The TAP captures economic relations and industrial collaboration of European cities and regions with the rest of the world. Economic relations include trade of goods and services, credit and debit, development aid, workers’ remittances and also Foreign Direct Investment and portfolio investment. Industrial collaboration has no immediate impact on the regions’ income but result in knowledge exchange, joint ownership of intangible assets and labour force movements. Global interactions increase the total factor productivity of regional economies though transfer of knowhow, innovation diffusion and spill-over effects. In this context, the TAP is addressing an important source of economic growth and creates an intersection of international, innovation and regional economics. Consequently, this TAP pursues a unique niche for ESPON, in particular, and for the field of regional studies in general,  adding new value to evidence-based territorial policymaking as global interactions monitored to such extent are typically a blind spot in regional statistics while having a significant impact on regional economic performance.

The objective of this TAP is twofold: 1) to bring unique insights on economic relations and industrial collaboration at subnational level (i.e. the ESPON niche) and 2) to investigate the causal relationship between global interactions, regional policies and the regional economic performance, the latter expressed as regional competitiveness and innovation (i.e. the policy usefulness). The TAP does not exclude transactions and collaboration within the Single Market, on the contrary, it expands single-market observations to a global dimension.

The TAP covers a panoply of interactions, which jointly form the productive capabilities of regions. It draws on a good practice of ESPON IRIE (ESPON 2022) examining simultaneously different types of global interactions and policies, and structuring them in causal relationship. Increasing the breadth and depth of the analyses of global interactions while avoiding empirical fragmentation, the TAP is proposed to be organised in multiple interlinked research activities, which culminate in one inferential research dedicated to the effect of global interactions on regional economic performance, moderated by local policies.

Proposed sequential and logical organisation of the TAP capacities:

• Developing a methodological concept based on which, the subsequent empirical activities can be carried out, e.g. on modelling economic performance as a consequence of global interactions. Links with the input-output modelling of the JRC can be explored at this stage.
• Capacity for analysing simultaneously all global transactions shaping the net income of European regions (i.e. balance of trade, net factor income from dividends and interest, net development aid and remittances). The purpose is to detect the spatial asymmetries and trends, revealing where in the world and how much European regions spend and earn.
• Capacity for examining capital ownership of European regions. Capitalising on the ESPON Foreign Direct Investment project (ESPON 2020) and ESPON IRIE (2022), the purpose is to update the evidence and add new one on portfolio investments, examining not only inward investment but also the global distribution of foreign capital ownership, which yields dividend flows to European regions.
• Capacity for examining industrial collaboration of European regions.
• Capacity for analysing the ‘glocal’ effect of global interactions on regional economic performance, moderated by local policies.
• Capacity for on-demand projects opening opportunities to investigate specific regional interests in specific interactions outside the single market, e.g. the outermost regions, interactions with the UK, Iberian links with South America or the Neighbourhood Instrument and activities of the NEXT programmes.

In order to make the research activities interconnectable, the units of analysis and the time period covered are proposed to be the same for all research projects (an exception is a potential on-demand activity). The spatial coverage is the entire ESPON space.

The TAP is predictive in nature (ex-ante), rather than evaluative (ex-post). Predictive modelling requires empirical work based on observations, so as to estimate the effects of changes in global interactions on regional competitiveness and innovation on the ground. Expert judgement on future developments remains an important layer adjusting the predictive character of the studies within the TAP while retaining a robust evidence-based framework. Hence, strategic foresight conducted by other organisations will benefit from a robust body of evidence that is reliable (reference source for other organisations studying global interactions), normative (providing clear guidance for policymaking) and unique (spatially disentangling national and European trade and industrial policies to inform the regions).

The TAP has a clearly-defined mission, distancing it from other ESPON 2030 TAPs - notably the one on resilience to crises. It is concentrated on global interactions in relations to the balance of payments, i.e trade and capital ownership as well as industrial collaboration. Interactions of higher-order nature, such as security, development aid and foreign policy, green diplomacy and migration in particular, will not be captured by this TAP. 

The reason is twofold. Firstly, higher-order policies are affecting trade, capital ownership and industrial collaboration, which in turn, affect regional competitiveness and innovation. The TAP seeks the closest path to understanding the effect of global interactions on the regional economies so as to inform regional policymakers on the active role they  can play within given structural frameworks. Secondly, the TAP is limited in time and budget and needs a clearly defined mission so as to extract the best policy value.

The implementation of the TAP will seek close cooperation with the EU Committee of the Regions, OECD and the EU Joint Research Centre. While naturally appealing to regions having a key role in international trade (e.g. port cities), the TAP is designed to inform all types of territories.

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Read more about the Thematic Action Plan (TAP) on ‘European territories in global interactions’ in the document that is attached below. 

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