DENMARK. Ex Post Evaluation of Cohesion Policy Programmes financed by the European Regional Development Fund in Objective 1 and 2 regions

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1 ISMERI EUROPA The Vienna Institute for International Economic Studies Ex Post Evaluation of Cohesion Policy Programmes financed by the European Regional Development Fund in Objective 1 and 2 regions Work package 1: Coordination, analysis and synthesis Task 4: Development and achievements in Member States DENMARK

2 TABLE OF CONTENTS PREFACE... 3 EXECUTIVE SUMMARY... 4 MAP OF DENMARK REGIONAL CHARACTERISTIC AND SOCIO-ECONOMIC CONTEXT NATIONAL MACROECONOMIC CONTEXT AND POLICY REGIONAL DEVELOPMENT POLICY AND CONTRIBUTION OF THE STRUCTURAL FUNDS EFFECTS OF INTERVENTION IN DIFFERENT POLICY AREAS FORM OF INTERVENTION IN DIFFERENT POLICY AREAS POLICY IMPLEMENTATION GLOBAL EFFECTS ADDED VALUE OF THE EU CONTRIBUTION LESSONS FOR THE FUTURE REFERENCES TABLES CORRESPONDENCE BETWEEN POLICY INSTRUMENTS AND FOI CATEGORIES Applica-Ismeri-wiiw 2

3 PREFACE This report is intended to summarise the main aspects of regional disparities, the changes in these which occurred over the programming period and the principal features of regional development policy over this period in terms of the objectives, the way that it was implemented and the contribution of the Structural Funds. It also reviews the evidence on the effects of policy as regards both the direct results of expenditure in the different policy areas and the wider impact on development as such. It is based on three primary sources of information. The statistical data on regional and national developments over the period so far as possible come from Eurostat in order to ensure comparability with other studies carried out at EU level as well as with the other national reports produced as part of the ex post exercise. The data on the allocation of funding and expenditure come from the INFOVIEW database maintained by DG REGIO, which itself is based on regular information from the Member States on the allocation of funding and the payments made. Information on policy objectives, on the results of expenditure and the wider effects of this and on the procedures adopted as regards the implementation of policy comes from various programming documents and national evaluation reports as well as from impact studies which have been carried out on the actual or intended effects of programmes. The reports, therefore, are based on existing information or more precisely, the information available at the time they were prepared (around mid-2008) and no new evaluation has been undertaken for purposes of preparing the report. The report has been prepared by the Applica-Ismeri Europa- wiiw Consortium, which is coordinating the work on the ex post evaluation of ERDF expenditure in Objective 1 and 2 regions, working closely with a national expert who was responsible for interpreting the quantitative data and the other information indicated above. 1 Although the contents of the report have been checked with officials in DG REGIO and with the national authorities, responsibility for any errors in the factual information presented or its interpretation rests with the authors and the views expressed do not necessarily reflect those of DG REGIO or the national authorities. 1 This report was produced with the assistance of Henrik Hochreuter, New Insight A/S Applica-Ismeri-wiiw 3

4 EXECUTIVE SUMMARY The main aim of the Danish Objective 2 programme ( ) is to strengthen the conditions for development and a structural readjustment so as to ensure prosperity, employment and equal opportunities as well as a sustainable environment in regions with structural problems. More specifically, policy focuses on four priorities: 1) Development of the region; 2) Enterprise development (especially SMEs); 3) Competence development and 4) Technical assistance and information activities. The programme includes five Danish regions: 1) North Jutland, 2) South Funen and the Small Islands, 3) Bornholm 4) Lolland, Falster and Møn and 5) the Joint Jutland Programme, which includes areas in the counties of Viborg, Ringkøbing, South Jutland and Aarhus. The programme area includes 51 municipalities with 537,738 inhabitants in the counties of Bornholm, Funen, North Jutland, Ringkøbing, South Jutland, Storstrøm, Viborg and Aarhus as well as 27 small islands that belong to the Association of Danish Small Islands. The population of the so-called transition regions - with 404,858 inhabitants - are also part of the Objective 2 programme. Overall results Although the quantitative targets set at the beginning of the period were achieved as regards the number of jobs created, course participants, projects and so on, the effects on development have been limited. The overall efforts of the Objective 2 programme to strengthen growth, employment and settlement in the outlying areas have not succeeded in altering the development path substantially and overcoming structural weaknesses. The main lessons for the future are that more size and focus is needed. This could be achieved through 1) strengthening the analysis of regional disparities in order better to determine the focus of regional development policy; 2) securing stronger partnerships with the stakeholders involved, including local authorities, research centres and universities and the business community, and 3) increasing efficiency in coordinating the activities of national authorities and the EU. Sector results By the middle of 2005, around 5,000 jobs had been created or maintained as a result of the Objective 2 programme, a number which is considerably higher than initially anticipated. In addition, the funding has strengthened the areas concerned by 1) increasing the education levels of working-age population; 2) increasing the regional supply of vocational training courses and, less tangibly, 3) strengthening regional cooperation and 4) strengthening the competitiveness of enterprises. Applica-Ismeri-wiiw 4

5 The main lessons for the future are that there is a potential for achieving greater effects by focusing more on networking and bridge-building projects, on formulating a framework for development and on multi-fund projects and by taking concrete steps to ensure the development of competences in SMEs. Policy delivery and implementation The Danish Objective 2 programme was jointly implemented by central and regional authorities. In general, the committee structure and cooperation between regional and central levels have worked well. The main lessons for the future are that the effects could be increased by better coordination of funding sources, as noted above, by closer involvement of universities and research centres, by increasing the exchange of experience across projects and by placing a higher priority on information activities. Finally, it should be noted that, in January 2007, a major structural reform came into effect (Kommunalreformen) which reduced the number of municipalities from 271 to 98 and the number of regions from 14 to 5. These changes have had a profound effect on the institutional set up for regional policy and development. Even though there is historically in a long tradition of cooperation over policy between local, regional and central government and between these and private stakeholders, the Structural Funds seem to have been a source of inspiration for the new institutional setup for regional development policy. Applica-Ismeri-wiiw 5

6 MAP OF DENMARK Applica-Ismeri-wiiw 6

7 1 REGIONAL CHARACTERISTIC AND SOCIO-ECONOMIC CONTEXT is a country with a very high degree of regional balance by international standards. While growth has been concentrated in metropolitan areas, redistribution through taxes and transfers have reduced differences in purchasing power and living standards between regions. As a consequence, regional disparities in disposable income per head are relatively small. Only three commuter regions - Nakskov, Langeland and Læsø - have a level of disposable income per head more than 10% below the national average. 2 Nevertheless there are differences. In some marginal areas, industrial development has been slower than in the rest of the country. In 2003 the Ministry of Economic and Business Affairs identified 15 marginal areas. These were small and medium-sized regions (small minor towns and their hinterlands) with relatively low GDP per head, which were home to around 9% of the country's population. These areas are located in North Jutland (Skagen, Hjørring, Frederikshavn, Læsø), southern Funen (Svendborg, Ærø, Langeland), Lolland-Falster, Bornholm, Tønder, Grenå and Mors and Samsø. 3 Analysis of regional income formation shows, that these marginal areas are characterised by low productivity, an ageing population, low labour force participation rates and high rates of unemployment. 4 The main underlying problems have been 1) a lack of job opportunities; 2) inward migration of people dependent on income from transfers, encouraged to move by low housing prices in the areas, despite the lack of job opportunities; 3) a relatively large proportion of people with only basic education and 4) an industrial structure dominated by the primary sector, handicrafts, retailing, transport, tourism and the public sector and, according, in general, by low-tech companies). 5 2 Ministry of Economic and Business Affairs (2003): The Danish Regional Growth Strategy, Copenhagen, pp ibidem pp ibidem, pp ibidem, pp. 42, 44 and 51. Applica-Ismeri-wiiw 7

8 The areas listed above correspond to the 51 municipalities which were the recipients of support under Objective 2. These municipalities have around 0.5 million inhabitants and are located in Bornholm county, North Jutland county, Ringkøbing county, South Jutland county, Storstrøm county, Viborg county and Aarhus county and 27 smaller islands. In addition, there are the so-called transition areas, with around 400,000 inhabitants which also were included in the Objective 2 programme. Over the period 2000 to 2006, the proportion of the population living in these areas fell slightly from 10% to 9.8% of the total. 6 Specific data for Danish Objective 2 municipalities show that total population fell by 1.5% over the period, the fall accelerating after The same data also indicate that the number of people resident in the areas who are in employment declined by almost 4% over the period, again by a faster rate in the second half of the period than the first. 7 GDP per head in the Objective 2 areas was, on average, nearly 20% below the national average in 2006, though with some differences across the counties concerned. The average growth rate in GDP per head was also lower over the period than in the rest of the country, if only slightly so (1.5% a year as compared with 1.7% a year). The gap in GDP per head, therefore, widened slightly over the period. This was especially so in the case of Bornholm County in which growth was only 0.7% a year, so that by 2006, GDP per head was 30% below the national average (and 15% below the EU25 average). 5 At the same time, the average unemployment rate fell in the Objective 2 areas by much the same extent as the national average. In Bornholm County, unemployment also fell at a similar rate, but this meant that the rate remained at almost twice the national average. In general, Bornholm County, the county with the lowest level of GDP per head in the country, lags behind the national average on most economic indicators (GDP per head, productivity, employment rate, unemployment rate, educational attainment) and the gap on most counts either remained much the same or widened over the programming period. The structure of economic activity in the Objective 2 counties showed some positive tendencies over the period. The proportion employed in business service and finance rose from 8.9% in 2000 to 10.6% in 2006 while the proportion employed in both industry and agriculture fell. 5 6 See Table 1: Regional disparities and trends. 7 The Danish Technological Institute (2005) Final Evaluation of the Danish Objective 2 programme (Danish version) pp. 5. Applica-Ismeri-wiiw 8

9 2 NATIONAL MACROECONOMIC CONTEXT AND POLICY Overall GDP growth rate and inflation in were both slightly lower than the EU average between 1999 and 2006 (both around 2% a year). There were also some differences in the pattern of change over the period. While the Danish GDP growth rate averaged 1.0% over the years , below the EU average of 1.7%, it rose to 3.2% in , well above the EU average of 2.4% (Table 2). 8 In 2007 and 2008, however, GDP performance in worsened again, GDP falling by just over 1% in the latter year. The economic slowdown in 2001 in was, therefore, relatively pronounced. In addition a change of government in 2001 was followed by restraint of general government expenditure, which fell from 55% of GDP in 2001 to under 52% in 2006 and to 51% in Moreover within this, government fixed investment was less than the EU average in relation to GDP at under 2% of GDP. The economic slowdown between 2001 and 2004 was more significant in the Objective 2 regions than in the rest of the country. 10 In the same period there was a much stronger focus both analytically and politically on regional balances in. The government had established a Regional Policy Committee and a Council for Regional Business Development. In 2001 and in 2003 the government launched a Regional Growth Strategy with the aim of reducing regional disparities. The new strategy marked a policy shift towards giving a higher priority to regional development policies. The macroeconomic situation, with a slowdown in and a relatively restrictive government expenditure policy was not favourable for regional development policies over much of the period, and the focus was very much on fiscal consolidation to improve the general framework conditions for growth. However, at the same time, there was an increased political focus on regional disparities and this led in turn to increased priority being given to regional development policies and the provision of funding for new regional initiatives from around onwards. 8 See Table 2: Macro-economic development. 9 See Table 2: Macro-economic development. 10 The Danish Technological Institute (2003): Midterm evaluation of the Danish Objective 2 programme (Danish version), pp. 40. Applica-Ismeri-wiiw 9

10 3 REGIONAL DEVELOPMENT POLICY AND CONTRIBUTION OF THE STRUCTURAL FUNDS Main objectives of regional development policy over the period The key aim for the Danish Objective 2 programme was to strengthen the conditions for development, ensuring prosperity, employment, equality and a sustainable environment in regions with structural problems. The initiatives undertaken to achieve this can be grouped into seven broad policy areas: Education, vocational training, innovation, ICT, entrepreneurship, regional attractiveness and Corporate Social Responsibility with a focus on the environment and social aspects. 11 A more specific objective was to strengthen cooperation between central, regional and local actors with the aim of creating favourable regional framework conditions for economic activity in all parts of the country. A so-called travel team for regional development based in the Ministry of Business Affairs was established with the aim of helping counties and municipalities to develop and implement regional strategies for business. 12 In addition, regional partnerships were established for the Capital region/the Oresund Region, Jutland/Funen, Western Zealand, Storstrøm and the special effort areas: Bornholm, Samsø, Southern Funen, Frederikshavn, Lolland and so on. Regional partnerships, therefore, covered the whole country. These partnerships were intended be the main policy means for business development in the regions in the future. 13 Special efforts were made in relation to the marginal areas: First, the Ministry of Business Affairs entered into detailed discussion and close cooperation with a number of regions and communities, in particular, with Bornholm, Lolland, Southern Funen, Samsø and Frederikshavn, at the request of the authorities concerned. Secondly, the Objective 2 programme was targeted at the most marginalised areas in. From 2003 on, the Danish Regional Growth Strategy enlarged the focus on growth in marginal areas and was aimed at ensuring that these areas did not miss out on the economic growth occurring in the rest of the country. At the same time, the strategy explicitly 11 Ministry of Economic and Business Affairs (2001): Regional Business Affair Policy Report.reg21, Copenhagen (Danish version), pp and pp ibidem pp ibidem pp Applica-Ismeri-wiiw 10

11 recognised that these areas should remain attractive areas in which to live and work. 14 Resources were increasingly targeted towards regions with the most serious problems and in policy areas which were the most critical. The government identified five key challenges for policy to achieve in the areas concerned 15 : 1) better job opportunities; 2) better educational opportunities; 3) attraction of new population groups to counterbalance the outward migration of the young; 4) commuting and teleworking and 5) industrial restructuring. The overall goal in the Danish Objective 2 regions was higher growth and employment - but also strengthening of the business community, promotion of settlement and equalisation of income. A number of concrete aims in Danish Objective 2 regions (as a whole) were specified at the beginning of the programming period for the years , including 16 : a 3% increase in total employed in the Objective 2 and transition regions. In 1998, where 253,749 were employed in Objective 2 areas and 203,902 in transition areas and the aim was to increase the first by 7,600 and the second by 6,100. a 12% increase in those employed in business services in both types of region. In 1998, 29,942 were employed in business services in Objective 2 areas and 25,895 in transition areas, implying an additional 3,600 in the first and 3,100 in the second. a reduction of 5 percentage points in the number of people without vocational education in Objective 2 and transition regions, which implied a reduction from 40% in 1998 to 35% in the former and from 38.% to 33% in the latter. The overall goals were adjusted after the mid-term evaluation because of the economic slowdown in which, as noted above, hit Objective 2 areas harder than the rest of the country. Policy efforts were concentrated on four priorities: 1) Development of the region 2) Development of enterprises especially SMEs 3) Development of competences 14 Ministry of Economic and Business Affairs (2003): The Danish Regional Growth Strategy, Copenhagen, pp ibidem pp The Danish Enterprise and Construction Authority: The Danish Objective 2 Programme (Danish version) pp. 34. Applica-Ismeri-wiiw 11

12 4) Development of information activities, technical assistance etc. These four priorities were reflected in the strategies implemented in all the Objective 2 regions. In general, the Objective 2 programme for represents a shift towards a longer term strengthening of businesses ability to innovate as well as work force skills. The midterm evaluation shows that 43% of Structural Fund support went to the development of the region, 23% to enterprise development and 27% to the development of competences. Allocation of expenditure in Objective 2 regions Funding was primarily targeted at promoting the business environment (35% of the total) with a dual focus on assisting SMEs (41% of spending in this area) and RTDI activities (48%). Some 22% of funding went to human resources and the same to territorial development, with a concentration in the first on education and training and in the second on tourism. 17 This pattern of allocation is in line with the government strategy of providing better educational and job opportunities to people in the marginal areas and promoting industrial restructuring through support to entrepreneurship and innovation. Financial execution At the end of 2008, around 97% of the Structural Funds allocated for expenditure in had been spent. Only two policy areas, Technical assistance and Human resources had spent much less than the initial allocation 51% less in the case of the first 58% less in the second EFFECTS OF INTERVENTION IN DIFFERENT POLICY AREAS Agriculture and fisheries In order to avoid double funding, agriculture and fisheries did not receive any support from the Danish Objective 2 programme. 17 See Table 3: Allocation of resources by main policy area in Objective 2 regions. 18 For a more detailed picutre of expenditures by plicy area, see Table 4. Applica-Ismeri-wiiw 12

13 Enterprise environment In general the Objective 2 programme improved the framework conditions for the business community in the regions. Networking has been strengthened, business service functions have been improved and better possibilities for the transfer of knowledge have been established. In addition, funding contributed to more cooperation between enterprises in the regions and led to joint marketing initiatives, especially in tourism. Across the regions assisted as a whole, 60% of the projects contributed to cooperation between private enterprises within the region and 88% to cooperation with enterprises outside the region, while 58% contributed to cooperation between private enterprises and research centres and between the private and public sectors. The more favourable business environment created, together with the establishment of advisory services, led to a higher survival rate of small businesses. Some 51% of the projects in this policy area are considered to have contributed to better framework conditions for firms in the regions. 19 Enterprises adopting new technologies led to permanent jobs being created, while 34% of the projects are regarded as having led to cooperation between enterprises both inside and outside the region, in 33% of cases, this involved foreign enterprises. On the other hand, relatively few projects led to relationships being created with research centres and public authorities. At enterprise level 20 : some 75% of projects led to new knowledge about, for example, the market, the use of IT and production processes; around 36% helped to strengthen management competences and 54% employee competences; over half of all projects contributed to a stronger competitiveness and strengthened the ability to restructure; some 64% of projects contributed to the development of new products; around 40% of projects helped to develop new markets both at home and abroad. The projects also in some degree (around a third of them) had a bridge-building effect and strengthened cooperation between the marginal areas and the larger cities. 19 The Danish Technological Institute (2005) Final evaluation of the Danish Objective 2 programmes (Danish version) pp ibidem pp Applica-Ismeri-wiiw 13

14 Examples of the ways in which support helped to create a better business environment include: Bornholm County: development of education institutions as a driver for enterprise development; Storstrøm County: improved knowledge of enterprises needs for business services; North Jutland County: stronger networking and transfer of knowledge to enterprises; Viborg County: sustainable and flexible consultancy services to SMEs; Funen County: strengthening the marketing of tourism through package holidays. In summary, the Objective 2 programme acted as an important catalyst for business development policy in the regions. Moreover, there was a high degree of synergy between EU funding and other policy initiatives at regional level which has contributed to creating a more favourable business environment. Human resources Overall, EU funding helped to create new education and training courses and to strengthen cooperation between the education institutions in the regions. In addition, it encouraged enterprises to plan their education needs more systematically and stimulated new forms of cooperation between education institutions and businesses. 21 Examples of measures at regional level include: Bornholm County: the establishment of Bornholm s Academy set up to keep young people from leaving the area and to attract new enterprises; Storstrøm County: the establishment of new courses to fill gaps in further education opportunities; North Jutland County: North Jutland Competence development aimed at strengthening education planning in enterprises. Despite these achievements, the jobs which the programme has helped to create were mostly low-skilled, which reflects the prevailing structure of economic activity in the regions, as well as the composition of the unemployed. The question is whether this short-term outcome will lead to more favourable structure developments in the longer term. 21 ibidem pp. 83. Applica-Ismeri-wiiw 14

15 Transport and telecommunication EU support for investment led to improvements in infrastructure endowment in the regions, including better broadband access for businesses, better ferry services to small islands and coordination of logistics. It has had a positive impact on the environment by reducing pollution from transport. Environment and energy A number of projects are considered to have helped protect the environment, though, according to regional administrators, the effect on the environment was typically not a key objective for projects. 22 Examples of measures which have had a positive effect include: optimising resources through new techniques; reduction of exhaust emissions due to better transport and infrastructure; improved facilities for rubbish collection and recycling; better use of energy in buildings. Territorial policy A large number of projects contributed to improving the attractiveness of regions. Examples include more attractive harbours and areas of economic activity, a wider choice for tourists and improved marketing of the regions. The Objective 2 programme is considered to have helped extend the tourist season in all regions. From the mid-term evaluation in 2003 to the end of the programming period, the total number of tourist weeks increased in the country as a whole by 300% and the number of overnight stays from 27,827 to 47,500, a rise of 70%. Under priority 1 (development of the region), 58% of the projects were considered to have strengthened tourism in the region either strongly or to some extent. 23 The improvements in buildings and the modernisation of facilities not only made the areas better places in which to live but also helped to attract more tourists. Improvements in the marketing of the regions, in part through joint ventures by firms working together, and increasing their visibility, including through the internet, which a number projects succeeded in doing, also helped in this regard ibidem pp ibidem pp Applica-Ismeri-wiiw 15

16 5 FORM OF INTERVENTION IN DIFFERENT POLICY AREAS The main form of intervention in different policy areas in the programming period are summarized below: 24 EUR Comments Category million % 1 Direct support to firms % on SMEs 6% on Planning and Rehabilitation 9% on Assisting large business 2 RTDI Direct support to firms for 2.1 innovation Indirect support for innovation % in RDTI infrastructure 3 Infrastucture Transport infrastructure % on Transport infrastructure 3.2 Other infrastructure % on energy infrastructure 64% on environmental infrastructure 4 Human capital Local environment Total POLICY IMPLEMENTATION The Danish Objective 2 programme is jointly implemented by the central and regional authorities. The Danish National Agency for Enterprise and Construction is responsible for both the European Regional Development Fund and the European Social Fund. The two funds were brought together in one ministry in 2003 with the aim of improving the coordination between employment policy and business development policy. The Danish National Agency for Enterprise and Construction is responsible for management, evaluation and monitoring the programme. In each Objective 2 region, regional committees, composed of representatives from the municipalities involved, interest groups, regional 24 This is based on the DG Regional Policy Infoview database. For the relationship between the forms of intervention (the instruments ) and the Infoview categories, see the table at the end of the report. Applica-Ismeri-wiiw 16

17 labour market councils and other relevant stakeholders are responsible for the processing and selection of project applications. In addition, a Monitoring Committee, consisting of representatives from national and regional authorities and interest groups and chaired by the Danish National Agency for Enterprise and Construction was established to ensure that the programme is implemented effectively. The committee is responsible for approving programme supplements and changes and for reviewing and responding to the mid-term evaluations. Policy focus, project selection and implementation The content of the Objective 2 programme was managed in relation to a number of overall aims and three specific priorities, under which support to concrete projects can be given. During the implementation of the programme a number of problems emerged: a lack of representation of some stakeholders in the Monitoring Committee, such as NGOs and municipalities; a need for a stronger representation of stakeholders from the business community in the regional committees; an overly strong involvement of representatives from the municipalities in these committees; some uncertainty over the overall strategy in relation to investment grants; mixed views on the Danish National Agency for Enterprise and Construction s contribution to the exchange of information across regions; the need for better coordination of regional labour market policy and more opportunities for multi-funded projects; a lack of knowledge about the Objective 2 programme in other ministries and among potential private sources of funding; There is a generally higher level of satisfaction with the Danish National Agency for Enterprise and Construction in relation to ERDF-funded projects than ESF-funded ones, though there is general satisfaction with the transfer of the ESF to the Danish National Agency for Enterprise and Construction. The overall picture, however, is that the Objective 2 programme was implemented reasonably satisfactorily and that cooperation between national and regional authorities worked well. Applica-Ismeri-wiiw 17

18 Monitoring and evaluation Despite the generally satisfactory implementation, the mid-term evaluation made some proposals for improvement, including, in particular 25 : the need to set more realistic global targets; making it possible for regions to reorder funding within priorities; the need for strengthening guidance and communication during the implementation phase; the desirability of creating a database to give an overview of all projects initiated and completed. Some of these proposals were taken up. In particular, the global targets were revised, more flexibility was allowed for funding modifications within priorities, a pamphlet was produced listing 10 typical pitfalls in project administration and a project database was established. Other proposals were not. In January 2007, a major structural reform came into effect (Kommunalreformen) which reduced the number of municipalities from 271 to 98 and the number of regions from 14 to 5. These changes had a profound effect on the institutional set up for both regional policy and regional development. Even though has a long tradition of cooperation among local, regional and central governments, the social partners and other interest groups across policy development, the Objective 2 programme seems to have been a source of inspiration for the new institutional set-up for regional development policy. 7 GLOBAL EFFECTS In overall terms, the programme has fulfilled most of its quantified goals. However, the efforts to strengthen growth, employment and settlement in the outlying areas have not succeeded in significantly narrowing disparities between these regions and the rest of the country, which tended either to remain the same or to widen over the period. Developments in the areas that received Objective 2 support are not unambiguously negative. The programme stimulated private R&D, encouraged a shift towards business services and knowledge based activities and raised the educational levels of both men and 25 ibidem pp Applica-Ismeri-wiiw 18

19 women. However such developments were are no more pronounced than in the rest of the country. An explanation for this apparent lack of success could lie in the limited size of the programme, which was not sufficient to counteract structural tendencies in the Danish economy, which have served to widen regional disparities since the mid-1990s. Another part of the explanation could be the extent of concentration of economic activity in the Copenhagen area and East Jutland which it is difficult to compete against. Bridge-building projects that established lasting structures for the transfer of knowledge and advice and guidance and those that provided more education and training opportunities are those where policy can be expected to have had long-term effects. Advice to entrepreneurs in Viborg County and vocational training in North Jutland and Film Funen are examples of such projects. Bornholm s Academy and project Alucluster are other examples where a clustering of expertise and networking may have similar long-term beneficial effect on the productive potential of the region. 8 ADDED VALUE OF THE EU CONTRIBUTION The deadweight costs of the Objective 2 programme seem to have been low. According to a survey among project managers, only 3% of the projects would have been carried out without support from the programme, and 26% would have been carried out only in part. In addition, 57% of the projects were reported to have been larger because of funding and, on average, each project was 70% larger because of support. Moreover, 90% of the project managers considered that funding had accelerated the implementation of projects. 26 On the basis of the survey, therefore, the added-value of EU support was significant in increasing investment in measures to strengthen the growth potential of the regions assisted. The substitution effects of support also seem to have been limited. Only 8% of the project managers surveyed reported that lower priority had been given to other activities in the enterprise or organisation as a result of the funding. EU cohesion policy has also to some degree contributed to the development of the regions assisted by pushing local authorities, businesses and other regional stakeholders to cooperate and so face the challenge of global change in a stronger position. 26 ibidem pp. 87. Applica-Ismeri-wiiw 19

20 9 LESSONS FOR THE FUTURE The evaluation reports pointed to some areas for improvement in the future: 27 a need for improved interaction and coordination between different sources of finance; a need to improve knowledge of EU cohesion policy in the Danish Ministry of Employment, Directorate General for Employment and Placement, Ministry of the Interior, Ministry of the Environment and the Ministry of Science, Technology and Innovation; a need to encourage those responsible for projects supported to try harder to find additional sources of finance to supplement EU funding; a need to improve the conditions for research centres and universities to participate in projects; a need for increased exchange of experience between projects; a need to increase awareness of the availability of EU funding and the broad objectives among potential applicants. In addition, evaluation of the projects carried out indicates that networking and bridgebuilding projects tend to have stronger and perhaps longer-lasting effects, which suggests that more weight should be attached to projects of this kind in the future. 27 ibidem pp Applica-Ismeri-wiiw 20

21 REFERENCES Ministry of Economic and Business Affairs (2001): Regional Business Affair Policy Report reg21 (Danish version) Ministry of Economic and Business Affairs (2002): Conditions for Growth in, Copenhagen (Danish version) Ministry of Economic and Business Affairs (2002): The Danish Growth Strategy (Danish version) Ministry of Economic and Business Affairs (2003): The Danish Regional Growth Strategy, Copenhagen (English version) The Danish Technological Institute (2003) Midterm evaluation of the Danish Objective 2 programme (Danish version) The Danish Technological Institute (2005) Final evaluation of the Danish Objective 2 programme (Danish version) The Danish Economic Council (Autumn 2006): The Danish Economy (English summary) The Danish Enterprise and Construction Authority: The Danish Objective 2 Programme (Danish version) Applica-Ismeri-wiiw 21

22 TABLES See Excel file for Tables 1 to 6: Table 1: Regional disparities and trends Table 2: Macro-economic developments Tables 3: Allocation of resources by main policy area Table 4: Expenditure at 2007 by policy area Table 5: Allocation of resources by programme Table 6: Expenditure by programme Applica-Ismeri-wiiw 22

23 CORRESPONDENCE BETWEEN POLICY INSTRUMENTS AND FOI CATEGORIES code Policy instruments FOI Categories 1 Direct support to firms 11 Agriculture Forestry Fisheries Large businesses Small businesses Tourism ICT Development of rural areas Planning and rehabilitation RTDI 21 Direct support to firms for innovation Indirect support for innovation Infrastructures 31 Transport infrastructures Other infrastructures 321 Telecommunication Energy infrastructure (production, delivery) Environmental infrastructure (including water) 34 4 Human capital 41 Developing educational and vocational training (persons, firms) Workforce flexibility, entrepreneurial activity, innovation, information and communication technologies (persons, firms) 5 Local environment 51 Indirect support to firms (agriculture, forestry, fisheries) Social infrastructure and public health Planning and rehabilitation Labour market policy Social inclusion and equal opportunity Development of rural areas ICT Services and applications for the citizen (health, administration, education) Miscellaneous 4 Note: Forms of intervention FOI. See Regulation 438/2001, Annex IV, Classification 3 Applica-Ismeri-wiiw 23