What are the levers for effective regional development?

‘What are the levers for effective regional development?’  was one of the most interesting questions posed recently by the Department of Housing, Planning, Community & Local Government in its recent ‘Issues and Choices’ consultation paper for the National Planning Framework.

In our WDC Submission to the consultation, we drew on previous WDC analysis including the WDC Policy Briefings ‘Why care about regions? A new approach to regional policy’, ‘Education, Enterprise & Employment – How Can Better Integration Of The 3Es Drive Growth In The Western Region?’ and ‘e-Working in the Western Region: A Review of the Evidence’ as well as other research to answer this question.

In our submission we argue that Infrastructure, the ‘3Es’ (Enterprise, Employment and Education) and Innovation are the key levers for effective regional development. The central aim of regional policy, the National Planning Framework and the upcoming Regional Economic & Spatial Strategies should be to provide the conditions for regions to grow and realise their full potential.  Developing infrastructure, the 3Es and innovation is the way to do this.  When these three areas complement and support each other, they drive regional growth.  Each has a distinctive role, and needs its own policy focus, but they are most effective when addressed through an integrated regional policy approach.

Growing Regions, WDC (2010), Why care about regions?

Infrastructure

Investment in infrastructure has always played a prominent role in regional policy.  The expectation that improvements in physical infrastructure will generate productivity gains for local businesses and increase the attractiveness of an area for investment and for tourism has been a recurring theme.  Less developed regions need to have a similar quality of infrastructures for their residents and businesses as is available in more successful regions. Infrastructural connectivity has a critical influence on choice of location for both indigenous and foreign investors.  The Western Region, and particularly the North West, is disadvantaged in terms of several forms of infrastructure.  For example Sligo was the only NSS Gateway which was not connected to Dublin with a motorway under the Major Inter-Urban motorway investments between 2006 and 2010 and was the only NSS Gateway or Hub to have a 0 improvement in its ‘accessibility to employment’ score as a result of this period of intensive investment, according to research by Transport Infrastructure Ireland.

In its submission to the NPF, the WDC makes a range of specific recommendations in relation to infrastructural investments needed to facilitate development in the Western Region.  The proposed investments include transport (national roads, regional and local roads, public transport (rail and bus), air and ports), communications (broadband and mobile coverage) and energy (electricity and natural gas).  These infrastructure investments are also highlighted in the WDC’s submission to the Mid-Term Review of the Capital Plan.

While infrastructure is critical, OECD[1]  work emphasises that transport and other infrastructure developments are not enough by themselves; to have an impact on regional development they need to be associated with, and complemented by, human capital and innovation developments.

The ‘3Es’: Enterprise, Employment and Education

Regions are successful because enterprises in these regions are successful.  When enterprises grow, employment grows and this depends on skilled and educated people.  Policy to support the ‘3Es’ of enterprise, employment and education must work together at both national and regional level to create dynamic regions.[2]

One of the most important issues that needs to be recognised and addressed by the NPF is that narrow definitions of ‘job’, ‘work’ and ‘employer’ as a full-time permanent employee travelling every day to a specific work location is extremely limited and does not recognise either the current reality of ‘work’ or the dramatically changing patterns likely to emerge up to 2040. Self-employment, the ‘gig’ or ‘sharing’ economy, contract work, freelancing, e-Working, multiple income streams, online business are all trends that are dramatically redefining the conception of work, enterprise, and their physical location.

A study conducted for Vodafone in 2016 found that nearly one in four broadband users in rural Ireland use the internet at home in relation to their work and one third have remote access to their company network. An estimated 150,000 rural workers avoid commuting some or all of the time because they can connect to work remotely.  This trend is likely to continue.

If the NPF mainly equates the term ‘employer’ with a large IT services or high-tech manufacturing company, many of which (though by no means all) are attracted to larger cities, then it will only address a small proportion of the State’s population and labour force, and will not help to achieve effective regional development. The NPF must recognise and support existing and new sole traders, micro-businesses and freelancers working in sectors where lagging regions have comparative advantage or which are not location dependent.

Quality of life is a key determinant in the location decision of many people and current trends in the world of work and technology will increasingly help people to work from the same location where they want to live.

Enterprise

Enterprises create most jobs.  The NPF must recognise the need to enable and support the diversification of the Irish economy.  It must provide a support framework for indigenous business growth.

Many of the references to enterprises in the NPF Issues and Choices paper focus on high value, high skill exporting enterprises, which are central to export-led growth and tend to cluster in cities and larger urban centres.  However such enterprises cannot provide a full solution for regional development or jobs growth.  While they play a significant role, and have considerable multiplier impacts in other sectors, direct employment in such enterprises only accounts for one in five jobs nationally (2016 there were a total of 400,985 jobs in IDA and Enterprise Ireland supported companies nationally (DJEI) which was 19.5% of total employment (QNHS, Q4 2016)).

Enterprises in employment-intensive, lower-skill sectors are central to maintaining and growing employment both nationally and regionally.  This is termed a ‘whole of enterprise’ approach acknowledging that enterprises across all sectors have the potential to innovate and increase productivity but vary in how they contribute to growth and employment.  If the NPF focuses too narrowly on high skill, high growth enterprises and/or Foreign Direct Investment it will not lead to effective regional development.  Recognising the role and needs of entrepreneurs in local and personal services is important for sustaining as well as creating jobs, in particular in smaller centres and rural areas.  93.1% of registered enterprises in the Western Region are micro-enterprises, employing fewer than 10 people, and in general the region is characterised by smaller enterprise size (CSO, Business Demography 2014).

While Ireland has emerged from recession, enterprise numbers are not back to pre-recession levels and even more so in the Western Region and particularly more rural counties.  Between 2008 and 2014 (latest data available) the Western Region lost 8.6% of its enterprises, compared with a loss of 2.4% nationally. Construction, Wholesale & Retail, Professional Services and Accommodation & Food Service are the largest enterprise sectors. Indeed fewer than 5% of the Western Region’s enterprises are in the Financial & Insurance and Information & Communications sectors combined.  The region’s enterprise base is currently quite concentrated and diversification of the enterprise base is a key objective.

Employment

As stated in the NPF, a skilled workforce will attract high value enterprises to a region, but a skilled workforce are less likely to locate in a region unless the job opportunities already exist.  In reality this relationship is not so straightforward.  Job opportunities are a critical, but not the only factor in people’s decisions on where to live, many other personal and social factors influence this decision.  In Ireland many people have selected to live in one location but commute to work elsewhere in some cases e-Working for a number of days a week. Equally, areas with large pools of skilled labour e.g. counties in the wider Dublin commuter belt, have not necessarily been able to attract employers to locate there instead.  40% of workers living in the Mid-East region work in a different region.

In general, lagging regions have substantial reserves of unmobilised labour, indicated by higher unemployment rates and lower participation rates.  During the Celtic Tiger this pattern was largely reversed in the Western Region with rising participation rates, falling unemployment and high levels of inward migration as many people returned to the region on response to economic growth opportunities. The WDC’s LookWest.ie campaign effectively illustrated many case studies of individuals and enterprises who (re)located to the region at that time.  Labour markets in lagging regions have the potential to respond very positively to improved economic circumstances and stimulus.

The recession however led to high out-migration, which is particularly detrimental to lagging regions, as the propensity to migrate is higher among the more skilled, depriving the region of their skills and leaving the less skilled more dependent on local employment opportunities.  The creation of job or entrepreneurial opportunities for graduates in lagging regions will help retain and attract a highly skilled labour force and, in turn, stimulate further growth and employment.

A key characteristic of the Western Region is that 1 in 5 people who are at work in the Western Region is self-employed (75,000 people were self-employed in the Western Region, QNHS special run, Q1 2016). While farming influences this to some extent, self-employment is higher in the region across most sectors and is particularly important in the most rural counties.

Between 2012 and 2016 the number of self-employed in the Western Region grew by 31.3% but the number of employees only increased 0.6%.  Practically all recent jobs growth in the region has been driven by self-employment. In more rural areas and smaller towns, people who wish to continue to live in these areas have created their own job.  The NPF must both recognise and support this trend.  The Local Enterprise Offices, local development companies and local authorities are most active in supporting this type of business. It would be important to continue and expand initiatives to support them such as:

  • Roll-out of fibre broadband.
  • Provision of serviced, shared workspace including through Community Enterprise Centres, at a reasonable cost.
  • Mentoring and provision of grants for start-up and established businesses.
  • Network facilitation to allow self-employed, particularly in more rural areas who may be quite isolated, to connect with others in other own or other sectors.
  • Training and upskilling for owner/managers and self-employed across all sectors including personal services (hairdressing, childminding), building trades, retail and hospitality.

What is most interesting in recent trends is that since 2012 there has been quite strong growth in the numbers self-employed who are employing other people (from 14,200 up to 19,000) showing the potential for the self-employed to be job creators.

Education

Further and higher education has an important role to play in regional development.  Educational institutions build a region’s human capital assets, attract and retain talent.  Further education and training have a particular role in up-skilling those with lower education levels, who face higher unemployment rates and are at greater risk of long term unemployment.  Lagging regions generally have a greater share of their labour force with lower levels of education.  In 2011 54.7% of adults in the Western Region had only secondary level education or lower, compared with 51.9% nationally.

Higher education brings knowledge creation, knowledge transfer, cultural and community development and innovation to regions.  It can also stimulate entrepreneurship. Within the Western Region, NUI Galway is a key regional asset and economic driver. It greatly contributes to the attractiveness and economic development of Galway city and its wider hinterland.  To the North West the three Institutes of Technology of Letterkenny, Sligo and Galway-Mayo, are collaborating on the Connacht/Ulster Alliance, an initiative that has the potential to expand the contribution of higher education to regional development in this area.

The broader role of further and higher education, touching on innovation, enterprise and employment, needs to be a key focus of regional policy.  Where this works effectively it becomes part of a virtuous cycle producing graduates and skilled workers, and enabling them to find employment in developing enterprises.

Innovation

To remain competitive, manufacturing and service firms must continually upgrade skills and capabilities, access new ideas and technologies through industry networks, tap the knowledge of their workers, suppliers and customers and search for new market opportunities. This is all innovation.

Innovation policy is often focused on scientific and technological research, but while leading OECD regions produce several hundred patents per year per million inhabitants, more than one third of OECD regions generate fewer than ten patents per year.  Lagging regions need a different kind of innovation policy, one that emphasises absorption capacity and innovation by adoption.

Policy needs to address the issues of regions that are not innovation leaders.  A substantial element of innovation policy should be focused on adoption of innovations developed elsewhere and on initiatives in areas such as human resource management or implementation of new processes.  It should stimulate innovation activity in areas where rural regions have particular strengths such as renewable energy and agri-food.

Regional policy which addresses the levers of effective regional development – Infrastructure, the 3Es and Innovation – through a co-ordinated, place-based, cross-sectoral  approach is needed if the so-called, ‘business as usual’ spatial pattern of growth is to be disrupted and all regions facilitated to realise their potential for economic growth and provide sustainable livelihoods for those who live there.

Pauline White

[1] OECD, 2009, How Regions Grow: Trends and Analysis; OECD, 2009, Regions Matter: Economic Recovery, Innovation and Sustainable Growth

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Census 2016: Housing In Ireland – What has been happening in the Western Region?

Last week the CSO published their first full volume of statistics from Census 2016 – Housing in Ireland. The infographic below illustrates some of the data available.

Below, we take a look at what some of the headline figures say about housing in the Western Region.

What is the housing stock in the Western Region?

Overall the housing stock in the Western Region in 2016 amounted to 404,494 units, accounting for 19.9% of the national total. There was a marginal increase since 2011 of 0.1% or 333 units, less than the national increase of 0.4%. These relatively small increases are not surprising following the economic crash and the very limited house building that has taken place since then. A blog post last September reviewing the preliminary results made some observations on the 2006 to 2011 period also, see here.

Within the Western Region there was an actual decline in housing stock in three of the counties, (see Table 1 below), Roscommon, -0.9% (-300), Sligo -0.8% (-280) and Leitrim -0.4% (-77), indicating some houses have been removed from the housing stock. The data does not tell us specifically the reasons why, but could include ‘ghost estates’ which have become demolished, derelict or abandoned. A change of use, from residential to commercial, could also be an explanation.

Though these are marginal changes, Galway county and city recorded percentage increases in housing stock higher than the State average of 0.4%.

 Table 1: Housing stock in western counties, Western Region and rest of state, State 2006, 2011What are the vacancy rates in the region?

The vacancy rate measures the share of the housing stock in each county that is recorded as a vacant dwelling by the Census enumerators.  Nationally, the vacancy rate in 2016 was 12.3%, a decrease of 2.2 percentage points on the 2011 rate of 14.5%.

Table 2 below shows the vacancy rates for counties in the Western Region.   All counties in the Western Region experienced a slight decrease in their vacancy rates between 2011 and 2016.  Leitrim (29%), Donegal (27.4%), Mayo (23.4%), Roscommon (20.9%) and Sligo (20.1%) had the highest vacancy rates in the region, all exceeding 20% or one fifth of supply. Conversely only counties Galway and Clare had rates less than one fifth. Galway city (10.5%) had the lowest rate in the Western Region.

Table 2: Vacancy rates in western counties, Western Region and State, 2011-2016

  2011 % 2016 % Change 2006-2016 (%)
Clare 21.2 19.6 -1.6
Donegal 28.6 27.4 -1.2
   Galway City 11.2 9.4 -1.8
   Galway County 19.4 17.2 -2.2
Leitrim 30.5 29.0 -1.5
Mayo 24.7 23.4 -1.3
Roscommon 23.2 20.9 -2.3
Sligo 22.2 20.1 -2.1
State 14.5 12.3 -2.2

 

Source: CSO, Census of Population 2016.

Vacancy rates relative to population

Figure 4.3 below illustrates the combined number of vacant houses and apartments per 1,000 inhabitants at county level in 2011 and 2016. Nationally there were 38 vacant homes per 1,000 people in April 2016, a fall from the corresponding figure of 50 recorded in 2011.

The highest number of empty dwellings (excluding holiday homes) relative to population size was in in Leitrim where for every 1,000 people in that county there were 112 vacant homes. This is followed by Roscommon, Mayo, Donegal and Sligo. In fact all Western Region counties fall within the 10 counties with the highest number of empty dwellings relative to population size.  Only Galway city is comparable to the State average. The lowest number of empty dwellings (excluding holiday homes) relative to population size was in South Dublin (13) followed by Fingal (17) and Kildare (20).

Vacancy rate in towns

Of the total 183,312 vacant houses and apartments, 64% (117,381) were located within the 873 settlements (cities, towns and villages) identified in Census 2016. At individual town level and excluding holiday homes, Keshcarrigan (45.6%) in Leitrim had the second highest vacancy rate after Blacklion (46.4%) in Cavan.

Among the urban towns (i.e. towns with a population of 1,500 or more) the highest vacancy rates were recorded in Ballaghaderreen (33.1%) and Castlerea (27.7%) in County Roscommon, along with Bundoran (29.9%) in County Donegal.

Among the larger towns with a population in excess of 10,000 the highest vacancy rates were in  Letterkenny (14.9 %), Longford (14.6 %) and Ballina, Co. Mayo (14.3 %).

Vacancy Changes since 2011

It is interesting to observe the change in status of the housing stock that existed in 2011 especially considering there has been so little change in the overall housing stock.

In Census 2011, there were 230,056 vacant houses and apartments. Of these the change in status in stock can be measured in 81.9% of cases[1]. Figure 4.6 below shows the dwelling status of Census 2011 vacant dwellings in 2016 capturing those that remain vacant, those that are occupied and those that other/unknown.

Overall, Census 2016 results show that 34.5% of dwellings (65,039) were recorded as vacant in both censuses, while 105,384 (55.9%) which were vacant in 2011 were occupied in 2016.

The Western Region counties have the lowest rates of occupancy and highest rates of vacancy. All Western Region counties are among the top 8 counties with the highest vacancy rates. The counties of Mayo and Roscommon had over 40% of vacant dwellings with the same status in 2011 and 2016.

The greatest reduction in 2011 vacant dwellings occurred in city and suburban areas where over 60% of dwellings changed from vacant to occupied across the counties of Fingal, Dún Laoghaire-Rathdown, South Dublin and Cork City.

Within the Western Region, 30.3% of dwellings in Leitrim which were vacant in 2011 were occupied in 2016, while the rate for County Galway in 2016 is 38.3%. In Galway city 56.8% of previously vacant dwellings were occupied in 2016.

Conclusions

While the total housing stock grew by just 8,800 (0.4%) between 2011 and 2016, and by just 0.1% in the Western Region, there is more change evident in occupancy and vacancy rates. It is also very clear that there are huge differences in housing stock and vacancy rates across the country.

While the counties in the Western Region have the highest vacancy rates there is evidence of change here too, with for example Leitrim showing an increase in occupancy of 30% of those dwellings that were vacant in 2016.

The full detail including charts and tables are available from the CSO at this link

This analysis also highlights the value of a five yearly census. The changes evident in the last 5 years are striking compared to that which occurred 5 years earlier. As such these data are vital to informing policy and research.

Deirdre Frost

[1] Changes in the fieldwork which were adopted for both the 2011 and 2016 censuses, mean that a direct comparison at individual dwelling level is possible for 188,390 (81.9%) of these units. The remaining vacant dwellings in 2011 have either fallen outside the housing stock in 2016 (i.e. categorised by Census 2016 enumerators as Derelict, Commercial Only, Under Construction or as not existing) or a direct comparison was not possible.
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How are we doing?  GDP of Irish Regions in 2014

The CSO has recently published Gross Domestic Product (GDP) figures for Irish regions (NUTS3) for 2014.  This publication updates the preliminary figures for 2014 which were published last year (and also makes some changes to the 2013 figures) but it does not, unfortunately, provide any 2015 estimates.

While a regional GDP[1] figure is provided (Table 9a) most of the information for regional accounts is for GVA at basic prices (Table 9c).  These are considered in this post which examines differences among regions and changes over time.

Discussions of GDP inevitably must also consider on the limitations of the statistic as a measure of economic development (see here ) but it is the key statistic used, despite shortcomings.  As Eurostat notes here GDP per capita does not provide an indication as to the distribution of wealth between different population groups in the same region, nor does it measure the income ultimately available to private households in a region, as commuter flows may result in employees contributing to the GDP of one region (where they work), and to household income in another region (where they live).

This drawback is particularly relevant when there are significant net commuter flows into or out of a region. Areas that are characterised by a considerable number of inflowing commuters often display regional GDP per capita that is extremely high (when compared with surrounding regions). This pattern is seen in many metropolitan regions of the EU, but principally in capital cities and is very clearly displayed in Ireland in particular between Dublin and the Mid East.

Indeed, the Solas Regional Labour Market Bulletin for 2016 has noted that the prevalence of inter-regional commuting was the highest in the Mid -East region, where 40% of workers who resided in the region were employed in other regions, the majority of whom were employed in Dublin. For this reason in most of the rest of the post Dublin and the Mid East regions are considered together.  It highlights that commuting to work was also sizeable in the Midland region, where a quarter of those in employment were commuting to other regions , while in the Border, South-East and West regions the corresponding figure was about one-in-ten.

Given these difficulties with the data, a  better picture of regional growth and development would be gained from a broader focus considering Income, Wealth and Consumption data but while Income figures are available at NUTS 3 level (see here) there is little regional data on Wealth and Consumption.

Despite issues with GDP and GVA they are important regional statistics and considering relative levels and changes over time can help us better understand economic development and growth in our regions.

 

How much of our GDP is produced in each Region?

The Dublin region contributed 45% of Ireland’s GDP and the South West contributed 17%.  In contrast the Midland region produced 3% (see Figure 1 below) and the rest of the regions were responsible for between 5 and 8% of national GDP in 2014.

The high level of commuting into the Dublin Region means much of that region’s GDP, more than any other, is produced by workers residing in other regions (mainly the Mid East but also Midland and Border regions).

 

Figure 1   GVA per Region at Current Market Prices  (GDP), 2014 

Source: CSO, 2017, County Incomes and Regional GDP 2014, Table 9

It should also be remembered that the regions also vary considerably in size.  While Figure 1 shows the GDP produced in each region in 2014, Figure 2 shows the proportion of the population (as estimated by the CSO for 2014) in each region.  Some of the reasons for the  different distribution of population and economic activity are discussed later in this post.

 

Figure 2 Population Distribution by Region 2014

Source: CSO, 2017, County Incomes and Regional GDP 2014, Table 13

It is interesting to see how the proportion of GDP produced in each region in 2014 compares with that in 2004 (Figure 3).  In that year Dublin produced 39% of GDP (compared to 45% in 2014) and the Border produced 8% compared to 5%.  This, as will be seen again later in this post, shows the dominance of Dublin, in particular, but the South West is also increasing its relative contribution while the relative importance of GDP from other regions has reduced over time.

 

Figure 3   GVA per Region at Current Market Prices  (GDP), 2004 

Source: CSO, 2015, County Incomes and Regional GDP 2012, Table 9b

 

Regional GVA per person

Clearly Dublin produces much of Ireland’s economic output, but it is important to look at how much is produced per person in each region.  As noted by Eurostat here, in a majority of the multi-regional EU Member States, capital city regions were generally those with the highest average GDP per capita; the only exceptions to this rule were Germany, Italy and the Netherlands.

Figure 4 shows the amount of GVA produced per person resident in each of the NUTS3 regions.  Dublin and the Mid East had the highest GVA per person in 2014 (€51,799), while the South West also had high output (€45,956).  In contrast the Border (€18,371) and Midland (€19,778) were much lower, the Border region only 35% of that in Dublin and the Mid East and the Midlands 38%.

 

Figure 4: GVA per person at basic prices 2014

Source:  CSO, 2017, County Incomes and Regional GDP 2014, Table 9c

 

Regional recovery in GVA- or not…?

The different trends in GDP overtime can be seen in Figure 5 below which shows GDP per capita for 2006, 2010 and 2014.

The Border is the only region to still have a lower GVA per person in 2014 than it did in 2010.  All other regions are now above the 2010 level, (though only by small amounts in the Midland and West).  However, only Dublin plus Mid East and the South West had higher GVA per person in 2014 than in 2006.

 

Figure 5: GVA per person (basic Prices) NUTS3 Regions (2006,2010,2014)

Source: CSO, 2017, County Incomes and Regional GDP 2014, Table 9c

Looking at the variation since 2006 (Figure 6 below) the strong recovery in Dublin and the Mid East since 2011 is evident.  The recovery in the South West was less consistent with a decline in 2013 but these two regions are significantly ahead of the other regions both in terms of the level of GVA per capita and the scale of recovery.  The West region which had begun to recover well had GVA growth between 2009 and 2012, it fell in 2013 but 2014 shows some recovery while recovery in the Midland and Border regions has been sluggish.

 

Figure 6: GVA per person 2006-2014 (Basic Prices) NUTS3 Regions.

Source:  CSO, 2017, County Incomes and Regional GDP 2014, Table 9c

These differing patterns of change can also be seen clearly when GVA per person is shown as an Index where the State =100 (Figure 7).  This allows us to consider the GVA per person in each region compares with that in the state over time (2006 to 2014).

The relative decline (compared to the State) in 2014 for all regions except the South West and Dublin plus the Mid East is worrying and the widening of disparities among the regions since 2006 is very clear.  In 2006 the gap between the lowest GVA per person (Midland 70.0 points) and the highest (Dublin plus Mid East 124.7 points) was 54.7 index points, but by 2014 the gap had increased very significantly to 87.8 index points (Border 48.2, Dublin plus Mid East 136.0).  In 2014 the Border (48.2) and Midland (51.9) were very low compared to the state, but even the South East (67.0), West (71.3) and the Mid West (75.9) have low GVA per person compared to the state average.

 

Figure 7: Indices of GVA per person 2006-2014 (Basic Prices) NUTS3 Regions (State=100)

Source: CSO, 2017, County Incomes and regional GDP 2014, Table 10

 

How do Irish Regions compare to the EU average?

It is useful to look at how Irish regions (at NUTS 3 level) compare to the EU average.  This is shown in Figure 8 with Indices of Irish regions between 2006 and 2014 with the EU average equalling 100 in each of those years.  The disparities discussed above are also clear relative to the EU average GVA per person.

In 2014 two of the regions (Dublin plus Mid East (179.5) and South West(159.2)) were significantly above the EU average while the Mid West, which was consistently above the EU average from 2006 to 2013 was just barely above for 2014 (100.1).  The State itself was also above the EU average (132.0).

In contrast, the West, which was briefly above EU average in 2012 and 2013 has again fallen below the EU average (94.1), while the South East was 88.5 in 2014.  The other NUTS 3 regions (Midland (68.5) and Border (63.6)) were both considerably below the EU average and both less than 75% of the EU 28 average.

 

Figure 8: Indices of GVA per person 2006-2014 (Basic Prices) NUTS3 Regions (EU28=100)

Source: CSO, 2017, County Incomes and regional GDP 2014, Table 11

Most EU structural funds  are directed to NUTS 2 level regions where GDP per capita is less than 75% of the EU28 average.  While both the Midlands and Border regions are well below this, when combined with the West the NUTS2 Border, Midland and West (BMW) region was just above the cut off for structural funds at 75.7% of the EU average in 2014[2].  By comparison, in 2006 the BMW region was 106.1% of the EU28 average.

 

Labour Productivity at Regional Level

Within regional accounts, labour productivity is defined as GVA at basic prices per person employed.  It should be remembered that in the regional GVA data for Ireland the ‘person at work’ statistic is related to the region of residence rather than of employment and so the gaps in GVA among regions can appear even wider.  This is shown in Figure 9.

GVA per person at work is, as expected, highest in Dublin at €116,112 per person at work while in the Midland region it is €49,863.  High levels of labour productivity are linked to the efficient use of labour (without using more inputs) and to the mix of activities in the regional  economy (some activities, such as financial services, have higher levels of labour productivity than others).  The South West also shows a very high level of labour productivity. At €111,600 per person at work the South West is only slightly below that of Dublin and the Mid East.  This is also likely to be due to the sectors in the region, especially pharmaceutical and other multinational manufacturers.

 

Figure 9: GVA per person and GVA per person at work (labour productivity) in 2014

Source: CSO, 2017, County Incomes and Regional GDP 2014, Table 13

Where a region has a higher proportion of older people, children, or people not in work for other reasons, the GVA  produced is being divided among relatively fewer people at work and so the figures for GVA per person at work appear better.  This is the case in the Border region most significantly, where only 36% of the population is classified as being at work, but also applies to those for the Midland region (39.7%) and the Mid West (39.4%) all of which have a lower proportion of people at work than the state average (41.7%).  In contrast Dublin (45.2%) and the Mid East (43.2%) have much higher proportions of people at work in their populations.

Figure 10 below shows the proportion of the population at work in each of the regions in 2014 as estimated by the CSO.

 

Figure 10: Proportion of the population in each region classified as persons at work, 2014

Source: CSO, 2017, County Incomes and Regional GDP 2014, Table 13

 

Conclusion

Dublin and the Mid East had the highest GVA per person in 2014 (€51,799), while the South West also had high output (€45,956).  In contrast the Border (€18,371) and Midland (€19,778) were much lower, the Border region only 35% of that in Dublin and the Mid East and the Midlands 38%.

The Border is the only region to still have a lower GVA per person in 2014 than it did in 2010.  All other regions are now above the 2010 level, (though only by small amounts in the Midland and West).  However, only Dublin plus Mid East and the South West had higher GVA per person in 2014 than in 2006 and other regions have not yet returned to the 2006 level.

The differences in GVA growth among regions are partially the result of increased productivity and concentration in high value sectors in the wealthier regions, and partly relate to different commuting patterns and the worker to population ratios.

The variations underline the importance of ensuring that there is a focus on regional development needs and a policy of investment and promotion of higher value sectors in all regions, so that the benefits of the recovery are felt more widely.

 

Helen McHenry

 

[1] GDP is Gross Domestic Product, GDP and GVA are the same concept i.e. they measure the value of the goods and services (or part thereof) which are produced within a region or country. GDP is valued at market prices and hence includes taxes charged and excludes the value of subsidies provided. GVA at basic prices on the other hand excludes product taxes and includes product subsidies. See background notes 

[2] The allocation of cohesion funds is currently based on a decision referring to average GDP per capita during the three-year period from 2007 to 2009; a mid-term review of cohesion policy allocations is taking place during the course of 2016 and will likely result in some changes to the system — more information is provided in an article on regional policies and Europe 2020.  See here also .

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Census 2016- Understanding Change in the Western Region

The Summary Results (Part 1) of the 2016 Census of Population were released last week (6th April), with information on population, and corrections to the preliminary results, as well as a number of other statistics giving an overall picture of Irish society.  The infographic below, produced by the CSO, provides a picture of the data available.

A CSO report with maps and charts on key statistics is available here  and a presentation on highlights of the data release is available here .

This post discusses some of the information available for the Western Region based on  data provided at county level.  As more detailed Profiles become available we will be able to present more information at Region, County and ED levels.

What is the population of the Western Region and how has it changed since 2011?

Since the release of the Preliminary Results which was discussed here  the population in most Western Region counties has been amended (in most cases it has been increased slightly, although Galway City population has been reduced)[1].  A notable change is that Sligo had, in the preliminary results, a marginal population decrease between 2011 and 2016 but in this corrected data it has actually shown a slight population increase.

The Western Region population was 828,697 people in April 2016.  The population of the region increased by 7,817 people since 2011 (0.95%). In contrast, between 2006 and 2011 there was an increase of 57,516 persons or 7.5% in the population of the Western Region.

The state population in April 2016 was 4,761,865. It increased by 173,613 persons (3.8%) between 2011 and 2016   (Table 1).

Two counties in Ireland, both in the Western Region (Donegal (-1.5%); Mayo (-0.1%)) experienced population decline over the period.  The highest population growth in the Western Region was in Galway City (4.2%) while Galway County also grew (2.4%).  Clare had the next highest population growth (1.4%) while both Leitrim (0.8%) and Roscommon (0.7%) had very small population growth.

Table 1: Population in 2011 and 2016 of western counties, Western Region and rest of state[2]

Source: CSO, Census of Population 2016 Summary Results part 1, EY004: Population and Actual and Percentage Change 2006 to 2016 by Sex, County and City, Census Year and Statistic   

Differences in Male and Female Populations

In all counties (and in the Western Region and the State) there was higher growth in the female population than the male population (See Table 2).  In the Western Region there was a 1.6% increase in the female population and 0.3% in the male population.  For the rest of the state the difference was not so pronounced (males 3.6%; females 4%).  Donegal was the only county to experience a decline in its female population.

Table 2:  Percentage Change in County Population 2011-2016 Male and Female

Source: CSO, Census of Population 2016 Summary Results part 1, EY004: Population and Actual and Percentage Change 2006 to 2016 by Sex, County and City, Census Year and Statistic   

This difference in the patterns of male and female population growth relates in large part to different patterns of migration and more detailed information will be available on this in Profile 2 (Population Distribution and Movement, release due 11 May) and Profile 7 (Migration and Diversity, release due 21 September).  However, Table 3 below shows the differences in the male and female population in each county (using the standard measure of males per 100 females).  As would be expected, because women live longer, in the oldest age category (75+) there are significantly fewer males than females.  What is more unexpected is that the 30-44 age category has fewer men than women (unlike the age categories above and below it).  This indicates significant male migration in this age category.  Again, as more detail becomes available the different patterns can be better understood.  Galway City consistently has more females than males across the age categories.

Table 3: County breakdown of men per 100 women by age group, 2016

Source: CSO Summary results Census 2016 Part 1, Figure 3.8

In this Census 2016 Summary Report the population is not available at ED level.  It is expected that this will be contained in the forthcoming release for Profile 2- Population Distribution and Movements on 11th May.  Similarly, while the Summary Report discusses urban and rural population the detail is not provided at county level.

Population Age and Dependency

Some information is provided about age and the map below shows the difference in average age across Ireland.  The average age in the state is 37.4 but the average age is higher in more rural counties of the West and North West and in Kerry and Tipperary.  In fact Kerry and Mayo have the highest average age (both 40.2) followed closely by Leitrim (39.8), Roscommon (39.7) and Sligo (39.2) while the youngest is in Fingal at 34.3 years.

Source:  CSO Summary results Census 2016 Part 1, Map 3.1

It is useful to examine the dependency ratios in the Western Region.  Dependents are defined for statistical purposes as people outside the normal working age of 15-64.  Dependency ratios are used to give a useful indication of the age structure of a population with young (0-14) and old (65+) shown as a percentage of the population of working age (i.e. 15-64).

Nationally, the total dependency ratio was 52.7% while that in the Western Region was, as would be expected, higher at 57.4%.  Leitrim had the highest dependency ratio of any county at 62.6 per cent, closely followed by counties Mayo (61.0%), Roscommon (60.8%) and Donegal (60.5%).  The lowest dependency ratios were in Galway city at 39.0 per cent, followed by Cork city (42.8%), Fingal (50.7%) and Kildare (51.4%).

Looking into the make up of this greater dependency the old age and young dependency ratios are shown in Figure 1.  Galway County has the highest young dependency in the region (36.1%) while Galway City has the lowest in the region (23.4%).  Most counties in the Western Region (except Sligo) have higher young dependencies than the State as a whole (32.3%) in part because of the loss of working age population through migration.  Similarly most Western Region counties also have higher old age dependencies than the state (20.4%) with Galway City once again the exception (15.6%).  The highest old age dependency is in Mayo (28.3%)

Figure 1: Old Age and Young dependency Ratios in the Western Region and State, 2016

Source: CSO, Census of Population 2016 Summary Results part 1, EY004

Conclusion

Over the coming months to December 2017 data from Census 2016 will be released under various headings.  This important information gives us the opportunity to better understand our region and its characteristics.  It is essential for policy and decision making, as well as to our understanding the differences among regions in relation to a variety of issues such as economic output, social transfers and the demand for different goods and services.  We look forward to analysing the future releases and to providing a better understanding of the Western Region throughout 2017.

 

Helen McHenry

 

[1] The Preliminary Results are based on the summary sheet for the Census form while this release is based on the information in the complete Census form.

[2] Rest of state refers to all the counties in the state except for the seven counties of the Western Region.

 

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Key Issues for the National Planning Framework – Submission from the WDC

The WDC  made its submission on Ireland 2040 – Our Plan: National Planning Framework   yesterday.  The Issues and Choices paper covered a wide range of topics from national planning challenges to sustainability, health, infrastructure and the role of cities and towns.  A key element of the paper considered the future in a “business as usual” scenario in which even greater growth takes place in the Dublin and Mid East region with consequent increased congestion and increasing costs for businesses and society, while other parts of the country continue to have under-utilised potential which is lost to Ireland.  The consultation paper therefore sought to explore the broad questions of alternative opportunities and ways to move away from the “business as usual” scenario.

The WDC submission considers these issues from the perspective of the Western Region, the needs of the Region, the opportunities its development presents for Ireland’s economy and society as a whole and the choices, investments and policy required to achieve regional growth and resilience.

This post highlights the key points made in the submission.  The complete, comprehensive submission on the National Planning Framework by the WDC can be read here (4.5MB PDF).  A shorter summary is available here (0.7MB PDF).

 

What should the NPF achieve?

  • The National Planning Framework (NPF) provides Ireland with an opportunity to more fully realise the potential of all of its regions to contribute to national growth and productivity. All areas of Ireland, the Capital and second tier cities, large, medium and small-sized towns, villages and open countryside, have roles to play both in the national economy and, most importantly, as locations for people to live.
  • While spatial planning strives for ideal settlement or employment patterns and transport infrastructure, in many aspects of life change is relatively slow; demographics may alter gradually over decades and generations and, given the housing boom in the early part of this century, many of our existing housing units will be in use in the very long term. If the NPF is to be effective it must focus on what is needed, given current and historical patterns and the necessity for a more balanced pattern of development.
  • To effectively support national growth it is important that there is not excessive urban concentration “Either over or under [urban] concentration … is very costly in terms of economic efficiency and national growth rates” (Vernon Henderson, 2000[1]). Thus it is essential that, through the NPF, other cities and other regions become the focus of investment and development.

Developing Cities

  • As the NPF is to be a high level Framework, in this submission the WDC does not go into detail by naming places or commenting on specific development projects, as these will be covered by the forthcoming Regional Spatial and Economic Strategies (RSES). The exception to this, however, is in relation to the need for cities to counterbalance Dublin.  In this case we emphasise the role of Galway and the potential for Sligo to be developed as the key growth centre for the North West.
  • The North West is a large rural region and Sligo is the best located large urban centre to support development throughout much of the North West region. With effective linkages to other urban centres throughout the region and improved connectivity, along with support from regional and national stakeholders, Sligo can become a more effective regional driver, supporting a greater share of population, economic and employment growth in Sligo itself and the wider North West region.

Developing Towns

  • While the NPF is to be a high level document and the focus is largely on cities it is important not to assume that development of key cities will constitute regional development. All areas need to be the focus of definite policy, and the NPF should make this clear.
  • While cities may drive regional development, other towns, at a smaller scale, can be equally important to their region. Recognising this is not the same as accepting that all towns need the same level of connection and services.  It is more important to understand that the context of each town differs, in terms of distance and connectivity to other towns and to the cities, the size of the hinterland it serves and its physical area as well as population.  Therefore their infrastructure and service needs differ.
  • Towns play a central role in Ireland’s settlement hierarchy. While much of the emphasis in the NPF Issues and Choices paper is on cities and their role, for a large proportion of Ireland’s population small and medium-sized towns act as their key service centre for education, retail, recreation, primary health and social activities.  Even within the hinterlands of the large cities, people access many of their daily services in smaller centres.  The NPF needs to be clear on the role it sees for towns in effective regional development.

Rural Areas

  • Rural areas provide key resources essential to our economy and society. They are the location of our natural resources and also most of our environmental, biodiversity and landscape assets.  They are places of residence and employment, as well as places of amenity, recreation and refuge.
  • They are already supporting national economic growth, climate action objectives and local communities, albeit at a smaller scale than towns and cities. But a greater focus on developing rural regions would increase the contribution to our economy and society made by rural areas.
  • The key solution to maintaining rural populations is the availability of employment. It is important that the NPF is truly focused on creating opportunities for the people who live in the regions, whether in cities, towns or rural areas.

Employment and Enterprise

  • In the Issues and Choices paper a narrow definition of ‘job’, ‘work’ and ‘employer’ as a full-time permanent employee travelling every day to a specific work location seems to be assumed. This does not recognise either the current reality of ‘work’ or the likely changes to 2040. Self-employment, the ‘gig’ or ‘sharing’ economy, contract work, freelancing, e-Working, multiple income streams, online business are all trends that are redefining the conceptions of work, enterprise and their physical location.
  • If the NPF mainly equates ‘employer’ with a large IT services or high-tech manufacturing company, many of which (though by no means all) are attracted to larger cities, then it will only address the needs of a small proportion of the State’s population and labour force.
  • Similarly the NPF must recognise the need to enable and support the diversification of the Irish economy and enterprise base. It must provide a support framework for indigenous business growth across all regions and particularly in sectors where regions have comparative advantage.

Location Decisions

  • While job opportunities are a critical factor in people’s decision of where to live, they are by no means the only factor. Many other personal and social factors influence this decision such as closeness to family (including for childcare and elder care reasons), affordability, social and lifestyle preferences, connection to place and community.
  • Many people have selected to live in one location but commute to work elsewhere or, in some cases, e-Work for a number of days a week. The NPF needs to recognise the complexity of reasons for people’s location decisions in planning for the development of settlements.

Infrastructure

  • New infrastructure can be transformative (the increase in motorway infrastructure in recent decades shows how some change happens relatively quickly). Therefore it is essential that we carefully consider where we place new investments.  To do so, capital appraisal and evaluation methods determining the costs and benefits of different investment projects need to be re-examined if we are to move from a ‘business as usual’ approach.
  • Investment in infrastructure can strongly influence the location of other infrastructure with a detrimental impact on unserved locations. The North West of the country is at a disadvantage compared to other regions with regard to motorway access. This situation will be compounded if investment in rail is focused on those routes with better road access (motorways) in order for rail to stay competitive, or if communications or electricity networks are developed along existing motorway or rail corridors.
  • The WDC believes that the regional cities can be developed more and have untapped potential, however better intra-regional linkages are needed. The weaker links between the regional centres – notably Cork to Limerick and north of Galway through to Sligo and on to Letterkenny, are likely to be a factor in the relatively slower growth of regional centres in contrast to the motorway network, most of which serves Dublin from the regions.

Climate Change

For the future, the need to move to a low carbon, fossil fuel free economy is essential and needs to be an integral and much more explicit part of the NPF.  The National Mitigation Plan for Climate Change is currently being developed, and it is essential that actions under the NPF will be in line with, and support, the actions in the Mitigation Plan.

How should the NPF be implemented?

  • While much of the role of the NPF is strategic vision and coordination of decision-making, in order for the Framework to be effective it is essential that the achievement of the vision and the actions essential to it are appropriately resourced. The Issues and Choices paper does not give a detailed outline of how the NPF implementation will be resourced, except through the anticipated alignment with the Capital Investment Programme.
  • It should be remembered that policy on services and regional development is not just implemented through capital spending but also though current spending and through policy decisions with spatial implications (such as those relating to the location of services). Therefore it is essential that other spending, investment and policy decisions are in line with the NPF rather than operating counter to it.
  • While the NPF is to provide a high level Framework for development in Ireland to 2040, it seems this Framework is to be implemented at a regional level through the RSES. The Framework and the Strategies are therefore interlinked yet the respective roles of the NPF and the RSES are not explicit and so it is not evident which areas of development will be influenced by the NPF and which by the RSES.
  • In order to ensure that the NPF is implemented effectively it is important that there is a single body with responsibility for its delivery and that there is a designated budget to help achieve its implementation.

 

It is expected that a draft National Planning Framework document will be published for consultation in May.  Following that a final version of the Framework will be prepared for discussion and consideration by Dáil Éireann.

 

As mentioned above the full WDC submission on the Issues and Choices paper Ireland 2040 Our Plan- A National Planning Framework is available here and a summary of key point and responses to consultation questions is available here.

 

 

Helen McHenry

[1] http://www.nber.org/papers/w7503

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County Incomes in the Western Region, 2014

Data on County Incomes and Regional GDP for 2014 was released by the CSO this week.  While preliminary figures for 2014 were released last year  this release provides the official data for 2014[1].  Unlike last year, however, the preliminary figures for the following year (which would have been 2015 in this case) have not been released.  In this post County Incomes in the Western Region are discussed and Regional GDP will be considered next week.  The map (produced by the CSO) gives an overview of the levels of Disposable Income across the State.

Disposable Income per person

Disposable Income per person is the focus of this post, this is made up of Primary Income[2] plus Social Transfers less Taxes and Charges[3].  The changes in the components of Household Income will all affect income level but these will be considered in more detail in a future post.  Table 1 shows Disposable Income per person for the seven counties Western Region counties and for the State.

Table 1: Disposable Income per person by county, 2014 and 2013Source: http://www.cso.ie/en/releasesandpublications/er/cirgdp/countyincomesandregionalgdp2014/ Western Region data- own calculations[4]

While Disposable Income per person in 2014 was €19,178 in the State, it was €16,963 in the Western Region.  For both there was an increase on 2013, by 3.5% for the State Disposable Income per person and by 1.9% for the Western Region.

The highest Disposable Income per person in the Western Region was in Galway (€17,929), while the highest nationally was in Dublin (€21,963 per person), some €4, 034 higher than Galway.    Donegal (€15,061) had the lowest Disposable Income in both the Western Region and nationally.

All counties showed growth in Disposable Income between 2013 and 2014 (see Figure 1) with the highest growth in the Western Region in Roscommon (2.7%) although Roscommon has the second lowest Disposable Income in the Region and nationally after Donegal.  Leitrim had the lowest Disposable Income growth (0.8%) between 2013 and 2014

Figure 1: Disposable Income per person, 2013 and 2014

Source: http://www.cso.ie/en/releasesandpublications/er/cirgdp/countyincomesandregionalgdp2014/ Western Region data- own calculations[5]

In the Western Region the gap between the county with the highest Disposable Income per person (Galway) and the lowest (Donegal) was €2,751 in 2014.  This gap between the highest and lowest has narrowed slightly since 2013 when the gap between the Donegal and Sligo was €2,802.  Revision of the 2013 figures (which reduced the Disposable Income per person figure for all of the Western Region counties) meant that Sligo had a higher Disposable Income figure than Galway, for the first time in 2013.  By 2014 Galway was again ahead but only by €61 per person.

 

Trends over time

Looking over the longer term (since 2006) incomes in 2014 have still not regained the levels seen in 2006 (see Figure 2), and are still some distance from peak levels in 2008.  Some of this may be explained by higher taxes and charges and lower social transfers than in 2008 and this will be examined in more detail in a forthcoming post.

Figure 2: Disposable Income per person, 2006-2014

Source: http://www.cso.ie/en/releasesandpublications/er/cirgdp/countyincomesandregionalgdp2014/

While Figure 2 shows the actual Disposable Incomes per person, when considering the trends among counties it is useful to use Indices so that county figures can be examined relative to the State (State=100).  This is shown in Figure 3.

Figure 3: Index of County Incomes per person 2006-2014, State=100)

Source: http://www.cso.ie/en/releasesandpublications/er/cirgdp/countyincomesandregionalgdp2014/

Disposable Income in Galway has been consistently the highest in the region (except for 2013) approaching the State average from 2006 onwards and in 2010 surpassing it with an index value of 100.9.  Since then, however, it has been relatively lower and in 2014 it was only 93.4% of the State figure.  In 2014 Sligo was also at 93.4% of the State Disposable Income per person, and over the longer term the income in Sligo has been improving relative to the State, rising fairly consistently from 92.2% in 2006.

In contrast both Clare and Roscommon have shown significant relative declines since 2006 when Clare was 94.2% of the State average and Roscommon was 93.6.  In 2014 Clare was 89.2% of the State average and Roscommon was only 85%.  Donegal has consistently had the lowest Disposable Income per person in the country at only 78.8% of the State in 2006 and 78.04% in 2014.  In 2010 it peaked at 84% but this was largely due to the lower State figure in that period.

This post has provided a brief overview of the key County Income figures released this week for the Western Region.  The components and trends will be analysed in more detail in the coming months.

 

 

Helen McHenry

[1] It should also be noted that the 2013 figures have also been revised.

[2] Disposable Household Income Is calculated in three steps; Primary Income Household Primary Income is defined for National Income purposes as follows: Compensation of employees (i.e. Wages and Salaries, Benefits in kind, Employers’ social insurance contributions) plus Income of self-employed plus Rent of dwellings (including imputed rent of owner-occupied dwellings) plus Net interest and dividends

[3] See http://www.cso.ie/en/releasesandpublications/er/cirgdp/countyincomesandregionalgdp2014/ for more information

[4] Western Region Household Disposable income per person is calculated by inferring population estimates for 2013 and 2014

[5] Western Region Household Disposable income per person is calculated by inferring population estimates for 2013 and 2014

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New WDC Publication: WDC Policy Briefing No.7 e-Working in the Western Region: A Review of the Evidence

The Western Development Commission (WDC) has published its latest Policy Briefing WDC Policy Briefing No.7 e-Working in the Western Region: A Review of the Evidence, which is now available for download at the following link here.

e-Work is a method of working using information and communication technology in which the work is not bound to any particular location. Traditionally this has been understood as working remotely from the office, usually from home, whether full-time or for a period during the working week. e-Working can provide particular opportunities in regions like the Western Region where many are living some distance from key employment centres.

The WDC Policy Briefing, which includes case studies from companies and individuals, examines:

  • The extent of e-Working.
  • The way in which weaker broadband access in more rural locations impacts on the rate of e-Working.
  • Factors driving e-Work.
  • Recommendations on how e-Working can be further promoted.

This Policy Briefing shows that e-Working is a widespread practice but somewhat hidden from official statistics. It also shows that while there is demand for greater e-working, broadband speeds need to be improved.

The WDC Policy Briefing contains recommendations to support more e-Working, including priority rollout of the National Broadband Plan to those counties with the lowest broadband speeds. Additional case studies are also available for download from here.

Deirdre Frost

 

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