and 

2005, the coeﬃ  cient of variation, which is a statistical measure 

of regional disparities, decreased by 7%. The trend is however 

worrisome for regions of Southern Italy and Portugal where 

both GDP/head and growth are relatively low.

GDP/head 

Gross  Domestic  Product  per  head  in  Purchasing  Power 

Standards.

Why does this matter?

Gross domestic product (GDP) is the total value of all goods 

and services produced within a region in a given time span. 

It corresponds to the economic wealth generated by a region 

and is the most common indicator of economic activity. GDP/

head is meant to capture the level of output and income per 

person within a region. In order to compare regions, its is com-

puted in Purchasing Power Standards (PPS) which eliminates 

diﬀ erences in purchasing power due to diﬀ erent price levels 

between regions. 

In general, the level of GDP per head is closely related to glo-

bal economic performance, in particular to production factor 

productivity and employment. Its growth rate indicates the 

pace of economic development. 

How do the EU regions score?

The geographical distribution of GDP/head underlines large 

development gaps between European regions and particularly 

between old and new Member States. The top ten regions 

are all located in the EU-15 and are often capital city regions. 

At the other end of the spectrum, several regions in Bulgaria 

and Romania have levels of GDP/head below 30% of the EU27 

average. The lowest level is 24% in Nord-Est, Romania. 

Country

Top ten regions in 
2005

GDP/head (PPS), 
EU27=100

UK

LU

BE

DE

AT

FR

SE

UK

DE

NL

Inner London*

Luxembourg 
(Grand-Duché)*

Région de 
Bruxelles-Capitale 
/ Brussels 
Hoofdstedelijk 
Gewest*

Hamburg*

Wien*

Île de France*

Stockholm*

Berkshire, 
Buckinghamshire 
and Oxfordshire

Oberbayern

Groningen

303

264

241

202

178

173

172

168

166

164

In these regions, GDP/head ﬁ gures tend to be overestimated 
because of commuter ﬂ ows.

30 Communication from the Commission to the European Parliament and the Council

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Canarias

Guyane

Guadeloupe
Martinique

Réunion

Açores

Madeira

Share of knowledge workers, 2006

% of total employment
< 30.77
< 30.77

30.77 - 35.67
30.77 - 35.67

35.67 - 38.63
35.67 - 38.63

38.63 - 42.27
38.63 - 42.27

>= 42.27
>= 42.27

No Data
No Data

REGIOgis

EU-27 = 36.68 %
Share of senior officials, managers and (associate) 
professionals (ISCO classes 1,2 and 3) 
of total employment
Source: Eurostat (LFS)

0

500 Km

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31

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Share of knowledge 
workers

Senior oﬃ  cials, managers and professionals as a share of total 

regional employment.

Why does this matter?

Knowledge workers are deﬁ ned by the ﬁ rst three ISCO cat-

egories1. They include managerial functions, highly qualiﬁ ed 

professionals as well as technical and scientiﬁ c positions and 

cover most knowledge-based jobs.

The share of employment in this type of occupation illustrates 

the shift to knowledge-based economy and the capacity to 

beneﬁ t from the global shift towards more intensive use of 

technology and sophisticated instruments of production. 

Knowledge-based jobs play a prominent role in the sectors in 

Country

Top ten regions 
movers

Change in the 
share of knowl-
edge workers , 
percentage points

This table shows the ten regions where the share of  
senior oﬃ  cials, managers and professionals  increased 
fastest between 2000 and 2006

FR

RO

GR

PL

AT

PL

PL

GR

PT

ES

Alsace

Bucureşti-Ilfov

Notio Aigaio 

Śląskie

Steiermark

Mazowieckie

Região Autónoma 
da Madeira

Kriti

Algarve

País Vasco

9.2

9.0

8.7

8.7

8.6

8.0

7.7

7.7

7.5

7.3

which Europe holds a comparative advantage. They therefore 

The share of knowledge workers diﬀ ers signiﬁ cantly between 

are a major factor of its competitiveness.  

European regions. In Praha, more than 60% of jobs fall in such 

Knowledge workers account for 36.7% of employment in the 

categories wile in Nord-Est in Romania, they only account for 

EU27. Between 2000 and 2006, employment in these categories 

16.8% of employment. The share of oﬃ  cials, managers and 

increased by 3.4 percentage points. 

How do the EU regions score?

Country

Top ten regions in 
2006

Share of
knowledge 
workers on total 
employment, %

CZ

BE

UK

SE

NL

FR

DE

BE

BE

SK

Praha

Prov. Brabant 
Wallon

Inner London

Stockholm

Utrecht

Île de France

Berlin

Région de 
Bruxelles-Capitale 
/ Brussels 
Hoofdstedelijk 
Gewest

Prov. Vlaams-
Brabant

Bratislavský kraj

60.7

57.7

57.3

56.9

54.1

53.8

52.5

51.1

50.5

50.2

professionals is generally high in regions of Europe’s core 

and/or in regions hosting major urban areas, often capital city 

regions. It is however much less in regions of Bulgaria, Greece, 

Romania, Slovakia and Spain. 

The share of knowledge workers increased in most regions 

which reﬂ ect the relative specialisation of the EU economy in 

activities related to knowledge-based jobs. 

Changes in share however show no clear pattern. For instance, 

the regions with the highest and lowest shares (respectively 

Praha  and  Nord-Est)  have  both  experienced  substantial 

increase in the share of knowledge workers (respectively 

of 6.0 and 5.3 percentage points). Moreover, high growth 

regions can be found all over Europe and are not systematically 

urban regions. These observations may however reveal a trend 

towards more even geographical distribution of knowledge 

workers.

1  The International Standard Classiﬁ cation of Occupations (ISCO) classiﬁ es 

jobs according to the tasks and duties undertaken.

32 Communication from the Commission to the European Parliament and the Council

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Canarias

Guyane

Guadeloupe
Martinique

Réunion

Açores

Madeira

Share of knowledge workers, 2006

% of total employment
< 30.77
< 30.77

30.77 - 35.67
30.77 - 35.67

35.67 - 38.63
35.67 - 38.63

38.63 - 42.27
38.63 - 42.27

>= 42.27
>= 42.27

No Data
No Data

REGIOgis

EU-27 = 36.68 %
Share of senior officials, managers and (associate) 
professionals (ISCO classes 1,2 and 3) 
of total employment
Source: Eurostat (LFS)

0

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33

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Unemployment 
rate

Why does this matter?

The unemployment rate is the number of people between 

the age of 15 and 74 who are out of work, looking for work 

and available for work divided by the number of people ac-

tive in the labour market, i.e. those who are either employed 

or unemployed.

The unemployment rate is key measure of social cohesion. A 

high unemployment rate is often accompanied by poverty 

and other forms of social exclusion.  It also shows whether 

a regional economy creates enough jobs in relation to the 

number of people who want to work. Strong disparities in 

unemployment rates create a strong incentive for people to 

move between regions or even countries.

Bolzano/Bozen have unemployment rates of respectively 2.7% 

and 2.6%. 

Country

Top ten movers

Change in
unemployment 
rate, percentage 
points

This table shows the ten regions in which
unemployment rate  decreased fastest between 
2000 and 2006

IT

BG

FR

ES

IT

BG

IT

LT

ES

BG

Calabria

Severoiztochen

Corse

Andalucía

Campania

Yugoiztochen

Sicilia

Lietuva

Extremadura

Severozapaden

-13.1

-12.9

-11.6

-11.4

-10.8

-10.7

-10.5

-10.3

-10.2

-10

At the European level, unemployment has remained just above 

Despite the relative stability of the European unemployment 

8% between 2000 and 2006 and only fell below to 7.2% in 

rate between 2000 and 2006, regions with high unemployment 

rates were able to sharply reduce their unemployment rates. 

The ten top movers had an average unemployment rate of 

22% which they reduced to only 11% by 2006. This provides a 

good example of the general reduction of disparities between 

regions with high and low unemployment rates that occurred 

over this period. The coeﬃ  cient of variation, a statistical meas-

ure of regional disparities, decreased by almost 24% between 

2000 and 2006.

Unemployment rates dropped signiﬁ cantly in the Baltic States, 

Bulgaria, Southern Italy and Spain. Some regions, however, did 

not follow this trend. Several regions in Portugal and Western 

Germany witnessed a substantial increase in their unemploy-

ment rates despite levels which were close or above the EU 

average in 2000. In the UK unemployment disparities decreased 

through a slight increase in the South-East and a decrease in 

the North and West.

2007.

How do the EU regions score?

Country

Top ten regions in 
2006

Unemployment 
rate, %

FR

FR

FR

FR

ES

DE

SK

DE

DE

DE

Guyane

Réunion

Guadeloupe

Martinique

Ciudad Autónoma 
de Ceuta

Mecklenburg-
Vorpommern

Východné 
Slovensko

Berlin

Leipzig

Sachsen-Anhalt

28.5

28.3

26.9

24.1

21.0

19.2

19.1

18.7

17.9

17.8

Regional disparities among the EU27 regions remain high in 

terms of unemployment. The French overseas departments and 

Ciudad Autónoma de Ceuta have particularly high unemploy-

ment rates but their location outside the European continent 

explains a large part of these high levels. Unemployment rates 

over 10% can be found in Slovakia, East German Länder and 

in most Polish regions but also in some regions of Belgium, 

Southern Italy, France or Southern Spain. At the other end of 

the spectrum, regions like Zeeland and Provincia Autonoma 

34 Communication from the Commission to the European Parliament and the Council

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Canarias

Guyane

Guadeloupe
Martinique

Réunion

Açores

Madeira

Unemployment rate, 2006

% of labour force

< 4.7
< 4.7

4.7 - 6.5
4.7 - 6.5

6.5 - 8.5
6.5 - 8.5

8.5 - 11.3
8.5 - 11.3

>= 11.3
>= 11.3

No Data
No Data

REGIOgis

EU-27 = 8.2
Source: Eurostat

0

500 Km

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Communication from the Commission to the European Parliament and the Council
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35

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K
N

-
A
G

-
0
8
-
0
0
1
-
E
N

-
C

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