advocates the potential of a regional regeneration strategy based on the development
of networks of companies and links between companies and other development
organisations.
3. The Study Regions
The study regions were chosen to highlight core-periphery differences within the EU,
and to illustrate the impact of different types of RIS. Bavaria is both within the ‘core’
group of EU regions, with GDP per capita consistently above the EU average.
Northern Ireland and the Republic of Ireland both had GDP per capita significantly
below the EU average in 1990-1991 but have since experienced very different growth
profiles. In Northern Ireland, GDP per capita has continued to lag 20-25 per cent
below the EU average while dramatic economic growth rates in the Republic of
Ireland have seen GDP per capita rise sharply. Indeed, by 1996, GDP per capita in the
Republic of Ireland was 96 per cent of the EU average, compared to only 80 per cent
in Northern Ireland (Table 1)9. Similar patterns are evident in unemployment rates
with Bavaria having consistently less unemployment than the EU average. In
Northern Ireland and the Republic of Ireland, unemployment rates were above the EU
average until the mid-1990s, but have fallen more recently reaching 8-9 per cent by
1998 (Table 1).
Some other contrasts between the study regions may also be important in terms of
their impact on the regions’ innovation potential. First, higher levels of per capita
income in Bavaria may mean that firms in Bavaria face a local demand for higher
quality, more sophisticated and perhaps more innovative products than firms in
Northern Ireland and the Republic of Ireland (Gudgin, 1995). Secondly, population
densities, which have been positively linked to higher rates of innovative activity
particularly in high-tech industries (e.g. Frenkel and Shefer, 1998), are notably higher
in the German region (Table 1). Thirdly, in 1996, the German region had higher levels
of R&D investment and patent applications per capita than Northern Ireland or the
9 Some care is necessary in interpreting these GDP figures for the Republic of Ireland due to the
importance of profits repatriated by externally-owned companies. In 1996, this meant that GNP at
market prices was only 88.8 per cent of GDP (Source: CSO, Table 2, NIE Dept of Finance). In 1990
the same figure was 89.7 per cent. In other words while the GDP figures for the Republic of Ireland
overestimate the average level of per capita income in the Republic of Ireland the growth profile from
1991 onwards does give a realistic impression of welfare changes.