Building the foundations
Professor Kevin Morgan says it’s time to reinvent regional policy with a new development model
As the Brexit negotiations get under way it is understandable that the main focus is on the financial implications.
In the case of regional policy, the UK has been allocated €16.42bn from European Structural and Investment (ESI) funds over 2014-20, increasing to €27.29bn when the UK contribution is included.
No part of the UK is more dependent on ESI funds than Wales, where they are worth £370m annually. This swells to £680m a year when other EU funds are included, like the Common Agriculture Policy and Horizon 2020 for research and innovation.
In its Brexit White Paper, the Welsh Government says it plans “to hold to account the campaign promises that Wales outside the EU would be not a penny worse off than it would otherwise have been within the EU”.
This is easier said than done – who in power is accountable for these promises?
Though it will be hard to persuade a pro-austerity Conservative government to honour “the campaign promises,” politicians in Wales are at least alive to the funding challenge.
But are they alive to the intellectual challenge of reinventing regional policy? Are they abreast of good practice in and beyond the UK as terms of what works where and why?
The post-Brexit world will demand a less parochial approach to regional development in Wales. This entails building on the past, because we need to accelerate what works, as well as breaking with the past, because regional policy can’t shoulder the burden of a new model of development on its own.
Building on the past – the knowledge economy and its limits
Reinventing regional policy in Wales doesn’t mean starting from scratch because policymaking is a path-dependent process. What a region or country is capable of doing partly depends on what it has done in the past and what it has learnt from the past.
Regional policy architects will want to build on what is working well in the current EU programme and decide if its priorities are appropriate for a more demanding future.
Take the European Regional Development Fund, where the key priorities are to promote: research and innovation capacity; SME competitiveness; renewable energy and energy efficiency;
connectivity and urban development.
It’s hard to imagine any of these priorities being totally jettisoned because they are all-important, so the challenge becomes one of identifying which places are best placed to develop the priority.
Regional policymakers will also need to refer to the UK’s new Industrial Strategy after the publication of the Green Paper earlier this year.