For an active policy of the regions on employment and socio-economic development - CPR (5) 2 Part II

Rapporteur:
Jean-Claude VAN CAUWENBERGHE (Belgium)

EXPLANATORY MEMORANDUM

Introduction

At its meeting on 9 September 1996, the Bureau of the Chamber of Regions decided to set up a working group to look at the specific role played by regions with regard to employment and economic and social development.

This group, assisted by the Interdisciplinary Regional Development Research Group under the direction of Professor Quevit, conducted a wide-ranging survey in conjunction with our natural partners, the CEMR and the AER, which proved to be most valuable in that over 150 replies to the questionnaire sent out were received.

The problem of under-employment, although lying somewhat outside the Council of Europe’s usual tasks, should nevertheless be one of the Council’s prime concerns at a time when the severe labour crisis and the closely related social malaise are challenging the foundations of our democratic structures and institutions.

As the writer and historian Diane Pinto pointed out, the Council of Europe, in the wake of its 1993 summit, “reorganised its many activities on the basis of the idea that, to create 'democratic security', action must be taken in Europe which genuinely strengthens democratic cohesion and quality of life, as well as cohesion and pluralism in the cultural sphere.”1

This position was recently upheld in the action plan adopted by the Heads of State and Government at the second Council of Europe summit (10-11 October 1997): “The Heads of State and Government instruct the Committee of Ministers to define a social strategy to respond to the challenges in society and to carry out the appropriate structural reforms within the Council of Europe.”

This issue has admittedly been looked at in numerous studies and surveys and we must acknowledge our own limitations in embarking upon yet more. Nevertheless, the issue has not yet been studied closely from the point of view of regional action to deal with the employment problem.

Alongside the more comprehensive approach followed by European or international organisations (EU, OECD, ILO, etc), the more general policies implemented by states and the action taken at local level by towns and smaller municipalities, using their inherent capabilities, there is ample scope for action and initiatives by regional authorities.

Accordingly, and in order to give our work a more pragmatic dimension, we accepted the invitation from Naples City Council to organise a colloquy on regional initiatives to promote youth employment.

This event was a valuable opportunity to give wide dissemination to examples of good practices and enabled politicians and key figures in the business community and society at large to exchange ideas.

Furthermore, the fight against unemployment is an area where east/west co-operation is at its most meaningful, making for mutual enrichment.

The Countries of central and eastern Europe are also hard hit by unemployment. A study carried out last December by the Vienna Institute of Economic Studies suggested that since the opening of the borders with eastern Europe in 1990, over 7 million jobs have been lost there.

We would like to stress that the aim of our work was not to identify a set of responsibilities common to all regions, a sort of lowest common denominator, nor to provide a theoretical outline of an ideal structure but rather to study the role which regional authorities play or could play in implementing measures which could create new jobs.

This brings us to the central questions of this report: What are the key elements of an active regional policy on employment and socio-economic development and what are the conditions needed if they are to be implemented?

By studying these questions and taking them a stage further we identified a number of useful examples to follow, upon which we have drawn heavily in drafting the recommendation and resolution submitted to this plenary session.

I. DEFINITION OF THE KEY ELEMENTS OF AN ACTIVE REGIONAL POLICY ON EMPLOYMENT AND SOCIO-ECONOMIC DEVELOPMENT

Obviously, not all regional authorities have the same responsibilities as regards employment. Regionalism in Greater Europe is a phenomenon which has taken on a rich variety of forms, in line with national structures in particular and regional differences. Furthermore, regionalism is in a state of constant flux, particularly but not exclusively in central and eastern Europe (this is also the case in western Europe, eg in Italy and the United Kingdom).

The results of the survey show that regional powers and responsibilities in the field of employment are in 65-75% of cases shared with central government.

The consultants’ study also showed that regions are primarily active in implementing or funding policies in the following areas:

These eight areas have both a direct and an indirect bearing on the question of employment.

For example, some are more closely linked to direct job creation via support to businesses in the form of, for instance, measures to promote employment in companies and entrepreneurship and funding for labour-intensive activities. Other areas, such as the reintegration of victims of exclusion into the labour market, have more of a social dimension. Lastly, some areas, such as vocational training, regulating the labour market and economic and technological development, are more closely related to regional development policies.

However, reduction/reorganisation of working hours and investment and tax incentives in connection with job creation are measures that would appear to be undertaken only by the more firmly established regions, often in the context of federal states. Moreover, in the majority of cases, such regions merely monitor or further action initiated at central government level, given that such action is part of a macro-economic policy.

Sub-regional and local authorities are also very active in this area and regions often have the role of co-ordinating initiatives taken at this level.

In order to make the information in this report more readily accessible, regional action on employment and socio-economic development has been sub-divided into three main areas:

1. Social policy aimed at (re)integration into the labour market

2. A policy for direct job creation through support for the development of companies, especially SMEs

3. Regional development policy

II. THE THREE AREAS IN GREATER DETAIL

1. Social policy aimed at (re)integration into the labour market

Social policy for (re)integration into the labour market pursues a dual aim: to create jobs and hence to combat social exclusion. Trying to prevent disadvantaged groups from being excluded from the community lies at the very heart of measures for reintegration into the labour market, even more so than job creation.

Some categories of the population are clearly more affected by unemployment than others. These are primarily:

i. The young, who often through lack of work experience or qualifications are unable to find any work at all.

As long ago as 1983, in Resolution 145, the CLRAE declared itself to be “more particularly concerned by the danger which youth unemployment [represented] for Europe, a real social scourge for our society, as almost 9 million young people under the age of 25 [were] unemployed in the member states for increasing periods of time, a situation which, unless it [was] remedied, [was] liable to alienate the young people of our society”.

ii. The long-term unemployed, who day by day see their chances of finding a job dwindle, and for whom, as they have involuntarily spent a certain amount of time on the margins of society, reintegration must inevitably include an element of resocialisation.

iii. Women, who have spent a long time outside the labour market but who, since the 1970s, have entered it in large numbers. However, they are often subject to various forms of discrimination.

iv. Ethnic minorities, who need to become integrated not only in the labour market but also in new societies which are not always very tolerant.

Social cohesion is therefore the prime aim of this policy whose measures in terms of job creation are basically remedial in nature. However, they must also be accompanied by preventive measures aimed at anticipating situations of social exclusion and marginalisation. In other words, these preventive measures are aimed at increasing integration efforts during the initial stages of unemployment (often between six months and one year) in order to prevent long-term unemployment situations which would require further remedial measures.

Interestingly, policies for (re)integration into the labour market in the majority of regions are already a key part of regional employment strategies. This is particularly the case in countries where social problems are significantly more acute.

Measures under this policy can be classified as follows:

1. Integration in companies

2. Setting up/promotion of companies specifically designed to (re)integrate unemployed people

3. Training

1.1 Integration in companies

Regional action for the integration of job-seekers in companies generally includes the following:

Working towards a reduction and reorganisation of working hours

In recent years some regions have experienced growth which unfortunately has not been matched by a corresponding increase in jobs.

Accordingly, there would have to be enormous growth in order to achieve full employment.

We as policy-makers at all institutional levels have a duty to continue and intensify our efforts to promote our domestic products and thus create wealth, ensuring this is distributed in a balanced way.

Certain regions have taken action to reduce and reorganise working hours in order to generate vacancies in companies which can be filled by the unemployed. The following initiatives in support of this have been devised:

- Regional funding of studies in companies on reducing and reorganising working hours

- Application of the principles of reducing/ reorganising working hours in administrative authorities and/or semi-public companies

- Promotion/dissemination of the concept of reducing and reorganising working hours

- Promoting part-time work

- Promoting studies on flexible working arrangements

- Regional consensus with all partners concerned (employers, job-seekers) with a view to reducing working hours in the companies in the region.

Placements in companies

Whenever an individual job-seeker has been unsuccessful in his or her own efforts to find work or is lost in the maze of the business world, he or she must have access to efficient placement services which can offer guidance and assistance.

Similarly, when a worker has lost his or her job, it is preferable that he or she be taken care of by an outplacement service so as to be reintegrated into the work environment as soon as possible and thus avoid marginalisation.

Improving placements in firms is a vital part of current policies for (re)integration into the labour market. Action in this field comprises the following:

- Introduction/optimisation of information, reception and guidance services and training in how to find work, based on three priority approaches: the service must be user-centred, the systems in place must be of high quality and the emphasis must be on objective-based management.

- Provision of telecommunications services relevant to work supply and demand.

- Analysis of opportunities for private-public partnerships in the field of placements in companies with due regard for the fundamental principles of equality of users, transparency, accessibility, trust and reliability.

- Funding for outplacement services.

- Sponsoring young job-seekers.

- Encouraging the networking of placement centres.

- Organising work-experience placements in companies for young people so as to offer temporary job opportunities for the unemployed while the usual employees are on holiday (job rotation).

Financial incentives for (re)integration

Very often employers are wary of taking on new staff, particularly young people or the long-term unemployed, as this involves significant human and financial investment which could, as they see it, adversely affect the firm’s viability. This risk is one most often faced by SMEs.

Consequently, in order to overcome employers’ reservations, certain regional authorities offer financial incentives for the recruitment of the unemployed.

These are primarily:

- Subsidies for job creation for vulnerable categories of the unemployed

- Financial support for running work-experience schemes in companies or administrative authorities (the region assuming part of the wage costs, subsidies)

- Introducing social clauses into public procurement contracts.

1.2 Promotion/setting up of companies specifically designed to reintegrate unemployed people and development of neighbourhood services

Paradoxically, whereas there is a growing number of people unable to find work, the needs of our society are increasingly unfulfilled.

In an attempt to rectify this situation, regional authorities have taken the initiative of promoting neighbourhood services, whether provided by the authorities or by associations, in order to satisfy these needs (home services, child-care, security, assistance to young people in difficulty, housing, public transport, etc). In addition, employment in these services is in many cases available to the less skilled and thus offers a means of social reintegration.

In view of this, "reintegration" companies are emerging in the market sector, pursuing two primary aims: meeting the needs of the population and ensuing the social integration of those unemployed people who find it particularly difficult to find work.

Regional action in this field includes:

1.3 Training

Labour market trends have shown a reduction in manual jobs with a corresponding increase in jobs of a more intellectual nature. This is what the American sociologist Alvin Toffler called moving from manufacture to “mentifacture”.

It is thought that in the European Union around 10% of young people leave school without any qualification and that 45% of young people between 15 and 24 leave school before the end of the upper secondary cycle.

The link between unemployment and inadequate qualifications is becoming more and more obvious.

Accordingly, training is not only an important measure for social reintegration; it also actively helps companies develop in that it provides them with skilled and competitive staff.

Training activities which can achieve these objectives include:

- “training cheques”: the region pays (up to a fixed amount) a proportion of the training costs for job-seekers in the light of their career plans prior to several months' unemployment;

- creation of jobs specially designed for the long-term unemployed in order to provide them with training bearing a closer relationship to ordinary employment;

- training centres specialising in teaching new skills to young people coming into the labour market with insufficient qualifications, the long-term unemployed, women, etc;

- promoting training in companies and more particularly sandwich-course training in the form of apprenticeship contracts or traineeships;

- combining training and job-seeking, not least through personalised training and integration strategies;

- acquisition of new skills (new technologies such as the Internet and new software) which could prove valuable for job-seekers on the labour market.

2. A policy for direct job creation through support for the development of companies, especially SMEs

A policy for direct job creation via support for the development of companies is generally beneficial for the economic development of a region. In terms of volume of employment, this policy represents one of the most effective ways of combating unemployment.

It is important to note here that regional support is geared to the development of companies for the purposes of direct job creation and not to social policies that entail maintaining jobs through support for firms in difficulty. There are four different stages to this strategy:

1. Promotion of entrepreneurship
2. Assistance with the setting up of businesses
3. Funding for labour-intensive activities (business development)
4. Support for business transfers

Here the Regions of Europe have been very active:

2.1 Promotion of entrepreneurship

As a precursor to the setting up of businesses, promotion of entrepreneurship is a key pro-active measure for the development of companies in a given area.

The depressed socio-economic climate in Europe is not a very attractive incentive for potential entrepreneurs, especially among the young, to get their projects off the ground.

The idea of owning their own business generally conjures up a picture of precariousness and legal and financial insecurity rather than independence and creativity.

It is therefore essential to change this trend by encouraging entrepreneurship. Accordingly, we must attempt to nurture within some of our citizens a taste and an opportunity for starting a business by helping them to shoulder the risks and challenges associated with setting up their own company (guarantee funds, etc).

Furthermore, developing the self-employed sector is also a useful means of job creation since this relatively flexible formula makes it possible to adapt swiftly to changes in demand and to the regional social and economic context.

The most frequent types of action undertaken by regions in this field are:

- Training in entrepreneurship: at school and in vocational training
- Financial incentives (start-up loans, project competitions, etc)
- Promoting self-employment
- Awareness-raising and information on entrepreneurship within companies, particularly for spin-off purposes.

In addition, between the competitive market and the public sector, a third sector is gradually emerging which deserves support. This is the social or solidarity-based economy.

The particular characteristics of such companies are self-management, democratic decision-making and the primacy of people and work over capital in the allocation of revenue.

There are several possible ways of giving practical support to such companies:

- Involvement in the remuneration and training of those running third sector companies;
- Assisting with the cost of supervising workers being integrated;
- Overseeing the project;
- Setting up the financial arrangements for such companies.

2.2 Assistance with the setting up of businesses

Regional measures to help people set up businesses cover a variety of fields ranging from the financial and practical measures related to the starting up of the company to less tangible aspects such as awareness-raising, advice, guidance and training.

Here we can see two complementary fields of action:

Practical support for the setting up of businesses

- development of infrastructure to assist with the setting up of businesses: zonings, commercial buildings, information outposts, industrial/scientific/technological estates, business initiative centres, assistance with industrial infrastructure, installation of teleworking centres;

- Financial assistance with starting up businesses;

- Direct aid: guarantees, loans, grants, repayable advances, seed capital, regional business creation allowances;

- Indirect aid: access to venture capital, regional participation in venture capital funds.

Intangible support for the setting up of businesses

- Support for entrepreneurs wishing to acquire training or qualifications;
- Promotion and development of advice and guidance services;
- Networking of structures offering assistance with the setting up of businesses;
- Simplification of the administrative procedures for setting up businesses;
- Assistance with administrative and legal formalities.

In particular, help with the setting up of businesses must be aimed at financing labour-intensive activities. Here, the environment, regional planning, tourism, health care and neighbourhood services are among those generally concerned.

Funding for labour-intensive activities

- Identifying neighbourhood service needs and funding start-up studies;
- Restoring landscapes, architectural heritage, etc;
- Encouraging people’s capacity for self-employment, particularly in the tourism sector;
- Setting up of centres providing help with domestic chores.

2.3 Support for business development

As with schemes for setting up business, activities to support business development cover a very broad range of fields. Generally speaking, regional schemes to support business development can be divided into two categories:

Direct support schemes

- Financial aid for business modernisation (modernising production facilities / acquiring equipment);

- Financial support for job creation;

- Financial aid for research and innovation;

- Financial support for access to business advice;

- Financial incentives to export: export subsidies for regional products, funding for market surveys;

- Financial support for vocational training, skills development and refresher courses.

Indirect support schemes

- Creating networks of business support services;

- Promoting co-operation between businesses with a view to establishing clusters or industrial estates;

- Fostering links between regional suppliers and subcontractors (joint participation in fairs, etc.);

- Promoting the setting up of company networks with a view to enabling large companies and SMEs to transfer skills and pool experiences;

- Promoting business support and advice services;

- Promoting bodies set up to support technological innovation in firms;

- Promoting staff training facilities for SMEs;

- Simplification of administrative formalities required to obtain business support.

2.4 Support for business transfers

All too frequently, businesses collapse prematurely as a result of the bad management of transfers or take-overs.

As soon as they arrive, new managers are confronted with new problems and obstacles (financial burdens, staff management, accounts, administrative formalities, etc.).

Regional authorities should do everything they can to provide them with aid and assistance.

The main means of assisting in the business transfer or take-over process are as follows:

- Promoting entrepreneurship;

- Creating a legislative framework conducive to the successful transfer or taking over of businesses;

- Regulating the business market by developing systems to keep supply in line with demand, such as data bases on the cessation of business activities and take-over opportunities in the region;

- Economic incentives connected with the expansion, transfer and take-over of businesses (grants or participating capital loans from the region).

3. Regional development policy

Through their regional development policies, the European regions have an indirect influence on many factors linked to employment matters. Accordingly, the key to an active regional employment policy lies in taking advantage of these factors and aiming at a consistent and co-ordinated employment policy throughout.

For these regional employment strategies to be put into practice all those concerned must be involved, including the authorities, employers, employees, citizens’ associations, temping agencies, employment agencies and training establishments, whether private or public.

As a rule regional strategies focus on the following five areas:

1. Education and training
2. Research and technological innovation
3. Support for the setting up and development of businesses
4. Labour market regulation
5. Management of development programmes: European schemes and local initiatives

3. 1 Education and training

Education and training are one of the cornerstones of employment policy.

In this area, it is vital for those European regions that have powers in this area not to overlook the action that needs to be taken at source level – ie in basic education - to prevent and anticipate problems. The current emphasis on training as a means of combating unemployment is no excuse for overlooking the efforts which also need to be made in the educational field.

In addition, the accelerating rate of change in technology and the market make further training much more important than in the past.

Education and training policies can prepare for employment in three different ways:

Preventive measures linked to basic education

Where basic education is concerned, the main focus should be on the links between the educational world and the labour market, with a view to enabling future job-seekers to adapt to the demands and the development of the labour market.

The development of this ability to adapt should be based not only on the acquisition of knowledge and skills but also on inculcating qualities that are useful on the labour market, such as flexibility, motivation, initiative, enterprise and responsibility.

These aims can be achieved by:

- Promoting links between schools, businesses and institutions (placements and visits);
- Ongoing refresher courses for teachers (introducing them to new skills and cultural trends);
- Promoting sandwich courses;
- Organising consultation between local partners on the subject of education.

Remedial measures involving the training of job-seekers

Further down the line, training for job-seekers, aimed at updating their skills or helping them to acquire new skills, is a prerequisite for their reintegration into the labour market.

The relevant measures are listed under item I.3 which deals with reintegration via training.

Measures involving further training

Life-long training has become an absolute necessity for workers who wish to adapt to the constant advances in technology and changing markets. For businesses to be competitive, they have to invest more and more in training.

The main areas in which this can be achieved are as follows:

- Training for employees with few skills who are likely to lose their jobs
- Training in new equipment and new techniques
- Language courses
- Networking of business training centres for companies working in similar fields

3.2 Research and technological innovation

Through their policies on research and technological innovation, the regions of Europe can create jobs in many ways, for example by making use of the results of research, arousing business interest in innovation and disseminating and transferring technology. These measures help to create employment and should be promoted by the regions since innovation has become one of the foundations of growth, competitiveness and employment.

The activities linked to research and technological innovation likely to have an impact on employment are as follows:

- Arousing business interest in innovation, particularly among SMEs: analysis, advice, loans, etc;

- Promoting a range of services linked to the innovative process (management, financial aid, technological adaptation, marketing, etc.); promoting business access to these services;

- Taking advantage of the results of research (business advice, support for feasibility studies, etc.) and technological transfer (fostering links between companies and scientific and technological institutions);

- Financial incentives for business innovation (premiums, grants, loans, etc);

- Training in management and innovation techniques;

- Support for offers of advice on innovation with a view to setting up company audits aimed at encouraging innovation;

- Financial support for companies in need of scientific or technological advice;

- Encouraging co-operation between innovators (universities, technological transfer centres, European bodies, etc.) by setting up regional innovation networks;

- Promoting co-operation between businesses in the field of research and technological innovation (clusters and industrial estates);

- Centralising information on assistance with and advice on innovation (setting up a single regional office);

- Financial incentives for innovative projects creating long-term employment.

3.3. Support for the setting up and development of businesses

Business competitiveness is also at the core of European regional development policy. Forms of support for business competitiveness aimed at creating and preserving a maximum number of jobs can be found in the following areas: innovation (see above), product marketing (export premiums, etc) and company organisation (total quality management, benchmarking, etc).

Regions can gear their support towards these aspects of business competitiveness by focusing their activities in the following areas:

- Financial incentives to increase competitiveness: loans, premiums, repayable advances, etc to carry out market surveys, company audits on organisation, etc;

- Setting up advisory services;

- Encouraging businesses to co-operate with one another with a view to transferring skills and pooling experience and/or carrying out joint projects (technological innovation, market surveys, production, etc);

- Subsidising investment based on criteria linked to improving competitiveness (increasing production capacity, exports, etc) and/or job creation;

- Setting up infrastructure to boost competitiveness: telecommunications, energy, transport, buildings and equipment.

3.4 Labour market regulation

To devise effective regional employment strategies it is essential for regions to be completely au fait with the structures of the labour market and all its components.

In this connection, it seems vital to us to set up systems of labour market regulation aimed at identifying needs and the services and skills available (and providing forward-looking management of the labour market by means of observatories and advice and placement services). This is the best way to identify the services and skills that are lacking and thence to make the appropriate adjustments in the balance between labour supply and demand.

The activities carried out by the regions in this area are as follows:

- The establishment or improvement of regional employment and training observatories responsible for anticipating labour and skills requirements;

- The development of telecommunications infrastructure and services to encourage the free flow of information on employment and the labour market at regional level;

- The promotion of study and discussion groups on changes in the labour market, focusing in particular on the following questions: the notion of full employment and full activity, universal welfare benefits and internal and external flexibility.

3.5 Management of development programmes: European schemes and local initiatives

Regional development policies are not the sole preserve of regional authorities. In reality sub-regional or local authorities frequently devise such policies, either on their own initiative or at the instigation of European schemes like the European Union’s Employment Pacts.

The result is that regional authorities must attempt to maximise the interaction between initiatives, measures and programmes devised at whatever level so as to preserve as much co-ordination and consistency as possible in the employment policy in their region.

In other words, regional employment strategies can only be effective if they are closely linked with the action taken by other levels of authority.

III. INSTITUTIONAL ASPECTS

As was noted above, the European regions have considerable potential for launching activities and setting up instruments to create jobs and combat unemployment. This potential lies mainly in three key areas: social policies for (re)integration into the labour market, direct job creation policies through support for businesses, and regional development policies.

However, for this potential to be realised, the regions need to be given the powers and resources they need to be in a position to act.

The way in which employment policies are implemented will therefore tend to differ depending initial degree of power-sharing. Simplifying somewhat, we can divide the regions into three distinct categories:

III.1. Highly decentralised regions, characterised by more offensive employment policies leading to measures aimed at creating new, long-term employment. These measures generally fall into the second or third key area defined above.

In practice, their application is facilitated by the powers of the regions in the following areas:

- support for innovation and technological transfer;
- support for job creation within businesses;
- tax incentives for job creation;
- support for the setting up of business networks;
- promotion of the self-employed sector;
- assistance with company transfers;
- sandwich course training.

These powers and activities in the area of employment and economic development are typical of those assigned to European regions belonging to a federal state.

III.2. Moderately decentralised regions, which generally adopt more traditional employment policies and develop those instruments which fall within their scope to varying degrees. Those that can may launch certain innovative activities. However, their room for manoeuvre on employment policy is restricted by the lower level of powers they are assigned.

Consequently, we recommend that these regions be assigned general powers in respect of matters relating to the three key areas of an active regional employment policy: a policy for (re)integration into the labour market, a policy of direct job creation through support for business development and a regional development policy geared to employment.

In the area of integration or reintegration into the labour market, policies should include:

- vocational integration measures such as incentives to reduce and re-organise working hours, more effective employment placement services and financial incentives for (re)integration;

- the setting up and development of reintegration projects such as the promotion of the third sector and local public services, the creation of community work by local and regional authorities, aid for projects launched by the long-term unemployed and financial incentives for the setting up of companies specifically designed to (re)integrate unemployed work;

- training, consisting for the most part in activities to improve the skills of job-seekers or adapt them to the labour market.

In the area of direct job creation through support for business development, in particular in SMEs, policies should include:

- measures to promote entrepreneurship;

- financial and practical assistance in setting up businesses;

- direct and indirect support for business development;

- support for business transfers.

In the area of regional development, the measures for combating unemployment which the regions should be concentrating on are as follows:

- education and training by means of preventive measures involving basic education, remedial measures involving training for job-seekers and further training courses;
- research and technological innovation;
- support for the setting up and development of businesses;
- labour market regulation;
- running development programmes, for example European schemes or local initiatives.

III.3 Regions in which power is assigned to outposts of central government, where the regional authorities simply implement national policy on employment and have very little opportunity to apply their own active employment policy.

Consequently we would recommend not only that these regions be assigned general powers in the fields relating to the three key areas of an active regional employment policy outlined above but also and above all that they be given more opportunities to play an economic role in promoting the implementation of this policy.

III.4 Finally, vital for the success of all active regional employment policies that all the regions of Europe, whatever their degree of institutional decentralisation, act as co-ordinators. This means that they must ensure that the activities launched in the area of employment in their region are consistent and co-ordinated, and must seek the consensus of all the players involved. This role forms a part of the process of implementing a territorial strategy and an overall employment policy in each region.

For this purpose, we recommend that all the European regions should apply the following principles when implementing their employment policy. They should:

Ensure consistency and co-ordination between European, national, regional and local initiatives and programmes as well as private and public schemes;

See to it that there is consensus between the private and public sectors over the main lines of employment policy and the activities to be carried out by means of joint programmes and help to set up partnerships between the private and public sectors wherever necessary;

Incorporate employment policies into regional development programmes;

Implement regional employment strategies, modelled on the European Union’s Employment facts and based on preliminary studies. Under these strategies, all those concerned, including representatives of the authorities, employers, unions, citizens’ associations and institutions specialising in the management of the labour market and training, would be involved in a comprehensive job creation programme implemented by means of joint structures and based on consultations;

Promote partnership between the parties involved with a view to taking full advantage of each party’s specialist skills while respecting the principle of subsidiarity and aiming for an integrated approach.

Conclusion

These are the working group’s main findings. Of course we do not claim that these are exhaustive and recognise that many of the areas studied merit further consideration. It is important to remain modest when dealing with themes such as the fight against unemployment and the promotion of employment.

However, we do believe that it is vital for regional authorities to press on with their exchanges and partnerships in this area of such crucial importance for the well-being of our fellow citizens and that it would be a very good idea to look into what arrangements could be made to establish close co-operation on this question between the CLRAE, the Parliamentary Assembly and the Committee of Ministers.

Accordingly, I would very much like the Committee of Ministers to urge the CLRAE to take an active part in the implementation of the action plan adopted at the 2nd Council of Europe Summit so that all those concerned can get together and devise a “social strategy to respond to the challenges in society”.

APPENDIX 1 - STUDY ON POWERS AND ACTIVITIES OF REGIONS WITH RESPECT TO EMPLOYMENT AND ECONOMIC AND SOCIAL DEVELOPMENT

1. Introduction

1.1 The unemployment rate has risen considerably in all European countries in recent years. Job creation has without any doubt become one of the major challenges which the governments of the countries of the Old World will have to meet in the coming years.

Furthermore, European unemployment rates show great differences not only between countries, but also between regions within countries. While the average unemployment rate in the European Union is 10.9% we find that regional unemployment rates vary from 3% in some regions to more than 30% in others. For example, the unemployment rate of the Oberösterreich region in Austria is 3.3%, while that of the Andalucia region in Spain is 32.4%, ie 10 times higher than that of the Austrian region. In Italy, the region of Trentino- Alto Adige (3.4%) has a rate almost 7.5 times lower than that of Ceuta and Melilla (25.5%)2.

At the same time, the regions have in recent years acquired increasingly broad powers and have in all European countries become players in socio-economic development which cannot be ignored.

· To what extent can regions play an active role in job creation and economic and social development?

· What powers do regional authorities have to tackle this major challenge?

· What action is being taken by the regions to create jobs and ensure their economic and social development?

· What regional and territorial strategies have been implemented in order to promote new jobs?

We shall try to provide some answers to all these questions in this report.

1.2 One of the major objectives of the study is to clarify the powers which regions have to set up employment policies.

1.3 The methodology employed for this exercise is based essentially on a wide-ranging survey of the regional authorities that are members of the Chamber of Regions of the Standing Committee, on the basis of a questionnaire produced by RIDER. The questionnaire is in 4 parts:

· Characteristics of the region: demography, unemployment rate, etc

· Regional competence: exclusive, shared or no competence (in the form of multiple-choice questions);

· The main instruments of public employment policy for which the regions has exclusive or shared competence: description of 2 instruments for each of the 8 categories of instruments identified (title, target group, objective, brief description);

· Specific territorial strategies to boost employment.

In order to make this report more readily understandable we have appended the questionnaire circulated to the various regions for the purpose of our survey.

2. Representativeness of the survey and quality of results

Before beginning the analysis proper and presenting the main findings, the representativeness of the survey must be examined in order to bring out the relevance and limits of the findings presented below. The representativeness of the survey will be dealt with from two points of view: on the one hand, according to the rate of reply to the survey (2.1) and, on the other, according to the rate of reply within the questionnaire (2.2).

2.1 Rate of reply

About 1000 questionnaires were sent to the regions and 700 to the micro-regions listed by the Council of Europe. Of all the questionnaires sent, 117 usable ones were returned to us. The rate of reply is therefore about 7%. This rate may seem low. Nevertheless, it is necessary to put this in proportion by pointing out that the questionnaire was sent to all the local and regional authorities listed by the CLRAE, not to a representative sample of them. In addition, a great number of micro-regions have only very limited real powers and freedom of initiative in this field and did not, therefore, feel concerned by the project. Finally, we should note that the number of replies obtained is sufficient to achieve the objectives of the project.

The survey covered 25 of the 40 member states of the Council of Europe. Our sample may not seem very representative. However, this ratio must be put into proportion. Most of the 15 countries that do not appear in our sample are very small ones such as Andorra, Cyprus, Malta, San Marino, Luxembourg, etc. The absence of these countries from our sample does not in any way prejudice the analysis below. These generally "mono-regional" countries cannot dissociate their regional policy from their national policy because of their size.

The major absentees from our survey are without doubt the countries of south-eastern Europe, such as Greece, Turkey, Ukraine and Bulgaria. Only one questionnaire reached us from Russia.

Lastly, we should stress the great interest some CEECs3 take in this subject, as is evident from the large number of questionnaires we received from some of these countries: Latvia (5 questionnaires), Hungary (9), Poland (4), Romania (6), etc.

2.2 Rate of reply within the questionnaire

It is not enough to obtain a satisfactory number of replies; the replies given must be complete. In other words, there must not be too many questions to which no reply has been given. In this respect we have defined a level of reply for each of the three main sections of the questionnaire, ie the ratio of the number of replies actually obtained to the maximum number of replies that could have been obtained.

The rate of reply to the competence section of the questionnaire is very good, at more than 80%. This high level shows that in general the questionnaires were completed by competent people within regional authorities familiar with all the powers and instruments that exist to deal with employment and economic and social development.

The section on main instruments of employment policy had a rate of reply of 53%. This rate is quite satisfactory since some regional authorities either have no powers with regard to certain measures or have no activities, or only one activity, in the suggested fields of action.

Similarly, the rate of reply to the section of the questionnaire concerning regional and territorial strategies on employment is very good, with 94% of the regional authorities questioned replying on this subject. Of the 70 regions that said they were developing such a strategy, 58 described the objectives.

3. Analysis of powers and activities by category of measure

For each of the categories of measures suggested in the questionnaire, this section will describe the results obtained in terms of powers and activities implemented by the regions.

These results4 will be presented according to the following plan:

· Powers of the regions.

· Action taken in the regional territory
eg examples of practices that we find interesting.

· Differences or special comments, especially between regions of western Europe and those of central and eastern Europe.

3.1 Reduction and redistribution of working time

The results of our survey of regions seem to show that measures designed to reduce and redistribute working time remain essentially a matter of national policy. Very few regions reported having exclusive powers with regard to this type of measure. Only the redistribution of working time in public (regional) authorities seems to be a more specifically regional power.

Actions designed to reduce and redistribute working time seem to be implemented very little in all regions.

The types of actions undertaken most frequently in this field are the redistribution of working time in public administrations and allowances to promote part-time work.
Note the existence of some regional features such as the promotion of seasonal work (tourist and rural regions) and the promotion of multi-activity. Multi-activity should enable workers to reposition themselves on the labour market more easily if one of their activities is under threat.

However, the use of measures designed to redistribute and reduce working time is still very controversial. Experts have difficulty agreeing on their net impact on employment because of the numerous induced effects of this type of measure (net loss effects, domino effects, displacement effects, etc). Consequently a great many regions are still very hesitant to implement them. Several of them are currently studying such measures or supporting pilot projects.

eg In this respect, we find some initiatives interesting. Several regions offer financial aid to companies using certified consultancy firms to conduct a survey on the distribution and organisation of working time. Such personalised studies make it possible to maximise the positive effects of such policies, at the same time as limiting their negative effects.

Both from the point of view of powers and measures taken, there is an important difference between the countries of western Europe (CWEs) and the countries of central and eastern Europe (CEECs). The regions of the CEECs unquestionably have fewer powers in this field. Measures to reduce and redistribute working time are rarely developed in the CEECs.

3.2 (Re)integration of disadvantaged groups

Powers with respect to (re)integration of disadvantaged groups are in most regions broadly shared between regional and other authorities.

The regions seem to be very active in this field, mainly via job creation through social economy measures (87% of the regions questioned), employment initiatives (eg community work) (83%), and setting up advice and placement services (86%).

Regions implement a great many socio-occupational (re)integration measures. Many are designed primarily for the most vulnerable unemployed people in the region (the long-term unemployed, young people, the disabled, single mothers, ethnic minorities, etc).

Various measures strike us particularly interesting because they seem to be gaining in importance in regional socio-occupational (re)integration strategies.

eg We may cite as an example:

- encouragement and support for unemployed people wishing to start up their own activity.

- support for local employment initiatives designed to create jobs in community work (improving quality of life; the environment, law and order, etc).

- Promotion of personal services (eg care of children and senior citizens, etc)

Very little difference is observed in powers or measures as between the regions of western Europe and those of central and eastern Europe. However, clauses in local and regional authority procurement contracts concerning the reintegration of unemployed people are used far more in the regions of the CEECs. This method is used in 71% of CEEC regions as opposed to 49% in other regions.

3.3 Promotion of employment in companies and promotion of entrepreneurship

Promotion of employment in companies and the promotion of entrepreneurship are fields divided between the various authorities. However, some powers are still mainly confined to national authorities, such as measures aimed at major companies (schemes to assist job creation in large private companies or state-owned companies undergoing privatisation) as well as measures designed to facilitate company transfer.

The regions are heavily committed to these areas. The measures most commonly taken by regions include subsidies for job creation in SMEs, promotion of entrepreneurship, general measures and training for new entrepreneurs, aid for the setting-up and expansion of companies, provision of suitable infrastructures for attracting new companies and help in obtaining capital for small businesses.

eg a few examples:

- Formation of databases for companies.

- Aid and support for starting up companies and for young entrepreneurs (advice and follow-up, share-holding, repayable advances, provision of appropriate infrastructure and services, facilitating contact with other local players and companies, specific training designed for young entrepreneurs.

- Centres for the initiation, discussion and development of new business projects.

- Support and aid in promoting companies within the region.

- Subsidies and assistance for company redeployment.

- Formation and support of company networks.

Regional authorities seem particularly active in supporting the creation of new businesses and supporting young entrepreneurs. No region, however, mentions action designed to promote the spirit of enterprise or the entrepreneurial culture.

The regions of the CEECs generally have far more limited powers as regards job promotion in companies or promotion of entrepreneurship. Measures to facilitate access by small businesses to various sources of capital are implemented in virtually all CEEC regions (27 of the 28 CEEC regions which replied to this question), whereas this happens in only 3 out of 4 regions in western Europe. The same phenomenon is also observed for job promotion measures in large state-owned companies undergoing privatisation. Conversely, action to form networks of companies is far less frequent in the CEEC regions.

3.4 Development of vocational training

The powers of regions with respect to vocational training are generally shared with other authorities.

Vocational training measures are, of course, developed in most regions. Further training courses and financial assistance for training are the most frequent instruments of vocational training.

Several vocational training schemes involve collaboration or partnerships between public authorities, training centres and companies. Such measures appear interesting to us as they make it possible to adapt training as closely as possible to the needs of the local economy.

eg some few practices that seem interesting to us:

- Preparatory training to give young people to vocational training or in-company training.

- Integration of information generated by training research and development units and centres in order to produce a new type of co-operation and networks between companies, research and consultancy centres and training institutes.

- Specific in-house training of trainers and development of specific training programmes in direct co-operation with a group of employers.

With regard to vocational training, there are significant differences between the CEECs and the CWEs. Regional authorities' powers with respect to sandwich courses and further training courses and their use are far broader in western Europe, while regional powers as regards refresher training for teachers and the implementation of this type of measure are much greater in the CEECs.

3.5 Labour market regulation

Labour market regulation is generally a power shared between regional and national authorities. However, for each of the 4 instruments suggested in the questionnaire, about a third of regional authorities say they have no powers.

Instruments to regulate the labour market seem to be used in a large proportion of the regions questioned.

The monitoring and regulation of the labour market by a regional authority affords a far more precise analysis and a far more rapid, more relevant response to needs or shortcomings.

eg a few initiatives in this field:

- Establishment of regional employment observatories

- Estimate of demands for permanent labour in the various sectors of regional activity

- Anticipation of needs in close conjunction with technical and technological development, promotion of specific skills in emerging sectors and training of workers in sectors at risk

- Regional authority to co-ordinate the labour market and policies

Regional authorities in western Europe enjoy significantly more powers in terms of anticipating changes in the labour market and creating employment observatories, and implement this type of policy more readily. Conversely, measures to anticipate manpower needs and matching job supply and demand are commoner in CEEC regions.

3.6 Support for intensive employment activities closely linked to improving the quality of life and the social environment

Here again, powers are very broadly shared between regional authorities and other authorities that exercise powers in the regional territory.

Measures to create new jobs in the spheres of environment, regional planning, tourism, health and help for the elderly are very widely implemented in the regions, while those designed to create new social services in fields such as personal security, the quality of life in neighbourhoods, housing., etc seem to be less successful.

eg A few initiatives nevertheless by way of example:

- Creation and promotion of new services in the home.
- Promotion of support for child-minding services and care of the elderly.
- Promotion and support for the creation of green spaces and housing construction or renovation.

The powers of regions in the CWEs and CEECs with respect to support for labour intensive activities are very similar. On the other hand, these instruments are used more systematically in CEEC regions than in other regions of Europe.

3.7 Conditions for granting investment incentives in connection with job creation

The power to grant tax incentives or apply selective criteria to promote job creating investment generally lies with the national authorities.

The least used measures to promote employment and economic and social development are selectivity criteria and job-related tax incentives in connection with grants to encourage investment.

A few examples:

- Low-interest loans for any job-creating investment (for companies or other projects in the voluntary sector) and bank guarantees.

- Preferential tax system and assistance to new companies.

Measures designed to link the granting of investment aid to job-creation are commoner in found more frequently in CEEC regions than in western European ones.

3.8 Economic and technological development

Despite a slight predominance of the national authority where some measures are concerned, powers with respect to economic and technological development are generally divided between national and regional authorities.

This type of action (technology transfer, aid to innovation, exports and market research) is fairly well spread over the regions.

The following are a few types of measures often found in the field of economic and technological development: subsidies or funding and R&D, establishment of centres and aids for technology transfer, promotion of company networks, establishment of centres for technological development and centres of excellence, facilitating contacts between companies and research centres, export subsidies.

As regards economic and technological development, there is an extremely important difference between the CEEC regions and those of western Europe in terms both of powers and of action taken. Most CEEC regions report having no power to employ such instruments, while only 10 to 20% of the regions of western Europe have no powers in this field. Similarly, this type of measure is very widely implemented in the regions of western Europe, but only very partially in the CEEC regions.

4. Transverse and thematic analyses


Having described the powers and actions of regions by category of measure, in this section we summarise the results presented in the previous section in more general, thematic form, and add a number of further considerations.

4.1 Powers of regions

More broadly, the analysis of regional powers shows that regional authorities have a large number of powers as regards employment and economic and social development policy. However, they only rarely have exclusive powers in this field, sharing them with the national authority. On average, the regional authority has exclusive powers for only 15% of the measures proposed but has exclusive or shared powers with respect to almost 72% of the measures suggested in our questionnaire, and thus has no powers in respect of about 28% of measures.

Note that central government gives takes powers with respect to the reduction and redistribution of working time, policy on large state-owned and private companies, and fiscal policy. The national authority is more ready to share or delegate to the regions powers relating to measures to reintegrate the unemployed, promote companies, vocational training, support for intensive employment activities, as well as those relating to technological development.

4.2 Action by regions

Generally speaking, many employment and economic and social development scheme are implemented within the regions. On average, 92% of measures over which regions have exclusive or shared powers are implemented within the region, and almost 95% of the measures over which the regional authority has exclusive powers are implemented. These high figures show that regions neglect almost no avenue with respect to employment and economic and social development. Our survey does not, unfortunately, yield any indicator to assess the scale of implementation of the various types of action taken by regions.

The types of scheme most frequently implemented to assist employment and economic and social development are the following:

- promotion of and support for companies established in the region, and especially SMEs, through action designed to provide optimally for their needs and growth (infrastructure, services, advice, partnerships, skilled labours, economic promotion of the area, access to sources of capital, staff training, etc) and promoting employment in them;

- encouragement and support in the creation of new companies; support and advice for young entrepreneurs;

- support for and promotion of new sources of employment, such as the social economy, the creation of community jobs or social services, promotion of personal services;

- monitoring and regulation of the regional labour market;

- promotion of technological development, notably by granting aid for technology transfer and technological innovation.

4.3 Difference between the regions of western Europe and the regions of central and eastern Europe

Analysis of regional powers with respect to employment and economic and social development shows slight differences between the regions of western Europe and those of central and eastern Europe. The CEEC regions enjoy exclusive or shared powers over almost 65% of measures on average, while the western European regions enjoy powers over about 75%.

- The CEEC regions have significantly more powers, either shared or exclusive, on the introduction into local and regional authority procurement contracts of clauses to reintegrate unemployed people, on the promotion of employment in major state-owned companies as well as on tax incentives to promote job-creating investment. Conversely, they have significantly fewer powers than the western European regions with respect to the following categories of measures: measures to reduce and redistribute working time, promotion of companies, vocational training, and measures concerning economic and technological development. The difference is particularly marked for this last category of measures: the regions of western Europe often have wide powers regarding economic and technological development measures, such as aid for innovation, technology transfer, export and market research, while the CEEC regions often have very little power in respect of such instruments.

In terms of action, we find the same differences as those observed in respect of powers, with the exception of measures to promote companies. Although, as mentioned above, the CEEC regions have more limited powers than other regions, measures in this field are more commonly applied in them.

4.4 Impact of (con)federalism on the powers and action of regions

Does federalism have an impact on the powers of regions and the measures they implement in the regional territory? Do the regions belong in federal countries have broader powers in terms of employment and economic and social development policy, and do they apply more measures in this field? Is the difference the same for each measure?

This sub-section will seek to outline some answers to all these questions by presenting our survey findings on this subject.

Generally speaking the findings confirm that regions in federal countries have more powers as regards employment and economic and social development. For 33 of the 38 suggested measures, the regions of federal countries enjoy more powers than those elsewhere.

The measures in respect of which the regions of federal countries enjoy far more powers are mainly incentives to companies, such as aid for technology transfer, technological innovation, job creation within companies, or again, tax incentives for job-creating investment. Lastly, there are measures designed to form networks of companies, develop self-employment and facilitate the transfer of companies, and measures concerning sandwich courses.

In view of the findings, we note that the differences between the two groups of regions in terms of measures implemented is far less clearly marked than in terms of the powers they have.

In line with their broader powers in this field, regions in federal states favour measures designed to support companies through grants for technology transfer, technological innovation, job creation in companies or tax incentives for job-creating initiatives, as well as action to facilitate the transfer of companies and develop a sandwich course training system. While these regions have less extensive powers, measures for socio-occupational integration and the creation of regional employment observatories are also more frequent than in other regions.

On the other hand, these regions are less engaged than others in measures such as the introduction into local and regional authority procurement contracts of clauses concerning reintegration of the unemployed, access by small companies to various sources of capital, forecasting manpower requirements and matching labour supply and demand.

4.5 Impact of the regional unemployment rate on measures taken

This sub-section seeks to analyse the impact of regional unemployment on the action taken within regions. We have approached this question from two start points. The first seeks to measure the impact in terms of the absolute regional unemployment rate. The second consists of comparing the actions undertaken in the region and the relative difference between the regional unemployment rate and the national unemployment rate.

In order to analyse the correlation between the absolute regional unemployment rate and the action taken in the regions, we have divided our sample into 3 groups: regions with a regional unemployment rate below 8%, those with a rate between 8% and 12% and, lastly, those with a rate above 12%.

We have also looked at the correlation between the regional unemployment rate and the action taken in relative terms. In other words, we no longer look only at the value of the regional unemployment rate, but consider the relative difference between the regional unemployment rate and the national unemployment rate. Here too we have divided our sample into three groups: the first comprises the regions with an unemployment rate more than 20% below the national rate, the second the regions with an unemployment rate diverging from the national rate by less than 20%, and the third the regions with an unemployment rate more than 20% above the national average.

For the results of these two approaches, we immediately observe that the regions characterised by a low level of unemployment apply a higher proportion of measures linked to their economic development. Conversely, the regions with a high unemployment rate favour measures more directly linked to the integration of the unemployed and the whole question of employment. These findings are not, of course, surprising.

More specifically, on the one hand, the regions whose unemployment rate is relatively high favour measures to redistribute working time, introduce into local and regional procurement contracts clauses concerning reintegration of unemployed people, promote employment in large state-owned companies, studies to forecast manpower requirements, support labour-intensive activities connected with improving quality of life and the social environment.

On the other hand, the regions with a lower unemployment rate favour measures concerning the promotion of companies, such as measures to facilitate the transfer of companies, company access to capital, aid for the creation and expansion of companies, as well as measures concerning economic development such as aid for technology transfer and innovation.

4.6 Financing the powers of the regions

In order for a regional authority to be able to initiate action or strategy on employment and economic and social development, the national authority must not only give it the powers, but also grant it, or allow it to acquire, the means of giving effect to those powers. The fact is that regional authorities may have extensive powers regarding employment policy but no corresponding funding. The result is either no measures implemented under this power, or de facto reappropriation of the power by the national authority, or again very restricted exercise of the power.

Our survey did not set out to deal with this aspect of the problem. Nevertheless, a few comments are in order:

- On the one hand, we observe that generally when a region has either shared or exclusive power, one or more measures are implemented under that power within the regional territory. This is borne in 95% of cases where the region has exclusive power with regard to the measure and in 92% of cases where the power is shared or exclusive. The problem of funding regional powers does not necessarily prevent regions from exercising those powers to implement schemes. However, we have no information about the intensity or quality of the measures implemented.

- On the other hand, as explained in section 5, only 15% of regions that implement no specific territorial strategy to promote employment mention lack of financial resources to justify the absence of such a strategy;. 60% of them are more inclined to justify that absence by lack of the necessary powers.

5. Territorial strategies to boost employment

70 regions out of 109 say they are pursuing a specific territorial strategy to boost employment.

Of the pursue that do not develop any specific territorial strategy to boost employment, 60% mention lack of powers to justify the absence of such a strategy. Lack of financial resources is argued by 15% of regions, while 10% do not have the necessary regional consensus to implement such a strategy.

The major thrust of regional or territorial strategies is aimed at:

- (re)integration of unemployed people, and particularly (re)integration of certain target groups. Target-groups are young people, the long-term unemployed, some vulnerable socio-occupational categories or certain ethnic minorities;

- better co-ordination of the various employment measures and policies implemented in their territory and liaison between the various local and regional players;

- raising the level of skills in the labour force through vocational training;

- promoting and supporting companies in the region, particularly SMEs, by providing them with appropriate infrastructure and services;

- stimulating and supporting the creation of new businesses (SMEs or micro-businesses) and promoting self-employment;

- economic promotion of the region.

Almost all regions claim that they integrate their territorial employment strategy with national policies, Community programmes (cohesion policies, PHARE, etc), local employment initiatives and consult with the socio-economic players in their region.

Lastly, we should note that regional development programmes set up in the framework of structural and cohesion funds enable some regions to formalise their regional strategies and constitute important financial levers as part of their strategy.

6. Conclusion

It is apparent from this analysis that regional authorities can play an important role in the socio-economic development and job creation at regional level. Although they very rarely have exclusive power over the instruments of employment policy, in most cases they enjoy powers shared with the national authority. The latter takes powers with regard to reduction and redistribution of working time, policy on large state-owned and private companies and fiscal policy.

We observe that the regions of central and eastern European countries generally have less extensive powers regarding employment and economic and social development than western European countries.

We have noted that the regions in federal countries generally have more extensive powers regarding employment and economic and social development. This does not mean, however, that a broader range of measures are implemented in these regions.

We find that regions characterised by a low unemployment rate favour implementing measures linked to the economic development of their region, and that regions with a high unemployment rate favour those more directly linked to the integration of the unemployed and employment-related issues.

Regions play, or can play, an important role in employment and socio-economic development. They very often have the powers to do so and are, or may be, particularly effective in implementing the following actions and policies:

Mobilising local endogenous potential, structuring it in order to impart a relevant, organised local boost employment and economic and social development.

The regions have a co-ordinating role to play between the various local players (companies, training institutes, consultancy firms, private companies, etc) and may be better able to co-ordinate and promote the various measures carried out in their territory and thus maximise co-operation between measures or between players.

Closely monitoring the regional labour market and better assessing local needs so as to implement the most appropriate responses to them speedily, taking full account of all the characteristics and components of their territory.

Promoting and supporting companies in the region, particularly SMEs heavily dependent on their regional roots, by satisfying their needs to the fullest extent possible (infrastructure, services, advice, partnerships, skilled labour force, economic promotion of the area, etc) in order to ensure them optimal, healthy growth.

Stimulating and supporting the creation of new companies or micro-companies, supporting and advising young entrepreneurs, encouraging the spirit of enterprise and stimulating new projects in their territory;

Stimulating and supporting new sources of employment, such as the social economy, local employment initiatives to create community work, promoting personal services.

Promoting the employability of target groups, particularly the most vulnerable groups in the region.

Most experts in employment promotion and economic and social development policy in Europe now agree on at least three points:

Firstly, the current problem of unemployment in Europe will not be resolved by creating jobs in the public sector, as was done in the 1970s and 80s. The budgetary problems facing most European countries are forcing them to make substantial cuts, or at least not to increase spending. It is therefore unlikely that there will be any significant increase in employment in the public sector that would absorb a significant proportion of the unemployed. On the contrary, a reduction in the number of civil service posts is likely in a large number of countries in the next few years.

Secondly, the traditional primary and industrial sectors, the major creators and consumers of manpower in recent decades, cannot now hope to provide a solution to employment in Europe in the coming years: for one thing, increased productivity in these sectors requires a smaller and smaller labour force and, for another, there is ever fiercer competition in these sectors, particularly as a result of globalisation and the saturation of many of these markets.

Lastly, the service sector, which has been relatively protected until now, now seems to be showing signs of changes very similar to those experienced by the traditional primary and industrial sectors a few decades ago (for example, the financial and banking sectors, which have grown enormously in recent years, are now announcing large redundancies in the coming years in Europe because of increasingly efficient application of computer technology, and also plan to sub-contract some operations to countries with lower wage costs).

Lastly, the only means of creating significant numbers of jobs over the next few decades seem to be (a) SMEs (innovative SMEs, those offering a specific or personalised product, creation of young SMEs, etc) and, (b) the "new sources of employment", such as local initiatives to create community jobs, personal services, etc.

Comparing these observations with the findings of our survey, it can immediately be seen that the regions will have an increasing role to play in employment and social and economic development policies. As have been said, the regions have significant powers in the fields of SMEs and new sources of employment, the latest fields on which most observers focus in order to create new jobs in Europe in the coming decades.

The regional authorities of western Europe are therefore becoming players in job creation that cannot be ignored, and must prepare now to meet the major challenge represented by the creation of new jobs: they play, or will play, a crucial and ever-increasing role in the coming years.

1 Diane Pinto, “The three pillars of democratic security” in The Challenges of a Greater Europe: the Council of Europe and democratic security, 1996, Council of Europe Publishing.

2 Source: Eurostat. Situation in April 1996.

3 CEECs: Central and eastern European countries/CWEs: Countries of western Europe.

4 N.B. The data provided by the regions are generally "binary": the region has exclusive or shared powers or has no powers regarding this measure, or the measure is implemented or not implemented on the territory of the region. When in the report we mention that certain regions enjoy broader powers or implement more actions, it should be understood that a greater number of regions have this power or implement this action and not that these regions have a greater level of powers for this specific measure or that the degree of implementation (eg proportion of the regional budget allocated to implementing this specific measure) is greater.