Four out of the five top competitive European Union regions are Dutch ones, the new EU Regional Competitiveness Index (RCI) finds out. Utrecht is the most competitive region, followed by Zuid-Holland – including Rotterdam and The Hague – and the French Ile de France. The Dutch province of Noord Brabant – where Eindhoven is located – ranks fourth, with Amsterdam and its commuting zone closing the top five.
By competitiveness, it means a region’s ability to offer an attractive and sustainable environment for businesses and residents to live and work. Launched in 2010, the RCI allows EU regions to monitor and assess their development over time, comparing themselves with the rest of Europe. 68 different indicators are considered to elaborate the index, spanning from corruption to patent filing and health services. The 2022 edition also introduces three subindices of competitiveness – basic, efficiency, and innovation – each containing specific pillars. All indicators antecede the war in Ukraine and mostly use pre-pandemic data.
Three stages identify the development level of a region: less developed (LD), transition (TR), and more developed (MD). This value is determined by Gross Domestic Product (GDP) per head in Purchase Power Spending (PPS). In an LD region, the value is less than 75 percent of the EU average; in a TR one, it is between 75 and 100 percent of the EU average; and in an MD one, it is above 100 percent of the EU average. The most competitive regions also fall under the more developed category.
Capital regions are more competitive
Most competitive European regions are in the northwest of Europe. Having said of the Dutch prominence at the top of the rankings, Stockholm, Copenhagen, and Brussels’ regions perform considerably better than the EU-27 average. Overall, the study finds out how capital regions tend to be the more competitive in each member state - except for the Netherlands, Germany, and Italy.
The analysis outlines how the gap between capital regions and the remaining regions is vast in France, Spain, and many of the eastern member states. The finding underlines how public bodies should promote upward convergence policies, allowing less competitive regions to catch up.
Overall, in more competitive regions, GDP per capita is higher, women achieve better results, and it’s easier for a young graduate to find a job.
Less developed regions are (slowly) catching up
The 2022 RCI edition presents a reinforced comparison with the previous ones, providing a more reliable picture of each region’s development from 2016 onwards. The analysts underline how less competitive regions are improving their performance, albeit at a low pace.
Portugal, Spain, and Greece slightly improved their performance between 2019 and 2022, while most Italian regions are moving away from the EU average. Eastern European countries are still the ones having the less competitive regions. Still, the Polish and the Lithuanian capital regions are the eastern areas with the highest growth - plus 18 and 12, respectively. Yet, the gap remains with the non-capital regions of these countries. The Polish region of Śląskie represents an exception as it increased its competitiveness by 10 points.
What’s the state of innovation in Europe?
As Innovation Origins, we took a closer look at the innovation subindices of competitiveness, which include three pillars: technological readiness, business sophistication, and innovation. Technological readiness measures to what extent households and enterprises are using and adopting existing technologies. Business sophistication shows the region’s economic potential for specialization and diversification, which can help it to respond to competition. Lastly, the level of a region's innovative capacity impacts how technology is diffused within the area.
Although Dutch regions perform well, they are all off the podium. Copenhagen's capital region leads the ranking, followed by Stockholm and Helsinki. Utrecht, Amsterdam, and Brussels follow, with Noord Brabant claiming seventh place.
In the searchable database below, you can consult innovation data from all European regions by each pillar, also seeing the evolution of innovation competitiveness over time - from the 2016 to 2022 editions of the index.
Work to do on the cohesion policy
“This revised index gives us a deeper insight into the different levels of competitiveness in EU regions. It will allow us to draw better policies, providing attractive and sustainable living conditions for citizens in Europe’s regions. This is the main goal of the Cohesion Policy. Because each region is unique, we provide tailor-made support to empower them and help them capitalize on their strengths and assets,” commented Commissioner for Cohesion and Reforms Elisa Ferreira.
To make the EU more competitive as a whole, the Commission and the 27 member states have work to do to make sure no one is left behind.
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