By Miroslav Kollar, Rocco Bubbico and Nicolas Arsalides
The significant “smartness gap” between regions in Central, Eastern and South-Eastern Europe (CESEE) and their counterparts elsewhere in the EU are particularly evident in innovation, accessibility, quality of government and quality of life.
Our study “Smart Cities, Smart Investment in Central, Eastern and South-Eastern Europe” demonstrates the infrastructure, productivity and innovation gaps and obstacles—as well as demographic challenges—faced by CESEE cities that want to follow the growing trend toward “smart cities.” The smart city approach uses digitalization, clean energy and innovative transport technologies to address the challenges that cities face, to allow inhabitants to make more environmentally friendly choices and to boost sustainable economic growth and innovation—while enabling cities to improve their service delivery.
Within the countries, the CESEE capital regions lag behind the EU average when it comes to smartness. Significant gaps emerge in governance and living quality. The capital regions perform significantly better than second-tier and other non-capital regions in societal factors, as well as technological consumption and business sophistication of companies. These intra-country regional disparities are much wider in the CESEE than those within other EU countries.
Increased investment is a necessary solution, but not enough alone. The whole EU is doing rather poorly on infrastructure investment planning. Where the CESEE municipalities lag behind the EU average is in the coordination of their investment projects with neighbouring municipalities, their region and with the networks of municipalities. This could result in inefficient planning and implementation.
The understanding of the specific gaps and the key areas of improvement compared to more wealthy areas of Europe and CESEE’s own capital cities is crucial for urban development policy, especially for digitally driven policies like smart cities. So, here’s what we found in more detail.
The EIB Investment Survey 1 shows that 40% of CESEE 2 cities still register gaps in basic infrastructure. A large share of CESEE cities reported under-investments over the last five years, specifically in transport and housing infrastructure, the areas where the quality of infrastructure is also lowest.
Regional economic data illustrates that most CESEE cities still lag behind the EU28 average, when it comes to productivity and innovation, while they also face demographic challenges. Over the last fifteen years, CESEE capitals have done much to catch up in economic and social terms, growing more quickly than other regions in their countries. This allowed CESEE capitals to converge quickly to average EU per capita income. Some of them even emerged as European economic hubs.
Chart 1: Smart region ranking (CESEE - ranking within CESEE)