Local indicators to measure the business environment and accessibility

Surveys of local businesses in Sweden provide a source of informatin for policy makers

If planning is to become a means of supporting growth and economic recovery, then planners, economic development specialists and others working with Cohesion Funds will need a better understanding of the local business environment and accessibility. A new ESPON report includes a description of indicators that are used in Sweden to monitor these concerns, and inform local policy and practice.

Monitoring the local business climate

The Foretagsklimat index combines national and local data to give a picture of the business climate in each Swedish municipality. The results are published openly on the web site of the Confederation of Swedish Enterprise (Svenskt Naringsliv). Some of the data that goes into building the index comes from the Swedish National Statistics Institute. Statistics that are used are: earned household income (from the private sector), local municipal tax rates, the share of local municipal budgeted activities that are outsourced to private organisations, the employment rate, the share of private sector employers per 1000 inhabitants, and the proportion of new business starts that succeeded in the past year.
This information is then supplemented with the local findings from an annual national survey of employers, which asks about local infrastructure, labour force skills, public services, application of laws and regulations, attitudes towards business and private sector competition.

Findings are weighted and combined into an index – a score for each municipality. The details are less important than the general approach, which is to recognise the significance of spatial variations in the business climate, and that local businesses are best placed to understand their current situations and prospects, while the municipalities also need this information to build a local strategy for business development. Publishing the results for each municipality makes some form of benchmarking comparison inevitable. Is this the kind of thing that the Local Economic Partnerships in England might find useful?

It is also interesting to find that every two years a survey is done to find out how local politicians see the economic situation of their municipality.

A Regional Accessibility Atlas

Although a region in general may enjoy good accessibility, there can be significant differences between different places within a region and by mode of transport used. Few readers of this blog would be surprised that this is the case. However the Skane Region in the south-west of Sweden has worked with the Swedish statistics agency to produce an Atlas of accessibility within the region. It involves dividing the area into 500500 meter cells. Accessibility is then measured in 30, 45 and 60 minutes time bands to a range of key facilities and locations – e.g. stations, hospitals, schools and workplaces.

Plans and Cohesion Funds

Use of such data gives a clearer picture of what can often be complex patterns within an administrative area. At a time when austerity measures are reshaping the capacity of local governments in many parts of Europe, better information will be seen by many as an unaffordable indulgence. In fact the reverse is the case. Hard times make it more important to base decisions on evidence.

The new round of EU Cohesion Funds that begins after 2014 will place more emphasis on the Europe 2020 priorities of Smart, Sustainable and Inclusive Growth. There is to be a strengthened focus on partnership working, cities and more integrated local development and planning. The more a package of integrated actions can be put together that sits within EU and national priorities but demonstrably meets local needs the better. If places are to move towards recovery and medium term repositioning to become more competitive and inclusive, then we need to look around at the kind of information that can underpin a strategy and shape decisions of politicians and investors. A scoping of how successful and inclusive European economies plan for growth at local and regional level would be an obvious starting point.