Report from the Commission to the European Parliament and the Council - Sixth progress Report on economic and social cohesion {SEC(2009) 828 final}
Date: 2009-06-25
Institutions: European Commission
Subjects: EU policy, economic and social cohesion, regional cooperation, regional policy, report

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COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 25.6.2009 
COM(2009) 295 final 

REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND 
THE COUNCIL 

Sixth progress report on economic and social cohesion 

{SEC(2009) 828 final}

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TABLE OF CONTENTS 

1. 

2. 

Introduction .................................................................................................................. 3 

The regional dimension of creativity and innovation .................................................. 4 

2.1. 

Creativity...................................................................................................................... 4 

2.1.1.  Developing talent ......................................................................................................... 4 

2.1.2.  Attracting talent and visitors ........................................................................................ 4 

2.1.3.  Tolerance...................................................................................................................... 5 

2.2. 

Innovation .................................................................................................................... 7 

2.2.1.  New firms..................................................................................................................... 7 

2.2.2.  Existing firms ............................................................................................................... 9 

2.3. 

Conclusion ................................................................................................................. 10 

3. 

3.1. 

3.2. 

3.3. 

3.4. 

Territorial Cohesion: The state of the debate............................................................. 11 

Definition, scope and scale of territorial cohesion..................................................... 11 

Better coordination and new territorial partnerships.................................................. 12 

Better cooperation ...................................................................................................... 13 

Improving understanding of territorial cohesion........................................................ 13

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REPORT FROM THE COMMISSION 

Sixth progress report on economic and social cohesion  
Creative and innovative regions 

1. 

INTRODUCTION 

This report focuses on creativity and innovation because they can help the Union to emerge 
faster  and  stronger  from  the  current  economic  crisis.  This  is  why  the  European  Economic 
Recovery Plan together with Cohesion Policy targets investments that strengthen the EU long-
term competitiveness, such as entrepreneurship, access to finance for SMEs, human capital, 
ICT,  green  technology  and  energy  efficiency1.  This  plan  reinforces  Cohesion  Policy's  link 
with  the  Lisbon  Strategy  and  the  stronger  focus  in  the  period  2007-2013  on  innovation  to 
which € 85 billion has been dedicated 2. The fifth progress report3 highlighted the strong role 
of  certain  sectors  and  economic  restructuring  in  regional  development.  This  recession  will 
accelerate restructuring and hit some sectors hard, particularly the financial, construction and 
automobile sector will face significant employment losses.  

Furthermore,  this  report  argues  that  creativity  and  innovation  have  a  crucial  regional 
dimension4.  The  OECD5  emphasizes  that  because  innovation  is  becoming  more  complex 
(with  more  open  innovation  models,  process  innovation  and  role  of  absorption  and 
adaptation) no single policy can promote innovation in all regions. Local knowledge needs to 
be  mobilised  for  regions  to  design  their  own  innovation  systems  and  use  knowledge  and 
technology  more  effectively.  Last  but  not  least,  the  European  Year  of  Creativity  and 
Innovation inspired the focus of this report.  

The main goal of this report is to show which factors can boost creativity and innovation in 
both  developed  and  less  developed  regions.  The  report  covers  technological  innovation,  but 
also many non-technological forms of innovation such as social, artistic, cultural, process and 
service innovation.  

Regional  data  available  for  this  report  does  not  yet  reflect  the  crisis.  Up  until  2007, 
unemployment  rates  were  shrinking  and  converging  rapidly  (see  Factsheet  1).  But  they  are 
now  increasing  dramatically  in  Spain,  Ireland  and  the  three  Baltic  States,  expected  to  reach 
between 11 and 17% in 2009, more than double the rate in 20076. These five Member States 
(MS)  are  also  forecast  to  suffer  economic  contractions,  bringing  to  an  end  a  period  of 
sustained growth (see Factsheet 2).  

The  report  also  provides  a  synthesis  of  the  debate  on  Territorial  Cohesion,  launched  by  a 
Green Paper last year.  

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COM(2008) 876 
SEC(2007) 1547 
COM (2008) 371 
Regional innovation Scoreboard 2006, MERIT 
Summary of the OECD Ministerial Meeting: Building Innovative Regions March 2009 
Economic Forecast, Spring 2009, EC 

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This report is accompanied by 11 factsheets mapping and analysing key indicators related to 
creativity and innovation.  

2. 

THE REGIONAL DIMENSION OF CREATIVITY AND INNOVATION  

This report uses creativity in the sense of generating a new and useful idea7, and innovation as 
putting a new and useful idea into practice. The regional dimension means that an idea has to 
be new and useful in the region. As a result, the analysis covers both activities that push the 
knowledge frontier and ones that allow regions to come closer to that frontier.  

2.1. 

Creativity 

How are new and useful ideas generated? Despite the popular image of the solitary inventor, 
most new ideas are generated by human interaction especially between different and talented 
people.  This  is  one  of  the  reasons  why  patent  applications  and  cultural  activities  are 
concentrated  in  cities.  To  boost  such  interaction,  regions  need  to  develop  their  own  talent, 
attract talent and be tolerant of diversity.  

2.1.1.  Developing local talent 

Education  and  training  can  help  people  to  develop  their  talents  and  creativity.  Yet  large 
differences in education levels remain between regions. The share of graduates is almost nine 
% points higher in the regional competitiveness and employment (RCE) and Transition8 than 
in Convergence regions (see figure 1). Also participation in lifelong learning lags far behind 
in Convergence regions, where the rate is half that in RCE regions. 

The  human  capital  intensity  (HCI)  index  shows  a  weighted  combination  of  secondary  and 
tertiary educational attainment by the population aged 25-64 (see Factsheet 3). Most regions 
in  Portugal,  Italy,  Greece  and  Southern  Spain  score  low,  which  implies  that  may  stimulate 
creativity less. The gap between Convergence and RCE regions is wide at nine points, but has 
shrunk  thanks  to  a  higher  increase  in  secondary  educational  attainment  in  Convergence 
regions.  

The HCI increased significantly for the whole of the EU over the period 2000-2007. This will 
continue  as  more  young  and  better  trained  people  enter  the  labour  force.  Women  are 
increasingly  gaining  medium-  and  high-level  qualifications.  Indeed,  young  women  are  now 
often better qualified than young men (see Factsheet 4).  

2.1.2.  Attracting talent and visitors 

A region can boost its share of talent by attracting talented people to move there or to visit. 
Although movements within a country can help some regions and cities, only attracting talent 
from abroad increase the national pool of talent. The share of foreign-born graduates is only 
2% in the EU, compared to 6% in the US, a level only eight EU regions match. The proposed 
EU Blue Card9 will help to attract more foreign graduates.  

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On creativity, 2008, Ernesto Villalba, JRC. 
Phasing  in  and  Phasing  out  regions  are  grouped  as  Transition  regions  since  both  receive  transitional 
support 
COM(2007) 637 

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The share of working age population born in another country follows the same pattern as the 
foreign-born  graduates,  with  high  shares  in  London,  Luxembourg,  Brussels  and  Vienna, 
where more than one in three are born abroad (see Factsheet 5), and many very low shares in 
most of the Central and Eastern MS (CE MS). In Convergence regions, it is only 3%, whereas 
in RCE regions it is four times higher.  

Fortunately, for countries and regions with high levels of outmigration, most citizens do not 
cut their ties with their country of birth. Some MS, for example, receive substantial inflows of 
remittances. This provides a strong inflow of capital, the equivalent of one or more % points 
of GDP a year10, but this could decline due to the crisis.  

Many  EU  citizens  have  already  gone  back  to  the  CE  MS  due  to  improving  employment 
opportunities  and  wages,  in  part  due  to  Cohesion  Policy,  and  increasing  unemployment  in 
some of the major destination MS. This reduces remittances, but they take their international 
experience, increased business acumen and contacts with them. In the past, Ireland and Spain 
lost  population  due  to  higher  out-  than  in-migration,  but  in  recent  years  they  have  gained 
population through intra-community mobility and migration thanks to high economic growth 
and a more open attitude. 

Business  travel  also  boosts  interaction  and  the  exchange  of  ideas.  Despite  more  and  better 
opportunities  to  connect  and  cooperate  online,  face-to-face  meetings  are  still  in  heavy 
demand. Business and scientific conferences continue to draw large crowds from all over the 
globe Business travel is a significant source of growth and employment for many cities and 
regions.  The  goal  of  leisure  travel  is  not  the  exchange  of  ideas,  but  it  can  contribute  to 
enriching social life in cities thus stimulating creativity. The number of arrivals per capita in 
hotels (see Factsheet 6) shows some of the most successful business destinations and the very 
low number of arrivals in the CE MS.  

2.1.3.  Tolerance 

Tolerance  of  different  backgrounds  and  lifestyles  helps  not  only  to  retain  and  attract  talent, 
but also to create the open environment in which creativity thrives and diversity is valued. In 
some countries, however, residents are not very comfortable with a neighbour or someone in 
the  highest  elected  political  position  with  a  different  ethnic  background,  religion  or  belief, 
sexual  orientation  or  with  a  disability  (see  Factsheet  7).  Discrimination  on  these  grounds  is 
prohibited11 in the EU. Nonetheless, in contrast to the US and Iceland, in eight MS over half 
the respondents were not comfortable with someone from a different ethnic background in the 
highest  elected  political  position  and  in  nine  MS  they  were  not  comfortable  with  a 
homosexual leading the country.  

Although overall, respondents said they thought discrimination had become less widespread 
in their MS, in 17 MS at least one type of discrimination was seen as more widespread than 
five years ago. In almost all MS this included ethnic discrimination, but also on the basis of 
religion, homosexuality or gender. Although the more developed MS tend to be slightly more 
tolerant, some of these still score low and increasing unemployment could lead to more acts 
of discrimination.  

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Remittance flows to and from the EU. 2007. Eurostat  
Art. 21 EU Charter of fundamental rights 

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Unemployment rates amongst residents born abroad are often higher in EU MS, up to double 
or triple the rate of people born in the country. These high rates are in part due to insufficient 
knowledge of the local language and lower education levels, but also due to discrimination. 
As  migration  from  outside  the  Union  will  be  the  only  way  to  stem  population  decline, 
ensuring  that  migrants  and  their  children  can  find  a  job  or  set  up  a  business12  will  become 
even more important in the future. Better access to appropriate training and higher education 
will help to improve their integration in the labour market13. 

The  core  creative  class  (see  Factsheet  8)  is  particularly  important  for  an  economy  as  its 
members  generate  more  ideas  and  are  more  likely  to  set  up  new  companies,  creating  both 
growth and jobs in the process14. Analysis has shown that in the USA15 this class is attracted 
to  talented,  tolerant  and  high-tech  cities.  Core  creative  class  professions  include  engineers, 
writers, architects, scientists, professors and artists and other professions which entail creating 
meaningful new products, processes or services.  

In the EU, the core creative class is highly concentrated in and around capital regions and in 
the  Benelux  and  Nordic  countries,  Ireland  and  the  UK.  These  regions  have  a  high  share  of 
foreign-born  graduates,  broadband  access  and  often  large  cities,  confirming  this  preference. 
These  regions  and  metropolitan  areas  are  increasingly  recognised  as  powerful  engines  of 
innovation  and  many  cities  are  taking  action  to  become  more  creative  by  attracting  highly 
skilled, creative people and offering a good environment for innovative occupations and for 
ideas  to  be  realised16.  Convergence  regions  have  a  lower  share  of  core  creative  class  5%, 
compared with 8% in RCE regions, which may be due to their lower shares of graduates and 
foreign-born,  and  lower  ICT  use.  For  example  in  2008  broadband  access  in  Convergence 
regions  at  32%  remains  well  below  the  57%  in  RCE  regions  but  much  higher  than  in  2004 
when it was only 8%. 

Figure 1: Creativity Indicators by type of region 

Indicator

Period

Unit

Convergence

Transition

RCE

Tertiary education attainment *

2007

% of population 25-64

Participation of adults aged 25-64 
in education and training *
Population aged 15-64 born in 
another country *

2007

% of population 25-64

2007

% of population 15-64

Unemployment rate

2007

% of active population

Unemployment rate trend

Arrivals in hotels *

2000 - 
2007
2006-07

% point change

Arrivals per capita

Core creative class *

2006-07 % of population 15-64

Broadband Access**
* excl. FR9 ** excl. FR9, DE5, DEC, UKD1, UKE1, UKK3, UKM5

2008

% of households

17

5.1

2.8

9.2

-4.6

0.7

5.4

32

25

8.1

10.3

8.4

-3.0

1.4

6.9

43

26

11.5

12.5

6.1

-0.5

1.4

8.3

57

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13 
14 
15 
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COM(2008) 394 
Jobs for Immigrants, 2008, OECD 
Creative class and regional growth. 2007 R.A. Boschma & M. Fritsch 
The Rise of the Creative Class. 2002 Richard Florida. 
Competitiveness of European Metropolitan Regions www.acre.socsci.uva.nl/ 

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2.2. 

Innovation  

The focus of this report is on the regional dimension, but there is also a global dimension to 
innovation. Research17 shows that the EU lags behind the USA, but has started to close this 
gap.  Notably,  the  EU  has  higher  growth  of  graduates,  researchers,  public  R&D,  venture 
capital, broadband access and knowledge-intensive services employment3 and it leads on S&E 
graduates, trademarks, technology balance of payments flows and medium-high and high-tech 
manufacturing employment3. 

A  new  and  useful  idea  can  be  put  into  practice  in  the  social,  cultural  or  economic  sphere. 
Social innovation can create better models of childcare, improve healthcare delivery at home 
and  promote  sustainable  transport.  Cultural  innovation  can  lead  to  new  art  forms.  In  the 
economy, it can reduce energy use, streamline processes and improve the design of products 
and services, which all tend to boost productivity. Many regions have witnessed a significant 
productivity growth (see Factsheet 9). The regions with the highest productivity growth tend 
to be in the CE MS. Since 2000 productivity in industry and services has grown by 2% a year 
in Convergence regions, double the RCE rate. This growth has been supported by increases in 
education, better and wider use of ICT and of high FDI inflows. 

FDI  is  a  crucial  source  of  investments  for  almost  all  CE  MS  (see  figure  3),  where  net  FDI 
flows reaches the equivalent of more than 3% of GDP a year between 2005 and 2007. FDI, 
however,  does  not  necessarily  mean  the  creation  of  a  new  firm.  Most  of  FDI  involves  a 
foreign  investor  taking  a  controlling  stake  in  a  company.  The  high  productivity  growth  in 
Convergence  regions  is  the  main  reason  why  the  gap  in  GDP  per  head  has  narrowed 
substantially. The gap in employment rates has remained above ten % points since 2000 (see 
figure 4). GDP per head relative to the EU average increased by six points between 2000 and 
2006,  bringing  the  Transition  regions  within  four  points  of  the  EU  average,  and  the 
Convergence regions, at 59, closer to, but still well below, the 75% threshold (see Factsheet 
2). 

2.2.1.  New firms 

New ideas are often put into practice by new firms. These can either be a start-up created by a 
local entrepreneur or by foreign direct investment (FDI). Start-ups are the key to innovation. 
Innovative new firms can conquer a niche market and grow rapidly (the so-called gazelles). 
But it is not always easy to create a start-up. The World Bank18 indicates that it is easier to 
start  a  business  in  at  least  one  hundred  other  countries  than  in  Germany,  Austria,  Greece, 
Spain and Poland (see figure 2). Only Ireland and the UK make it into the top ten. 

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European Innovation Scoreboard 2008, 2009, MERIT 
Doing Business 2009 Report, World Bank 

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Figure 2: Ease of Doing Business Ranking, 2009 

Economy

Ease of Doing 
Business Rank

Starting a 
Business

Ireland
United Kingdom
France
Denmark
Finland
Belgium
Estonia
Romania
Hungary
Sweden
Portugal
Latvia
Slovenia
Slovakia
Netherlands
Italy
Luxembourg
Lithuania
Bulgaria
Czech Republic
Germany
Austria
Greece
Spain
Poland
Rank out of 181 countries.

7
6
31
5
14
19
22
47
41
17
48
29
54
36
26
65
50
28
45
75
25
27
96
49
76

5
8
14
16
18
20
23
26
27
30
34
35
41
48
51
53
69
74
81
86
102
104
133
140
145

Source World Bank Ease of Doing Business Report 2009

In 2006, the Spring European Council set three clear objectives to make it simpler, cheaper 
and faster to register a new company, but by 2008 only nine MS reached all three objectives19.  

Another important way to boost entrepreneurship is to actively promote it as a career option, 
especially  in  regions  with  a  high  (youth)  unemployment  rate.  Entrepreneurship  education 
could convince more young people to turn ideas into action.  

New  foreign  firms  are  often  concentrated  in  the  capital  region  for  example  in  the  Czech 
Republic, Slovakia, Finland and Portugal (see Factsheet 10). They also often locate in border 
regions, particularly along the borders closest to the rest of the EU, for example in Western 
Poland and Hungary, North-Western Romania, and Eastern France. In 2005-07, Convergence 
overtook RCE regions in terms of new foreign firms per inhabitant. The crisis will lead to a 
drop in FDI and fewer new foreign firms. Research20 shows that regional policies are better at 
encouraging knowledge spillovers from foreign firms than national policies..  

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http://ec.europa.eu/enterprise/entrepreneurship/support_measures/start-ups/startups2008.pdf  
Final Report, 2009, DYNREG 
http://www.esri.ie/research/research_areas/international_economics/dynreg  

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Figure 3: Net Foreign direct investments as % of GDP, 2005-2007 

Net FDI flows by MS 2005-2007

Bulgaria
Malta
Estonia
Romania
Latvia
Czech Republic
Slovakia
Cyprus
Lithuania
Poland
Hungary
Belgium
United Kingdom
Finland
Portugal
Slovenia
Greece
Austria
Italy
Germany
France
Denmark
Sweden
Netherlands
Spain
Ireland
Luxembourg

-37

-10

-5

0

5

10

15

20

Average Annual average net FDI in share of GDP, 2005-2007, in %

One of the goals of the services directive is to facilitate start-ups in services in other Member 
States  by  the  end  of  2009.  This  could  lead  to  an  increase  in  FDI,  particularly  in  border 
regions.  A  prompt  and  complete  implementation  of  this  Directive  by  national,  regional  and 
local authorities will ensure the highest impact on jobs and start-ups across Europe. 

2.2.2.  Existing firms 

Existing  firms  innovate  with  the  aid  of  R&D  and  other  methods21,  such  as  technology 
adoption,  non-technological  innovation  and  combining  existing  knowledge  in  new  ways. 
Studies22  highlight  that  large  firms  invest  more  in  R&D  and  do  more  in-house  innovation, 
while  SMEs  have  less  access  to  finance  and  tend  to  innovate  less  and  outsource  their 
innovation  needs.  High-growth  SMEs,  however,  can  have  an  even  bigger  impact  on 
innovation, but they can be hindered by protected markets and other obstacles. 

R&D is highly concentrated both in certain sectors – manufacturing accounts for 80% – and 
regionally,  for  example  30%  of  business  expenditure  on  R&D  (BERD,  see  Factsheet  11)  is 

21 
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Neglected Innovators, 2008, MERIT. 
Ex. Innobarometer 2007, 2008, Flash EB213, and R&D in Europe, 2009, K. Uppenberg, EIB. 

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located in just ten regions. Only in 29 regions do businesses invest more than 2% of GDP in 
R&D. In most the share is below 1%. Overall, the EU spends far less on R&D than the USA, 
but  some  MS  equal  the  US  level  in  certain  manufacturing  sectors.  R&D,  however,  covers 
only a small share of innovation related expenditure. 

In  RCE  regions,  BERD  stands  at  1.3%,  which  is  four  times  more  than  in  Convergence 
regions. In less developed regions, technology diffusion is likely to play a more decisive role, 
which  is  illustrated  by  the  stark  difference  in  the  number  of  patents  per  head,  with  RCE 
producing 13 times more patent applications than Convergence regions. 

Figure 4: Innovation Indicators by type of region 

Indicator

Productivity in industry and 
services (PPS)
Productivity trend in industry and 
services
Employment rate
GDP/head (PPS)
GDP/head (PPS) trend
New foreign firms per million 
inhabitants
Change in new foreign firms per 
million inhabitants
R&D expenditure in the business 
enterprise sector
* excl. UKM5 UKM6 

2.3. 

Conclusion 

Period

2006

2000-2006

2007
2006
2000 - 2006

2005-07

2001-03 - 
2005-07

2006 *

Unit

Convergence Transition

index EU27=100

Average annual real 
productivity growth
% of population 15-64
index EU27=100
index point change
Total new foreign firms per 
million inhabitants
Total new foreign firms per 
million inhabitants

63

1.9

59
59
5.4

268

118

90

1.3

64
95
5.9

62

-34

RCE

113

0.9

69
122
-4.4

225

-18

% of GDP

0.36

0.42

1.36

The financial crisis and recession reinforce the role of creativity and innovation. This analysis 
has  shown  that  creativity  and  innovation  have  a  distinct  regional  dimension.  On  most 
indicators  RCE  regions  score  high,  such  as  core  creative  class,  R&D  and  human  capital 
intensity.  On  others,  such  as  FDI  and  productivity  growth,  however,  Convergence  regions 
score higher. What conclusions can be drawn from these trends? 

Convergence  regions  can  obtain  greater  benefits  from  foreign  firms  by  embedding  them  in 
their regional economy and improving their absorption capacity. Strong links between foreign 
firms  and  local  suppliers  increase  efficiency,  local  employment  and  knowledge  transfers. 
These regions should improve the educational attainment and participation in training, which 
will add to their capacity to absorb new ideas and practices and help them sustain their high 
productivity growth.  

In addition, these regions should increase their appeal to leisure and business travellers by, for 
example,  stimulating  cultural  and  creative  activities.  This  would  boost  exchanges  of  new 
ideas and possibly increase the appeal of the region to new residents and returning migrants. 

Transition regions are closing the gap with RCE regions, but still score lower on many of the 
economic indicators including productivity and employment. Indicators related to innovation 
such as R&D, patents and human capital are still substantially lower. To move from a focus 
on  cost-effectiveness  to  an  economy  fuelled  by  innovation23,  these  regions  will  need  to 
improve their business environment and invest more in R&D, education and training and the 
development of core creative skills. 

23 

Global Competitiveness Report 2008-2009, 2008, World Economic Forum 

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RCE regions should make sure that they obtain the maximum benefit from the high share of 
residents born in another country, by ensuring that they are integrated into the labour market 
and making it easier for them to set up their own business. To continue to compete on a global 
scale,  these  regions  need  to  increase  their  investment  in  creativity  and  innovation  and 
accelerate the transition from a new idea to a new product, service or process.  

Creativity  and  innovation  thrive  in  an  environment  where  new  ideas  and  approaches  are 
accepted and encouraged. A region in which people are discriminated against on the ground 
of their ethnic origin, belief, gender, disability, age or sexual orientation will not only be less 
just  but  also  less  competitive.  Therefore,  all  regions  should  endeavour  to  reduce 
discrimination,  promote  intercultural  dialogue  and  more  openness  towards  people  with 
different backgrounds or lifestyles.  

3. 

TERRITORIAL COHESION: THE STATE OF THE DEBATE 

In  its  article  3,  the  Lisbon  Treaty  makes  territorial  cohesion  an  explicit  Objective  for  the 
future of Cohesion Policy. Moreover, the current crisis with its asymmetric territorial impacts 
has increased the importance of territorial cohesion within the EU, and the discussion about 
the concept has gained momentum. 

In  October  2008,  the  European  Commission  adopted  a  Green  Paper  on  “Territorial 
Cohesion”24  launching  a  broad  public  debate  on  territorial  cohesion  and  its  policy 
including 
implications.  The  Commission  was  pleased 
contributions from all Member States, from nearly 100 regional authorities, from more than 
150 regional and local associations as well as from cities, economic and social partners, civil 
society organisations, research institutions, and individual citizens. The European Parliament, 
the  Committee  of  the  Regions,  and  the  European  Economic  and  Social  Committee  have  all 
adopted their opinions on the Green Paper on Territorial Cohesion.  

to  receive  391  responses25, 

This section briefly summarises the key outcomes from the consultation. 

3.1. 

Definition, scope and scale of territorial cohesion 

The Green Paper on Territorial Cohesion did not propose a definition, but asked for one. The 
European Parliament, in its reaction, expressed the concern that without a "commonly agreed, 
shared  and  understood  definition"  it  would  be  difficult  to  discuss  the  policy  implications. 
Some respondents shared this concern, but others argued that demanding a precise definition 
would needlessly delay the discussions. Fortunately, a broad agreement on the goal and basic 
elements of territorial cohesion emerged from this debate. 

The goal of territorial cohesion is to encourage the harmonious and sustainable development 
of all territories by building on their territorial characteristics and resources. 

The three basic elements proposed to achieve this goal were broadly supported: 

•  concentration (achieving critical mass while addressing negative externalities),  

24 
25 

COM(2008) 616 
http://ec.europa.eu/regional_policy/consultation/terco/consultation_en.htm  

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•  connection  (reinforcing  the  importance  of  efficient  connections  of  lagging  areas  with 

growth centres through infrastructure and access to services), and  

•  cooperation (working together across administrative boundaries to achieve synergies). 

The  replies  highlighted  that  territorial  cohesion  complements  and  reinforces  economic  and 
social cohesion and underlined that the three basic elements were already implicitly present in 
Cohesion  Policy.  For  some,  territorial  cohesion  essentially  serves  social  and  economic 
cohesion, while for most it is a wider, horizontal concept underpinning all policy areas at all 
administrative levels.  

Many  contributors  underlined  the  solidarity  dimension  of  territorial  cohesion;  some  as  a 
territorial  dimension  of  the  European  social  model.  This  implies  that  economic  and  social 
disparities between territories at all levels (from the EU to the regional and local level) need 
to be taken into account. Many replies stated that a good quality of life, equal opportunities 
and  access  to  services  of  general  interest  in  all  territories  are  crucial  both  for  solidarity  and 
competitiveness.  

A  minority  of  respondents  proposed  to  link  territorial  cohesion  to  a  small  number  of 
geographical  features  which  may  influence  development.  They  also  proposed  specific  EU 
policies and funding or even comprehensive EU strategies for these territories. However, the 
majority  of  replies,  including  a  clear  majority  of  MS,  argued  that  these  features  do  not  in 
themselves determine success or failure, nor take account of the capacities of Member States 
and  regions  to  provide  appropriate  policy  responses,  and  therefore  do  not  require  specific 
treatment, let alone compensation. These reactions confirm that the socio-economic situation 
of  territories  should  be  the  basis  for  policy  intervention  and  design.  In  addition,  they 
emphasized  that  Cohesion  Policy  already  provides  sufficient  flexibility  to  tackle  different 
problems in different territories. 

Many  reactions  argued  that  different  issues  (e.g.  social  exclusion  or  urban  sprawl, 
accessibility to services or the risk of flooding) require policy responses at different territorial 
levels. These may vary from deprived urban neighbourhoods to metropolitan areas, from river 
basins  to  mountain  areas.  The  need  for  European  support  and  desired  flexibility  to  address 
problems  in  a  functional  manner  should  be  considered  in  the  light  of  the  subsidiarity 
principle.  

3.2. 

Better coordination and new territorial partnerships  

The  majority  of  contributions  associate  territorial  cohesion  with  an  integrated  approach, 
multilevel  governance,  and  partnership;  all  three  appreciated  assets  of  Cohesion  Policy.  In 
particular,  Community  Initiatives  such  as  URBAN  and  rural  development's  LEADER  were 
mentioned  favourably.  Yet,  many  replies  argued  that  territorial  cohesion  should  lead  to  a 
further  improvement  of  the  territorial  dimension  in  the  design  and  implementation  of 
Community  policies.  For  example,  many  reactions  asked  for  a  better  coordination  and 
coherence between different EU instruments and funds.  

A  clear  consensus  emerged  that  public  policies  at  different  levels  need  to  take  into  account 
their  territorial  impact  to  avoid  contradictory  effects.  This  is  particularly  true  for  European 
policies  with  a  territorial  impact,  such  as  cohesion,  transport,  energy,  agriculture, 
environment,  employment,  competition  and  research  policies.  Several  contributions  stressed 
that also the territorial dimensions of Lisbon and Gothenburg strategies should be considered. 

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Taking  the  territorial  impact  into  account  during  the  phase  of  policy  formulation  would 
improve  synergies  and  effectiveness.  That  is  why  a  better  understanding  of  the  territorial 
impact of public policies is needed. Most reactions requested the EU to play a key role here, 
for  example  by  testing  ways  to  strengthen  the  territorial  dimension  of  existing  impact 
assessments.  

All  contributions  agreed  that  coordination  can  also  be  improved  through  more  multi-level 
governance.  For  the  vast  majority,  this  does  not  change  the  distribution  of  competences, 
especially  as  regards  spatial  planning.  The  important  role  of  regional  and  local  actors  – 
including  representatives  from  the  cities  and  towns,  private  sector  and  civil  society  –  in 
formulating,  implementing,  and  evaluating  policies  was  emphasized  by  many  replies. 
Contributions invite the EU to facilitate territorial governance across borders (e.g. urban-rural 
partnerships, city-regions, networks of towns) so as to reach critical mass in providing public 
services or to develop projects of common interest. A number of contributions stated that the 
EU has a role in supporting institutional capacity at various spatial levels through Cohesion 
Policy, which also increases the efficiency of non-EU funded policies. 

3.3. 

Better cooperation 

The  three  strands  of  territorial  cooperation  are  almost  unanimously  recognised  as  key  for 
territorial  cohesion  and  clear  examples  of  EU  added  value.  There  is  a  strong  demand  for 
reinforcing territorial cooperation by making it more strategic, but – at the same time – more 
flexible and simple. In this regard, the European Grouping of Territorial Cooperation (EGTC) 
is welcomed and its potential recognised. 

Cross-border regions are regarded as laboratories of European integration. Stakeholders from 
cross-border agglomerations or natural areas, for example, could test integrated development 
plans and service delivery. 

The majority of contributions underline the importance of coordinating national and regional 
strategies,  regulations  and  funding  in  favour  of  the  sustainable  development  of  whole 
transnational areas, as was done in the Baltic Sea Strategy. 

The  EU  should  facilitate  exchanges  of  experience  and  best  practices.  There  is  wide  support 
for  strengthening  inter-regional  cooperation  (in  particular  INTERREG  C  and  URBACT), 
especially  networking  and  benchmarking  on  solving  problems  regardless  of  administrative 
borders.  

Finally,  contributions  call  for  better  coordinating  cohesion  and  external  policies; 
strengthening  the  European  Neighbourhood  Policy;  and  using  the  EGTC  on  the  external 
borders as well. 

3.4. 

Improving understanding of territorial cohesion  

All  respondents  agreed  that  better  tools  for  territorial  analysis  and  indicators  to  understand 
territorial  trends  are  needed.  Improved  analysis  at  NUTS3  level,  development  of  thematic 
analyses  on  migration  or  climate  change,  improvement  of  territorial  impact  assessment 
instruments, can all improve policy design. The ESPON programme and the Urban Audit are 
regarded as key assets in this respect.  

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The  Commission  is  urged  to  complement  for  analytical  purposes  GDP  per  head  with  other 
indicators  of  quality  of  life  (e.g.  human  development,  sustainability,  vulnerability, 
accessibility of services).  

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