econd Tier Cities Matter · Virtually all city Source: regions lost population during 2000 – 2014. While the loss (million inhabitants)in Bucharest was modest with an annual rate

Inspire policy making by territorial evidence

ESPON Policy Brief 5Second Tier Cities Matter

EUROPEAN UNION

More than ever, cities today need to reinforce smart, sustainable and inclusive growth, while managing e.g. demographic change, housing, urban mobility, energy transition, all in a context of scarce public but also private resources. They function as nodes of development and contribute decisively to local, regional, national and European economic growth.

Evidence has shown that a greater distribution of investments within countries is associated with stronger economic performance of their second tier cities. Consequently, a more resilient and polycentric development of the European urban fabric can be achieved by strengthening second tier cities, and by promoting a more networked development of the system of European cities at regional, national and European level. It is therefore important for policy makers to keep in mind the significance of strong second tier cities for economic growth and jobs as well as for polycentric and cohesive territorial development.

Key messages for policy consideration

• SeveralEuropeansecondtiercitiesfaredbetterthantheircapitalsthroughouttheeconomiccrisis.Theireconomiesgrewquicker,theirpopulationisoftengrowingandhighlyeducated,andtheyimprovedtheiraccessibility.

• Second tiercitiesdifferand therefore require tailor-made,place-basedpolicydevelopment,takingintoaccounttheirnationalandregionalcontext,theirlocationintheEuropeanterritory,accessibility,availabilityofwell-educatedhumancapitalandgovernancestructure.

• PoliciesandinvestmentsshouldpromotedevelopmentinEurope’ssecondtiercitiestosupportabalancedpolycentricurbansystemand territorial cohesion inEurope.This isparticularlyimportantincountrieswherecapitalcitiesstillstronglydominatethenationaleconomy.

• Thesmallerthesocio-economicdifferencebetweensecondtiercitiesandthecapital,themoresuccessfulnationaleconomieswillbeandthebettersecondtiercitieswillperform.

• Accessibilityimprovementsforsecondtiercitiesoftenimplyinvestmentsinsecondarytransportnetworks.However,animprovedaccessibilitypotentialisnoguaranteeforpositiveeconomicanddemographicdevelopment.Itneedstobeaccompaniedbyotherdevelopmentmeasures.

• Regionalairportscanincertaincircumstancesimprovethedevelopmentpotentialofsecondtier citieswith lowaccessibilitybyair.However,air connectionsaremorevulnerablesinceprivateflightoperatorschangedestinationsmorerapidlythanoperatorsusingrailorroad.

2

ESPON Policy Brief Second Tier Cities Matter


• Sinceagrowingnumberofjobswillrequiretertiaryleveleducation,accesstohighereducation,eventuallywithafocusonthelocallyprevailingeconomicstructure,shouldbefurtherimprovedforsecondtiercitiessothattheycancontinueattractingyoungpeople.

• Governance, institutional capacity and cooperation of stakeholders across all levels ofgovernanceplayanimportantroleforsecondtiercitiestofurtherthrive.

Altogether,29%oftheEuropeanpopulationlived in second tier cities in 2014. ThedemographicdevelopmentofthesecitiesisareflectionofthebroaderEuropeanpicturewhereregionsinthenorth,centreandsouthof Europe tend to be more dynamic andattractmorepeoplethanregionsintheeastandintheBalticcountries.Someofthelatterexperiencedanegativemigratorybalanceintheperiod2000–2014,withmanypeoplemoving to other parts ofEurope thatweremoreresilienttothecrisisandcouldstillofferjob opportunities and higher standards ofliving.Particularlyyoungpeoplewithhighereducation degrees moved from eastern,partiallyalsosouthernpartsofthecontinentfurther west and north looking for betterjob and life prospects altogether. In somecases, threetimesasmanypeople left thecountry than people entering it. Romania,for instance, experienced a considerabledownturnintermsofpopulationdevelopment.Virtuallyallcityregionslostpopulationduring2000 – 2014.While the loss in Bucharestwasmodestwithanannualrateof-0.01%,mostsecondtiermetroregionshadtocopewith an annual population loss of -0.25%to -0.9%.Themetro regionofCraiova, for

Regional level: NUTS 3 (2010)Source: ESPON EGTC, 2016Origin of data: Eurostat, 2016

© EuroGeographics Association for administrative boundaries

This map does notnecessarily reflect theopinion of the ESPONMonitoring Committee

Annual population growth rate (%),2000 - 2014

0.50

11.5

Population (million inhabitants)

- 0.5- 1

- 1.5

2.5

5

10.50.1

10 second tier city regions

capital city regions

0 480240km© ESPON EGTC, 2016

EUROPEAN UNION

Second tier citiesencompassthegroupoflargestcitiesinacountryexcludingthecapital.Theireconomicandsocialperformanceissufficientlyimportanttoaffecttheperformanceofthenationaleconomy.The127secondtiercitiesinEuropevaryconsiderablyinsize,accessibilityandeconomicperformance.NosecondtiercitiesaredefinedforIceland,Cyprus,Luxembourg,MaltaandLiechtensteinduetothesmallsizeofthecountriesandconsequentlytheabsenceofotherlargercitiesapartfromthecapital.

Second tier cities growing in population

Normally,populationgrowthincapitalsishigherthantheoneinsecondtiercities(seeMap1).Onaverage,thelattergrewby0.35%peryearin2000-2014,i.e.by600000peopleperyear.SomecountriesthoughsawpopulationgrowthintheirsecondtiercitiesthatgoesbeyondtheEuropeanaverage.NorwayisleadinginthisrespectwithanannualaveragepopulationgrowthratefourtimesthatoftheEuropeanaverageinitssecondtiercities.PopulationgrowthwasalsocomparativelyhighinSwedishandSwisssecondtiercities,followedbytheonesinAustria,Finland,FranceandSpain.

Map 1. Annual population growth in European capital and second tier metro regions, 2000-2014

3



instance,lostcloseto95000inhabitantsbetween2000and2014.AsimilarsituationcanbeseeninHungary,wherethemajorityofsecondtiermetroregionsexperiencedanannuallossofpopulation.Theannualgrowth rateofBudapest, though,waswith0.4%still lower than theaverageannualgrowthrateof0.6%ofEasternEuropeancapitals.

While the described trends in European population development had unfavourable effects onsomeEasternandSouthernsecondtiercities,theycontributedtotheoverallpositivedevelopmenttrajectoryofsecondtiercitiesinthewestandnorthofEuropeafterthecrisis.Themigrationofwell-educatedandqualifiedyoungpeoplealsohelped the recoveryof theeconomiesof the recipientregions.Apartfromthefactthatthelattercouldstillofferemployment,theyalsomanagedtomaintainagoodlevelofserviceprovision,attractivelivingconditionsaswellasgoodaccessibility.

European second tier cities are experiencing faster economic recovery than capitals

Economicactivitiesconcentrateinlargercitieswheretheybenefitfromgoodaccessibility,availabilityof well-educated human capital and various services and amenities thatmake those cities alsoattractiveplacestolivein.Secondtiercitiescanachievemanyoftheagglomerationeffectsofcapitalcities,iftheyhavetherightinfrastructure,facilities,capacityandpowers.IntheEU28secondtiercitiesaccountedfor30%oftheGDPinPPSin2013.

Inmorepolycentriccountrieswitharelativelybalancedurbansystem(e.g.Germany,Italy)secondtiercitiescontributenotonlyverystronglytothenationaleconomicperformance,theyevendosotoalargerdegreethanthecapitals.

Beforetheonsetoftheeconomiccrisisin2008,secondtiercitiesinmanycountriesoutperformedtheircapitalcitiesintermsofeconomicgrowth.However,thisimprovedeconomicperformancewas,amongothers,duetosubstantialinvestmentofpublicresourcesinmanycountries.Theeconomicandfiscalcrisishadvariousimpactsonsecondtiercitiesandthreatenedtounderminetheirearlierachievements.ThemajorityofsecondtiercitiesexperiencedadropintheirGDPduring2007-2009.Afewhavenotrecoveredsince.

Whilesecondtiercitiescontributedstonglytotheirnationaleconomicperformancealreadybeforetheonsetofcrisis,theystilldosotoday.However,thedifferencetothepre-crisisperiodliesinthefactthatfromthepeakofthecrisisto2013alsoseveralEasternEuropeansecondtiercitiesfaredbetter thantheircapitals(CzechRepublic,Bulgaria,Hungary),whichoftendominatethenationaleconomytoalargedegree.Infact,in15outof24EuropeancountriestheleadingsecondtiercitieshadhigherannualGDPgrowthratesinthisperiodthantheirrespectivecapitalcity(seeFigure1).Comparedtothepre-crisisperiod,thisisanimpressivedevelopmentofEurope’ssecondtiercities,whichseemed tobemore resilient to theeconomic turmoil than thecapitals.On thecontrary, insomecountries,theleadingsecondtiercitiesthatshowedfastergrowthratesduringtheboom,areshowingslowerrecoveryratesthancapitals(Sweden,Denmark,Ireland,Croatia).

InAustria,BulgariaandSlovakiaallsecondtiercitiesgrewfasterineconomictermsthanthecapitalcity;inGermanysixsecondtiercitiesgrewfasterthanBerlin,whichhasbeenhistoricallyconstrained.Thistrendwasalsoobservedintheboomyearsandcontinuedirrelevantofthecrisis.

InFrance,theeconomicgrowthofsomesecondtiercities(i.e.Nantes,Marseille)wasapproximatelyonaparwiththecapitalcityafterthecrisis.Beforetheonsetofrecession,someFrenchsecondtiercitiesexperiencedgrowthratesthatwere1.5timeshigherthanthatofParis.Intheperiodbetweenthepeakofthecrisisupto2013,ToulouseandLyonshowedevenhigherannualgrowthratesthanParis,justlikeintermsofpopulationgrowth.InPoland,themajorityofsecondtiercitieswerenotat

4



0

4

8

12

16

0

4

8

12

16

0

4

8

12

16

0

4

8

- 4

- 8

12

16

Prah

a

Brno

Plze

ň

Ost

rava

Hra

dec

Kral

ove/

Par

dubi

ce

Am

ster

dam

Eind

hove

n

Hee

rlen

Rott

erda

m

Arn

hem

Ensc

hede

Bucu

reşti

Cons

tant

a

Cluj

-Nap

oca

Iasi

Tim

işoa

ra

Crai

ova

Berl

in

Stutt

gart

Leip

zig

Mün

chen

Brem

en

Biel

efel

d

Nür

nber

g

Dre

sden

Han

nove

r

Man

nhei

m-L

udw

igsh

afen

Chem

nitz

Köln

Ruhr

gebi

et

Ham

burg

Fran

kfur

t am

Mai

n

Düs

seld

orf

Bonn

Wie

nSa

lzbu

rgIn

nsbr

uck

Gra

zLi

nz

Lond

onM

anch

este

rCa

rdiff

Live

rpoo

lBr

adfo

rdN

otting

ham

Sheffi

eld

Leic

este

rBi

rmin

gham

Bris

tol

Gla

sgow

New

cast

le u

pon

Tyne

Edin

burg

hLe

eds

Belf

ast

Pari

sTo

ulou

seLy

onM

arse

ille

Nan

tes

Nic

eBo

rdea

uxRe

nnes

Mon

tpel

lier

Toul

onRo

uen

Gre

nobl

eLi

lleSt

rasb

ourg

Lens

- Li

évin

Met

z

Brux

elle

s /

Brus

sel

Ant

wer

pen

Gen

tLi

ège

Char

lero

i

Hel

sink

iTa

mpe

reTu

rku

Viln

ius

Kaun

asKl

aipe

da

Stoc

khol

m

Göt

ebor

g

Mal

mö

Rīga

Dau

gavp

ils

Talli

nn

Tart

u

Ljub

ljana

Mar

ibor

Købe

nhav

n

Aal

borg

Ode

nse

Årh

us

Dub

lin

Cork

Zagr

eb

Split

War

szaw

aW

rocł

awKi

elce

Krak

ówG

dańs

kLu

blin

Pozn

ańŁó

dźW

locl

awek

Bydg

oszc

zKa

tow

ice

Szcz

ecin

Sofia

Var

naPl

ovdi

v

Brati

slav

aKo

šice

Buda

pest

Gyo

rM

isko

lcSz

eged

Pécs

Deb

rece

n

Rom

aBo

logn

aM

ilano

Bres

cia

Fire

nze

Bari

Sale

rno

Tori

noCa

tani

aPa

lerm

oN

apol

iG

enov

a

Mad

rid

Mur

cia

Barc

elon

aSe

villa

A C

oruñ

aCá

diz

Bilb

aoM

álag

aV

alen

cia

Ath

ina

Thes

salo

niki

Annual growth rate of GDP since the peak of crisis in second tier metro regions, %

Annual growth rate of GDP since the crisis in capital metro regions, %

Annual growth rate of GDP since the crisis, national average, %

Annual growth rate of GDP during the boom in metro regions, %

Annual growth rate of GDP during the boom, national average, %

DEROCZ NL

BE FI LTFRAT UK

SI DK IR CREESE LV

HR IT ES ELSKPL BG

Capital city recovery rate higher than all second tier cities

Recovery rate in leading second tier metro region 1 to 1.5 times capital

Recovery rate in leading second tier metro region over 1.5 times capital

Crisis had little e�ect on GDP growth in some regions Some (or all) metropolitan regions show no signs of recovery

Origin of data: Eurostat (2016)

Figure 1. Annual GDP growth rate in second tier cities, 2009 - 2013

5



allaffectedbythecrisisandthosethatwererecoveredveryquickly.

The crisis is still deepening in all of the cities inGreece, in themajority of theSpanish secondtiercitiesandinsomecitiesinItaly(Naples,Palermo,andGenoa)andHungary(Pecs).AlsotherecoveryofMadridandRometooklongerthanthatofotherEuropeancapitals.

WhenlookingatabsoluteGDPvaluesandtheirdevelopmentovertheyears2009–2013,EasternEuropeansecondtiercitiestendtoshowsignificantlylowerGDPvaluesthantheircapitals.RomaniaandHungarybothrevealratherbigdisparitiesbetweenthecapitalcityandtheirsecondtiercitiesintermsofeconomicdevelopment.Forinstance,Bucharestalreadystronglydominatedthenationaleconomyintheperiodbeforetheeconomiccrisisandthishasn’tchangedintheyearsupto2013.In2013,theGDPinPPSinBucharestwassixtimesthatofCluj-NapocaandclosetosixtimesthatofTimisoara.

Stuttgart’s fast recovery: the link between short-term and mid-term policy strategies was key

The second tier city of Stuttgart, state capital of Baden-Wurttemberg, was particularly negativelyaffectedbythecrisisbecauseofthedominanceofexportorientedautomotiveandmachineryindustry.GDPdeclinedby8.7%in2009,whiletheaveragedeclineinGermanyamountedto5.2%.However,theeconomicrecoveryafter2009wasstrongerinStuttgartandthestateofBaden-Wurttembergaltogether.WhiletheaverageannualGDPgrowthinall16secondtiercitiesinGermanyandinBerlinamountedto5.2%intheperiod2009–2013,theoneofStuttgartwasalmosttwiceashigh(9.4%).Althoughthehighexportintensitycausedahighvulnerabilityofthecitytothecrisis,italsoprovedtobethekeytoafastrecovery.IncreasingdemandsfromChinaandotheremergingeconomiesledtoswiftlyimprovingGDPgrowthandanewpeakin2013.

AnotherreasonfortheresilienceofStuttgartisthestronginnovationcapabilitiesoftheeconomy.Infact,companies tried toavoidreducing investment inresearchanddevelopmentoreven increasedtheiractivities to foster their innovativecapabilities.Furthermore,experiences frompast recessionsweresuccessfullyprocessed,i.e.insteadofmakingstaffredundant,companiesusedflexibleworking-timearrangementsandshort-termworktoretaintheirworkforce.Finally,dialogue-orientedgovernancestylesstimulated thedevelopmentofpragmaticshort-termsolutions.After the recovery,Stuttgart isevenmorecompetitivethanbeforethecrisis.

Gdansk’s resilience due to various factors

ThePolishseaportcityofGdansk,likethemajorityofPolishcities,wasnotaffectedbythecrisis.Thecity’sresiliencecanbeputdowntoamultilayeredpackageoffactors.TheeconomyinthecityandthesurroundingPomorskieregionisdiversified,dominatedbystrongsmall-andmedium-sizedenterprisesandexportoriented.Europeanfundscontributedtothemodernizationofnumerouscompanies,whichhelpedtoincreaseefficiencyofproductionwhilekeepinglabourcostslow.Well-qualifiedhumancapitalworkinginshipbuilding,electronic,ITandchemicalindustriescontributedsignificantlytothehighlevelofGdansk’sresilience.Importantbranchesofthelocaleconomyarealsohealthandeducationalservices.Furthermore,Gdanskbenefitsofafavourabledemographicstructurewithoneofthehighestannualpopulationgrowthinthecountry(12.5%in2013)duetoboth,positivenaturalpopulationdevelopmentand positive immigration. It also offers the highest living conditions in the country with a rich anddiversifiednaturalenvironment,whichisimportantinattractingandkeepingqualifiedhumancapital.

RegionalauthoritiesinPolandhaveonlylimitedautonomy,buttheycansetupdevelopmentstrategiesand influence regional transport infrastructure.The regional development strategies in and aroundGdanskfocusedonimprovingtransportaccessibility.ThejointmanagementofGdanskairportbythelocalandregionalauthoritieseffectivelysupportedthefunctioningoftheregion’seconomy.

6



Accessibility dynamics in second tier cities

Regional level: NUTS 3 (2010)Source: Spiekermann and Wegener

Urban and Regional Research (S&W), 2014Origin of data: S&W Accessibility Model, 2014

RRG GIS Database, 2014S&W Flight Network Database, 2014

© EuroGeographics Association for administrative boundaries

This map does notnecessarily reflect theopinion of the ESPONMonitoring Committee

Accessibility potential, air2001 - 2014 (annual change, %)

10

23

Accessibility potential, air 2014

- 1 - 2- 3

150

100

50

25

200 second tier city regions

capital city regions

0 480240km© ESPON EGTC, 2016

EUROPEAN UNION

Map 2. Potential accessibility of European capitals and second tier cities by air, 2001-2014

Good accessibility is generally deemed aprerequisite for economic performance anddevelopment in second tier cities as wellas other cities and regions. It has a directimpact on attracting investors, increasingemploymentandtrade,andbuildingnetworksof cities. Accessibility is not only a locationfactorforeconomicactivitiesbutalsoprovidesforagoodqualityoflife.

Transport policies that strengthen accessto second tier cities can support thedevelopment towards a more cohesive andpolycentric European territory. Transportinfrastructure that extends secondarytransport networks can have substantialimpacts on the potential accessibility ofindividual places. Improvements in high-speed rail connections throughout Europehaveparticularlycontributedtoincreasingthepotential accessibility of places outside theEuropean core, including second tier cities.Nevertheless, the scope to which improvedaccessibility can lead to better economicperformancedependsonthecompetitivenessofthesecondtiercityinquestion.

Second tier cities in Western Europe arenormallywellconnectedbyroadandrailandbenefit of positive population development;secondtiercitiesintheeastofEuropearewellconnectedbyroadandpartiallybyrailbutchallengedwithdemographicloss.However,improvementsinaccessibilityarenoguaranteeforanincreaseinlocalandregionalpopulationnumbers,noranenhancedeconomicperformance.WhilethesecondtiercityofDebreceninHungaryinvestedinthefurtherdevelopmentoftheirairportandseveralnewflightsstartedtodepartfromthere,thecitystillhadtocopewithannualpopulationlossesduringthelastyears.

Thehighest relativechangesofmultimodalaccessibilityduring2001–2014occurred inEasternandSouth-EasternEurope.ThisispartlytheresultofastrongfocusofEasternmemberstatesonprioritizingroadinfrastructuredevelopment.Thesegrowths,however,arenotonlybasedonrelativeimprovementsinroadtransportbutalsoairtransport.

Second tier cities particularly in Eastern Europe sawmajor improvements in terms of potentialaccessibilitybyairintheperiod2001–2014(seeMap2andFigure2).Citieswithbelowaverageaccessibilitybyairin2001experiencedagrowthofuptoorsometimesevenmorethan30%.Thisis a positive development in terms of integration of these cities in the European urban system.Furthermore,suchimprovementsalsocontributetoanenhancedattractivenessandcompetitivenessof thesurrounding regions.Threesecond tiercities inPoland,Bydgoszcz,WrocławandKrakówregistered the biggest annual gains in absolute terms for potential air accessibility for the years2001-2014.Thebiggestimprovementsintermsofrelativeannualchangesduring2001-2014canbefoundinthesecondtiercitiesofKlaipedainLithuaniaandBydgoszczinPoland(seeFigure2).

7



Citiesshowinghighgrowthratesinpotentialairaccessibilityusuallybenefitfromnewflightservicestoandfromsecondaryairports.However,policystrategiesbasedonthedevelopmentofregionalairportstoimproveaccessibilitymightberisky.Airaccessibilityismorevulnerabletochangingmarketconditionsthanaccessibilitybyothermodes.Forexample,thecancelationofflightconnectionsasaconsequenceofthefinancialcrisisunderlinestheriskofregionalfluctuationsinairaccessibility.

In several Western and Central European countries, potential air accessibility comparativelydeteriorated between 2001 and 2014, both in second tier as well as in capital cities. Potentialaccessibility by air is still on a high level in these countries, but as they already enjoyed highaccessibilityvaluesinpreviousyears,therewaslessscopeforfurtherimprovement.Furthermore,areductionofflightservicesalsoledtosomedeficitsinairaccessibility,forinstanceinFrance,SpainandGermany.Thesedevelopmentscanalsobeseenasaneffectofthecompetitionwithimprovedrailservicesintherespectivecountries.InsomeEuropeancountries,secondtiercitiesshowedevenbetterpotentialairaccessibilityinabsolutetermsin2014thantheirrespectivecapitalcities,amongthemMilan,FrankfurtandMalmo.

People of many second tier cities are well educated

Citiesandurbanagglomerationsnormallyattractpeopleholdinghigher-educationdegreesbecausetheyofferavarietyofjobsthatrequiretertiaryeducationalattainmentaswellasthequalityoflifethatgraduatesarelookingfor.Secondtiercitiescanstandupthecompetitionwithcapitalcitieswhenitcomestoattractingpeoplewithtertiaryeducation.Infact,in2014therewereatleastsixsecondtiercitiesinEuropethatoutperformedtheirnationalcapitalcitiesintermsofeducationlevelsoftheirpopulation(seeFigure3).Bilbao,EdinburghandToulousealreadyperformedbetterthantheircapitalsbeforetheonsetofthecrisis.However,Arnhem,LyonandBergenarenewcasesofsecondtiercitiesthatdobetterthantheircapitalcityconcerningtheeducationalattainmentoftheirpopulation.MostofthesecitiesarecharacterisedasbeingresearchintensiveandfocusingonICT.Theyhostinstitutionsofferinghighereducationcoursesandresearchcentres;companiesfromrelatedeconomicactivitiessettle there to benefit from synergies and proximity of clients and competitors alike, reinforcingspecialisationanddrawinghighlyqualifiedstafftothecitiesandsurroundingregions.InToulouse,for instance,theaerospaceindustryisthebigpull factorthatoffersemploymentopportunitiesforgraduates.Arnhemworks togetherwith theneighbouringmunicipalityofNijmegenondevelopingtheircityregion intothesecondbiggesteconomicarea intheNetherlandsafter theRandstadby2020.Thecityregionfocusesonsiximportantclustersthatshouldhelptostrengthentheeconomic

0

1

2

- 1

3

4

5

6

7

Viln

ius

Klai

peda

War

szaw

a

Bydg

oszc

z

Wro

cław

Krak

ów

Kiel

ce

Sofia

Var

na

Plov

div

Buda

pest

Deb

rece

n

Bucu

reşti

Cluj

-Nap

oca

Crai

ova

Tim

işoa

ra

Talli

nn

Tart

u

Zagr

eb

Split

Brati

slav

a

Koši

ce

Origin of data: S&W Accessibility Model, 2014; RRG GIS Database, 2014; S&W Flight Network Database, 2014

Capital city Second tier city

SKCREEROHRBGPLLT

Figure 2. Accessibility potential of selected second tier cities by air, 2001-2014 (annual change, %)

8



profile.Amongtheseclustersarehealthcareandlifescience,energyandenvironmentaltechnology,and smart and sustainable logistics.Several universitiesand research centres in the city regionprovideeducationandtrainingforpeoplewhoaimatworkinginthesesectorsinhighlyskilledjobs.

Someothersecondtiercitiesdisposeofhighsharesofpopulationwithtertiaryeducationalthoughnotashighasinthecapitalcity.ThisgoesforinstanceforAntwerp,Barcelona,Bristol,Cork,Eindhoven,Glasgow,Salzburg,TampereandThessaloniki(seeFigure3).

In some second tier cities, though, the share of population with tertiary education is below thenationalaverage.ThisgoesforinstanceforAalborg,Odense,OstravaandPlzeň,thesecondtiercitiesinHungary,andsomesecondtiercitiesinthesouthofSpainandItaly.Concerningthelatter,thereismostprobablyalinkbetweenthecomparativelylowereconomicperformancesofsomeofthesesecondtiercitiesduringandafterthecrisiswiththelowershareofhighlyeducatedpeoplethere.Throughoutthecrisis,particularlyyoungpeoplewithhighereducationdegreeshadsubstantialdifficultiesfindingorkeepingtheirjobsinthelabourmarketsofSouthernEuropethatwereheavilyaffectedbytheeconomicdownturn.Manyofthesepeoplemigratedtootherpartsoftheircountryorabroadtotryandfindemploymentthere.However,theSouthernItaliansecondtiercitiesdidactuallyshowamodestpopulationgrowthbetween2000and2014(seeMap1),albeitbelowthenationalaveragegrowthrate.InthesouthofSpain,secondtiercitiesexperiencedevenhigherpopulationgrowthratesduring2000–2014thanothercitiesinthecountry.

Figure 3. Share of population with tertiary education levels, %

0

10

20

30

40

50

60

0

10

20

30

40

50

60

NL ESNOUK FR

LT FI SE IR BG DK HR CZ SKELAT IT BE

Lond

onEd

inbu

rgh

Bris

tol

Gla

sgow

Sheffi

eld

Notti

ngha

mBe

lfas

tLe

ices

ter

Card

iffM

anch

este

rLe

eds

New

cast

le u

pon

Tyne

Live

rpoo

lBi

rmin

gham

Brad

ford

Pari

sTo

ulou

seLy

onG

reno

ble

Bord

eaux

Nan

tes

Renn

esN

ice

Mar

seill

eM

ontp

ellie

rSt

rasb

ourg

Lille

Toul

onRo

uen

Osl

oBe

rgen

Arn

hem

Am

ster

dam

Eind

hove

nEn

sche

deRo

tter

dam

Hee

rlen

Mad

rid

Bilb

aoBa

rcel

ona

A C

oruñ

aV

alen

cia

Sevi

llaM

urci

aCá

diz

Mál

aga

Wie

nSa

lzbu

rgIn

nsbr

uck

Gra

zLi

nz

Rom

aBo

logn

aM

ilano

Fire

nze

Gen

ova

Tori

no Bari

Pale

rmo

Nap

oli

Cata

nia

Bres

cia

Brux

elle

s /

Brus

sel

Ant

wer

pen

Gen

tLi

ège

Char

lero

i

Ath

ina

Thes

salo

niki

Viln

ius

Kaun

as

Hel

sink

iTa

mpe

reTu

rku

Stoc

khol

mM

alm

öG

öteb

org

Dub

linCo

rk

Sofia

Var

naPl

ovdi

v

Købe

nhav

nÅ

rhus

Ode

nse

Aal

borg

Buda

pest

Deb

rece

nPé

csM

isko

lc

Prah

aPl

zeň

Ost

rava

Brati

slav

aKo

šice

Origin of data: DG Regio and Urban, EC, 2016

Share of population with tertiary education in capital city higher than all second tier cities (persons aged 30-34)

Share of population with tertiary education in leading second tier city higher than capital city (persons aged 30-34)

Capital city Second tier city

9



Tampere’s transition to a node in the global knowledge economy

TheFinnish second tier city ofTampere is the secondmajor economic centre in the country afterHelsinki.The localeconomyunderwentaprocessof restructuringandgraduallyputastrong focusontheICTsector.Thetwouniversitiescontributedtothecreationoftheregionalknowledgebaseandtherebyalsotothegradualtransitiontoaknowledgeeconomy.ResearchinstituteswereestablishedinthecityandNokiasetupalocalresearchunit.TheknowledgeeconomywasfirmlysettledinTampereandinnovationprocesseswereongoingwhentherecessioninthe1990shittheglobaleconomy.

Universitiesandhighereducation institutions form thebackboneof the regional innovationsystem,togetherwithlargeR&Dorientedcompanies.TampereisnowthesecondR&Dhubinthecountry,withastrongscienceandtechnologybase,especiallyinthefieldsofICT,healthandbiotechnology.Thereisa long traditionofcooperationbetween the twouniversitiesand local industry that takesvariousforms,e.g.studentshavewrittentheirmasterthesisincooperationwithcompanies,anduniversitystaffhasprovided trainingcourses forcompanies.University initiativessuchaspart-timeprofessorshipsforexpertsfromindustryalsoindicatecloselinksbetweenthelocalscientificcommunityandindustry.

Theuniversitiesandotherhighereducationinstitutionsattractstudentstothecity,whooftenstayaftergraduation to takeup jobs in the localor regionalknowledgeeconomy.Togetherwith thepresenceofresearchinstitutes,theeducationalinstitutionsaccountforthehighshareoflocalpopulationwithtertiaryleveleducationalattainment(42%in2014),whichisabovetheEUaverageof30%.TampereisthereforeamongthetopEuropeancitieswiththebesteducatedhumancapital.Itisalsoamongthe26secondtiercitiesinEuropethatexperiencedhighpopulationgrowthintheperiod2000–2014.

Thecity’spositivedevelopmentandresiliencethroughoutthecrisiswassupportedbytheeffectivenessofaspecificnationalurbanpolicy,theCentreofExpertiseProgrammethathadfocusedonknowledgeintensivesectorsofthecountry’slargestcityregionssince1994.

Territorial governance matters for the performance of second tier cities

Whileexpliciturbanand/orterritorialpoliciescanaddressparticulardevelopmentopportunitiesandchallengesofthecitiesconcerned,itisimportanttokeepinmindthattheoverallperformanceofsecondtiercitiesdependstoalargedegreeonmainstreampoliciescomingfromnationalgovernments.Forinstance policies addressing infrastructure development, education and skills, research and ICTdevelopmentall influencethewaysinwhichsecondtiercitiesperform.Theexamplesmentionedaboveallservetoillustratethispoint.

Localauthoritiescan,amongothers,stimulate thecreationofnetworksbetweencompaniesandeducationalinstitutionstoimprovethedevelopmentofaparticularsector;theycanworkonenhancingtheirattractiveness for residents,enterprisesandvisitors. Indeed, the latteraspect isconsideredhighlyrelevantbystakeholdersonalllevelsofgovernance,fromEuropeantolocal.AstheESPONworkshopon“Europeansecondtiercities”on1June2016showed,policymakersandpractitionersagreethatdevelopmentstrategiesfosteringsecondtiercitiesshouldnotonlyjustfocusoneconomicfactors.Investmentsinthesocialandculturallifeofcitiesarejustasimportantandcanplayamajorroleincreatingaspecificidentitythatthelocalpopulationissatisfiedwith,andthatcanbecomeanassetforfurtherdevelopmentandgrowth.

TheLatviansecondtiercityofDaugavpilsforinstanceinvestedinthecreationoftheMarkRothkoArtCentre,amultifunctionalcontemporaryartandculturalcentre.Thisprovedtobeanimportantdevelopmentforthecitybecauseitcontributedtothegradualimprovementofthecity’simageandattractivenessaswellasthecreationofanewidentity.Asaconsequence,thecitizenofDaugavpilsalsofeltbetterabouttheirhometownthatusedtobeknownexclusivelyasanindustrialcity.

10


Possiblepolicymeasuresthatmightbetaken,forinstancetofurtherstrengthentheaccessibilityofsecondtiercitiesdepend,amongothers,onthedistributionofresponsibilities,theinstitutionalcapacityparticularlyoflocalstakeholders,andthecooperationofrelevantpolicymakers.Infact,cooperationamongstakeholdersacrossalllevelsofgovernanceiskeyinthesustainabledevelopmentofsecondtiercities.However,cooperation requires thenecessaryhumancapacity that tends tobe lackinginmanycities,particularlysmallerones.Capitalcitiescanplayasupportiverolehereandsupportsecondtierandothercitiesincapacitybuilding.ThisisanapproachthatAmsterdamfollowswiththeir“ResponsibleCapital”policy,whichisbasedontheappreciationofthecapitalthatitisresponsibleforandfeelssolidaritywithothercitiesinthecountry.Therefore,Amsterdamprovidescivilserviceknowledge and expertise to three shrinkingmunicipalities that are challengedwith restructuringtasks.Furthermore,ithelpswithfacilitating(private)initiativesthatcansupportthemunicipalitiesbypromotingtheirattractiveness,qualityoflifeandsustainability.

All inall, theexistinggovernancestructure is relevant for thesuccessfuldevelopmentofsecondtiercities.Likewise,thefactifthesecondtiercityislocatedinacountrywithamorecentralisedorfederalpoliticalsystemplaysacrucialrole.Forsecondtiercitiestofurtherthrive,itisimportanttorespectandapplyamultilevelterritorialgovernanceapproachthat:

• Coordinates actions of actors and institutions (as in the case of the joint management ofGdanskairportbylocalandregionalauthorities);

• Integratesrelevantpolicysectorsacrossalllevelsofgovernance;

• Mobilises stakeholder participation (as in Tampere, where universities and local industrycooperatetotheirmutualbenefitaswellasthatofthecity’sprosperity);

• Adapts to changing contexts (as in Stuttgart, where during the peak of the crisis flexibleworking-timearrangementswereappliedtoavoiddismissingstaff);and

• Realisesplace-based/territorialspecificitiesand impacts,alsostemming fromconsideringawiderterritorialcontextthanhitherto.

Disclaimers:

The content of this publication does notnecessarily reflect theopinionof theESPON2020MonitoringCommittee.

ISBN:978-2-919777-97-6

©ESPON

Reproduction is authorized provided thesourceisaknowledgedandacopyissenttotheESPONEGTC.

PublishedinJune2016

ESPON 2020-Moreinformation

ESPONEGTC

4rueErasme,L-1468Luxembourg-GrandDuchyofLuxembourgPhone:+3524259914700Email:[email protected],Twitter,LinkedIn

The ESPON EGTC is the Single Beneficiary of the ESPON 2020 CooperationProgramme.TheSingleOperationwithintheprogrammeisimplementedbytheESPONEGTCandco-financedbytheEuropeanRegionalDevelopmentFund,theEUMemberStatesandthePartnerStates,Iceland,Liechtenstein,NorwayandSwitzerland.

FurtherinformationonissuesaddressedinthispapercanmainlybefoundinthereportsoftheESPONprojectsSGPTD,ECR2andTANGO.

Documents

econd Tier Cities Matter · Virtually all city Source: regions lost population during 2000 – 2014. While the loss (million inhabitants)in Bucharest was modest with an annual rate