Catching the Wave: Local Mediterranean Development Strategies are Beginning to See Progress
Mediterranean Europe was hit hard during the recession and the subsequent Eurozone crisis. Unemployment, especially among youth, skyrocketed in France, Portugal, Italy, Spain, and Greece. Policies from the European Central Bank and the European Parliament overwhelmingly guided these debt-heavy countries toward austerity, a policy that aimed to balance budgets but left citizens vulnerable to economic shocks like unemployment, lack of capital, and decreased pensions. This was paired with a lack of appetite among national governments to pursue needed economic reforms, especially in their labor markets. During the Greek crisis earlier this year, Greece’s central government pulled all available funds from its municipalities across the country, defunding critical public institutions like hospitals, fire stations, and public schools. Instead of solutions for citizens of the Mediterranean countries, Brussels and many national governments seemed to be dolling out more challenges for citizens and local and regional leaders to solve.
Cities and regions continue to find their own solutions and strategies to create growth in spite of Europe’s growing list of challenges. Cities like Barcelona and Milan are creating new policies to spur innovation, promote entrepreneurship, spread and grow capital, and scale smaller and medium-sized enterprises for global markets. Incubators, universities, private firms, and venture capital firms are beginning to spring up in major metropolitan areas like Turin, Bilbao, Genoa, and Thessaloniki, and city leaders are finding ways to support these new engines of economic activity. Since 2014, the German Marshall Fund’s Urban and Regional Policy program has worked in close accord with cities and metro areas in the Mediterranean to help them develop better strategies to support these activities, and the results have been fruitful for these regions.
Turin’s innovation and entrepreneurial ecosystem continues to turn out new start-ups and entrepreneurs from its incubator I3P of Torino Polytechnic University, one of Europe’s most successful university incubators. Students from all over Italy and Europe have come together under the leadership of Professor Marco Cantamessa, and over 50 start-ups have come out of the incubator in the just in the past three years. The City of Torino continues to develop strategies and policies to help promote this kind of 21st century economic growth, including blazing a path in areas such as social entrepreneurship through the city’s social innovation initiative. Recently, the German Marshall Fund, Torino Strategica, and the Compagnia di San Paolo convened entrepreneurs, financiers, academics, and international experts convened to discuss Turin’s strategy for ecosystem development. Over 50 of the city’s most influential stakeholders weighed in and made recommendations on how the city can boost growth in innovation and jump creation through better policies and network coordination. International entrepreneurship expert Greg Horowitt advised the stakeholders on how to build more robust and cohesive growth strategies, and the city’s entrepreneurs were then able to respond and discuss these recommendations with Horowitt firsthand.
Bilbao and the Basque Country in northern Spain is one example of a truly innovative city and region. The region avoided the worst of the economic crisis that hit the rest of Spain hard and bounced back quickly owing to its diversified economy and unique model of sustainable and human-centered economic development. The region serves as a testament to the power of reinvention—it has retained its model for vocational training while also embracing a knowledge-driven economy and word-class physical development. Much of this can be attributed to the strong use of the human capital potential of its citizens and tradition of public-private collaboration, mixed with a heavy dose of creativity and experimentation. This shows through in recent efforts in Bilbao such as Bizkaia Talent, which aims to attract talent to the region in the areas of knowledge and innovation, and increasing attention to attract capital into the city through foreign direct investment.
A metropolitan or regional development strategy is a savvy way to grow economies in ways that are meaningful to citizens. The experience of cities such as Bilbao and Torino shows us that these local strategies can make a meaningful impact in the economic and social trajectory of southern European cities. However, local actors will eventually need to establish collaborative working relationships with their national governments to influence the trajectory of more structural issues such as taxation, labor, and governance. This appears to be happening a few cases; for example, the Catalonia regional party “Ciudadanos” ran in Spain's recent national elections in part to change Spain labor laws. Under the GMF’s Mediterranean Strategy Group initiative, which engages the cross-sector of the Mediterranean around discussion of the future of this region, GMF is aiming to make sure that such integrated conversations continue.
The views expressed in GMF publications and commentary are the views of the author alone.