The Location of ICT activities in EU regions. Implications for regional policies
The location of ICT producing industries does matter for global competitiveness
and long-run growth potential. For instance, the differing contribution of
ICT to economic growth between the US and the EU is often mentioned as one of the
main cause explaining the diverging growth performance of these two areas since the
mid-1990s. In turn, since the mid-1990s, countries with especially dynamic economic
growth have tended to be highly specialized in ICT-producing and ICT-using industries,
see van Ark and Inkaar (2005). More generally, ICT producing sectors, tend
to promote technological change and innovative capability which are seen to be at the
core of economic growth and competitiveness. When considering the EU economy,
ICT industries appear to be concentrated in a limited number of regions, see Koski et
al. (2002) for empirical evidence. Afirst objective of the present paper is to document
the location of ICT producing industries in European regions in order to map existing
EU clusters as well as to analyze recent changes in these industries using recent data
on employment and firm location, especially in relation to the EU enlargement that
has taken place in May 2004. The location of the ICT-producing sectors is not the end
of the story however. A crucial aspect concerns the nature of activities that are being
undertaken in different regions. Importantly, ICT industries do have different characteristics
in terms of human capital, skill requirement, and knowledge content. In particular,
because of the positive association between human capital, knowledge and
long-run growth, it is important to analyze to what extent EU regional ICT clusters
differ in according to these characteristics. The second question addressed in the paper
concerns the nature of ICT activities undertaken in EU regions. Finally, the paper
provides econometric estimates of the location of firms in ICT industries across EU
regions. The paper considers more specifically the case of multinationals location.
Results on the determinants of firms location appear to differ widely depending on the ICT sector considered as well as the type of companies considered. A number of
policy implications are derived from these results.
Check other articles from the issue Otoño 2008 or from other issues.