Report: Bridge agreements between central government and regions contribute to regional development

The Government concluded bridge agreements with Southwest Finland, Kainuu, the Tampere Region and North Savo between 2018 and 2020. Under the agreements, both parties strive to jointly identify bottlenecks to regional growth (especially the supply of skilled labour) and to find solutions to them. According to the report published on 28 September, the agreements have generated a wide range of positive impacts, such as closer cooperation between central government and individual regions.

Bridge agreements provide a new tool for regional development but the model is not yet well-established. The report, commissioned by the Ministry of Economic Affairs and Employment and prepared by MDI, assesses the operating model and impacts of the bridge agreements as well as the process applied. The report also contains proposals for developing the operating model and selection criteria for new regions.

Bridge agreements have made regional development more consistent and target-oriented

A phenomenon-based approach to problem-solving between ministries and individual regions, preparation of a joint situational picture and achieving faster progress than would normally be the case are listed as positive features in the report. In most of the projects set out in the bridge agreements, the objectives are correctly set as their focus is on accessibility (transport infrastructure projects), education, training and the supply of labour. The ‘official’ character of the bridge agreements has meant that results have been achieved and regional development has been on a more consistent basis. The bridge agreements are not binding but applying the agreement model has made the work more target-oriented. Closer cooperation between regions was also seen as a positive development.

“Close cooperation between central government and regions has clearly contributed to regional development. For example, according to the report, there has been an increase in the supply of labour in Southwest Finland and unemployment in the region has fallen more rapidly than expected. These are precisely the employment impacts that the bridge agreements are expected to achieve,” notes State Secretary Kimmo Tiilikainen, who chaired the bridge agreement working group.

Challenges arising from the effectiveness of the bridge agreements, such as the lack of additional funding resources, tight schedules, deficiencies in strategic work, impact assessment and poor accessibility record were also highlighted in the report. According to the report, the bridge agreement model should be more explicit, have a clear framework and be provided with more agility and flexibility.

Development proposals and recommendations for the bridge agreement operating model

The report proposes five practical measures to develop the bridge agreement model:

1. a more clearly focused approach in the region concerned
2. specifying the roles and responsibilities of the regional and central government representatives in the bridge agreement process
3. listing the key bridge agreement objectives for each region, developing suitable monitoring indicators and reviewing the indicators every six months
4. setting up a clear funding framework and providing earmarked funding to ensure that all projects laid out in a bridge agreement can be carried out
5. creating a bridge agreement model that provides an incentive for each region to focus on its own development and to cooperate with other regions

It is proposed in the report that the model should be applied in regions characterised by both positive and negative structural change. According to the report, the regions for the bridge agreements should be selected by comparing region-specific employment statistics, and in these comparisons, consideration should be given to the number of job vacancies, the match between employer needs and employee skills, and the number of companies facing recruitment problems.

“The positive impacts generated by the report show that operating models such as the bridge agreements are also needed in the future. The report contains useful development ideas for the ministry as well as material for examining the regional development toolkit,” Tiilikainen concludes.

Research method

Four bridge agreements have been concluded so far: for Southwest Finland (2018–2019) and for the Tampere Region, Kainuu and North Savo (2019–2020). Parties in all bridge agreement regions gave their views for the report. Document analysis, interviews with experts and questionnaires sent to regional and central government representatives were used as research methods. A statistical analysis of the impacts of the bridge agreement model was only carried out in Southwest Finland because in other regions, the agreement process is still under way. The study was concluded with a workshop bringing together the parties involved.

Inquiries:

Kimmo Tiilikainen, State Secretary, Ministry of Economic Affairs and Employment, tel. +358 295 530 303
Pirkko Jukka, Senior Specialist, Ministry of Economic Affairs and Employment, tel. +358 295 048 981
Mikko Valtakari, Lead Specialist at MDI, tel. +358 40 569 1568