Foreign Direct Investments in Business Services: Transforming the Visegrád Four Region into a Knowledge-based Economy?

Foreign direct investments (FDIs) in the service sector are widely attributed an important role in bringing more skill-intensive activities into the Visegrad Four (V4). This region—comprising Poland, the Czech Republic, Hungary and Slovakia—relied heavily on FDIs in manufacturing, which was often found to generate activities with limited skill content. This contribution deconstructs the chaotic concept of “business services” by analysing the actual nature of service sector activities outsourced and offshored to the V4. Using the knowledge-based economy (KBE) as a benchmark, the paper assesses the potential of service sector outsourcing in contributing to regional competitiveness by increasing the innovative capacity. It also discusses the role of state policies towards service sector FDI (SFDI). The analysis combines data obtained from case studies undertaken in service sector outsourcing projects in V4 countries. Moreover, it draws on interviews with senior employees of investment promotion agencies and publicly available data and statistics on activities within the service sector in the region. It argues that the recent inward investments in business services in the V4 mainly utilize existing local human capital resources, and their contribution to the development of the KBE is limited to employment creation and demand for skilled labour

The Czech Transition: The Importance of Microeconomic Fundamentals

We examine the case of the Czech Republic, which has been frequently cited as one of the most successful cases of transition economies in Central and Eastern Europe (CEE). Despite the costs related to the break-up of Czechoslovakia in late 1992 and 1993, the immediate consequences were quickly absorbed and the country implemented the most important market-oriented reforms relatively successfully and faster than most other CEE countries. We first identify the initial conditions in the Czech Republic in 1989 and the development strategy adopted at the beginning of the transition. We then address the importance of international factors, including the role of trade opening, foreign direct investment, and external borrowing. We analyse the achievements and failures of the strategy with respect to both economic performance and progress with institutional reforms, as well as the reasons behind the resulting outcomes. This leads us to outline future challenges, including unfinished areas of reform. We conclude with lessons for other developingtransition economies, development policy, economic strategy

Competitiveness and future outlooks of the Estonian economy: R&D and innovation policy review 2002

In the last few years lively discussions have been held in Estonia about what the country’s hitherto economic growth has rested on and how to speed it up in order to catch up with the average living standard of the European Union. Current Review of research and development activities analyses the foundations of the hitherto economic growth in Estonia and relates these to the objectives of the strategy Knowledge-based Estonia. Compared to the previous research and development studies this analysis pays more attention to the economy, its competitiveness, innovativeness and demand for research and development. The Review relies on various international surveys that have analysed the competitiveness of Estonian economy, combines their conclusions into an integrated whole, and analyses the situation in the context of implementing the strategy Knowledge-based Estonia.competitiveness growth research innovation technology development

Challenges of Building a Knowledge Based Economy in Croatia

The objective of this paper is to explore the essential nature of knowledge-based economy and to examine the current position of Croatian economy in the process of establishing sufficient conditions for transition to it. Particular attention is given to the production, transmission and transfer of knowledge and information and communication technology (ICT) in Croatia which determine the pace, direction and success of creating a knowledge-based economy. The paper concludes with the policy suggestions how to narrow the gap between Croatia and developed nations relying on the knowledge and ICT as two essential and interrelated core elements of any strategy aiming to build a knowledge-based economy.knowledge-based economy, knowledge, information and communication technology, Croatia

Emergence and Development of Industry Clusters in Hungary : Searching for a 'Critical Mass' of Business via Cluster Mapping

In the epoch of globalization, small or medium-sized national companies have great difficulties in finding an appropriate place for themselves in global labor division systems. They most frequently apply either strategies that help them becoming part of global value chains as regular suppliers, or they try to locate in which they might cooperate with other small companies in industrial clusters to compete with larger multinational companies. In both cases, communication, knowledge transfer, and cooperative actions among companies are essential for improving competitive capacities. Since this type of cooperation relies heavily on close, regular contact and face-to-face interaction, the spatial concentration of actors can improve the chances for success. Literature on the topic of supplier networks and spillover effects, as well as that on industrial clusters, emphasizes the importance of a "critical mass" of companies and other organizations and institutions. The authors first define and describe the types of synergies that stem from co-location of cooperating market actors. In addition the potential linkages among the two types of networks, supplier chains and clusters are explained. After a brief overview of the related literature, the authors introduce a new, refined measurement method of spatial concentration with empirical survey results from Hungary.industry cluster, supplier network, foreign direct investment, Hungary

The countryside in urbanized Flanders: towards a flexible definition for a dynamic policy

The countryside, the rural area, the open space, … many definitions are used for rural Flanders. Everyone makes its own interpretation of the countryside, considering it as a place for living, working or recreating. The countryside is more than just a geographical area: it is an aggregate of physical, social, economic and cultural functions, strongly interrelated with each other. According to international and European definitions of rural areas there would be almost no rural area in Flanders. These international definitions are all developed to be used for analysis and policy within their specific context. They are not really applicable to Flanders because of the historical specificity of its spatial structure. Flanders is characterized by a giant urbanization pressure on its countryside while internationally rural depopulation is a point of interest. To date, for every single rural policy initiative – like the implementation of the European Rural Development Policy – Flanders used a specifically adapted definition, based on existing data or previously made delineations. To overcome this oversupply of definitions and delineations, the Flemish government funded a research project to obtain a clear and flexible definition of the Flemish countryside and a dynamic method to support Flemish rural policy aims. First, an analysis of the currently used definitions of the countryside in Flanders was made. It is clear that, depending on the perspective or the policy context, another definition of the countryside comes into view. The comparative study showed that, according to the used criteria, the area percentage of Flanders that is rural, varies between 9 and 93 per cent. Second, dynamic sets of criteria were developed, facilitating a flexible definition of the countryside, according to the policy aims concerned. This research part was focused on 6 policy themes, like ‘construction, maintenance and management of local (transport) infrastructures’ and ‘provision of (minimum) services (education, culture, health care, …)’. For each theme a dynamic set of criteria or indicators was constructed. These indicators make it possible to show where a policy theme manifests itself and/or where policy interventions are possible or needed. In this way every set of criteria makes up a new definition of rural Flanders. This method is dynamic; new data or insights can easily be incorporated and new criteria sets can be developed if other policy aims come into view. The developed method can contribute to a more region-oriented and theme-specific rural policy and funding mechanism

The Impact of the European Structural Funds and European Policies on the Small and Medium Enterprises

Diplomová práca popisuje malé a stredné podniky, ich rozvoj a podporu poskytovanú európskou politikou a štrukturálnymi fondami. Použitie relevantnej literatúry a prípradových štúdií umožnuje poskytnúť kritický pohľad na danú problematiku. Na konci práce sú navhrnuté odporúčania na zlepšenie a záver.This master’s thesis describes small and medium enterprises, development factors and the support provided to them by EU policies and structural funds. By the support of relevant literature and case studies, critical view is given on this issue. At the end of the paper the conclusions and further recommendations are proposed.