Empirical analysis of human capital development and economic growth in Europe

Recent discussion of the knowledge-based economy draws increasingly attention to the role that the creation and management of knowledge plays in economic development. Development of human capital, the principal mechanism for knowledge creation and management, becomes a central issue for policy-makers and practitioners at the regional, as well as national, level. Facing competition both within and across nations, regional policy-makers view human capital development as a key to strengthening the positions of their economies in the global market. Against this background, the aim of this study is to go some way towards answering the question of whether, and how, investment in education and vocational training at regional level provides these territorial units with comparative advantages. The study reviews literature in economics and economic geography on economic growth (Chapter 2). In growth model literature, human capital has gained increased recognition as a key production factor along with physical capital and labour. Although leaving technical progress as an exogenous factor, neoclassical Solow-Swan models have improved their estimates through the inclusion of human capital. In contrast, endogenous growth models place investment in research at centre stage in accounting for technical progress. As a result, they often focus upon research workers, who embody high-order human capital, as a key variable in their framework. An issue of discussion is how human capital facilitates economic growth: is it the level of its stock or its accumulation that influences the rate of growth? In addition, these economic models are criticised in economic geography literature for their failure to consider spatial aspects of economic development, and particularly for their lack of attention to tacit knowledge and urban environments that facilitate the exchange of such knowledge. Our empirical analysis of European regions (Chapter 3) shows that investment by individuals in human capital formation has distinct patterns. Those regions with a higher level of investment in tertiary education tend to have a larger concentration of information and communication technology (ICT) sectors (including provision of ICT services and manufacture of ICT devices and equipment) and research functions. Not surprisingly, regions with major metropolitan areas where higher education institutions are located show a high enrolment rate for tertiary education, suggesting a possible link to the demand from high-order corporate functions located there. Furthermore, the rate of human capital development (at the level of vocational type of upper secondary education) appears to have significant association with the level of entrepreneurship in emerging industries such as ICT-related services and ICT manufacturing, whereas such association is not found with traditional manufacturing industries. In general, a high level of investment by individuals in tertiary education is found in those regions that accommodate high-tech industries and high-order corporate functions such as research and development (R&D). These functions are supported through the urban infrastructure and public science base, facilitating exchange of tacit knowledge. They also enjoy a low unemployment rate. However, the existing stock of human and physical capital in those regions with a high level of urban infrastructure does not lead to a high rate of economic growth. Our empirical analysis demonstrates that the rate of economic growth is determined by the accumulation of human and physical capital, not by level of their existing stocks. We found no significant effects of scale that would favour those regions with a larger stock of human capital. The primary policy implication of our study is that, in order to facilitate economic growth, education and training need to supply human capital at a faster pace than simply replenishing it as it disappears from the labour market. Given the significant impact of high-order human capital (such as business R&D staff in our case study) as well as the increasingly fast pace of technological change that makes human capital obsolete, a concerted effort needs to be made to facilitate its continuous development.

An assessment of the industry cluster approach as a tool for local economic development:the case of the new media industry in Birmingham

Industry cluster policies are a current trend in local economic development programmes and represent a major shift from traditional approaches. This trend has been coupled by an increasing interest in new media industry as a significant focus for regional development strategies. In England clusters and new media industry have therefore come to be seen as important tools in promoting local and regional economic development. This study aimed to ascertain the success of these policies. In order to achieve the aims of the study, the Birmingham new media industry was chosen for the study. In addition to an extensive review of the literature, semi-structured interviews were conducted with new media firms and Business Support Agencies (BSAs) offering programmes to promote the development of the new media industry cluster. The key findings of the thesis are that the concerns of new media industry when choosing their location do not conform to the industry cluster theory. Moreover, close proximity in geographical location of the industries does not mean there is collaboration and any costs saved as a result of close proximity to similar firms are at present seen as irrelevant because of the type of products they offer. Building trust between firms is the key in developing the new media industry cluster and the BSAs can act as a broker and provide neutral ground to develop it. The key policy recommendations are that new media industry is continually changing and research must continuously track and analyse cluster dynamics in order to be aware of emerging trends and future developments that can positively and negatively affect the cluster. Policy makers need to keep in mind that there is no uniform tool kit to foster the different sectors in cluster development. It is also important for them to be winning support and trust of new media firms since this is key in the success of the cluster. When cluster programs are introduced they must explain their benefits to industries more effectively in order to encourage them to participate in programmes. The general conclusions of the thesis are that clusters are a potentially important tool in local economic development policy and that the new media industry has a considerable growth potential. The kinds of relationships which cluster theory suggests develop between do not, as yet, appear to exist within the new media cluster. There are however, steps that the BSAs can take to encourage their development. Thus, the BSAs need to ensure that they establish an environment that enables growth of the industry.

Urban labour, voice and legitimacy:economic development and the emergence of community unionism

Community unionism has emerged in the past decade as a growing strand of industrial relations research and is influencing trade union strategies for renewal. This article seeks to further develop the concept, while exploring the potential roles for unions in communities subject to projects of urban regeneration.

An examinaton of how British local authorities are employing strategic planning and management in their economic development function

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Regional competitiveness, economic growth and stages of development

This paper positions the concept of regional competitiveness within theories concerning regional economic growth and stages of economic development. It examines the sources of regional competitiveness encompassing an analysis based on the particular stage of economic development that the nations within which regions are situated have reached. As a means to achieve this, the paper undertakes an empirical analysis of data stemming from the World Competitiveness Index of Regions, and identifies regional competitiveness as a dual concept that explains relative differences in rates of economic development across regions, as well as an understanding of the future economic growth trajectories of regions at a similar stage of economic development. As with endogenous growth and development theory, the notion of regional competitiveness presented here places knowledge, innovation and entrepreneurship at the forefront of conceptualisations of regional economic differentiation.

Gazdasági versenyképességet támogató pályázatok eredményessége az NFT és az ÚMFT keretében = The effectiveness of grants supporting economic development under hungary's national development plans

A Budapesti Corvinus Egyetem kutatócsoportja által végzett kutatás során arra a kérdésre kerestük a választ, hogy a Nemzeti Fejlesztési Terv (NFT) és az Új Magyarország Fejlesztési Terv (ÚMFT) keretében létrehozott, kis- és középvállalatok számára kialakított gazdaságfejlesztési pályázatok milyen hatékonysággal működnek. Hogyan volt képes a rendszer beépíteni az NFT Gazdasági Versenyképesség Operatív Program (GVOP) tapasztalatait az ÚMFT Gazdaságfejlesztési Operatív Programba (GOP). Továbbá, hogy maguk a kis- és középvállalatok miként értékelik ezen kiírásokat és milyen javaslatokat tennének az ilyen típusú pályázatok "felhasználóbaráttá" tételéhez. A kutatás 2009 márciusától 2009 decemberéig tartott. A kéziratot 2010 áprilisában zártuk. / === / In a research group of the Corvinus University of Budapest we aimed to answer the questions of efficiency and effectiveness of the economic development grants of the National Development Plan (2004-2006) and the New Hungarian Development Plan (2007-13) with the focus of small and medium sized enterprises (SME's). We tried to highlight the results of learning by doing of the first National Development Plan and how this practice was built into the second development plan. An emphasis was placed on the opinion of the SME's, how they evaluate the grants and what are their proposals to make the grant system more "user friendly".

Általános egyensúlyi modellek alkalmazása gazdaságpolitikai elemzésekre (Application of general equilibrium models to economic policy analyses)

A szerző az alkalmazott többszektoros modellezés területén a lineáris programozási modellektől a számszerűsített általános egyensúlyi modellekig végbement változásokat tekinti át. Egy rövid történeti visszapillantás után a lineáris programozás módszereire épülő nemzetgazdasági szintű modellekkel összevetve mutatja be az általános egyensúlyi modellek közös, illetve eltérő jellemzőit. Egyidejűleg azt is érzékelteti, hogyan lehet az általános egyensúlyi modelleket a gazdaságpolitikai célok konzisztenciájának, a célok közötti átváltási lehetőségek elemzésére és általában a gazdaságpolitikai elképzelések érzékenységi vizsgálatára felhasználni. A szerző az elméleti-módszertani kérdések taglalását számszerűsített általános egyensúlyi modell segítségével illusztrálja. _______ The author surveys the changes having taken place in the field of multi-sector modeling, from the linear programming models to the quantified general equilibrium models. After a brief historical retrospection he presents the common and different characteristic features of the general equilibrium models by comparing them with the national economic level models based on the methods of linear programming. He also makes clear how the general equilibrium models can be used for analysing the consistency of economic policy targets, for the investigation of trade-off possibilities among the targets and, in general, for sensitivity analyses of economic policy targets. The discussion of theoretical and methodological quuestions is illustrated by the author with the aid of a quantified general equilibrium model.

A temporary loss of pace or the "middle income trap" - a commentary on the tasks for Hungary's economic development

The latest Hungarian economic growth data, though favourable, do not let us forget that in the longer term growth is weak compared to the preceding period – as well as to the performance of the East-Central European region, which is more dynamic than the European average. In order to make sense of the past decade’s relative loss of pace and lay the foundations for future development policy, it is worth placing Hungary’s case in the context of the slowing tempo typical of middle-income countries. The economic development policies currently pursued by the government are aimed at increasing output in the processing industry, and by extension exports, while relevant international experience advises that it is the higher value-added activities of the global value chain, particularly business services, which should be developed further. In this way real wages and income levels could be increased, and the economy would be less exposed to the fluctuations of international cycles.

Social construction of economic exchanges: A Weberian approach

The subject-matter of this dissertation is the social construction of economic exchanges, with an emphasis on market transactions. Applying a Weberian approach, the dissertation analyzes the social construction of economic exchanges at the following analytical levels: the agency-level, the institutional-structural level and the comparative-historical level. At the agency-level, the dissertation explores the role that human actors and social actions play in economic exchanges, especially market transactions. Theoretically elaborated and empirically examined is the assumption of market-economic exchanges as particular types of social action. At the institutional-structural level, the dissertation examines the relations of society and culture to market-economic exchanges. The assumption that the market economy is situated in and influenced by a broader social-cultural framework is advanced and evaluated in light of empirical findings. At the comparative-historical level, the dissertation engages in an analysis of the social construction of economic exchanges across various societies and over time. The assumption of the historical specificity of the market economy is reexamined, and the social construction of economic exchanges in traditional, capitalist and post-socialist societies is subject to comparative investigation. In the conclusion, further theoretical, methodological and empirical implications as well as directions for future analyses are discussed. ^