The Regional Economic Research and Technological Development Policy through Foresight and Mentoring (REFORM) project sets out to ‘develop, support and implement a variety of measures and activities which will enable regions to understand their particular needs to enable increased RTD [research and technological development] activity and investment in the future’.
The South East Regional Authority (SERA) is one of six regional promoters participating in this initiative. According to the REFORM website, the South East’s performance is ‘behind that of the [Irish] economy as a whole and behind that of the majority of the other Irish Regions’. The key economic indicators for the region such as the unemployment rate, disposable income, and Gross Value Added (GVA) per capita all confirm this observation.
Unemployment rate
As highlighted in figure 1.1, the unemployment rate in the South East Region was 5.9 percent in 2006, compared to the national average of 4.2 percent. As such, the South East unemployment rate was forty percent higher than the national average and substantially higher than any other region in the country.
The most recent figures, cited in the SERA Annual Report (2008), show unemployment has increased significantly across all NUTS 3 regions within Ireland. As highlighted in figure 1.2, the South East is no longer the highest region in terms of unemployment as it now lies in joint 3rd place behind the Midland and West regions.
From the point of view of the South East, the most positive aspect of the recent SERA Annual Report (2008) is that the region has experienced the smallest increase in unemployment of all the NUT 3 regions since 2006. Figure 1.3 shows that the South East’s unemployment rate increased by 47 percent between 2006 and 2008. Although this figure seems extremely large in absolute terms, in comparison to other regions the South East’s unemployment rate has not been hit as hard by the current economic downturn.
A possible explanation for this scenario may be the fact that the South East had the highest unemployment rate of all NUTS 3 regions in 2006 and as such other areas had much more scope for increases. For example, the Mid West region experienced an increase in unemployment of 98 percent; more than double that of the South East. In 2006 the unemployment rate in the Mid West was only 4.3 percent, compared to 5.7 percent in the South East. As a result the Mid West experienced a much greater percentage increase in unemployment than the South East, despite both regions now having almost identical unemployment rates.
Disposable incomeAccording to the CSO (2009), a disparity exists between the disposable incomes per person of the two NUTS 2 regions of Ireland. In 2006, the Southern and Eastern region experienced disposable income per person of three percent above the state average, whereas the Border Midland and Western region was 8.3 percent below the state average. As such, a gap of 11.3 points existed between the two regions.
As shown in figure 1.4, at the level of the eight regional authority areas the South East region is positioned fifth and the area is the lowest of the five regions comprising the Southern and Eastern NUTS 2 regions. The level of disposable income within the South East is thus more comparable with the Border Midland and Western region rather than the wealthier Southern and Eastern.
Gross Value Added (GVA) per personThe CSO (2009) explain GVA is not an evaluation of household income. Instead, it is a calculation of the value if goods and services generated in a region minus the cost of the materials and services used in their creation which were brought in from outside the area. The CSO state that ‘GDP and GVA are the same concept’ in that they both measure the value of goods and services produced in a particular area. However, when analysing regional GDP, the CSO use GVA per person as a proxy for GDP per person as it excludes product taxes and includes the value of product subsidies.
According to the CSO (2009), the GVA per person generated in the Southern and Eastern NUTS 2 region was 10.2 percent above the national average in 2006. In contrast, the average value added per person in the Border, Midland and Western region was 27.8 percent below the state average in the same year. The CSO (2009) study combines the Dublin and Mid East regions as both are affected significantly by workers living in one area and commuting to work in the other.
As shown in figure 1.5, when assessed based on GVA per person, the South East region is again placed in the lower half of the eight regional authorities and is the lowest of the five regions within the Southern and Eastern NUTS 2 region. The South East region was 26.9 percent below the state average with only the Border and Midland regions producing less added value per person, at 27.5 percent and 33 percent respectively.
ConclusionAs shown, the unemployment rate, level of disposable income and GVA per person of the South East region has been poorer than the majority of other Irish regions. SERA (2008) has recognized this and states that since the Authority’s formation it has been ‘concerned at the relatively weak economic performance of the South East’.
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