Discussion Papers 2009. No. 72.
Cohesion Deficiencies in Eastern and
Central Europe – Inequalities of Regional Research Area
CENTRE FOR REGIONAL STUDIES
OF HUNGARIAN ACADEMY OF SCIENCES
DISCUSSION PAPERS
No. 72
Cohesion Deficiencies in Eastern and
Central Europe – Inequalities of
Regional Research Area
by
Gyula HORVÁTH
Series editor
Zoltán GÁL
Pécs
2009
Discussion Papers 2009. No. 72.
Cohesion Deficiencies in Eastern and
Central Europe – Inequalities of Regional Research Area
ISSN 0238–2008
ISBN 978 963 9899 14 8
© Gyula Horváth
© Centre for Regional Studies of the Hungarian Academy of Sciences
2009 by Centre for Regional Studies of the Hungarian Academy of Sciences.
Technical editor: Ilona Csapó.
Printed in Hungary by Sümegi Nyomdaipari, Kereskedelmi és Szolgáltató Ltd., Pécs.
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Discussion Papers 2009. No. 72.
Cohesion Deficiencies in Eastern and
Central Europe – Inequalities of Regional Research Area
CONTENTS
Introduction ........................................................................................................................ 5
1 Disparities
between regions .......................................................................................... 6
1.1 Losers and winners ............................................................................................... 7
1.2 Regional inequalities by countries ...................................................................... 12
1.3 Differentiated urban networks ............................................................................ 17
2 Regional inequalities in Eastern and Central European research area ........................ 23
2.1 Intellectual potential and regional development ................................................. 23
2.2 The organisation of scientific institutions in Central and Eastern Europe,
1950–1990 .......................................................................................................... 26
2.3 The impact of the change of régime on the regional structure of Eastern
and Central European R&D ................................................................................ 28
3 Conclusions ................................................................................................................ 35
References ........................................................................................................................ 38
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Discussion Papers 2009. No. 72.
Cohesion Deficiencies in Eastern and
Central Europe – Inequalities of Regional Research Area
List of figures
Figure 1 GDP per capita by region and sector in Central and Eastern Europe,
2005 ................................................................................................................. 8
Figure 2 GDP per capita by region in Central and Eastern Europe, 2005 ...................... 9
Figure 3 Large urban centres in Central and Eastern Europe ....................................... 19
Figure 4 Number of towns or cities with over 100,000 inhabitants in Eastern and
Central European countries (excluding the capital) and their proportion
of national population, 2006 .......................................................................... 22
Figure 5 Share of the core areas in GERD, 1994–2005, per cent ................................. 31
Figure 6 GERD as per cent of GDP in CEE regions, 2005 .......................................... 32
Figure 7 Employers of institutes of Academies of sciences outside capital city in
specific European countries, 2007 ................................................................. 33
List of tables
Table 1
Regional differences in GDP per capita in Central and Eastern European
countries, 2005 ................................................................................................. 7
Table 2
Level of development of NUTS 2 regions, 20000 ......................................... 10
Table 3
GDP per capita in the ten richest and the ten poorest regions in Central
and Eastern Europe, 2005 .............................................................................. 10
Table 4
Characteristics of territorial inequalities in the countries of systemic
change ............................................................................................................ 11
Table 5
The weight of capital cities in some activities, in per cent, 2005 ................... 18
Table 6
Population of the largest urban centres, 2001 ................................................ 21
Table 7
Changes in R&D main indicators in Eastern and Central Europe,
1980–2005...................................................................................................... 29
Table 8
Distribution of GERD by sectors, 2005 ......................................................... 30
Table 9 Weight of capital regions in national R&D .................................................... 31
Table 10 The distribution of students in HE in central areas, 2006 .............................. 34
Table 11 Students in HE by field, 2006 ....................................................................... 34
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Cohesion Deficiencies in Eastern and Central Europe – Inequalities of Regional Research Area.
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Introduction
Regional diversity in the European Union increased sharply with the enlargement.
The present EU regions are already characterized by substantial income, employ-
ment and productivity disparities reflecting differing resource endowments and
innovation performance. These features include physical and social infrastructure,
the skills of the work force, an institutional framework and culture conducting to
innovation and the efficiency of public institutions (especially managerial capac-
ity) at the regional level. In every fourth region of the enlarged EU, GDP per cap-
ita is below 75 per cent of the EU average, which makes these regions eligible for
the Convergence objective of the EU Structural Funds. These “Convergence re-
gions” are characterized by low levels of GDP and employment; their share in the
EU’s total GDP is only 12.5 per cent, compared with a 35 per cent share in the
EU’s total population. The same can be observed within certain EU countries. In
some regions, economic welfare is lower than on average in the country. This
applies especially to the “new” EU member states. In recent years, because the
disparities among regions prove significantly greater than those among countries,
analysis of the causes of the socio-economic differences among the European
regions has attracted increasing interest.
One reason for Europe’s declining role in the world economy is the fact that
the development of research capacity and of the human factor lags behind that of
their US counterparts. A programme aiming to correct these deficiencies was
formulated in the European Union’s Lisbon Strategy.
Europe’s further development depends on the way in which growth factors are
spread across its regions, and one reason for the lower level of competitiveness is
major regional differences in R&D. Weak regional cohesion and an exaggerated
spatial concentration of modern regional development factors have a clearly nega-
tive effect on European competitiveness today. Activities with high value added
are concentrated within the London–Paris–Milan–Berlin–Amsterdam pentagon,
but the distribution of innovative industries differs even in the developed coun-
tries. The role of national core areas is vital to R&D capacity, high-technology
industries and to developed services – but, again, the situation is very similar in
the Eastern and Central European countries, where the level of concentration, in
fact, increased after the change of régime.
This paper introduces the Central and Eastern European situation of regional
disparities. Besides the analyses of the transformation processes in the regions it
draws a picture of urban systems influencing improvement of the regions and
localities in six medium-sized Central and Eastern European countries.
The second aim of this paper is to identify regional differences in the R&D
structure of EU member states in Eastern and Central Europe. The basic hypothe-
sis is that exaggerated intellectual polarisation hampers the strengthening of re-
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Pécs : Centre for Regional Studies, 2009. 40. p. Discussion Papers, No. 72.
gional cohesion and that R&D must be given a priority role in economic develop-
ment strategies.
This notion has not yet been realised in the operative programmes of National
Development Plans. The strengthening of R&D featured prominently in the Lis-
bon criteria, but only a few words were devoted to the regional dissemination of
intellectual potential, R&D capacity and knowledge-intensive fields of activity.
Conditions suitable for innovative development are simply not yet available in
most European regions.
1 Disparities between regions
In the countries of systemic change, depending on their level of urbanisation, the
territorial expansion of rural areas and their level of backwardness display signifi-
cant inequalities. With the exception of Poland, where urban population is grow-
ing, outward migration from rural areas has stopped. Moreover, in some coun-
tries, due to reverse migration from the towns and cities, rural population is grow-
ing These recent demographic trends cannot be considered as unequivocally posi-
tive, since the economic bases of these rural areas are weak and most of those
who returned there were forced to seek livelihood in agricultural production. The
rate of working-age population is the highest in these rural areas and in the tradi-
tional industrial areas. In metropolitan areas quite the opposite process is wit-
nessed. In the age structure of the capitals, the weight of the older age groups is
growing. In regions of dynamic development (like in Western and Central
Transdanubia in Hungary, in the north-western regions of Poland, or in Southern
Moravia of the Czech Republic) as well as in the northern and eastern Romanian
and eastern Slovakian regions where birth rates are high, a favourable age struc-
ture is emerging, although in the latter regions a strong outward migration has
negative impact on the rate of working-age population.
The territorial differences of the labour markets are the result of the previous
economic structure and the structural transformations that have taken place in the
emerging market economies. The economic activity rate is high in regions where
the structural transformations have not started yet. Several heavy industrial re-
gions in the Czech Republic and in Poland have not been set on a new develop-
ment track, and there are also many rural areas in Eastern Europe where the high
rate of agricultural employees (reaching 42 per cent in Moldavia, Romania) is
expected to cause sharp tensions. There are regions where the rapid growth of the
previously neglected tertiary sector has counter-balanced the shrinking size of
other sectors of the economy. A peculiar paradox of the Central and Eastern Euro-
pean transformation is that, with the exception of Hungary and the Czech Repub-
lic, the activity rates are the lowest in the more successful regions. Among the
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Horváth, Gyula :
Cohesion Deficiencies in Eastern and Central Europe – Inequalities of Regional Research Area.
Pécs : Centre for Regional Studies, 2009. 40. p. Discussion Papers, No. 72.
new CEE member states Hungary has the lowest economic activity rate (50.9 per
cent in 2007), while the rates of more developed regions are a few points higher
than the national average.
1.1 Losers and winners
The development of the diverse economic potentials of the CEE countries is hin-
dered by cohesion problems. At low levels of economic development, however,
the performance gap among the regions within the same country are not greater
than in Western Europe (Table 1). Yet, the gap between the worst performing
region and the best one (Prague and the Romanian and Bulgarian regions) is not
greater (5.5-fold) than in Western Europe. On the whole, disregarding national
inequalities, the Central and Eastern European economic space is relatively
homogenous, with the majority of the regions performing below the European
average; in Romania and Bulgaria even the capitals are quite under-developed
(Figures 1–2).
Summing up, the radical transformation of the economic structure affected the
different regions in different ways. The losers of transition, like in the most other
European countries, where the areas were dominated by heavy industry and min-
ing and, as a special Eastern European feature, the extensive agricultural areas.
The emerging market economy brought about the strengthening of regional
inequalities. Comparing the regional data of the member states and the candidate
countries we find that the Central and Eastern regions are at the bottom of the
European ranking, while the Czech and two Hungarian regions are above the EU
average, and one (West Transdanubia) is near at that level (Tables 2–3).
Table 1
Regional differences in GDP per capita in Central and Eastern European
countries, 2005
Country Least
developed
region
Most developed region
Difference
Region’s GDP per capita in PPS, EU27 = 100
Bulgaria South-Tsentral
27
South-west
52
1.93
Czech Republic
Central-Moravia
60
Prague
160
2.67
Poland Lubelskie 35
Mazowieckie 81
2.31
Hungary
North Great Plain
41 Central
Hungary
105 2.56
Romania North-east 24
Bucharest
75
3.13
Slovakia Eastern
Slovakia
43 Bratislava
148 3.44
EUR15
Anatoliki Makedonia
47
Inner London
303
6.44
Source: The author’s calculations on the basis of the Regions: Statistical Yearbook, 2007.
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Cohesion Deficiencies in Eastern and Central Europe – Inequalities of Regional Research Area.
Pécs : Centre for Regional Studies, 2009. 40. p. Discussion Papers, No. 72.
Figure 1
GDP per capita by region and sector in Central and Eastern Europe, 2005
Source: The author’s calculations on the basis of the Regions: Statistical Yearbook, 2003.
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Horváth, Gyula :
Cohesion Deficiencies in Eastern and Central Europe – Inequalities of Regional Research Area.
Pécs : Centre for Regional Studies, 2009. 40. p. Discussion Papers, No. 72.
Figure 2
GDP per capita by region in Central and Eastern Europe, 2005, EU27=100
Source: The author’s calculations on the basis of the Regions: Statistical Yearbook, 2007.
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Pécs : Centre for Regional Studies, 2009. 40. p. Discussion Papers, No. 72.
Table 2
Level of development of NUTS 2 regions, 2000
Level of GDP as a
Number of development region
percentage of EU27
Bulgaria
Czech
Hungary Poland Romania Slovakia
average, in PPP
Republic
Over
100
– 1 1 – – 1
75 –
100
– – – 1 – –
50 –
75
– 7 2 4 1 1
36 –
49
– – 4 9 2 2
26 –
35
6 – – 2 4 –
25
or
less
– – – – 1 –
Source: The author’s calculations on the basis of the Regions: Statistical Yearbook, 2007.
Table 3
GDP per capita in the ten richest and the ten poorest regions
in Central and Eastern Europe, 2005
The richest
The poorest
Rank Region Coun- GDP per As a per- Rank
Region
Coun- GDP per As a per-
try capita in centage
try capita in centage
PPS,
of EU27
PPS,
of EU27
Euro
average
Euro
average
11
Prague
CZ
35,901
160
11 North-east RO 5,430
24
12 Bratislava SK 33,124
148 12 South
Central BG 6,026
27
Central
13
HU 23,489
105 13 North-west BG 6,023
27
Hungary
14 Mazowieckie PL 18,184
81 14 North
Central BG 6,205
28
Bucharest–
15
RO 16,760
75 15 South-west RO 6,293
28
Ilfov
Central-
16
CZ 15,792
71 16 South-east RO 6,527
29
Czechia
17 South-west CZ 15,672
70 17 North-east BG 6,874
31
18 South-east CZ 15,252
68 18 Southeast
RO 6,921
31
Moravian-
19
CZ 14,633
65 19 South-east BG 7,405
33
Silesia
West
10
HU 14,275
64 10 North-west RO 7,542
34
Transdanubia
Source: The author’s calculations on the basis of the Regions: Statistical Yearbook, 2007.
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Cohesion Deficiencies in Eastern and Central Europe – Inequalities of Regional Research Area.
Pécs : Centre for Regional Studies, 2009. 40. p. Discussion Papers, No. 72.
Obviously, economic differences among the smaller territorial units are
stronger than those among the regions; interestingly, at the county (NUTS 3) level
the development gap is the widest in every country. The GDP per capita figure for
Budapest exceeds that of Szabolcs-Szatmár-Bereg county more than threefold, or
the GDP gap between Bucharest and Vaslui county in Romania is fourfold.
The impacts of market economy and the economic crisis of recent years are
expected to bring about the further strengthening of territorial inequalities. During
the territorial restructuring of Eastern and Central European countries, the leading
and backward areas have been developing at quite different paces, which indi-
cates that the spatial structuring forces are now more differentiated than they were
in the planned economy period. Back then, planned industrialisation was to shape
the economic potentials of the various regions; today, their economic develop-
ment is influenced by the competitive sectors of industry and by adjoining ser-
vices (Table 4).
Table 4
Characteristics of territorial inequalities in the countries of systemic change
Before 1990
After 1990
The dimension of spatial
Between urban and rural areas
Within settlements
disparities
Within settlements
Between regions
The tendency of disparities
Decreasing inequalities between Increasing difference within
urban and rural areas
settlements
Decreasing inequalities between Increasing difference between
regions
regions
Stabile inequalities between
Stable difference between urban
settlements
and rural areas
The driving force behind the
Industrialisation Structural
changes
development of disparities
Services
Foreign direct investment
Decision determining dispari-
National level
Local level
ties
Transnational level
Indicators expressing disparities Demographic composition
Unemployment rate
Communal and social
Wage level
infrastructure
Social incomes connected to the
use of communal and social
facilities
Source: Vision Planet. p. 48.
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1.2 Regional inequalities by countries
The disparities between the individual development regions within Bulgaria are
relatively small except for the more pronounced lagging of the North-west region
in its social-economic development. Considerably more significant, however, are
the intra-regional disparities, i.e. those between the municipalities and districts
within the same planning region, representing a specific issue that the regional
development policy has so far failed to adequately address. Almost all of the
country’s regions and districts exhibit the typical contrasts of the core–periphery
kind. Particularly affected in this respect are the border territories, many of the
rural territories, several areas in industrial decline, as well as those with high
concentration of ethnic minorities. These are typically Bulgarian disparities that
necessitate special attention since they put a lot of territories in critical condition,
provoking also many negative social and socio-demographic developments whose
long-term effect is still uncertain.
In terms of per capita GDP, however, the differences among the individual
statistical regions have not been significant. This indicator was relatively higher
in the South-west region (including Sofia), whereas in the rest of the regions were
rather evenly distributed. It should be noted that the indicator’s value in certain
regions (notably the North-west region as well as parts of the North-east and the
South-west regions) has been highly dependent on the actual state of the local
large enterprises and the population migration.
The structure of the economy in all of the country’s regions showed that ser-
vices had the largest share in overall output, while agriculture and forestry jointly
had the lowest relative weight among economic activities. This trend appeared to
be the most notable in the region exhibiting the highest GDP figure – the South-
west region, – where the service sector accounted for 67.5 per cent of the value
added in contrast to the modest 5.7 per cent share of agriculture and forestry. The
share of manufacturing in GDP turned to be the highest in the North-west region,
reflecting the location of several large enterprises on its territory, whereas the
service sector was relatively less developed there, accounting for only 45.1 cent
of overall output. Agriculture had the largest share in the North-east region. In
nominal terms, the manufacturing sector exhibited the highest GVA figure in the
South-west region, while value added in agriculture was most significant in the
South-central region.
In the Czech Republic economically the Prague region is the most efficient
one. It has been creating a quarter of the Czech Republic’s gross domestic product
for a long time. The other seven NUTS 2 regions account for the remaining 75 per
cent of GDP.
With 160 per cent of the EU per capita GDP average, Prague represents a
unique region, as compared not only to the other cohesion regions within the
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Pécs : Centre for Regional Studies, 2009. 40. p. Discussion Papers, No. 72.
Czech Republic, but also to any other NUTS 2 region in any other new member
states. The amount of Prague’s per capita GDP is even much higher than that of
an overwhelming majority of the current EU regions, or higher than the value of
this indicator in thirteen out of the fifteen EU member states. Thus, Prague is the
only cohesion region in the Czech Republic that will not ask for support under
Objective 1 within the framework of the EU economic and social cohesion policy.
In terms of the interpretation of the aggregate per capita GDP indicator, the
other regions represent a relatively homogenous group, fluctuating within a rela-
tively narrow interval of 60 to 71 per cent of the EU per capita GDP average. So
they meet the Objective 1 level. From this viewpoint, 99.4 per cent of the area of
the Czech Republic and 88.5 per cent of the population represent the regions of
which the development is lagging behind. As compared to the other candidate
countries, the per capita GDP values in the Czech NUTS 2 regions can be consid-
ered relatively high and even close to those of a number of regions in the so-
called EU cohesion countries.
Using other indicators, however, it is possible to mark some more problematic
regions in the Czech Republic. The cohesion regions that are sensitive in this re-
spect include primarily the North-West and Moravian-Silesia, which show above-
average rate of unemployment not only in national terms, but also in relation to
the EU. Moreover, these regions are also most affected by structural unemploy-
ment, or employability, for the share of the long-term unemployed here ap-
proaches 50 per cent of the total number of the unemployed.
The Czech economy as a whole has undergone a sharp structural change in the
past ten years. The shares of agriculture and industry in GDP generation have
decreased (from 7.7 to 3.4 per cent and from 34.5 to 31.8 per cent, respectively)
in favour of the share of the services sector (which increased from 41.8 to
49.7 per cent). A similar process took place at the level of the cohesion regions
without exception; however, the intensity was different in particular cases. There
has been a considerable decline in the weight of industry within the overall eco-
nomic activity (a major fall of the share of industry in the individual region’s
GDP) and simultaneously a sharp increase in the weight of services, or the tertiary
sector within the overall economic activity (a growing share of services, or the
tertiary sector in the individual region’s GDP) in the past ten years.
Structural changes in the individual regions were affected especially by the
following factors:
down-scaling of fuel mining, metallurgy and heavy chemistry in the North-
west and Moravian-Silesia regions (nevertheless, the above-mentioned
industries still remain dominant in these regions with respect to economic
activity and employment);
the process of restructuring the heavy machinery industry in the South-west
region;
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high weight of the leather, textile and food industries in the North-east, Cen-
tral Moravia and South-east regions;
declining share of agriculture in the economic activity of the South-east re-
gion (mountain and sub-mountain areas).
Hungary can be characterised by significant economic, social and infrastruc-
ture differences. These are more noticeable between the capital city and the rest of
the country, between individual regions, and also among micro-regions and towns
and villages. Compared with the rest of the country, the development of Budapest
is striking. 17 per cent of the Hungarian population lives in Budapest, while it
contributes 35 per cent to the GDP of the country. Its advantages result from high
population density, its function as a centre for business and financial services and
as an innovation transfer centre. It has large high value added sectors, mainly
business services, research and development and tourism. 28 per cent of the com-
panies are operating in Budapest: over half of the firms with foreign direct invest-
ment and 54 per cent of subscribed capital are concentrated here. The significant
role of Budapest is further increased by its central geographical location and the
hub role in the transport network. However, the large economic and social poten-
tial of Budapest has effect only in the agglomeration, but not in the more remote
regions of the country.
Considering the level of economic development, household incomes and
unemployment in the regions, apart from the favourable indicators of Budapest,
the gap between the east and the west is large. The restructuring of the north-
western and central parts of the country has been successful when compared to
the slowly catching up of the remainder of the country.
The current dynamics of the north-western regions comes primarily from the
geographical position of these regions, and from the proximity to western mar-
kets. Particularly, with neighbouring Austrian provinces, this has been the domi-
nant factor in economic restructuring. In Central Hungary, Western and Central
Transdanubia the well-trained labour force, its low cost compared with the aver-
age of European Union, and the favourable transport network helped the influx of
foreign capital and innovative, export-oriented industries. As a consequence,
unemployment rate is the lowest in these areas, and income conditions are also
better than the national average.
Economic performance of the rest of the regions lags far behind the three most
advanced regions. The reasons for that were the inherited industrial structure with
low efficiency and the low income generating capacity. These areas were domi-
nated by mining, heavy industries, the agro-business, and the loss of the collapsed
eastern market had a dramatic impact on them. The industrial restructuring of the
1990’s had the most adverse effect in North Hungary, turning the region into a
depressed area. Agriculture and food industry concentrated in the regions of Great
Hungarian Plain and South Transdanubia. Due to the low income generating
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capacity of agriculture, the share of areas lagging behind is significant. In this
regions the relatively low level of human resources and the high rate of the inac-
tive limit the economic restructuring.
Diversity of the economic potential of regions in Poland is similar to the one
occurring in the majority of the EU member states. The principal indicator – GDP
per capita – becomes different in the proportion of 1:2.3. In the context of Po-
land’s accession to the EU, the most important problem became not the diversity,
but the low economic potential of all regions. Even the best of them does not
reach the level of the EU27 average GDP per capita. The weakest Polish regions
are classified among the last twenty European regions.
Participation of people employed in the agriculture decides on the average
value of the labour efficiency in the region’s scale. The highest position in this
respect is occupied by voivodships with structures dominated by non-agricultural
activities, such as: Mazowieckie, Śląskie, Wielkopolskie, Dolnośląskie, and
Pomorskie, and the lowest – Lubelskie (50 per cent of labour resources in
agriculture), Podlaskie, Podkarpackie, Warmińsko-mazurskie and Świętokrzyskie.
Interregional diversity of the unemployment rate (according to BAEL)
oscillates between the 15.6 per cent index in Małopolskie voivodship and 27.3 per
cent in Warmińsko-mazurskie voivodship. These differences do not overlap fully
with differences in the GDP per capita level, since in many voivodships
agriculture serves as a kind of “storehouse” for hidden unemployment in the
situation of agrarian overpopulation. Despite this, in the eastern part of the coun-
try, the participation of rural population in the total number of unemployed people
was the highest and varied in the 55-65 per cent limits with the country’s average
of 44 per cent.
The highest unemployment rate was registered in 2006 in the following
voivodships: Warminsko-mazurskie (17.3 per cent), Zachodniopomorskie (17.2
per cent), Kujawsko-pomorskie (16.2), Warmińsko-mazurskie (16.0). Such
situation has existed for many years as a result of decline in the economic base in
small cities and in the state owned farms in this part of the country.
Regions with the highest competitiveness and development level include the
following voivodships: Małopolskie, Mazowieckie, Pomorskie, Sląskie and
Wielkopolskie. Their competitive advantage results from: high efficiency of the
production sector, big human resources potential (including research centres, well
prepared cadres), relatively well developed infrastructure. They have the biggest
chance to participate in the European development processes (globalisation,
construction of information society). Their trump cards are their capitals – big
agglomerations with diverse economic structure and high participation of services
in the employment sector.
In Romania there still are major differences within statistical regions where
heavily agricultural counties coexist with more developed areas. The phenomenon
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has been even made worse by the concentrated impact of economic restructuring
in given areas with mono-industrial towns typically being affected by labour mar-
ket shocks due to the shutting down unprofitable state enterprises. Other factors
with an impact on regional development traditionally include border regions and
the Danube with regions bordering Moldova and Ukraine and regions along the
Danube more under developed than the others.
One of the most striking features of Romania’s economic growth over the last
ten years has been the growing importance of the Bucharest area in development
terms. This is in line with a well-known trend affecting all transition economies,
but it is even more evident here due to the large size of the country in both
population and territory terms. With some of 9.0 per cent of the population
Bucharest accounts 21 per cent of the country’s GDP. 20 per cent of all SMEs are
registered there and the capital has attracted 47 per cent of total foreign invest-
ment. The quite significant development of Bucharest not had any significant
spill-over in neighbouring counties. Some of Romania’s most underdeveloped
counties are still to be found in the immediate surroundings of the capital city.
The second peculiarity of regional development of Romania is the mosaic-like
structure of economic development at the sub-national level. In practically all the
regions’ fairly developed counties co-exist with rather underdeveloped ones.
The main problems of regional development in Romania are as follows:
The growing importance of Bucharest,
Unbalanced growth between west and east of the country,
Economic growth has followed a broad west–east direction with proximity
to western markets acting as a growth spurring factor,
Underdevelopment concentrates in the north-east and in southern regions
along the Danube,
The urban decline of small and medium towns,
Strong negative impact of industrial restructuring in mono-industrial locali-
ties.
In Slovakia conditions that were created in the process of the transformation of
the economy from a completely planned economy to a market economy have
further deepened the territorial imbalance. The actual disparities are shown
particularly in:
the share of regions in formation of GDP,
unemployment rate,
level of entry of foreign capital in the individual regions,
level of income of population,
establishment of new firms in the regions etc.
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The evaluation of the level of regional development shows that only the region
of Bratislava differs significantly. Among the other regions there are no large
differences, in GDP/capita. Most significant differences exist obviously only at
the level of counties. The region of Bratislava has a special position in compari-
son with EU average, too. With the level of around 100 per cent of the EU aver-
age it can be classified to the most developed regions of CEE countries. The other
regions of Slovakia attained 36 to 44 per cent of EU average.
Districts classified to the category of developed areas include 31.6 per cent of
the population of Slovakia. Economically stabilised areas availing of conditions
for the future development comprises 25.5 per cent of population. The percentage
share of population living in stagnating districts is 17.3 and the share of economi-
cally depressed region’s population is 25.6 per cent.
1.3. Differentiated urban networks
One of the key issues which influence the regional economic performance is the
urban hierarchy of the country. Changes in the settlement structure in every coun-
tries during the state socialism were primarily quantitative. By the late ‘90s, the
rate of urban population reached 69 per cent in Bulgaria, 70 per cent in the Czech
Republic, and 63 per cent in Hungary. The less urbanized country is Romania,
where 55 per cent of the population lives in towns and cities.
The weight of capitals, at the peak of the town hierarchies, is remarkable in
Bulgaria and in Hungary. Sofia accounts for 14 per cent, Budapest for 18 per cent
of the population of the country. Prague, Bratislava and Bucharest have more
moderate share (6–10 per cent) in population of respective countries. The role
they play in the economy and in cultural life is more dominant than their share in
the population. The important elements of the market economy are concentrated
in the capitals (Table 5). Several elements of a decentralised development policy
could be designed to decrease this unfavourable, decades-long territorial
concentration.
Since the early 1990s, processes related to the changes that affected the whole
society have influenced the settlement structure. One of these processes is sub-
urbanisation, i.e. urban population moving to the countryside, especially into the
outskirts of large cities. This trend has emerged gradually, as it is observable in
the slight decrease in the population of urban settlements and in the increase in
the share of inhabitants living in smaller and/or rural settlements.
In the shaping of a decentralised development policy, the large and medium
sized towns of the second level of the town hierarchy play an important role. The
endowments of the countries are different in this respect. Bulgaria has three towns
with populations over 200,000 (Plovdiv, Varna and Bourgas), and three towns
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(Rousse, Stara Zagora and Pleven) between 130,000 and 170,000. Hungary has
one town over the population of 200,000 (Debrecen), while three regional centres
(Miskolc, Szeged and Pécs) have populations of around 160,000. In Bulgaria’s
two towns (Sliven and Dobrich) the populations are between 100,000 and
130,000, while in Hungary there are three such towns (Győr, Nyíregyháza and
Székesfehérvár). The urban network of Poland and Romania shows a relatively
balanced hierarchy and regional pattern (Figure 3).
Table 5
The weight of capital cities in some activities, in per cent, 2005
Activity Sofia2000
Prague Budapest Warsaw Bucharest
Bratislava
GDP 24.6
24.5
35.0
n.d.
16.51998 24.2
Industrial output
15.9
13.0 17.6 11.8 17.0 37.3
Foreign direct investment
49.9 25.7 56.5 33.0
46.7 71.2
Tertiary education students
43.3 31.4 49.2 16.7
32.4 83.0
Employees in R&D
72.71995
48.0 55.8 30.0 39.0 40.2
Source: Own calculations based on national statistical yearbooks.
The second level includes 2–8 cities with over 300,000 inhabitants (e.g. Lódz,
Krakow, Poznan, Katowice, Gdansk in Poland, Cluj-Napoca, Timisoara, Craiova,
Iasi, Conştanca in Romania, Brno, Ostrava in the Czech Republic). This figure
has to be compared with more than 20–30 similar towns in western European
countries. These towns exert significant influence over wide area, this is why they
are called effective or potential regional centres. They have relatively good
amenities to prevent their inhabitants from going to capital cities. They have aca-
demic tradition and cultural history. But they are often too weak, from an interna-
tional point of view, to compete successfully with other large European cities.
The settlement structure of the Czech Republic is characterised by high density
and disintegrated nature of settlements. A large portion of the population lives in
urban settlements. Towns with over 50,000 inhabitants were among those most
severely affected by the process of urbanisation; between 1993 and 2000 they
posted a migration decrease of over 25,000 inhabitants. To the contrary, in terms
of migration the largest increases were posted by settlements with over 10,000
inhabitants.
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Figure 3
Large urban centres in Central and Eastern Europe
Source: Designed by the author.
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The settlement structure in Poland is characterised by:
Moderate, polycentric concentration of population and economic activity in
less than twenty medium size centres, relatively homogeneously localized
over the country’s territory,
Relatively low share of the capital metropolis in the total of the country’s
population (Warsaw – 4.2 per cent),
Low position of Polish metropolis type cities in European rankings (Warsaw
– in groups V and VI in 8-group classifications),
Low urbanization degree, below 62 per cent, that has been remaining at the
same level for the last 12 years,
Highly dispersed settlements in rural areas, where as much as 38 per cent of
the Poland’s population lives.
The medium town network, with populations between 50,000 and 100,000, in-
cludes 15 towns in Bulgaria and 12 in Hungary. The small town network, with
towns of less than 20,000 inhabitants is dense in both countries: it includes 152
towns in Bulgaria and 160 in Hungary. The spatial organising functions of most
of the small towns are weak. They can only provide low quality services to the
rural settlements in their sphere of gravity, and they do not play an important role
in the employment of the inhabitants of these settlements. In most of these towns,
the majority of jobs were terminated with the closing down the former industrial
sites after the change of regime.
The rural settlement structure is also rather differentiated. Bulgaria has a large
number of villages (5100), whereas in Hungary there are much fewer of them
(2,900). Although in European comparison both countries have a high proportion
of villages, this type of settlement is far more typical of Bulgaria. There, 83 per
cent of all villages have fewer than 1,000 inhabitants; this figure in Hungary is 59
per cent. While in Bulgaria villages of over 5,000 inhabitants are rare (there were
only 8 such settlements at the mid 1990s), in Hungary 38 settlements belonged to
this category in 2001.
In countries having several economic centres, like most Western European
countries, the difference between the population of the primary city and that of
the regional centres is at most five-fold; in the case of countries dominated by the
capital, this difference is ten to twelve-fold. In Poland and Romania, for instance,
the capitals are followed by six to eight major cities with populations between 300
and 700 thousand, which have an impact on the spatial structure of the entire re-
gions. Contrary to this, in Hungary, there are only four regional centres, whose
population exceeds 150 thousand (Table 6).
At the same time, a particular Central and Eastern European characteristic is
that the medium cities play important role in the organisation of the settlement
structure. Many such cities function as territorial administrative centres, and the
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structure and scope of their institutional system and administrative organisations
do not differ significantly from those of major cities. The unitary administrative
and political system of the planned economies has worked towards homogeneity:
the major cities could not assert their natural and traditional power in organising
the spatial structure. It is not surprising therefore that after the first steps towards
regionalisation and a decentralised development policy, sharp competition
emerged among the territorial centres, different in size but of similar institution
structure, to control the new functions of regional organisation.
Table 6
Population of the largest urban centres, 2001
Country
Capital city
The seven largest regional centres
’000
Per cent,
’000
Per cent,
country = 100
country = 100
Bulgaria
1,190 14.4 1,154 16.7
Czech
Republic 1,193 11.7 1,288 12.5
Hungary
1,812 18.0 1,036 10.3
Poland 1,615
4.1
4,064
10.5
Romania
2,027 9.0
2,156 9.6
Slovakia 449
8.3
806
14.9
Source: National statistical yearbooks. Calculations by the author.
The large city network in Eastern and Central Europe – except for Romania
and Poland – is thin (Figure 4). In the whole area, 97 towns or cities are above
100,000 in population terms, and two-thirds of these are found in Poland and
Romania. Slovakia has, apart from the capital, a total of one major city. In these
two countries the number of regions is much lower than the number of cities but
the largest of the latter are evenly distributed over the whole area and can be be-
come potential regional centres.
For this reason, therefore, designating a regional centre could be much more
convenient. In most of the Eastern and Central European countries the debates
over the designation of regional centres became more intensive as the EU Acces-
sion process progressed. In Poland, after the introduction of the new voivodship
public administration, the leading major cities became the centres of the new re-
gions. The only exception is the Kujawsko-pomorske voivodship where the re-
gional centre is not Bydgoszcz, the industrial centre with 368,000 inhabitants, but
Torun, with its historical traditions and a population of 208,000. In the other
countries the competition among towns or cities goes on almost exclusively in
respect of the setting-up of the labour organisations of the development agencies
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and of changing the number of the NUTS 2 regions. The latter is especially at the
centre of debate in Romania. Several cities with traditionally strong regional
organising functions in the country, such as Arad, Oradea, Sibiu, and Targu-
Mures lost their potential regional centre role. These demand a change of the na-
tional regional system. The dissatisfaction in the counties belonging to the plan-
ning-statistical regions is shown by the fact that the headquarters of the regional
development councils in several cases in Romania were set up in smaller county
centres. There were also examples of neglect of the role of the leading cities in
Bulgaria. As a result of the public administration reform undertaken in the ‘70s, in
which, instead of small spatial units, six large “oblasts” were created, the leading
major city was replaced, and a smaller-sized town in the geographical centre of
the region became the regional centre.
Figure 4
Number of towns or cities with over 100,000 inhabitants in Eastern and Central
European countries (excluding the capital) and their proportion of national
population, 2006
Source: Author’s own construction based on data from national statistical yearbooks.
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2 Regional inequalities in Eastern and Central European
research area
2.1 Intellectual potential and regional development
The establishment and distribution of institutions of economic and social innova-
tion have played an important role in European development since mediaeval
times, and the first universities on the continent had close contact with the actors
in both their nearer and more distant regions. The “universities” in the early
Christian Irish monasteries were the innovation centres of their time. They gath-
ered and codified cultural, technological and professional information from all
over Europe and disseminated this through their networks to what was tantamount
to the production level. Due to this, Ireland was Europe’s most important innova-
tion centre in the 2nd and 3rd centuries, in spite of its peripheral position (Joyce,
1907; Ó Drisceoil, 1993; Pounds, 1990).
The geographical deconcentration of the development of universities was typi-
cal of the Middle Ages. The central areas of the Italian Peninsula became the
principal development centre in the 12–14th centuries, and, by the 1400’s, 13 of
Europe’s 30 universities were based there. At that time universities were quite
common in Western Europe, and, at the beginning of the 16th century, Europe’s
total of 70 universities were spread evenly across Spain, Germany, France and
Italy. The regional contacts of these universities were limited to financial matters,
and one prominent responsibility of these institutions, maintained as they were, by
urban capital was the spread of humanist culture across the regions. Economic
contacts were of less importance, although the hugely significant role of German
universities in the development of the printing industry is unquestionable.
In the 18–19th centuries the centralised states deliberately – through financing
and by exercising foundation and endowment rights – attempted to draw universi-
ties away from regional influences. The Prussian and French education systems
were able to achieve this, but Switzerland has, even today, still not managed to
establish a federally operated university. Moreover, in (both unitary and central-
ised) Great Britain, regional influence remained strong due to the traditional state-
university conflict. Only in extreme cases did some universities manage to extri-
cate themselves from centralisation, and, following the French annexation of the
Netherlands in 1802, the University of Groningen was able to survive, but only
because the northern region was geographically isolated. Meanwhile, most Dutch
universities had either been closed or reorganised into a lower level institution
(Florax, 1992).
With the passage of some 150 years, the growing importance of geographical
decentralisation and of regional stimuli had become a major motivation force in
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European academic development, and, in the meantime, the social role of the
university and of the economic and political environment had also changed. The
demand for innovation in economic development was growing fast and this in-
spired the development of new institutions which focused only on research and
development. The Kaiser Wilhelm Institute – established in Germany in 1911 –
was the name given to 29 institutes between WWI and WWII – mainly in the
German provinces, Berlin being home to 12 (Macrakis, 1993).
After WWII, institutions of higher education (HE) were characterised by
strong centralisation. In the first place, education and research were concentrated
in relatively few institutions, with central government having direct control over
universities, whilst, in the second place, in almost every country the universities
were located in the most developed cities, some of these, especially the capitals,
having an overwhelming position.
The 1950s, however, were a period of extensive development in HE, in that its
higher levels were largely replaced by forms of mass education – which met the
needs of society and the economy as a whole. Between 1960 and 1970 the number
of university students rose from 1.8m to 4.8m. For example, the number of
Norwegian students quintupled, whilst those of British, Italian and Swedish stu-
dents quadrupled. In the European ranking the order of the leading countries also
changed.
Around the beginning of the 1960s, institutions of higher education diversified
as a result of decentralisation and the monopoly of the universities ended in many
countries. Specialised colleges were founded, the independence of individual
institutions grew and education became much broader.
Functional decentralisation not only meant the establishment of new institu-
tions (comprehensive universities in Germany, polytechnics in the UK, high
schools in the Netherlands and regional institutes of technology in Ireland), but
also the reorganisation of the fragmented HE structure targeting economies of
scale. In Sweden 100 smaller colleges were reorganised into 33 new units and the
385 (newly established) colleges in the Netherlands were consolidated into 85
institutions (Neave, 1979).
The academic network broadened and regional economic development came to
play a decisive role in the funding of new universities. In the UK the development
concept had been elaborated by the British Higher Education Commission, which
was founded in 1961. This gave priority to enlarging student numbers and
eradicating regional differences. In the UK the 1960s saw the founding of 22 new
universities, mainly by combining existing colleges, in the northern parts of the
country and in rural regions. Nowadays one third of British university students
study at newly established universities (Commonwealth Universities Yearbook,
2005). This was to mention simply that in 1992–95 in the UK a total of 41 new
universities were created – almost all in 92 with 2 or 3 stragglers in ’93, ’94 and
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’95, 38 were built around polytechnics. The previous total was 47, although this
did include London University as a single entity even though this federal institu-
tion comprises around 10 or more “colleges” which are universities in their own
right both in terms of quality and size.
In 1970 the West German Federal Parliament (the Bundestag) enacted a law to
improve the structure of higher education in West Germany. The law specified
new areas for university improvement but did not initiate any significant expan-
sion in the traditional historical university centres. Regional development issues
featured prominently in relation to location, with the Ruhr Area (in a state of
structural crisis) and the rural areas of Bavaria being allocated more new institu-
tions in the field (Lömker, 1986). Regional considerations also prevailed in the
operation of the Max Planck Society – which had been built on the institutional
base of the Kaiser Wilhelm Society but which had been compromised during the
National Socialist era. Today, there are 12,000 researchers and 9,000 PhD stu-
dents and research fellows working in no fewer than 80 institutions. Berlin and
Bonn (the former capital) do not feature very strongly. The similar multidiscipli-
nary Fraunhofer Society is research organization with 58 institutes spread
throughout Germany, each focusing on different fields of applied science. It em-
ploys over 12,500 researchers, with an annual research budget of about €1.2 bil-
lion.
In Sweden, universities in the 1960s were concentrated in five southern cities.
The regional concept, drawn up to develop the northern regions, brought about
the founding of Uppsala and Umeå universities at the end of the 1960s, with the
first northern university being established in 1971 in Luleå. Regional concerns
also had priority in the expansion of the Swedish HE system. The training struc-
ture of the new universities and colleges were geared to the needs of regional
economies, and so faculties of technology, economics and administration were
given priority. Faculties and colleges of technology became regional innovation
centres and developed strong connections with regional authorities and local
economies. The increasing international competitiveness of Swedish industry was
due (among other factors) to the new regional HE system (Hjern, 1990). Similar
regional structural anomalies were eliminated by the Finnish government in
roughly the same way as the Swedish. 14 new universities were established in the
‘60s, consistent with the country’s regional development policy principles, along-
side the traditional university cities of Helsinki, Turku and Tampere.
As a result of geographical decentralisation, the importance of the central re-
gions and capitals of countries declined. Even though these were still able to pre-
serve their leading position in many places, the general tendency was for some of
the larger regional centres of HE and research to strengthen gradually.
Higher education has an effect on internal regional development – not only
due to its role in the R&D sector, but also because of its dominant position in the
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training of specialists who organise, produce and sell technologically developed
products and competitive services. In parallel with technological change, indus-
tries and companies who produce competitive products choose their location
according to quality criteria. HE has an important role among these, its power to
attract capital being influenced not only by any advantages of the labour market
generated by itself, but also by the innovation capacity concentrated there.
Throughout Europe, influence on major technological systems was primarily in
the hands of the R&D organisations of metropolitan or agglomeration-based
companies. However, HE institutions were dominant in the technological renewal
of SMEs and in organising local and regional technological clusters. The driving
force of such regional institutions can be shown by the growth of industrial areas
in Central and Northeast Italy and the regional development of Bavaria, Northeast
France, the Netherlands etc. (Bennett – Krebs, 1991; Ciciotti, 1993).
A higher education network must meet at least four criteria in order to fulfil its
function and to be able to carry out integration tasks as part of the innovation
system:
1. Research has to be qualified as a core function of HE, and this has to be
taken into account financially and in the operation of universities and col-
leges;
2. National technology policy and regional institutions must support organised
cooperation between HE and the economy with appropriate stimuli;
3. The structure of HE must be able to generate technological and economic
innovation;
4. HE must be geographically decentralised, and its institutional measures
must reach the critical mass needed to fulfil these functions. This produces
equality with the institutions of the central region concerning research
funding and distribution of international research and development.
2.2 The organisation of scientific institutions in Central and Eastern Europe,
1950–1990
The different levels of development of the two sides of Europe are particularly
evident in relation to science, and the roots of this reach back several centuries.
The university foundation period of the Middle Ages, in fact, had its influence on
only a very small part of Eastern Europe. In this region were founded four
universities (which play a prominent role until today). These are the universities
of Prague (1347), Krakow (1364), Vienna (1365) and Pécs (1367). Higher educa-
tion appeared in other parts of Europe only several centuries later. For example,
Bulgaria’s first university was founded in Sofia in 1888 (after many years of
Turkish rule) but newer universities in the country appeared only after 1970. The
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first universities of Romania were founded in Bucharest in the 1850s and in Iaşi
(Moldavia) in the 1860s. In some major cities a university network – primarily in
Transylvania – developed between the two World Wars, and in the communist era
many new universities were founded in major cities or industrial centres, includ-
ing the underdeveloped parts of the country.
Developments in many Eastern European countries were relatively uniform.
The basis of higher education and research appeared only after the Great War and
the number of institutions was very small. Only four universities were operating
in Hungary between the two World Wars, the number of students being 14,000
out of a population of 9 million in 1938
Due to regional development issues, and from the viewpoint of sectoral educa-
tion, few adjustments were made after the Second World War. The University of
Heavy Industry in Miskolc and the University of the Chemical Industry in Vesz-
prém were founded in 1949, at the beginning of the communist era.
The foundation of national academies of sciences was crucial for the scientific
systems of the countries of Eastern Europe, and all had organised their academies
by the beginning of the 1950s. The academies were not only the coordinating
institutions for science in their respective country, but had an extensive research
network, typically embracing some 40–70 institutions. The consequence of
centralised government was that these academic research institutions were, with
few exceptions, organised in the capital cities.
The modest changes in over-centralisation introduced in some countries have
some influence in the deconcentration of the institutions. For example, the
government in Hungary issued a decree reforming science policy within the eco-
nomic reform programme started in 1968, and the communist party document
issued in 1969 also asserted the need for science to be decentralised. The decree
declared the negative sides of the excessive concentration of research in Budapest
and proposed to decrease the differences between the disciplines and to develop
the social sciences. The enactment of the decree, however, was only partially
successful. At the beginning of the 1970s science developed noticeably in the re-
gional centres, and the Hungarian Academy of Sciences organised a Biological
Research Centre in Szeged, which was the most highly developed in Central
Europe. The Faculty of Business and Economics began to operate at the Univer-
sity of Pécs – only the second institution of education in economics in the country
– and the academic research institutions of Pécs acquired a new profile – that of
regional science. However, the resettlement of research institutions or HE institu-
tion from Budapest was not successful. A decision had been made to move the
Faculty of Veterinary Science from Budapest to Debrecen in the east of Hungary
– the centre of Hungarian agriculture, but, due to obdurate opposition (for per-
sonal interests) by the leaders of the university, the plan failed.
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Although the Communist Party’s policy for science had different characteris-
tics in individual countries – as in other spheres of the economy and society, we
can detect some characteristics common to all:
1. Science enjoyed a privileged position in the socialist era – a typical feature
of the Soviet model. The favoured groups of people in the sciences
(academicians, principal researchers) received higher incomes and enjoyed
a variety of social benefits;
2. Intensive state intervention and government control were accompanied by
continuous and adequate budgetary resources, although these varied in the
different branches of science. Of the national income, 2– per cent was spent
on R&D in the Eastern European countries in the 1970–80s. This high rate
was due in part to research in the armaments industry, and a further
explanation is that many industrial products (in telecommunications and
computer technology) were produced on the basis of domestic research be-
cause of the boycott on exports of Western European technology;
3. The state established research institutes in technology and the natural sci-
ences in the 1950s, a period of extensive development and promotion of
science, but the social sciences remained in an inferior position for decades,
due to the dominance of Marxist ideology. The new branches of science
(sociology, political and regional sciences) developed relatively late, and
they were only embedded in the HE system with difficulty. The ratio of re-
searchers employed in the social sciences amounted to less than one-fifth of
that in several countries;
4. Academic research networks, sectoral research institutes controlled by the
ministries and corporate research units were dominant in the institutional
structure of research. For example, in Hungary in 1985, corporate research
units absorbed 48 per cent of all R&D expenditure. Universities were
primarily institutions of education and research expenditure within
universities was marginal. In Hungary, in 1985, HE institutions accounted
for no more than 12 per cent.
2.3 The impact of the change of régime on the regional structure of Eastern
and Central European R&D
The change of régime at the beginning of the 1990s produced a significant
restructuring of the scientific potential of Eastern and Central European countries.
One characteristic common to all was a considerable reduction in scientific capac-
ity. Two fields of research capacity shrank dramatically, one of these being the
sectoral research institute network. The majority of research institutes funded by
national bodies (such as ministries) were closed and the number of employees in
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academic research institutes declined equally dramatically. As a direct conse-
quence, the percentage of GDP allocated to R&D was greatly reduced – to one-
third or even one-fifth. In Table 7 we show this in terms of GERD/GDP (Gross
expenditure on research and development as a percentage of Gross domestic prod-
uct).
After the change of régime R&D underwent a substantial restructuring. The
reorganisation of the HE system was the starting-point of a range of positive
changes. In East European countries the number of undergraduates doubled or
tripled, new colleges and universities were established and R&D was given an
important role. One part of the major, state-owned research institutes closed (apart
from the academic networks) and the other part was privatised. Certain groups of
companies started to increase their R&D activity, including several multinational
companies settled in Eastern Europe. The structure of expenditure changed
perceptibly, with spending on state- or community-financed research continuously
decreasing and that on corporate research rising.
Table 7
Changes in R&D main indicators in Eastern and Central Europe, 1980–2005
Name Bulgaria
Czechoslovakia
Poland
Hungary
Romania
1980 2005 1980 2005 1980 2005 1980 2005 1980 2005
GERD/GDP 2.5
0.5
3.9
1.41
2.2 0.6 3.2 1.0 n.d. 0.4
0.52
Number of
31.6 21.6 39.6 37.51
96.3 55.0 31.4 23.0 71.1 33.4
researchers,
17.52
‘000s
Note: 1 Czech Republic, 2 Slovakia.
Source: Author’s compilation based on national statistical database 1980, and Europe in Figures.
Eurostat Yearbook 2008.
There are, however, considerable differences between the countries of Eastern
Europe. In the Czech Republic, expenditure in business research locations ac-
counts for nearly two third of all GERD – data similar to the EU-27 average. The
ratio of company-financed research is the lowest in Bulgaria where government
finance is still of great importance. In two countries, Hungary and Poland, the
influence of HE institutions in financing research exceeds the EU average, and in
all countries government-supported research institutes have a notably higher share
of GERD than the EU average due to the maintenance of a network of Academies
of Sciences (Table 8).
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Table 8
Distribution of GERD by sectors, 2005, per cent
Name
Business sector
Budgetary institutions
Higher education
Bulgaria 22.2
67.3
10.5
Czech Republic
64.7
19.0
16.3
Hungary 45.0
28.6
26.4
Poland 31.6
36.8
31.6
Romania
48.0 34.1 17.9
Slovakia 50.0
30.0
20.0
EU-27 64.0
13.4
22.6
Sources: Europe in Figures. Eurostat Yearbook, 2008; Statistical Yearbook Romania, 2007.
The sectoral transformation of research institutions was followed in none of
the countries by a positive change in regional structure, and it remained typical of
the spatial structure of research centres that they were still mainly concentrated in
the capitals. In the 1990s, however, the spatial structure of R&D changed in sev-
eral countries. The central or core areas declined in importance, and the major
results of decentralisation are evident in the regionalised and federalised coun-
tries. The relative weight in Austria of Vienna decreased by 15 percentage points
and, in Spain, that of Madrid by 12. There was a slight decrease – or even no
movement at all – in the unitary states of Hungary and Greece. In the latter, the
Attica region even increased its share in the GERD of the country (Figure 5).
In Eastern and Central Europe the capitals and metropolitan regions are the
bastions of research and science, the weight of the metropolitan region being
greatest in Bulgaria. Four-fifths of the country’s research potential is concentrated
in Sofia and its vicinity, and two-thirds of Hungary’s GERD is found in the Cen-
tral Hungary (NUTS2) region which consists of Budapest and Pest county). The
research capacities of the Czech Republic, Poland, and Slovakia reveal a slightly
more balanced picture – the metropolitan proportion in these countries being un-
der 50 per cent (Table 9).
Most of the important R&D indicators in the core areas of CEE countries are
below the EU average, and in no more than 2 (Czech) regions of the 49 NUTS2
regions of the 6 do CEE countries exceed the EU average for the GERD/GDP
ratio. In 8 regions the GERD/GDP level is between 1.0 and 1.9 per cent, and in 39
the level does not reach 1 per cent. In 20 regions it is even below 0.3 per cent
(Figure 6).
If we look at the regional spread of R&D activity, we would draw a similar
conclusion. In most countries the most highly concentrated R&D activity is
corporate-financed, and foreign joint ventures’ target locations for establishing
R&D units in CEECs were almost solely capital cities.
30
Horváth, Gyula :
Cohesion Deficiencies in Eastern and Central Europe – Inequalities of Regional Research Area.
Pécs : Centre for Regional Studies, 2009. 40. p. Discussion Papers, No. 72.
Figure 5
Share of the core areas in GERD, 1994–2005, per cent
Source: Author, based on Europe in Figures. Eurostat Yearbook, 2003, 2008.
Table 9
Weight of capital regions in national R&D
Country Region
Percentage share in
Percentage share in
R&D expenditure
R&D employees
Bulgaria South-west
83.4
71.6
Czech Republic
Praha
37.5
40.4
Hungary Central
Hungary 68.8
63.4
Poland Mazowieckie
42.5
32.6
Romania
Bucureşti–Ilfov 59.3
60.9
Slovakia Bratislavský
kraj 47.6
49.8
Source: Compiled by the author on the basis of http://epp.eurostat.ec.europa.eu.
31
Horváth, Gyula :
Cohesion Deficiencies in Eastern and Central Europe – Inequalities of Regional Research Area.
Pécs : Centre for Regional Studies, 2009. 40. p. Discussion Papers, No. 72.
Figure 6
GERD as per cent of GDP in CEE regions, 2005
Source: Compiled and edited by the author based on http://epp.eurostat.ec.europa.eu.
The location of the academic institutions, the leading basic researchers, is no
more positive. Most of the institutes of academies of sciences are located in na-
tional capitals and no more than 7 (19 per cent) of the 37 research institutes of the
Hungarian Academy of Sciences operate outside Budapest. This means that only
15 per cent of the Academy’s employees, some 4,000 in number, work in these
institutes. By contrast, thirty-eight percent of the Polish Academy’s employees
work in institutes outside Warsaw. It is important to emphasise that, in federal
states, the spread of Academy institutions is very different from the above. There
are a remarkable number of research centres in the federal states of Austria and
Germany (Figure 7).
32
Horváth, Gyula :
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Pécs : Centre for Regional Studies, 2009. 40. p. Discussion Papers, No. 72.
Figure 7
Employers of institutes of Academies of sciences outside capital city in specific
European countries, 2007
Source: Compiled and edited by the author.
Great expectations followed the change of régime in terms of the modernisa-
tion of the regional structure of higher education. In almost every country the total
number of students tripled or quadrupled, although this increase was spatially
unbalanced. The dynamic of HE in the capital is as strong as the increase in the
number of students outside the capital. The developments were discursive in that
no regional policy concepts were applied and, moreover, spatial development
planning was undeveloped. The unfavourable spatial structure of HE was pre-
served, with some 30–40 per cent of students still concentrated in the capital
(Table 10). A further characteristic of rapid change was the significant increase in
the incidence of the social sciences in the HE system of most countries –
important in terms of establishing the economic bases of regional development.
The weight of social sciences in HE is higher in CEE countries than in other
member states of the EU, but at the same time the importance of natural sciences
and technology in HE is lower (Table 11).
33
Horváth, Gyula :
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Pécs : Centre for Regional Studies, 2009. 40. p. Discussion Papers, No. 72.
Table 10
The distribution of students in HE in central areas, 2006
Country
Number of students, ‘000s
As national per cent
Bulgaria 114
47.1
Czech Republic
125
37.0
Poland 445
20.7
Hungary 187
42.6
Romania 294
35.2
Slovakia 65
32.8
Source: Compiled by the author based on http://epp.eurostat.ec.europa.eu data.
Table 11
Students in HE by field, 2006, per cent
Country
Students – ‘000s
Social sciences1
Technology and
Other fields 3
natural sciences2
Bulgaria
243 43.5 35.2 21.3
Czech
Republic
337 27.6 38.7 33.7
Poland
2,145 40.9 30.1 29.0
Hungary
439 41.5 28.6 29.9
Romania
835 50.0 31.5 18.5
Slovakia
198 28.3 43.9 28.3
Austria
253 34.9 35.1 30.0
Finland
309 22.4 52.8 24.8
Netherlands 572 38.0 32.1 29.9
Ireland
186 23.1 36.0 40.9
Note: 1 Business, behaviour, law and other social sciences; 2 Biological and physical natural sci-
ences; 3 Teacher training, liberal arts, personal and security services, environmental protection.
Source: Compiled by the author based on http://epp.eurostat.ec.europa.eu data.
At the beginning of the 1990s a faculty of social sciences was founded in
many cities by the former political élite. The establishment of university faculties
or colleges in regional public administration centres was a result of political
change, and the, now unused, official buildings and education centres of the
Communist Party offered an adequate infrastructure for HE. The Ministry of
Education accepted implicitly the relatively cheap and extensive developments in
social science education. As a result of the demand for specialists required to
34
Horváth, Gyula :
Cohesion Deficiencies in Eastern and Central Europe – Inequalities of Regional Research Area.
Pécs : Centre for Regional Studies, 2009. 40. p. Discussion Papers, No. 72.
work in the market economy, the growth in numbers in economics education can
be understood.
The slight decrease in the regional distribution of R&D was generated by the
fact that research and development was given an important role in university
functions. In the analysis of the R&D investment structure, we have already men-
tioned the different distribution of HE in different CEE countries, and we saw that
in Poland and Hungary HE represents a higher weight than the EU average in
terms of R&D expenditure, There is no other type of research organisation outside
higher education to be seen in any CEE country: the role of corporate research is
well-nigh invisible and the number of regional development planning institutions
and research centres of many West European countries can rarely be found.
3 Conclusions
In this paper the relationship between within-country regional disparities has been
examined. Disparities are lower in the early stages of development, peak in the
middle-income stages, but diminish again as a country becomes wealthy. Among
country-specific factors, the date of EU accession plays an outstanding role, being
responsible for more than one-half of the differences in regional disparities be-
tween the EU member states. It is argued that four main factors connected to EU
membership are possible driving forces behind the disparities. The transition
process in the new member states completely changed their economic structure,
and some regions recovered faster than others. The radical transformation of the
economic structure affected the different regions in different ways. The losers of
transition, like in the most other European countries, where the areas were domi-
nated by heavy industry and mining and, as a special Eastern European feature,
the extensive agricultural areas. The emerging market economy brought about the
strengthening of regional inequalities.
What is more important, they have learned how to use these funds efficiently
and how to build effective institutions which might also allow for more decentral-
ized regional development policy and planning. For the new EU member states,
the above implies that disparities will not decrease just because a country is catch-
ing up to the more developed EU countries. Development policies must not focus
extensively on the country as a whole, but have to take into account the prefer-
ences and possibilities of their peripheral regions as well.
Reducing backwardness and the development of regions are among the most
important strategic objectives of the Community, receiving almost forty percent
of its budget. Member states and their regions, depending on their level of
development, receive substantial support for cohesion. But we must also recog-
nise that despite the high payouts, changes in regional development rankings
35
Horváth, Gyula :
Cohesion Deficiencies in Eastern and Central Europe – Inequalities of Regional Research Area.
Pécs : Centre for Regional Studies, 2009. 40. p. Discussion Papers, No. 72.
within individual member states only occur when consistent structural policy is
followed for multiple decades in the use of EU subsidies. These regions did not
concentrate on the creation of traditional infrastructure, but rather on the modern
impulses of regional development: innovation, business services, modern indus-
trial organisation solutions and human resource development. Those regions
which expected to get along simply on the basis of the European Union’s support
policies, were unable to improve their relative positions.
If we examine the spatial location of R&D activity, which should be one of the
factors supporting the dynamic of European regional development, we can see
that the change of régime and the transition have had the effect of preserving the
“status quo ante” in the new member-states in Central and Eastern Europe. Major
regional inequalities are still evident in the regional structure of developed
innovation institutions, and the core areas and capital cities still have their privi-
leged position. The regional and structural policies based on EU norms have not
stimulated the development of R&D in the new member states, as the operational
programmes for 2007–2013 demonstrate. There is no Central or Eastern European
country with a regional or competitiveness-related operational programme target-
ing a comprehensive transformation of human resource development in respect of
research.
Changes in the factors influencing regional development require the regional
policy system of objectives, together with the related instruments and institutions,
to be transformed. The long-term trends of European spatial development require
the widest range of institutionalised forms of decentralisation to be established in
the countries of Europe in the face of their different traditions. The new, Central
and Eastern European member states can only meet EU cohesion requirements
with the help of decentralised institutions. This is not only a public administration
issue, but also a prerequisite for the success of R&D in helping to improve
competitiveness. If regionalism progresses, it can bring about the modernisation
of regional structures and the need for multi-polar regional development may
change the hierarchies of power in those countries still in transition quite pro-
foundly. The sub-national level of the power structure, the region, is a territorial
entity which supports the sustainable development of the economy and the
modernisation of the spatial structure – with its own financial resources and hav-
ing at its disposal an autonomous development policy based upon local
governmental rights. The regions are becoming the stage for innovative develop-
ment, and the degree of embeddedness at regional level of the fundamental
institutions of innovation output is becoming stronger.
The decentralisation of science and R&D has a number of positive effects on
the improvement of the regions. The formation of research-intensive sectors in-
creases the number of quality jobs and the business development effects of the
setting up of spin-off companies are clearly evident. Innovative business develops
36
Horváth, Gyula :
Cohesion Deficiencies in Eastern and Central Europe – Inequalities of Regional Research Area.
Pécs : Centre for Regional Studies, 2009. 40. p. Discussion Papers, No. 72.
the region’s export capacity and helps the region to integrate into the European
and international research area. Companies which demand or rely on research
contribute to the re-industrialisation of the region and to the spread of modern
services. All of these improve the income-generating ability of the regions and
contribute to the enhancement of regional cohesion. The Lisbon criteria cannot be
met without decentralisation.
37
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Pécs : Centre for Regional Studies, 2009. 40. p. Discussion Papers, No. 72.
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BENKŐNÉ LODNER, Dorottya (ed.) (1988): Environmental Control and Policy: Proceedings of
the Hungarian–Polish Seminar in the Theoretical Problems of Environmental Control
and Policy
OROSZ, Éva (ed.) (1988): Spatial Organisation and Regional Development Papers of the 6th Polish–
Hungarian geographical Seminar
DURÓ, Annamária (ed.) (1993): Spatial Research and the Social–Political Changes: Papers of the
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RECHNITZER, János (2000): The Features of the Transition of Hungary’s Regional
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No. 33
MURÁNYI, István–PÉTER, Judit–SZARVÁK, Tibor–SZOBOSZLAI, Zsolt (2000):
Civil Organisations and Regional Identity in the South Hungarian Great Plain
No. 34
KOVÁCS, Teréz (2001): Rural Development in Hungary
No. 35
PÁLNÉ, Kovács Ilona (2001): Regional Development and Governance in Hungary
No. 36
NAGY, Imre (2001): Cross-Border Co-operation in the Border Region of the Southern
Great Plain of Hungary
No. 37
BELUSZKY, Pál (2002): The Spatial Differences of Modernisation in Hungary at the
Beginning of the 20th Century
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Discussion Papers 2009. No. 72.
Cohesion Deficiencies in Eastern and
Central Europe – Inequalities of Regional Research Area
No. 38
BARANYI, Béla (2002): Before Schengen – Ready for Schengen. Euroregional
Organisations and New Interregional Formations at the Eastern Borders of Hungary
No. 39
KERESZTÉLY, Krisztina (2002): The Role of the State in the Urban Development of
Budapest
No. 40
HORVÁTH, Gyula (2002): Report on the Research Results of the Centre for Regional
Studies of the Hungarian Academy of Sciences
No. 41
SZIRMAI, Viktoria – A. GERGELY, András – BARÁTH, Gabriella–MOLNÁR, Balázs
– SZÉPVÖLGYI, Ákos (2003): The City and its Environment: Competition and/or Co-
operation? (A Hungarian Case Study)
No. 42
CSATÁRI, Bálint–KANALAS, Imre–NAGY, Gábor –SZARVÁK, Tibor (2004): Regions
in Information Society – a Hungarian Case-Study
No. 43
FARAGÓ, László (2004): The General Theory of Public (Spatial) Planning (The Social
Technique for Creating the Future)
No. 44
HAJDÚ, Zoltán (2004): Carpathian Basin and the Development of the Hungarian
Landscape Theory Until 1948
No. 45
GÁL, Zoltán (2004): Spatial Development and the Expanding European Integration of the
Hungarian Banking System
No. 46
BELUSZKY, Pál – GYŐRI, Róbert (2005): The Hungarian Urban Network in the
Beginning of the 20th Century
No. 47
G. FEKETE, Éva (2005): Long-term Unemployment and Its Alleviation in Rural Areas
No. 48
SOMLYÓDYNÉ PFEIL, Edit (2006): Changes in The Organisational Framework of
Cooperation Within Urban Areas in Hungary
No. 49
MEZEI, István (2006): Chances of Hungarian–Slovak Cross-Border Relations
No. 50
RECHNITZER, János – SMAHÓ, Melinda (2006): Regional Characteristics of Human
Resources in Hungary During the Transition
No. 51
BARTA, Györgyi – BELUSZKY, Pál – CZIRFUSZ, Márton – GYŐRI, Róbert –
KUKELY, György (2006): Rehabilitating the Brownfield Zones of Budapest
No. 52
GROSZ, András (2006): Clusterisation Processes in the Hungarian Automotive Industry
No. 53
FEKETE, G. Éva – HARGITAI, Judit – JÁSZ, Krisztina – SZARVÁK, Tibor –
SZOBOSZLAI, Zsolt (2006): Idealistic Vision or Reality? Life-long learning among
Romany ethnic groups
No. 54
BARTA, Györgyi (ed.) (2006): Hungary – the New Border of the European Union
No. 55
GÁL, Zoltán (2006): Banking Functions of the Hungarian Urban Network in the Early
20th Century.
No. 56
SZÖRÉNYINÉ, Kukorelli Irén (2006): Relation Analysis in Rural Space – A Research
Method for Exploring the Spatial Structure in Hungary
No. 57
MAUREL, Marie-Claude – PÓLA, Péter (2007): Local System and Spatial Change – The
Case of Bóly in South Transdanubia
No. 58
SZIRMAI, Viktória (2007): The Social Characteristics of Hungarian Historic City Centres
No. 59
ERDŐSI, Ferenc – GÁL, Zoltán – GIPP, Christoph – VARJÚ, Viktor (2007): Path
Dependency or Route Flexibility in Demand Responsive Transport? The Case Study of
TWIST project
No. 60
PÓLA, Péter (2007): The Economic Chambers and the Enforcement of Local Economic
Interests
No. 61
BUDAY-SÁNTHA, Attila (2007): Development Issues of the Balaton Region
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Discussion Papers 2009. No. 72.
Cohesion Deficiencies in Eastern and
Central Europe – Inequalities of Regional Research Area
No. 62
LUX, Gábor (2008): Industrial Development, Public Policy and Spatial Differentiation in
Central Europe: Continuities and Change
No. 63
MEZEI, Cecília (2008): The Role of Hungarian Local Governments in Local Economic
Development
No. 64
NAGY, Gábor (2008): The State of the Info-communication Markets in Dél-Alföld
Region – Hungary
No. 65
HORVÁTH, Gyula (2008): Regional Transformation in Russia
No. 66
BELUSZKY, Pál – SIKOS T., Tamás (2008): Changing Village-Typology of Rural
Settlements in Hungary at the Beginning of the Third Millennium
No. 67
CSIZMADIA, Zoltán – GROSZ, András (2008): Regional Innovation System in West
Transdanubia
No. 68
HARDI, Tamás (ed.) (2008): Transborder Movements and Relations in the Slovakian–
Hungarian Border Regions
No. 69
ERDŐSI, Ferenc (2008): Global and Regional Roles of the Russian Transport
Infrastructures
No. 70
CSIZMADIA, Zoltán (2009): Cooperation and Innovativity: the Network Foundations of
the Regional System of Innovation
No. 71
HAJDÚ, Zoltán – LUX, Gábor – PÁLNÉ KOVÁCS, Ilona – SOMLYÓDYNÉ PFEIL,
Edit (2009): Local Dimensions of a Wider European Neighbourhood: Crossborder
Relations and Civil Society in the Hungarian–Ukrainian Border Arean
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