Regional development key to growth in all areas of economy, report states

 

DEVELOPING THE regions will benefit all sectors of the economy and should not be viewed as an isolated or sectoral issue, a Western Development Commission (WDC) report states.

The full potential of the State’s less developed regions is not being realised, leading to a “waste of talent and opportunity”, according to the commission study, which is due to be published tomorrow.

It recommends that an “identifiable single figure at national level” is required to implement an effective co-ordinating role in regional development.

Recent research by the Organisation for Economic Co-Operation and Development (OECD) shows that nurturing growth in these less developed areas will bring about national growth, Dr Helen McHenry, WDC policy analyst and author of the study, says.

Two OECD papers published last year found that while leading regions were important in driving national economies, lagging regions also made a strong contribution.

“Regional policy is not a zero sum game where growth in one region is at the expense of another,” Dr McHenry says.

“The aim of regional policy should be to maximise national output by assisting and encouraging each individual region to reach their growth potential,” she said, and she noted that “the market does not achieve this alone”.

Regional policy has been suffering from “unclear management at national level”, the commission report finds, due to a mixture of “broad” and “narrow” approaches, including the National Spatial Strategy and the Clár programme.

The report cites Finland as a case study in strong regional development, and recommends that regional policy in Ireland needs to be co-ordinated by an identifiable single figure at national level.

In Finland, a state with a similar population to Ireland living in a significantly larger land area, regionalisation of university education was found to be a very efficient means of spreading development.

Special programmes based on the “know-how” and skill-base of smaller urban centres also played an important role, while early infrastructural improvement policies had “long lasting positive effects” in less developed regions of Finland.

In its report Why Care About the Regions? A New Approach to Regional Policy, the commission recommends that a focused and targeted policy here should extend beyond transport and infrastructure. It also says that regional policy in the future must have a “more subtle understanding of issues such as environmental sustainability, individual welfare or happiness, and their association with economic and social development”.

It believes investment in infrastructure must be maintained and combined with investment in the three “Es” – enterprise, employment and education, along with a “drive to increase innovation”.

It says the OECD found that when these elements worked together, they created growth.

“There is often a presumption that some regions have more ‘potential’ than others,” Dr McHenry says. “This shouldn’t be used to justify concentration of investment.” She adds: “Concentrating resources in one place is not enough to bring about sustained national growth. Harnessing the assets of both rural and urban regions will bring the greatest overall benefit.”

The commission is the statutory body promoting economic and social development in counties Donegal, Sligo, Leitrim, Roscommon, Mayo, Galway and Clare.

Its abolition was recommended in the McCarthy report on expenditure, and it has had its investment fund cut dramatically.

The Council for the West has urged its retention.