While CENTROPE is situated neither geographically nor economically at the centre of Europe, the four-country region does serve an important bridge function between the economic hubs in the west of Europe and the less developed but briskly growing markets in the eastern part of the continent. The massive investments of the automotive industry or the numerous headquarters of international corporations that have settled in CENTROPE emphasise the advantages offered by this easily accessible region at the interface between old and new EU member states.

CENTROPE is growing. The economic data are positive all round. In 2006, Slovakia attained the highest growth rate since the political turnabout – fully 8.3 % GDP –, and forecasts indicate an even higher growth rate of 8.5 % for 2007. The Czech Republic, too, continued its robust growth in 2006 with an increase by 6.4 % (5 % estimated for 2007). Due to an austerity package adopted in mid-2006, the Hungarian economy grew by “only” close to 4%, which still puts the country ahead of the EU-25 average (a plus of 3 %). Austria likewise exceeded this average by attaining a growth rate of 3.1 % – the highest in six years. Taken together, the economy of the CENTROPE states thus grew almost twice as quickly as the EU-15 average, and this trend will continue in 2007 and 2008, forecasts maintain.

The integration of markets within the Central European Region is rapidly proceeding. Despite existing barriers relating to infrastructure and the labour market, cross-border economic activities have markedly increased over recent years. According to the latest surveys, roughly one fourth of enterprises in CENTROPE maintain business contacts with neighbouring countries through subsidiaries, distribution channels or other forms of co-operation. While the old line of economic demarcation that had been the Iron Curtain is still palpable, Bratislava e.g. attains a GDP at purchasing power parity per capita that is already above the EU-25 average.

Strong location, future-oriented industries

The assets of CENTROPE as a business location lie in its solid industrial base, particularly with respect to the supply sector (e.g. automotive components), its focus on niches and high-quality products as well as – this goes above all for CENTROPE sub-regions in the new Member States – a rapid technological catching-up process and relatively low wage costs. The broad diversification of the industrial structure of the Central European Region is inter alia evidenced in the Cluster Observatory by the Stockholm School of Economics (which is based on numbers of employees). The strong points of the Central European Region include the automotive industry, financial services, petroleum and gas, transport, communications, shoe manufacturing, lighting fixtures and electronics accessories, energy generation and energy supply in Western Slovakia; in Eastern Austria, these areas are application- and industry-oriented services, communications, financial services, transport, the construction industry, foodstuffs, mechanical engineering and tourism; in West Hungary, the core industries are the automotive industry, communications, foodstuffs, mechanical engineering, the construction industry, tourism, IT, leather, lighting fixtures and electronics accessories; and in South Moravia, these correspond to mechanical engineering and instrument manufacturing, IT and electrical engineering, textile and shoe manufacturing, foodstuffs, the chemical and pharmaceutical industries as well as energy generation and energy supply.

A clear sign of the economic clout of CENTROPE is also transmitted by existing and emerging clusters, i.e. networks of mutually co-operating enterprises, research facilities and public authorities. Starting in 2000, a number of cluster initiatives were launched in CENTROPE. The main focuses are on the following complexes: automotive industries/mechatronics/plastics, sustainable construction/timber/renewable energies/environment and health/health technology/wellbeing/health tourism.

Strengthening the human capital together

A well-trained workforce provides the backbone for growth and economic efficiency of the Central European Region. Roughly 250,000 students attend a total of 25 universities in CENTROPE. The share of specialised workers with secondary education (grammar school-leaving exam or comparable) is far above the European average. Moreover, the quota of persons with low qualifications is smaller in the region than on an EU-15 average. The fact that the labour market situation of this workforce is inferior to the general European level is partly due to the momentous restructuring processes of the last decade and partly the consequence of a relatively inflexible vocational training system. At the same time, however, the Central European Region – due to rapid economic growth – now also suffers from a lack of highly skilled specialists in some sectors of the economy. Thus it is the declared goal of the Central European Region to strengthen its human capital jointly and to deploy qualifications and skills where they are most needed.

Related links
CENTROPE Business & Labour Report 2007
European Cluster Observatory


Pictures:
© ARGE CENTROPE
©Vienna IT Enterprises / Getty Images


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