Measuring and monitoring regional competitiveness in the European Union

Abstract

The European Regional Competitiveness Index (RCI) was set up as a tool to assist European Union (EU) regions in setting the priorities to increase their competitiveness by measuring the strong and weak points in terms of territorial competitiveness for each of the EU regions. The index builds on the Global Competitiveness Index methodology developed by the World Economic Forum. It covers a wide range of issues related to competitiveness including innovation, quality of institutions, transport and digital infrastructure and measures of health and human capital. As such, the RCI extends the traditional analysis of competitiveness from a purely economic measure to incorporate social elements. In this way, it goes beyond the perspective of businesses to integrate the concerns of residents. In addition, the index takes into account the level of development of a region by shifting the emphasis from more basic issues to innovation-related factors. This chapter presents the RCI and discusses its evolution between the 2010 and 2013 editions. The use of updated and regional-level sourced data, together with method refinements, are considered. These refinements smooth the transition between the different levels of development and take into account commuting patterns. The chapter goes on to outline how regions in Italy, Spain, Belgium, Germany and Luxembourg have already started using the RCI to pick priorities for their development strategies. The index can provide indications of what each region should focus on, taking into account its specific situation and its overall level of development.