Preface

Through the EIB Investment Survey, the Economics Department shows significant evidence that CESEE cities lack behind their EU counterparts when it comes to basic infrastructure. Moreover, investments in transport and housing infrastructure in these cities have been below expectations in the past 5 years.

This paper utilises a multidimensional framework for defining smart cities and regions by introducing a Smart Region Index to identify and further examine the gaps in CESEE. The Smart Region Index focuses on aspects regarding economic dynamics and innovation, environmental sustainability, quality of administration, accessibility, human capital and quality of life. This approach has the benefit to allow the exploration of the underlining factors that cause the particular gaps to emerge. From the analysis, there is evidence that CESEE regions lack behind the EU in factors related to mobility, governance and quality of life. Furthermore, the paper provides a thorough discussion about the performance of capital and non-capital regions in CESEE and supports the consensus that intra-country regional disparities are relatively large.

Looking at the source of the problems, the EIBIS also allows the identification of obstacles when it comes to infrastructure project design and implementation. Evidence suggests that limited access to finance has a negative impact on municipalities’ investment activities. Municipalities in CESEE are therefore dependent on European Structural and Investment Funds. As a result, EU funding reforms in the post-2020 Multi-Annual Financial Framework will be of the outmost significance for the financial situation of municipalities in the future. Regional coordination and prioritisation of projects is also an important aspect, which requires improvement.

As a result, smart city projects can help to address basic infrastructure needs and will make cities more attractive to people and businesses by encouraging innovation.

Debora Revoltella

Director, Economics Department, European Investment Bank