Regional competitiveness is the ability of a region to offer an attractive and sustainable environment for firms and residents to live and work. Launched in 2010 and updated every three years, the Regional Competitiveness Index (RCI) allows regions to monitor and assess their development over time and in comparison with other regions.
The Regional Competitiveness Index (RCI) has been measuring the major factors of competitiveness since 2010 for all the NUTS-2 level regions across the European Union. With more than 70 comparable indicators, the Index measures the ability of a region to offer an attractive and sustainable environment for firms and residents to live and work.
The full presentation of the RCI and all related materials and data sets are available on this webpage.
In publishing the 2019 version of the RCI we are making some of the results from the RCI available on the #ESIFopendata platform for the first time. Three datasets are available on the open data platform:
- RCI 2019 and its component scores on the 0-100 scale, national and regional NUTS-2 levels by country => LINK
- RCI z-scores variation over time - 2010, 2013, 2016 and 2019 - for EU-28 and NUTS-2 regions => LINK
- RCI z-score variations over time (with significance levels) => LINK
(Datasets 2 + 3 present the data on z-score variations in slightly different formats to allow the creation of charts 2 + 3 below).
Using #ESIFOpenData you can
- Use the interactive charts below to filter, benchmark and compare;
- Build your own charts and embed them on your website;
- Download the underlying data for further analysis.
2. RCI ... what is it?
The RCI provides a comparable and multifaceted picture of the level of competitiveness for all EU regions. The sub-national level described by the RCI allows the assessment of inequalities of competitiveness levels across regions and monitoring performance across time at a disaggregated spatial level. In most cases, the regional level is much more suitable than looking only at the national level. The RCI should be considered as an instrument to assist with the design of better policies and monitoring their effectiveness.
Being a multidimensional and intertwined concept, improving competitiveness requires the coordinated effort of many different actors. The analysis of the RCI, its three sub-indexes and 11 dimensions helps to highlight the strengths and weaknesses of each region with the possibility to benchmark each one to the EU average or its peers.
The RCI is a unique, comparable and transparent tool for national and local decision makers responsible for regional development strategies, in particular in the context of cohesion policy.
Each edition of the RCI expresses the relative performance of regions and member states in relation to the EU average (set to zero), with the regional and national RCI calculated in z-scores. Comparison over time is not straightforward because each edition of the Index incorporates slight modifications. The modifications arise because new indicators become available at the regional level (while others are no longer available) and revisions of NUTS-2 boundaries can cause breaks in the series.
The 2019 edition of the RCI is composed as follows:
- It tracks the performance of 268 regions at NUTS-2 level across 28 EU Member States (7 capital regions have been merged with their respective commuting areas);
- It includes 74 indicators selected from a set of 84 candidate indicators (some indicators used in 2016 have been replaced);
- Following the same framework and methodology of previous editions, the indicators are grouped into 11 dimensions of competitiveness capturing concepts that are relevant to productivity and long-term development;
- In turn, these 11 dimensions are organised into three sub-indexes, as follows:
- BASIC SUB-INDEX: Institutions, Macroeconomic stability, Infrastructure, Health, Basic Education
- EFFICIENCY SUB-INDEX: Higher Education and life long learning, Labour market efficiency, Market size
- INNOVATION SUB-INDEX: Technological readiness, Business sophistication, Innovation
- Most indicator values available span the period 2015-2017 (some are as recent as 2018, while a few others go back to 2014).
What are z-scores?
The regional z-score is a measurement of the relationship of the regional RCI value to the EU RCI mean (average), measured in terms of standard deviations from the mean. If a z-score is 1, it indicates that the data point's score is one standard deviation above the EU average. Positive values show higher than EU-mean score; negative values are lower than the EU-mean score.
3. What does the 2019 RCI show us?
3.1 Chart 1: RCI 2019 by country, region and RCI components
This first chart shows the 2019 regional competitiveness scores (0-100) for the NUTS-2 regions in a selected Member State (these scores have been compiled by normalising z-scores into a 0-100 scale).
Use the filters in the drop down menu to choose between different Member States. The second filter allows you to the explore each of the 11 dimensions, the three sub-indexes (see list in section 2 above) and the overall RCI and the performance of the different regions. Click "reset" on the drop down menu for the second filter to see all components.
Two version of this chart are presented below to allow values from 2 Member States to be compared.
In the RCI 2019, wide-ranging variations characterise both countries and regions within the same country (explore regional variations by country in the chart above).
Capital regions tend to be the most competitive in their country. The Netherlands, Italy and Germany present key exceptions. In the Netherlands, Utrecht remains the best-performing region followed by Amsterdam. In Italy, Lombardia, historically a highly productive region, continues to be the best-performing Italian region, while in Germany the best-performing region is still Oberbayern (Munich region) with many other German regions outperforming Berlin.
Other countries also show a very high variability, although this is due to the significantly higher performance of the capital region with respect to other regions in the country: for example, in France, Portugal and most of the Eastern and Nordic countries where the regions neighbouring the capital are far less competitive. A key question with important policy implications is whether the gap between the capital region and the rest of the country has widened or narrowed over the past 10 years or so. The four points in time now available for the RCI allow for an in-depth analysis of these gaps.
What are the most important factors for good levels of competitiveness? Although a simple comparison of the 11 pillar scores is not sufficient to understand a complex phenomenon such as regional competitiveness, the analysis of the overall and component scores provides useful insights.
3.2 RCI evolution over time and assessing the significance of changes
Chart 2: RCI evolution over time (compare countries and regions)
The time evolution below should always be read in conjunction with the bar chart showing "significance level" of changes over time. You can using the filters to compare changes in the regional and national RCI scores since 2010 across Europe by using the NUTS-2 codes or key words to find a country or region.
To judge the significance of changes over time Chart 2 below should be used in conjunction with Chart 3 (filter by single regions).
Chart 3: RCI score variations over time with significance levels
Using the filter, you can choose one region or member state at a time and examine whether the changes in z-scores between indices have changed by more than +/-5% .
Four points in time can now be compared. The first 2010 edition referred to indicators values from before the recession, whereas the later values show the subsequent progression.
- Regions can use RCI scores to make a comparison with any other region in the EU or with the EU average. It is also helpful to compare a region with regions at a similar level of economic development. For example, a less-developed region may have an overall low score but outperform regions with similar GDP per capita. Conversely, a highly developed region may have a high score but still fall short of what is typical for comparably wealthy regions.
- In assessing changes over time, it is important to bear in mind that minor changes in the scores are not to be considered as informative (they can be due to minor differences between RCI editions). Similarly, changes in a region’s ranking over time are not necessarily meaningful. It may be that a change in ranking is due to a small, insignificant difference in the scores or to changes in the total number of NUTS-2 regions following administrative border revisions.
- On the other hand, analysing significant changes over time in the scores, as opposed to the rankings, can be highly informative. An individual region is defined as significantly improving (or deteriorating) between two RCI editions if its score increases (or decreases) by more than 5 % of the overall score range.
In general, rapid and wide movements are not common across the four RCI editions. Regional performances are quite stable across time, even if a slight convergence can be observed in some cases. As examples of time comparison analysis, the capital regions in France, Sweden, Romania and Czechia, consistently remained the top performer with a wide gap compared to the other regions in the country. But are these gap expanding or contracting?
- In France, the gap is narrowing slightly due to the combined effect of better performances by the chasing regions and the relative lower performance of the capital region Île-de-France.
- In Sweden, Stockholm, with a stable high score, has been slowly caught up by the other three top regions in the country since 2016.
- In contrast, the gap between the region of Bucharest and the rest of Romania has remained strikingly wide over the past decade even though the next three regions have recently improved.
- In Czechia, Praha is the only region registering above the EU average (positive scores) with steadily increasing scores over the years. The gap with the rest of the country is wide and increased in 2013 compared to 2010 but has fallen slightly more recently with the top non-capital regions showing signs of improvement.
These are just some examples of the insights from the RCI time series.
4. How to reuse open data resources
The #ESIFOpenData datasets and other material derived from the RCI can be found in the catalogue.
You can create a user profile on the platform (sign up here) to carry out more advance functions such as
- Filtering datasets before download;
- Creating charts;
- Sharing or reusing charts using url links or embedding them on your own websites.
For additional information on #ESIFOpenData go here:
5. More reading
- The full presentation of the RCI is made on this webpage.
- For relevant #ESIFOpenData content check the catalogue here.
Paola ANNONI / Lewis DIJKSTRA
Text: October 2019