1. REGIONAL STRATEGY BUILDING AND EVALUATING OPEN DAYS Brussels, 9 October 2007 Grzegorz Gorzelak Centre for European Regional and Local Studies (EUROREG) Warsaw University

2. 2 Contents Methodological issues of strategy building – and not about its content. Organised in a set of dilemmas – but each of them is provided with a suggestion. Example

3. 3 Why do we need a strategy? Organisation of our own future activities through: analytical evaluation of present and future potentials; formulating wishes and wants, setting goals; preparing actions; securing financing.

4. 4 Why a regional strategy is important A slow, but real shift from equity to efficiency (in reality, if not in words). Endogenous factors gain in importance. External assistance may bring success only if supplements own efforts of the region. Strategy increases the efficiency of using own and external funds.

5. 5 The methodological dilemmas Dilemma 1: whose strategy? Dilemma 2: how broad the strategy? Dilemma 3: what comes first: vision or SWOT analysis? Dilemma 4: how many strategic goals? Dilemma 5: social needs or growth? Dilemma 6: politicians and experts or wide social participation? Dilemma 7: following the state policies or independent?

6. 6 Dilemma 1: whose strategy? The strategy may be owned: by the regional authorities who will be implementing it (if they exist – if not, a strategy is not needed), or by all major actors located in the region. Suggestion: the strategy should have its well specifiedowner. Strategy is a commitment, and its owner bears responsibility for the shape and implementation of the strategy. The regional authorities are a natural body which should prepare the strategy and later implement it. However – a degree of decentralisation is necessary if the strategy is to be an own document of the regional authorities.

7. 7 Dilemma 2: how broad the strategy? limited to the field of competence of the regional authorities, or all processes and phenomena that occur within a given region. Suggestion: the scope of the strategy should be narrow, limited to the activities for which the regional authorities can take direct responsibility or which they can influence indirectly.

8. 8 Dilemma 3: what comes first - vision or SWOT? The background of the strategy may be provided by: a vision – a description of the regions features by the end of the time horizon of the strategy; or a SWOT analysis which leads to an evaluation of regional potential, conducted from both internal and external perspectives. Suggestion: the vision should precede the SWOT analysis, which allows for including into the set of goals also these desired processes which cannot be included in the SWOT analysis.

9. 9 Dilemma 4: How many strategic goals? Strategy is a choice, not a shopping list! It has also education and promotion goals – should be understandable. The representatives of the regional authorities must be able to memorize the goals. Suggestion: not more than 5 goals

10. 10 Dilemma 5: social needs or growth? Necessity of constant restructuring and adaptation, especially in catching-up regions. No free lunches – there is always a price to be paid for restructuring, and there is no social justice in selection of those who pay it. Postponing restructuring leads to higher costs, sometimes even for smaller gains. Suggstion: strategy should be development-oriented. One may distribuite only what had been produced

11. 11 Dilemma 6: politicians and experts or wide social participation? The strategy may be prepared in two different ways: –by a narrow group of experts working together with the regional authorities which adopt the final strategy, or –by a wide committee, composed of all regional actors which works out the assumptions of the strategy, its goals and approve the final version. Suggestion: the strategy building should be based on expert-politicians approach, however with participation of a wider public.

12. 12 Dilemma 7: following the state policies or independent? The regional strategy may follow the state policy of regional development in order to secure that the region will get access to all pockets of state money. Becomes a strong temptation. The strategy may be independent, neglecting the possible sources of external financing. Suggestion: a compromise needed between these two orientations.

13. 13 Strategy building – step 1 A A. analysis: what may happen

14. 14 Strategy building – step 2 A B A. analysis:what may happen B. vision: what we want B

15. 15 Strategy building – step 3 A B A. analysis:what may happen B. vision: what we want C. action: what can be done (SWOT) C B

16. 16 Strategy building – step 4 A B C B A. analysis:what may happen B. vision: what we want C. action: what can be done (SWOT) D. STRATEGY: what we want and can do D A B C

17. 17 Example – Lubuskie region, Poland The strategy for the Lubuskie voivodship (western Poland, medium level of development) was constructed around 4 strategic goals. These were decomposed to 19 operational goals. Development-oriented. A result of strategic choice. Disciplined and resistant to several internal pressures.

18. 18 Strategic goals 1.Securing social, economic and spatial cohesion of the region though modernisation of its major transport infrastructure and accelerated economic development. 2.Increasing the level of education of regions inhabitants and promoting research, innovation and technology 3.Supporting entrepreneurship through improving conditions for local businesses and attracting external investors 4.Efficient use of regions natural environment and cultural heritage for economic development

19. 19 Implementation A living strategy, in the period 2001-2005 applied in practice, a permanent reference for the activities of the regional authorities. Evaluated ex-post with the help of 4 capitals model. Evaluation used for the strategy update, done in 2005.

20. 20 Four capitals model Four capitals are the following: –manufactured (or human-made) capital consists of material assets created by man: infrastructure, buildings, machinery, goods and commodities; –natural/environmental capital embraces traditional natural resources (water, energy, mineral reserves) and also natural assets that are not easily valued monetarily, such as biodiversity, endangered species, and the ecosystems which perform ecological services; –human capital refers to individuals and their features, like health, education, skills – which improve productive potential of a given socio-economic system; –social capital is composed of potential for co-operation and joint actions, to which the existence of trust between individual people and socio-economic groups is a necessary precondition.

21. 21 4 capitals in practice The overal capital (sum of the four) should increase in the process of development. Trade-offs between particular capitals may may occur (and will occur) – none of the capital should be decreased below a certain threshold. Strategic goals can be related to the capitals, and should allow for their increment.

22. 22 Strategy evaluation in 4 capitals model A strategic goal may be an important means to develop a certain capital, and this should be reflected in the strategy. During strategy implementation this goal may increase given capital in different way. Therefore, than can be congruence or lack of congruence in potential and real effect of a given goal on a given capital. If congruence occurs – the strategy implementaion was efficient. If there is discrepancy – we draw a red card and intensify impelementation of this goal.

23. 23 Evaluation of the strategy 1

24. 24 Evaluation of the strategy 2

25. 25 Conclusions The strategy should be implemented – cannot be just a book on a shelf. After a certain period it has to be honestly evaluated, and adapted to the changing reality. There are several ways of such an evaluation – the four capitals concept is one of possible – and effective - approaches.