The Upper Rhine Council
The Upper Rhine Council, created in 1997, is the “parliament” of the trinational cross-border Upper Rhine Region. The Upper Rhine Council is composed of 71 elected persons in the regions covering the cross-border area over the 3 countries. The council has the objective to promote dialogue and information sharing among elected representatives of the cross-border area. The different proposals and official statements are reported to the three national governments, regional assemblies and other relevant bodies. The council meets once or twice per year. The Council Presidency rotates each year to a different country. Its main objectives are: the development and the promotion of political cross-border co-operation exchanges, the support of cross-border development activities at regional and city level; the contribution to a coherent regional development strategy of the Upper Rhine and the cross-border engagement at political level.
The Upper Rhine Metropolitan Trinational Region (RMT)
The RMT was created in 2010, with the aim to co-ordinate the development of a tri-national region and facilitate the dialogue among the different cross-border institutions. The RMT’s activities focus on the four key pillars identified as priorities for the cross-border economic development of the region: politics, economics, science and higher education, and civil society. Each theme is co-ordinated by a representative of the RMT Secretariat and benefits from the work of expert group meetings. The RMT promotes linkages and horizontal co-operation across different themes and refers to high-level political entities as well as citizens and local communities of stakeholders. The RMT has the objective to mobilise relevant cross-border actors by means of new forms of governance. The RMT has been created to simplify and bridge already existing structures, promote and facilitate networks and platforms, integrate different socio-economic pillars in the overarching strategy, and undertake actions to help the policy-making process like the development of statistics, analyses and mapping exercises.
Box 2.9. Governance institutions in the Upper Rhine Trinational Metropolitan Region (cont.)
The main goals of the science pillar are: i) intensify networks and connections among innovation actors (with a science week, French-German applied schools, good practice exchanges); ii) promote co-operation among universities and higher education institutions (joint programmes, mobility schemes, common research projects); iii) foster innovation spillovers towards the rest of the economy (with the creation of an Upper Rhine Innovation Observatory, an Upper Rhine Environment Institute, workshops and platforms); iv) branding the Upper Rhine region as a leading innovation and science area; and v) promoting specific scientific sectors (chemistry, life and health sciences, earth science and materials, etc.).
Among the case study areas, InterTradeIreland provides a unique example of a formal cross-border agency. InterTradeIreland provides data, policy intelligence and programmes focused on cross-border economic promotion (Box 2.10). The InterTradeIreland Board gathers relevant organisations related to cross-border, all-island economic co-operation, from representatives of national science and research agencies, political parties, trade unions and the business sector, including private companies. Representatives of Enterprise Ireland, the economic development agency of Ireland, and Invest Northern Ireland, its counterpart in Northern Ireland (UK), sit on programme steering committees. There are typically meetings every three or six months to discuss programme activities. In addition, the CEO and Chairs of InterTradeIreland, Enterprise Ireland and Invest Northern Ireland meet on an annual basis to discuss priorities.
Box 2.10. InterTradeIreland: A unique cross-border economic promotion agency
The period since the 1998 Belfast/Good Friday Agreement between Ireland and Northern Ireland (UK) opened a new era of possibilities for developing cross-border linkages. Institutions and policies have been enacted jointly by Irish and British authorities, with support from the EU and the international community, to promote development of both sides of the island. These institutions serve to restore trust across the border in addition to economic ties. The willingness to “reap the benefits of peace”, relying on mutually beneficial exchanges, is currently high on the political agenda.
Cross-border co-operation on an all-island basis is institutionalised through the bodies established by Ireland and the United Kingdom in 1999, such as the North-South Ministerial Council, InterTradeIreland and the Special EU Programmes Body (SEUPB). These institutions provide legitimacy and continuity with respect to cross-border co-operation. There are now seven cross-border bodies and hundreds of individuals working on a cross-border basis. Several of these cross-border entities have an economic development mandate. Among them, InterTradeIreland focuses on trade and innovation (figure below). This ensures stability and structural funding to the promotion of cross-border economic activities. It also helps to overcome paralysis due to “fair return” calculations of money invested on either side of the border. The SEUPB is another body established after the Belfast/Good Friday Agreement, with the mission to manage cross-border EU programmes.1
Box 2.10. InterTradelreland: A unique cross-border economic promotion agency
InterTradeIreland launched its activities in 1999, always focusing on SMEs, but has already evolved on several fronts. It focuses on SMEs in particular, and with a goal of developing networks and partnerships. A range of programmes has been developed and implemented over the years with demonstration of mutual benefit to both jurisdictions. It also has a unique role in providing policy research. The team of 40 does not use branch offices per se, but works with the responsible entities in each jurisdiction (Enterprise Ireland and Invest Northern Ireland), as well as other groups such as chambers of commerce, to reach firms and in the implementation of cross-border programmes. InterTradeIreland facilitates and promotes the mainstreaming of cross-border innovation efforts by operating in close contact with relevant national and regional entities. The organisation has since moved from being seen as a political entity to one that has a clear economic rationale for its activities. Another shift has been from a focus on trade to one on competitiveness more generally. Indeed, the current name is now somewhat of a misnomer, in the sense that many of its actions are focused on innovation. However, given the brand recognition it has built up, the name remains.
Note: 1. Other entities that also address economic development with an all-island remit include Tourism Ireland (since 2000) and SafeFood (since 1999).
Sources: InterTradeIreland (2013), “Ireland/NI background report for OECD study on cross-border regional innovation policies”; Nauwelaers, C., K. Maguire and G. Ajmone Marsan (2013), “The case of Ireland-Northern Ireland (United Kingdom) - Regions and Innovation: Collaborating Across Borders”, OECD Regional Development Working Papers, No. 2013/20, OECD Publishing, Paris, http://dx.doi.org/10.1787/10.1787/5k3xv0llxhmr-en.
Some cross-border areas, albeit not in the case studies, have established permanent legal structures using a new European instrument. The European Grouping of Territorial Co-operation (EGTC) instrument was adopted in 2006, providing a legal framework and more visibility for such territorial co-operation. The EGTC is a legal entity and as such, different from most other cross-border structures. The use of this legal instrument is increasingly popular. By end 2012, the number of established EGTCs was 32, driven by around 700 national, local and regional authorities in 17 EU member states. A further 17 EGTCs were in different phases of constitution (Committee of the Regions, 2013).6 Hungary has been the most active user of this legal instrument, due both to the large number of country borders (seven) and the national government’s support (Box 2.11).
However, the use of EGTCs includes many challenges (Box 2.12). The EGTCs’ objectives cover areas as diverse as: health, civil defence, economic development, protection and promotion of natural resources, tourism, labour mobility and training, etc. With a few exceptions, innovation promotion does not take a prominent role in the EGTCs. In general, EGTCs have a broad mission covering most aspects of socio-economic regional development, those EGTCs with more narrowly defined objectives7 being the exception rather than the rule (Committee of the Regions, 2012).
Box 2.11. Hungary and the use of European Groupings of Territorial Co-operation
Hungary borders seven countries (EU members: Austria, Croatia, Romania, Slovak Republic and Slovenia; and non-EU members: Serbia and Ukraine), therefore cross-border co-operations are a top priority for the Hungarian government. Hungary was the first EU member state to adopt a national law governing European Groupings of Territorial Co-operation (EGTCs) (Act XCIX of 2007). In order to help and facilitate the establishment of new EGTCs and the operation of the existing ones, the Hungarian government has been providing support from the central budget since 2011 for both purposes. In 2013, the total direct support was approximately EUR 400 000. There are currently 16 registered EGTCs with Hungarian members, 12 of which are registered in Hungary. The majority of actions appear to focus on infrastructure, culture and environmental considerations, but in some EGCTs actions are focused on regional growth, such as SME development. There are already several plans from EGTCs for Integrated Territorial Investments.
Source: Personal communication with the Hungarian Ministry of Public Administration and Justice (2013).
Box 2.12. Hurdles associated with European Groupings of Territorial Co-operation (EGTC) Start-up phase:
- • High number of partners often leading to long start-up periods.
- • Striking the balance between visible actions in the short term and larger policy-making projects for a mid-term perspective.
- • Overcoming local and sector interests, at least partially, and developing a set of cross-border projects.
- • Developing and implementing projects with a limited number of staff.
- • Overcoming the risk that after the initial momentum during the constitution phase and after the first lengthy decision-making procedures, stakeholders’ energy evaporates. In such cases, new approaches to facilitate the process have to be found. New ideas might come from joint study tours and on-site visits. It might also be helpful to define a set of concrete actions and operational targets during the constitution phase in order to avoid such difficult transition periods.
- • High budgetary dependency (in particular for EGTCs in new member states) on the successful participation in European Territorial Co-operation programmes.
Source: Committee of the Regions (2012), EGTC Monitoring Report 2011, European Union, Brussels, September 2012.
Despite the need to garner greater national policy support, national policy makers are rarely invited to participate in formal governance arrangements. The Board of InterTradeIreland, which was appointed by a national government on one side and a UK devolved administration on the other, is the exception among the six case studies. Even participation by national staff below the political level as observers could nevertheless raise awareness for specific cross-border needs for which the national government has a role. In some instances, a national political leader may be a relevant stakeholder to have on a political board. In other cases, perhaps a national agency may be more relevant because national agencies set some of the programme rules that concern the possible cross-border innovation instruments.
Multi-actor-governance: Wider stakeholder involvement is necessary for sustainability
In all of the case study regions but Ireland-Northern Ireland (UK), only public sector authorities are directly responsible for the governance of the cross-border area. A common characteristic is the lack of a wider involvement of stakeholders of the triple helix.8 Entities like the Oresund Committee or the Bothnian Arc Association, for example, do not have representatives of the private sector or higher education institutions (HEIs) on their governing boards. An exception is InterTradeIreland, which gathers on its board representatives from business associations and private companies. In North America, there are examples of an active private sector engagement, such as the Borderplex Alliance covering the area of El Paso (Texas), Las Cruces (New Mexico) in the United States and Ciudad Juarez (Chihuahua) in Mexico. The privately funded entity seeks to promote the cross-border area to be an attractive location for business (Box 2.13). Some form of engagement of various types of innovation and knowledge institutions is necessary to achieve sustainable, fruitful and effective cross-border partnerships. Some form of inclusion of HEIs, firms and actors from civil society increases the acceptance and success of cross-border innovation policies.
Box 2.13. The CaminoReal: Largest US-Mexico cross-border metropolitan area
This cross-border area of around 2.4 million inhabitants includes the urban centres of El Paso (Texas) and Las Cruces (New Mexico) in the United States and Ciudad Juarez (Chihuahua) in Mexico. This area is bi-lingual and bi-cultural, which is an asset as the United States Hispanic population is expected to grow considerably in the coming decades. There is daily cross-border commuting (five bridges between the twin cities of El Paso and Ciudad Juarez) and many cross-border firm interactions. Population growth and cross-border exchange in the area has been facilitated by the North American Free Trade Agreement (NAFTA). It is the second busiest/largest trade corridor between Mexico and the United States.
The strong manufacturing base is one of the region’s distinctive features. The maquiladora sector in Ciudad Juarez (almost 350 maquila facilities owned and operated by more than 200 multinationals) constitutes the largest manufacturing region in North America, mainly contributing to the automotive and ICT sectors. The economy is more diversified on the US side with a much larger service sector. It is the public sector that has contributed to recent job growth, including through military installations such as Fort Bliss (Texas), White Sands Missile Range (New Mexico) and Holloman Air Force Base (New Mexico).
One of the area’s biggest challenges is to increase its attractiveness on a global scale. This requires fixing the “damaged brand” of the region by addressing the fundamentals to attract and retain workers and their families. With several universities and 110 000 university students, the area trains, but then exports, many science and engineering graduates to locations with better job opportunities. Pockets of poverty remain a drag on competitiveness on both sides of the border. Tightened border controls on the US side and drug-related violence on the Mexican side further compromise cross-border integration and the area’s competitiveness.
Box 2.13. The CaminoReal: Largest US-Mexico cross-border metro area (cont.)
The Borderplex Alliance is a new private agency to promote the cross-border area for firm and investment attraction. In contrast to European models, this governance approach is private sector driven. The organisation fulfils a recommendation of a review of the El Paso Economic Development System to have a private sector entity with a remit that covers the cross-border area spanning the three states and two countries. The Center for Global Competitiveness of the University of Texas El Paso provides research for economic development efforts.
The Borderplex Alliance seeks to contribute to a change in the region’s economic development approach to transition from a cost competitiveness approach to one focused on higher value added goods and services and a skilled workforce. It has been given the task of creating a strategic plan for bi-national economic development and promoting its realisation with federal, state and local authorities in both countries as well as the private and non-profit sectors. The area is characterised by low levels of innovation and R&D investment by firms (albeit other parts of New Mexico have considerable public R&D). Therefore, efforts to develop greater innovation-related collaboration among the region’s firms, universities and other centres are required. This new approach also implies a shift away from the parochial approach to economic development of the constituent areas that often favour a “race-to-the-bottom” type of competition.
Sectors of priority in the cross-border area include: automotive; consumer electronics; renewable energy (particularly solar); tourism and the medical sector. The Medical Center of the Americas will contribute to the latter (for medical tourism, medical research and medical device manufacturing). Other areas identified for joint action are: i) border infrastructure; ii) military bases; and iii) workforce development.
Sources: OECD (2010), Higher Education in Regional Development: Paso Del Norte Region, Mexico and the United States, OECD Publishing, Paris, http://dx.doi.org/10.1787/9789264088887-en; Feser, E. (2011), El Paso Economic Development System Review and Recommendations, prepared for the City of El Paso, Texas, 9 December; and personal communications with the Borderplex Alliance (July 2013).
If not through formal boards, the involvement of the private sector, HEIs and in some cases citizens may take place outside of formal governance bodies. This can take the form of an advisory role in the definition of the cross-border innovation strategy or on some of the mechanisms in place for cross-border co-operation. For example, private organisations and universities can provide feedback on initiatives and programmes in place, evaluating what worked successfully or not, or whether the right or wrong incentives were in place. Policy makers in charge of cross-border co-operation need to promote this consultation process to make the strategy work and keep all the relevant stakeholders engaged in cross-border innovation-related goals. InterTradeIreland, for example, promotes this kind of consultation by means of steering and working groups giving advice on the agency’s cross-border programmes. Especially when cross-border efforts are at an early stage and the benefits of cross-border co-operation not yet understood by all of the relevant stakeholders, wider engagement is a key aspect for the sustainability of cross-border initiatives. If beneficiaries of programmes feel excluded from governance processes, the risk of fading interest with respect to those programmes is higher. Even worse, there is a risk that programmes are poorly conceived and therefore public funds wasted.
Often private entities are the first to see the potential for cross-border collaborations, driven by market opportunities that do not stop at administrative boundaries. In some cases, large companies began to take advantage of the functionality of a cross-border area, before the cross-border area was acknowledged at the political level. This is, for example, what happened in the TTR-ELAt. For decades Philips established cross-border activities across the southern part of the Netherlands, Flanders (Belgium) and Germany. This collaboration is very clear in co-patenting statistics. Cross-border co-operation at the political level began years later. Many Finnish firms cross the border to establish headquarters in Tallinn, to benefit from cheaper locations but also the dynamic innovative ecosystem. Technopolis Ulemiste is an example of a business park located in Tallinn where many Finnish and Estonian companies share office spaces. Policy makers can learn from these kinds of private sector experiences to better target or design programmes. Especially when SMEs are involved, the private sector can bring its contribution to the discussion on cross-border strategies, through cluster and lobby associations of firms. In the Oresund area, for example, the Chambers of Commerce in both countries promote analysis, organising discussions and providing feedback on cross-border initiatives.
Special governance capacities are needed for cross-border efforts, particularly to support innovation
Capacity issues are of particular consideration for innovation and cross-border work by public authorities. There are two layers of complexity, one for supporting innovation and the other for supporting work across borders. Supporting innovation is difficult per se, given the needs for creative and cutting-edge solutions that must adapt to fast and unforeseen changes in technological sectors or knowledge-intensive services. In addition, when working at cross-border level, public administration staff needs to have or acquire additional skills concerning languages in use in different jurisdictions, the knowledge and awareness of different national and international programmes and regulations having an impact on the cross-border area. It also means they need to be exposed to different cultures and different ways of interacting (this can be different working hours, lunch habits, vacation periods, etc.). As a consequence, public administration officials successfully working on a cross-border basis often need to make use of creativity to make cross-border collaboration happen. Cross-border areas can promote and encourage ad hoc classes and training sessions for the staff working on cross-border issues. An interesting example is the Euro-Institute in Germany that serves the Upper Rhine Trinational Metropolitan Region (Box 2.14).
Box 2.14. The Euro-Institutes: Building capacity for cross-border collaboration
A network under the brand Euro-Institutes exists around Europe to provide training to civil servants relevant for cross-border efforts in a range of policy areas as well as administrative and legal issues. For example, the Euro-Institute in Kehl, Germany (across the river from Strasbourg, France) offers courses to civil servants on a set of topics ranging from local finance in the different jurisdictions to laws regarding children’s rights to inter-cultural communications. One training session in 2013 was specifically dedicated to the innovation policies of actors in the cross-border area to reinforce the science pillar of the cross-border initiative of the Upper Rhine Trinational Metropolitan Region.
One of the positive by-products of these collaborations is a capacity-building element. Policy makers can learn from different national and regional contexts and traditions, inspired by good practices across the border. This learning component may also have the indirect effect of the introduction of innovations in the public administrations jointly working to target the cross-border area.
Often personal contacts and relationships across public administration officials in different areas are important to maintain strong ties and build trust. Long-lasting personal contacts promote faster transfer of knowledge and relevant information, thanks in part to the fact that people feel more committed towards working together. Losing such social capital may be an obstacle towards further engagement in co-operation. The two cities of Helsinki and Tallinn, for example, have established connections on a wide range of topics. However, the retirement of many older Estonians in the public service in favour of a new generation with different work styles is making it harder to know the right contact. This also points to a possible need to institutionalise cross-border policies and complement social proximity by an institutional one.
One way to promote mutual learning and facilitate inter-personal contacts is to establish mobility schemes of the personnel in the different administrative bodies of the cross-border area. This can take the form of long- or short-term secondment periods and can be an opportunity to learn how institutions work in different places, gain personal contacts and acquire new language and cultural skills.