Konstantinos Melachroinos (p), Nigel Spence (p)

Burak Turkgulu

The relationship between regional specialisation and economic performance is a contested issue. Although from a theoretical viewpoint it is often assumed that specialisation improves regional competitiveness, the empirical evidence so far is particularly thin. Recent research has provided clarification of the meaning of the term and codification of the variety of forms that it can take. Furthermore, it is now possible to situate each type of specialization measure in an appropriate conceptual context from a regional economic growth viewpoint. The aim of this paper is to use these advances to judge whether a region specialising in an economic activity, whatever that may constitute, is a positive influence on its economic performance however defined. More specialization, or less, can occur naturally, organically or by design and intervention. Whatever is the driving force for changing levels of specialization, it is important to understand probable impacts on economic outcomes. Here the lens is focused on British regions, a territory comfortable with notions of industrial diversification and its importance since the time of the Barlow report eight decades since.

Burak Turkgulu (p), Mihir Nikhil Madhekar, Penelope Demetra Fidas

Edurne Zubiria-Ferriols

Subnational Business Ready is a new demand-driven World Bank product which provides actionable data for policy makers on the local business environment. The data provides granular measures for quality of the regulatory framework, availability of public services, and operational efficiency in the topics of business entry, business location, utility services, dispute resolution, and business insolvency. This study presents findings from the data collected for 40 cities in six EU member states as part of the initial phase of the Subnational Business Ready in the EU project funded by the European Commission’s DG REGIO. The data show that even though the measured cities perform well in general, there is appreciable variation in overall performance across the cities in four of the five topics both within and across borders. At a more granular level the data shows that while the regulatory frameworks are consistent within countries and quite homogenous across them, most of the measured variation is attributable to differences in operational efficiency (based on expert and firm-level data) and availability of public services. The observed variation indicates that there are ample opportunities for cross-city learning to provide better local business environments. Additional econometric analysis uncovers that higher population may explain better availability of public services on average within a country, and more surprisingly, higher income levels are significantly associated with lower operational efficiency within a country. These findings might be explained by the facts that larger cities respond to higher demand by providing better public services, but in higher income cities, public services are more costly to supply, and the firms are more willing to both pay and wait for those services anticipating higher returns. As a results, policy makers in higher-income cities can potentially have social efficiency gains from initiatives that promote more efficient service provision.

Edurne Zubiria-Ferriols (p), Teresa Martínez Fernández, Luis Cuni Monserrat

Philip McCann

The objective of this study is to highlight the growing importance of knowledge and innovation in urban environments, particularly in how local governments respond to the evolving demands of their citizens. To reach this purpose, we carried out a review of the attributes a city must possess to be considered an innovative city, from the perspective of the Ministry of Science Innovation, and Universities (Spain). By examining these attributes, we aim to understand the essential factors that contribute to urban innovation and how they align with contemporary challenges faced by municipalities.

Innovation in the public sector is no longer just an option but a necessity, placing new responsibilities on municipalities as they navigate the challenges of globalization and seek to leverage opportunities within their territories.

The academic community has made various attempts to define the concept of an "innovative city," often overlapping it with related terms such as "smart city", "sustainable city", or "eco-city". However, there is still no universally accepted definition or clear conceptual framework.

In 2010, the Spanish Ministry of Science, Innovation and Universities launched the “City of Science and Innovation” award to recognize municipalities that excel in fostering innovation, and Innpulso Network was founded (Spanish city network). In 2025, 90 Spanish municipalities are holding this distinction. Given this context, this study will analyze the key attributes that define an innovative city and explore the relationship between local innovation and sustainability.

The methodology used is based on analyzing the attributes a city must possess to be considered an innovative city, taking as a reference those established by the Spanish Ministry of Innovation, Science, and Universities. To complement this information, a qualitative study was conducted through in-depth interviews between 2020 and 2023 with municipal responsibles for promoting local public policies.

The findings of this study highlight that innovation and sustainability are intrinsically linked, as today’s environmental and social challenges demand creative and disruptive solutions that transform traditional models. Innovation drives the development of new technologies, processes, and strategies that enable more efficient resource use, reduce pollutant emissions, and create more sustainable products and services. At the same time, sustainability provides an ethical and pragmatic framework that guides innovation toward objectives that enhance social well-being while preserving the natural environment. Both fields contribute to long-term responsible economic growth, ensuring that present needs are met without compromising the ability of future generations to meet their own.

Philip McCann (p), Michiel Daams (p), Paolo Veneri, Richard Barkham

Konstantinos Melachroinos

This paper will examine data from more than 15,000 large scale commercial real estate investments in the office, retail and industrial sectors to identify how the UK and European investment markets responded to economic shocks, namely the 2008 global financial crisis, the 2016 Brexit vote, and the 2020-2021 Covid-19 lockdown crisis. We compare different types of comparator city and regional groupings in the UK and in different parts of Europe and we examine how the city and regional investment yields and risk premia respond to these shocks. We also examine how QE quantitative easing affected different types of cities and regions in terms of their investment yields and risk premia. We consider, in particular, how the trends in investment yields and risk premia were affected by the major economic shocks of the 2008 global financial crisis, the 2016 Brexit vote, and the 2020-2021 Covid-19 lockdown crisis, and we examine how the different responses to these crises affected different types of cities and regions in different ways. As part of our research, we will construct synthetic controls for different types of cities and regions, each built on different periods spanning one or more of these shocks. Finally, by considering the patterns and trends of city and regional investment yields and risk premia across different types of places, we aim to provide on the regional effectiveness of monetary policy.