Sectorial background of urban–rural economic development inequalities

1. Sectorial background of urban–rural economic development inequalities dr. László Jeney associate professor jeney@elte.hu Economic Foundations of Local Development Module 1/b: Urban and Rural development by sectors Autumn term 2017/2018. CUB Department of Economic Geography and Futures Studies

2. Shifting of the economic Core 2

3. Geographical concentration of the economy still remained in the Core • Economic development: GDP per capita • Economic density: area GDP per area 3

4. The European Pentagon • Pentagon/Core • Area: 20% • Population: 40% • GDP: 50% • Cities over 500thousand residents: • population: 20% • GDP: 29% • GDP/cap.: 141% • GDP-growth: faster with +8%-point 4

5. Economic Importance of Cities in North America Economic development measured only with per capita GDP At current market prices in € Examined area: V4 Countries (CZ. HU. PL. SK) Examined regional level: NUTS3 Examined period: 1995–2004 Data source: Eurostat http://epp.eurostat.ec.europa.eu/ 5

6. Key Factors of Urban Competitiveness in European Space Structure 6

7. The subject of research, basic assumptions • New factors affecting the regional processes of East Central Europe at the turn of the millennium • Transition (the end of the bipolar world system) • Integration (accession to the European Union) • Globalization • Dynamic take-off, but cities and rural regions get different developmental impulses • Dual effects on economic pattern of V4 Countries (trade-off theories) • Convergence in pan-European relation (catching-up) • Divergence in urban–rural relation

8. Territorialframe • EastCentral Europe • Broader • Cultural, historicalrelationships • V4 Countries • Narrower • Currentpoliticalstates (CZ, HU, PL, SK) • Regional level: NUTS3

9. Definition of the Concept of Urban and Rural Regions • Urban regions = cities • Population>500 thousand + Bratislava • Without suburbs • Regions at NUTS3 level (Bratislava Bratislavský County) • Rural regions = complementaryregions • ≠ Villages • ≠ Regions with rural characters (e. g. sparse population, importance of agriculture)

10. Database used • Economic development measured only with per capita GDP • At current market prices in € • Examined area: V4 Countries (CZ. HU. PL. SK) • Examined regional level: NUTS3 • Examined period: 1995–2004 • Data source: Eurostat http://epp.eurostat.ec.europa.eu/

11. Cities as positive residuums of the East Central European space structure

12. Differences of Urban–Rural Duality in Member States of EU, 2013 • Measuring Urban–Rural Duality • DUR: urban–rural duality index • xU: average per capita GDP of cities in a country • xR: average per capita GDP of rural regions in a country Source of data: Eurostat

13. Relationship Between State of Development and Urban–Rural Duality for EU Members, 2004 Source of data: EuroStat • 13

14. Post-socialist countries: characterized with growing urban–rural dualism Chiefly the outstanding of capitals More remarkable in case of underdeveloped, catching-up V4 countries than older members Source of data: EuroStat Change of Urban–Rural Duality in EU Member States, 1995–2013 • 14

15. Growing Importance of Cities in European Economic Pattern Economic Development State of Cities and Rural Regions Related to their National Average • Most of the cities over average • Studying success of cities: key issue for current European regional trends and regional policy • Some countries • Only the cities are over average (e. g. V4) • Other inequality factors are more important (Germany. Italy. Romania. Spain)

16. State of cities and rural regions as compared to the national averages of V4 member countries, 2013

17. Role of urban–rural inequality in overall regional inequalities • Measuring overall economic inequalities at level of NUTS3 regions (H. Hoover index): • n: number of regions at NUTS3 level (n = 87 for Visegrad Countries) • xi: share of “i” region of the total GDP of the country • fi: share of “i” region of the total population of the country • Measuring urban–rural inequalities (Hur: Hoover index same formula) • n = 2 (aggregate of 8 cities and aggregate of 79 rural NUTS3 regions) • Role of urban–rural inequality with the overall regional inequalities (Rur):

18. Degree of urban–rural inequality in proportion to the overall regional inequalities in EU, 2013 Source of data:EuroStat

19. Hur: urban–rural inequality Rur: role of Hur in overall regional inequalities (H) Role of urban–rural inequality in overall regional inequalities of EU member states, 2013 Source of data:EuroStat

20. Groups of EU members according to the inequality at urban–rural and NUTS3 regional level, 2013 Source of data:EuroStat

21. Role of urban–rural inequality in overall regional inequalities of V4 member states, Hoover index 2013 Source of data:EuroStat

22. Post-socialist cities are to join to the 2nd level of European city-network Studying success of cities: key issue for current European regional trends and regional policy New European models on Peripheries should adjust the classic urban zone of Blue Banana Sunbelt or (Golden Banana) Central European Boomerang Post-socialist cities: new development wave (similar to Southern Periphery) based chiefly on international investments 22

23. BUT: weak position of V4 cities in the European Urban hierarchy Worseposition of V4: V4 countries: 508 companyfromthe 15 thousandlargestcompany of EU Air traffic Relativebetterposition of V4 International meetings (betterposition) 23

24. Cities and NUTS2 regions: gerrymandering for development • Budapest, Warsaw • Suburbanzone lowercommonaverage • Initially: betterpositionforEU-supports • Later: duetotheurbandevelopment no supports • Prague • Suburbanzone: targetarea of EU supports

25. The sectoral background of the urban–rural development inequalities 25

26. V4: success of cities not independent of the shift of their sectoral structure V4: success of cities not independent of the shift of their sectoral structure Increase of urban–rural inequality is mainly tertiary based Industrial renewal hide in the background of fine differences among rural regions Growth Indexes of Gross Value Added (GVA) in the Sectors in V4 Countries, 1995–2013. • 26

27. Growth of GDP and GVA by Sectors for Cities and Rural Regions • 27

28. Regional and Sectoral Shifts within Industry after Transition (1992–1998): The Case of Hungary 28

29. Regional Shifts in Hungarian Industry. 1992–1998. • 29

30. Sectoral Shifts in Hungarian Industry. 1992–1998. • 30

31. Changes in Regional Industrial Specialization in Hungary. 1992–1998. Hirschman–Herfindahl index 1992 1998 employment output export • 31

32. Regional Differences of the Economic Development Level in Hungary, 1998. (NUTS3) • 32

33. Conclusions Postsocialist countries: characterized with growing urban–rural dualism Chiefly the outstanding of capitals More remarkable in case of underdeveloped, catching-up V4 countries than older members Not only the urban–rural inequality increases, but its role is more and more appreciated in overall regional inequalities V4: success of cities not independent of the shift of their sectoral structure Increase of urban–rural inequality is mainly tertiary based Industrial renewal hide in the background of fine differences among rural regions • 33