The Future of Regional Economy in Estonia

Comparative analysis of national and county level development strategies

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The qualitative thematic analysis comprises six topics: regional economic concentration; territorial scope of economic regions; regional specialization; international and cross-border opportunities for regional development; institutional framework for regional development; values guiding development. The analysis focuses on the normative component in strategies and applied research ─ what is considered to be normal and/or desirable future state of affairs.

The national strategies with spatial sensitivity (the strategy of regional development and national spatial plan) problematize excessive economic concentration and aim at regional „balance“, but do it from „realist“ perspective. Instead of regional equality, the ambition is to compensate somehow regional disadvantages and to avoid piling-up of negative consequences of regional inequality. The national growth strategy for business sector, on the other hand, does not see anything wrong in economic concentration. It prioritizes large companies with high growth potential, and lists regional entrepreneurship in fourth and last place as a way to achieve national targets. The development strategies of counties approach to concentration issue depending on their current developmental position. The strategy of the capital city region (Harju county) sees itself as the (only) national growth engine, while the strategy of the region around second largest city in Estonia (Tartu county) aims at the role of being the economic growth center for Southern-Estonia. The smaller and more peripheral counties are satisfied with slowing down the processes of economic concentration.

The normative territorial scope for economical regions presented in strategies varies as well. The national strategy of regional development and national spatial plan deploy quite complex territorial hierarchy, including Tallinn and Tartu as its main growth centers with functional hinterlands dividing Estonia into two regions, division of Estonia into four development region, and the discrimination of smaller functional regions (based on population size and commuting patterns) which territory resembles but does not coincide with the territory of 15 counties. The strategy provides regionalized guidelines for four development regions, and provisionally determines areas for smart specializations for 15 counties and 2 additional subregions. For the national growth strategy, the only region Estonia has is one with the center in Tallinn and covering whole territory of the state. The growth areas for smart specialization are determined namely for that region in the strategy.

The international and cross-border opportunities for regional development are described in strategies in quite general terms. The selection of cooperation partners is based on territorial proximity and earlier practice. Thus, for Tallinn key cross-border partners are and are planned to be Helsinki and St. Petersburg, while it is considered reasonable for Tartu to co-operate with Pskov and Riga. Ida-Viru county searches its development opportunities within Tallinn-St. Petersburg-Helsinki (Kotka) triangle. Valga-Valka cross-border twin-town is brought forward both in national strategies and in the strategy of Valga county. For many other smaller counties international co-operation does not present itself as significant developmental opportunity at all ─ at least their county strategies are silent about that.

The national strategy of regional development and the national spatial plan operate with the concept of multi-level governance as the normative governmental model for the successful regional development. The specific roles of different regional actors (including universities and their regional colleges) are prescribed in the strategy. The growth strategy targets on crosssectoral cooperation, and promotes clusters and TA&I centers as organizational tools for economic development. The dominant values written into Estonia development strategies and applied research are modern ─ economic growth, competitiveness, productivity, the paradigm of development itself. The soft „postmodern“ values like sustainability, community, participation, etc., pop-up here and there in strategy texts but only as supplementary to growth and competition discourse. Even ecological lines of action are predominantly seen in service of economic growth and improved competitiveness.

Authors: Veiko Sepp, University of Tartu

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