Regionally Different Effects of the EU's Eastern Enlargement in Austria

The issue studied was which regions can expect to enjoy net benefits and in which regions disadvantages will outweigh advantages. The assessment was made on the basis of the sectoral structure and endowment with location factors. In terms of sectoral structure, the analysis was based on the geographical distribution by sectoral typologies which were derived theoretically and supported by empirical data. Location factors identified as being important were obtained from a growth equation in terms of economic development of Austrian districts. Both aspects delivered quite similar regional patterns. Regions with a large pool of human capital (large and medium-sized cities and towns, suburban regions) not only have more sectors which are potential beneficiaries, but they are also better endowed with location factors which are important for future regional competitiveness. It appears that the metropolis of Vienna is particularly favoured. On the other hand, rural border regions feature not only more sectors which will be subject to greater competitive pressure upon EU enlargement, but they are also markedly less well endowed with those location factors that are important for an international knowledge economy. In these border regions, predatory pressure will be experienced by service companies which have so far operated on nationally segmented regional markets, because EU enlargement will break these up and will force them to operate across borders. But not all the rural border regions will be confronted with serious problems: those not too far away from larger towns will be more easily able to compensate for job losses. The greatest disadvantage will be suffered by rural border regions situated in marginal locations where the impact of larger towns will no longer be felt. Examples would be regions in the south of Austria or in the north-west of Lower Austria and North of Upper Austria (Waldviertel, Mühlviertel). In these regions suffering from long-term structural problems, the economic basis may well be further eroded, although no dramatic development need to be expected in general. The EU's eastern enlargement will not trigger, but only accelerate the structural change at regional level. Border regions should be given aid selectively. The emphasis should be put on regions with the greatest need for action. Accordingly, it is recommended to concentrate regional policy tools on those marginal rural regions which are least able to handle destructive competition. Similarly, urban districts which may have problems integrating foreign workers should be given equal aid focus. Nevertheless, "offensive" preparatory strategies should be used for all regions, in order to improve international competitiveness. Measures should primarily aim at intensifying cross-border co-operation in order to exploit collaborative advantages such as are offered mainly by regions at the EU's external border. Depending on the locational circumstances, co-operative ventures need to be specified by regions. In larger towns, the greatest emphasis should be devoted to R&D collaboration. Industrial and tourism regions with a high level of fixed assets should strengthen their vertical and horizontal division of labour with the CEECs in order to reduce costs. Rural border regions should enter into neighbourhood co-operations to exploit resources.