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The profile and relevance of the Oresund cross-border area for innovation

In the Oresund area, many pre-conditions for a functional region are present. Physical internal accessibility, thanks to the Oresund bridge, and external accessibility, thanks to Kastrup Airport, are both excellent. Efforts to build an “Oresund identity” in a culturally and linguistically similar but still diversified population stand high on the political agenda, albeit the sense of an Oresund identity appears to be much higher on the Swedish side. Both sides of the sound share similar levels of development and present profiles of increasingly knowledge-based economies, with strong universities and innovative companies. Regional strategies across the area share many similar economic development priorities for high-tech areas in life science, iCT, material science or clean technology.

The economic centre of gravity of the Oresund is on the Danish side. With a core around the Copenhagen-Malmo-Lund hub, the respective parts of the Oresund region cover a more important share of the Danish (49%) than the Swedish (11%) economy. Over two-thirds of the 3.8 million population of the Oresund is on the Danish side. Including the Danish Capital Region naturally reinforces the strengths of the cross-border area, but creates internal tensions in Denmark when it looks east to Sweden instead of west to the Jutland peninsula. The Oresund has a core-periphery configuration, as most of the population, economic growth and activity is concentrated in the central area of the Oresund, in direct proximity of the bridge. The Danish Capital Region has the highest GDP per capita (and Zealand the lowest at 60% of that of the Capital Region), but the Swedish side of the sound, Skane, (81% of the Capital Region GDP per capita) is growing at a faster rate. The Oresund is further nested in the wider Oresund-Kattegat- Skagerrak border region, and in the Baltic Sea macro-region.

Economic and innovation assets of the Oresund are important, but the region still faces threats. Although specialised in services, the Oresund still has a sizeable manufacturing sector in Skane and Zealand. The region as a whole, and especially its urban core, has a highly educated population (35% of the overall workforce has a tertiary education, above the average of OECD peer knowledge hubs regions at 31%). GDP growth and productivity are, however, not as impressive in a Nordic context. GDP growth has been much lower on the Danish side of the Oresund. Ageing, labour force shortages and growing international competition for its key industries, are common challenges throughout the Oresund. Its specialisation in high-tech industries relies on a few large companies, and their strategic decisions have significant economic impacts on the region. New firm creation dynamics in the Oresund are better than their national contexts (according to Orestat, in 2009, 26% of all new business in Denmark and Sweden were launched in the Oresund region), but not as high in wider comparison.

The Oresund region is a technology hub with excellent innovation potential, world-class scientific infrastructure and a good environment for start-ups. The Oresund accounts for a large share of total Swedish and Danish R&D: its R&D expenditure (4.9% of GDP), mainly of private origin (73%), outperforms national figures. The Oresund has a critical mass of workers in high-technology sectors among its already well-educated labour force. The bi-national region is characterised by a concentration of research-intensive multinational companies, innovative SMEs, and leading higher education and research institutions, specialised in life science and ICT. Pharmaceuticals and electro-medical equipment are its most important high-tech specialisations. Large infrastructure adds to the scientific potential and high-tech image of the region: two large scientific facilities for materials science research are being built, MAX IV and the European Spallation Source (ESS). Their reach extends much further than the cross-border region, but efforts are devoted to stimulate spillovers from the new infrastructure to regional companies. They are also giving a reason for the Danish side to look towards its “little brother”, Skane, where the facilities are located. Several incubators and other initiatives exist on both sides of the straight to support start-ups in knowledge-based activities.

According to the Oresund Integration Index, labour market integration increased until 2008 and then stagnated, but the index does not capture knowledge and innovation flows. Labour market integration, which is commuting flows mainly from Sweden (of both Swedes and Danish nationals) to Denmark, jumped after the bridge opened. Until 2008, differences in salaries (higher in Denmark), housing prices (higher in Denmark) and unemployment rates (higher in Skane) had driven these mobility patterns. Subsequently, the narrowing in housing price differentials, combined with growing unemployment on the Danish side, explain the slight decline in labour and housing market integration. Regulatory, tax and other policy obstacles remain that impede cross-border mobility. There is also an influx of students, more so from Sweden to Denmark, but this flow is hampered by differences in university rules and tuition fee structures. Visa regulations for non-EU citizens are reported to be an obstacle for cross-border mobility of highly skilled workers. The Oresund Committee, comprised of regional and local authorities, lobbies national authorities to resolve the barriers to cross-border integration, in particular the differences in taxation and social security systems. With respect to knowledge and innovation, evidence in the life science sector, for example, shows increased intra-Oresund scientific co-operation over time.

Table 8.3. Innovation overview: The Oresund

Variable

Oresund

Denmark

Capital Region of Denmark

Zealand

Sweden

Skane

(Sweden)

OECD peer average: Knowledge and tech hubs*

Tertiary educational attainment (as a % of labour force) (2010, 2008 for OECD peer average)

35

32

39

26

32

33

31

R&D personnel (as a % of total employment) (2009)

--

3.1

5.2

2.7

2.6

2.7 (South Sweden)

2.7

Share of employment in high-tech manufacturing (2008) over total manufacturing employment (%)

39

48

44

43

43 (South Sweden)

49

Share of employment in knowledge-intensive services over total service employment (2008) (%)

59

63

57

63

62 (South Sweden)

57

Total R&D expenditure as a % of GDP (2009)

  • 4.9
  • (South

Sweden)

3.1

5.3

4.0

3.4

4.7 (South Sweden)

3.9

Business R&D expenditure as a % of GDP (2009)

3.6

2.2

3.8

3.4

2.5

3.5 (South Sweden)

--

Share of R&D by private sector (%)

73%

71%

72%

85%

73%

74%

--

PCT patents per million

315

207

339

323

309

425

260

inhabitants (2008-10 average)

Notes: Peer regions average: average of the clusters “Knowledge and technology hubs”. For further information see Ajmone Marsan and Maguire (2011). * EU regions only, for R&D expenditure and personnel variables. South Sweden includes the Swedish areas of Skane and Blekinge.

Sources: Eurostat; OECD (2013), OECD Regional Statistics (database), http://dx.doi.org/10.1787/region-data-en; Orestat database, www.orestat.se,www.orestat.dk.

Table 8.4. Snapshot of the functional region for innovation: The Oresund

(Oresund in bold)

Characteristic

Specification

Comments

Region settlement patterns

Metropolitan area

Network of small and medium-sized cities

Sparsely populated with small towns

The core of the Oresund is composed of the Capital and Zealand Regions on the Danish side, with Copenhagen as the hub (a relatively small capital in OECD standards). Skane, on the Swedish side, contains smaller cities, including Malmo, the third largest city in Sweden, and the university town of Lund as well as Helsingborg to the north. The rest of the Oresund region is composed of small towns and rural areas.

Internal accessibility and flows (geographic proximity)

Strong

Moderate

Weak

The Oresund bridge, combined with efficient train connections, ensures strong internal accessibility between the two main conurbations and external accessibility with its major international airport.

Industrial and knowledge specialisations (cognitive proximity)

Similar with complementarities

Same

Different

Both sides of the cross-border region have several areas of common specialisation, such as life science and ICT with complementary potential in universities and companies.

Socio-cultural context (social proximity)

Very similar

Somewhat similar

Different

Danes and Swedes share many common Nordic values, habits and cultural traditions. But business culture differences are reported which create both potential assets as well as difficulties for co-operation.

Innovation system interactions

Pervasive

Hub-to-hub

On the border

Most potential for innovation co-operation and complementarity is between the adjacent urban hubs of Copenhagen and Malmo, but smaller size cities also participate in the interactions, particularly Lund and its university/science infrastructure.

Level of innovation development across border

Balanced, strong

Balanced, weak Unbalanced

Both sides of the Oresund have high living standards and are knowledge and innovation intensive.

 
Source
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