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Mapping the ICT in EU Regions: Location, Employment, Factors of Attractiveness and Economic Impact

  • Authors: Salvador Barrios, Matilde Mas, Elena Navajas, Javier Quesada
  • EUR Number: 23067 EN
  • Publication date: 12/2007

Abstract

Factual evidence suggests that ICT-led growth and ICT-producing sectors are strongly localised geographically. Given that the nature of ongoing technological change and innovation dynamics has a strong local/regional component, public policies need to be designed at this level as well. However, little is known - if anything - of the regional impact of ICT. The present study documents the regional impact of ICT by mapping the location of the ICT industry in the EU25, analysing the volume and nature of ICT employment across European regions, identifying the determinants of EU regions’ attractiveness for ICT business location and, finally, assessing the contribution of ICT investment to regional growth and convergence. The study provides evidence for the prominent role played by the Computing Services sector in recent employment and skills' changes in the ICT industry, as well as for the emergence of new regional growth poles in the EU. Departing from traditional business models, this sector of activity presents relatively low sunk costs, especially in terms of physical capital requirement while having strong innovative and skills content, opening-up new opportunities for regional development in the EU. These factors also seem to explain much of the recent trends in ICT multinationals firms' location over the past decade. The study also shows that ICT capital investment tends to promote regional economic convergence. Regional policies aiming to promote regional cohesion must therefore consider ICT diffusion as a potentially important tool for the promotion of convergence throughout the EU. Importantly, ICT diffusion should also be accompanied by other policies and, in particular, policies aiming at improving education and skills levels. The study also shows that the absence of high ICT specialisation should not be seen as a major barrier to promoting the impact of ICT on regional development.

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