The new members states were able to join the European Union because the Commission judged them to be sufficiently ready to satisfy political and economic criteria as well as the provisions of the Community acquis by last January 1st. However they still have to make progress in certain fields and maintain the pace of their reforms even after their accession. Their progress will be monitored and followed step-by-step within the Community enlargement strategy which focuses on three principles: consolidation, conditionality and communication. For some decades enlargement has been at the centre of EU development and the accession of Bulgaria and Romania on 1st January completed the fifth enlargement round which began in May 2004 with the accession of ten member states. Enlargement has contributed towards the increase in economic prosperity and potential, allowing the larger Union to become more competitive at an international level and to respond more effectively to the challenges of globalisation, with direct advantages for the whole of Europe. Enlargement has given the EU greater weight and more say on the international scene. This historic project is based on a vision of a united Europe and of its role in the world. This role was launched by the Strategy of Lisbon, and reformed in 2005 as a strategy for growth and employment, with the aim of improving the competitiveness of the European Union and of achieving sustainable economic growth with new and better workplaces and increased social cohesion.
The entry of the new member states, ten in 2004 and the last two last January, means reaching these objectives has become more of a challenge, especially considering the internal differences faced by these countries. Despite the progress achieved thanks to European Community support, the results so far are inconsistent and less satisfactory than expected.
The need to adopt a global strategy of intervention with coordinated and integrated actions in the economic and social sectors has been recognised. For a sustainable economy it is essential to modernise the European social model by investing in people and combating social exclusion. The positive effects of economic and social cohesion policies on those areas of the European Union that are in difficulty and need more support must be recognised. This would also help face the challenges of enlargement. Indeed there is considerable socioeconomic disparity between the member states and between the regions. This disparity in terms of income and development stem from structural weaknesses in some key factors of competitiveness such as investment in material infrastructure, innovation, human resources and sustainable development. As a result, some regions grow at twice the speed of the group's average and others develop at rates lower than the 1% per year average. The challenge of the cohesion policy lies in investing in competitiveness to allow the member states and the regions to overcome their respective structural problems. The concentration of resources will benefit the less prosperous member States and regions, favouring laggard newcomers.
The indicator obtained as a combination of seven (Note 1) of the fourteen indicators identified by the Lisbon Agenda may be useful to highlight the differences between European regions: an area that stands out for its high performance is made up of the region of Stockholm, a part of Norway, Denmark, East Scotland and South-East England, as well as some areas of Germany, the Netherlands, Austria and the whole of Switzerland. Regions with an above-average performance are also found in Italy, Portugal, Spain, Ireland, France, Finland, Slovakia and Cyprus. In some countries, cities distinguish themselves from the surrounding area and from the rest of the country. This is the case for zones of the capitals Prague, Bratislava and Budapest, but can also be seen in the metropolitan areas in Belgium, Germany and Spain.
At a regional level, the combined performance indicator highlights the diverse strategies that the regions should consider adopting, based on their potential, in order to reach the objectives established in Lisbon (Figure 11.8).
Even when considered separately, the indicators highlight different results for different areas. As concerns growth and competitiveness, between 2001 and 2005, the European Union as a whole went through a cyclical weak phase, although there were still good performances in terms of economic growth, level of income and productivity, especially in the new member States. Research and information technology, identified by the Lisbon Strategy as driving forces behind development, showed notable differences between countries and regions. There was disparity and clear delays for new member States and those of southern Europe. The same is true of investment in human capital, measured by learning during the course of one's life: on one hand the Baltic countries and the United Kingdom have shown very high performances, on the other the new member States and some Mediterranean countries have dissatisfactory results for the period concerned.
The tables below show the indicators considered significant for the topics dealt with in the first part of the Statistical Report. In each one the Veneto is compared with the regions considered as competitors: Lombardia, Piemonte, Emilia-Romagna, Toscana, Baden-Württemberg, Bayern, Cataluña and Rhône-Alpes; and with Italy and the European Union.
For each indicator chosen there are three graphs, the first refers to time series of the last five years, the second to the value for the most recent year available, and the third, slightly more detailed, to the percentage variation for the five years in question, to the percentage variation on the last year and to the value of the last year.

Most of the data used for the analysis comes from Eurostat and BAK. For each topic attempts have been made to show the tendency of the phenomenon through the study of the time series. However, as it has not always been possible to reproduce the same years, the most recent updates available are given. For the Veneto, the most recent data is available for almost all the topics, but to make necessary comparisons, values of the same time period for all the regions analysed have been used. Indeed some differences may be noted between the data presented in the first part of this report and those that follow: this is due to the need to make them homogenous amongst themselves and with some Eurostat definitions that do not always exactly correspond to the official ones used at a national level.

On a European level, the Veneto has kept its good status as regards GDP per capita in Purchasing Power Standards. The last year for which there is data for comparison with other European regions is 2004 and the Veneto's GDP per capita was 28,310 euro, 18.6% above the national average.
In 2004 the regions with a GDP per capita above 30,000 euro were Bavaria, Lombardia and Baden-Württemberg.
In terms of annual growth the Veneto's GDP per capita increased by 3.8% in 2004, 0.8 percentage points above the national average. This is the highest growth after Cataluña (+4.9%).
If we look at a longer period, from 2000 to 2004, the rise in GDP per capita was in line with that of other Italian and European competitors. Of the regions selected, only Cataluña's increase in GDP per capita is above 20 percentage points.

Analysis of the dynamics of added value confirms that the most industrialised countries are still in the process of tertiarising their economies: the manufacturing sector is becoming less important and the service sector is on the rise.
Of all the regions selected, Rhône-Alpes has the highest share of added value from services. In 2004 the added value from the service sector in Rhône-Alpes was equivalent to 72% of the entire wealth generated from the French region, growing from 69.5% of total added value in 1990 to 72.2% in 2004.
In 2004 the Italian regions with the greatest contribution from the service sector to total added value were Toscana (69.5) and Piemonte (67.9). The Veneto ranks last of the Italian regions with services contributing 63% to total added value.
As regards growth in services from 2000 to 2004, the performance of Piemonte (+6.8%), Rhône-Alpes (+3.9) and Veneto (+3.5%) are noteworthy.

The new economy is made up of sectors related to IT services and telecommunications, hardware production - that is those sectors characterised by innovative instruments with high technological content and considerable research and development. This sector developed considerably in the 90s and has recently seen above average growth and a high level of hourly productivity. The added value per capita of this sector is clearly higher in regions with high-technology, innovative firms such as those in northern Europe: the value of Bavaria, for example, is over double that of the Veneto. The Veneto ranks higher than Catalonia and also comes above other Italian regions such as Emilia Romagna and Toscana. Despite recent efforts, Italy is still far from European levels. Even in terms of temporal dynamics, Bavaria, Rhone Alpes and Baden Wurtemberg are top.

The urban economy sector is made up of trade, tourism, transport, financial, business and personal service sectors.
Of all the competitors selected, Bavaria has the highest added value per capita from the urban economy. In 2004 the added value per capita for Bavaria was 13,729 euro, 31.9 percentage points above the European average.
Lombardia ranks second with an added value per inhabitant of 12,387 euro.
The added value per capita of urban services for the Veneto (10,538 euro) was slightly above the European average.
Bavaria wins the record for growth from 2001-2005, with a 6.4% rise, followed by Rhône-Alpes and Cataluña with annual increases of 5.9%.
In the same timespan, all the Italian regions selected recorded a drop in added value per capita from urban services, with a negative peak of -3.2% in Lombardia.

The traditional sector is made up of traditional industrial branches, which tend to have low added value. It has become less important in western Europe since for many firms it is more economical to relocate production to emerging countries, where labour costs are lower. Regions are forced to reduce the share of this sector to allow a more efficient allocation of resources and to perform better.
Nonetheless in certain regions these industries remain attractive, particularly if highly specialised in top-quality, profitable goods.
From 2001 to 2005 the added value per capita in this sector decreased in all territories selected for comparison, with the only exception being Cataluña (+0.7%).
Veneto is particularly specialised in the traditional sector, which generates about 30% of the region's wealth. In 2005 the added value per capita of this sector was about 5,825 euro and was over 1,900 euro above the national average (3,918 euro).
Among the competitors, Lombardia has the highest added value per capita (6,259 euro).
Veneto comes third, after Baden-Württemberg (5,908 euro).

Since the early 1990s internationalisation through foreign direct investment (FDI) and other forms of non-trade internationalisation has had such an impact on firms in the Veneto that it is now one of the defining features of our model of regional development.
International comparison is possible by referring to the number of cross-border greenfield investment and expansion of activity projects per million inhabitants. With reference to these data the performance of the Veneto can be compared with that of competitor regions.
At the beginning of 2006 the most attractive regions, among those selected, were Rhône-Alpes, with 9.7 projects per million inhabitants, and Cataluña (9.2).
There seems to be a rather wide gap with respect to the attractiveness of the strongest European regions; Lombardia is the only Italian region which can compete with them, with 5.6 projects per million inhabitants.
A comparison with other Italian regions is more balanced. After Lombardia, the most attractive Italian regions for foreign investors are Veneto, Emilia Romagna and Piemonte.
Reasons for this limited presence of foreign-invested enterprises in the Veneto probably include the structure of the region's economy which makes it intrinsically less attractive to foreign MNEs. It is still characterised by medium-low technological intensity and by small and medium-sized enterprises which reduce investment opportunities for international operators. The high concentration of small family-run businesses reduces investors' chances of acquiring already existing activities.

In 2005 the European Commission relaunched the Lisbon strategy, concentrating mainly on establishing more stable and lasting growth and on the creation of new and better jobs, in light of the rapid economic changes and the considerable ageing of the population.
Five years after the initial definition of the strategy the employment situation is generally better in non-Italian regions, whose employment rates in 2005 were all above the European average. Baden-Württemberg and Bavaria reached the European target of 70% which was set for 2010. Of the Italian regions compared, Emilia Romagna had the highest rate in 2005, 68.4% and it also established itself at the top of all Italian regions for 2006 with a 69.4% rate. The Veneto's position in 2005 is intermediate, with 64.6% of 15-64 year-olds employed, seven percentage points above the Italian average. The Veneto's position compared with Italian regions is also good for 2006, with a 65.5% employment rate. But midium-term observations show that Italian regions are rapidly catching up: national average rates for 2005 compared with 2001 are +3 percentage points, with respect to the European Union's +1.6, and +2.7 in the Veneto.

In a context of rapid economic changes and continuous reduction of the economically active population and the increase of elderly persons in our society, it is necessary to attract and keep more people in the labour market through specific policies.
Greater participation of women in the labour market is essential in order to reach the economic targets. Though it is at a lower level, the employment rate for females has grown more in Italian regions than in European regions in recent years. German regions reached the 60% European target for 2010 a few years ago, with a rate of 63% in 2005. In the same year Rhône-Alpes also reached the target and Catalonia also came close. Of the Italian regions compared, only Emilia Romagna has reached the 60% target for female employment. The Veneto ranks last among the regions compared here: 53 women aged 15-64 years worked in 2005, compared however with the Italian average of 45 women. Nonetheless in 2006 the female employment rate has continued to grow both in terms of the Italian average and in the Veneto, and reached 43.6% and 53.6% respectively.
The European average was already closer to the target than Italy was in 2005 with 56 out of 100 women in the labour market. Even if 3 out of 4 new jobs in the EU appear to be taken by women, it is important to specify that there are still strong gender imbalances and there are many obstacles preventing women from realising their full potential.

Although the participation in the working world is greater in the European regions they have, on average, registered higher unemployment rates compared with those in Italian regions: in 2005 it was 8.4% in Rhône-Alpes, still below European average (9%), and 7% in the German regions and in Catalonia. The Veneto's 4.2% of unemployed people as percentage of labour force is higher only than the rate in Emilia Romagna, 3.8%, and in Lombardia, 4%, and is more than three percentage points better than the Italian figure. In 2006 the Veneto maintained its good position with 4%. On a national level there has also been a significant reduction in the number of people seeking work in the last two years, and the unemployment rate for Italy has dropped to 6.8% in 2006, compared with 7.7% the previous year. This is the lowest rate in the last ten years. On the other hand, German regions have been witnessing a steady, considerable increase in unemployment levels in recent years: the rates have almost doubled in the last 5 years.

On a European level, the Veneto has kept its good status as regards GDP per capita in Purchasing Power Standards. The last year for which there is data for comparison with other European regions is 2004 and the Veneto's GDP per capita kept its excellent position: 28,310 euro, 18.6% above the national average.
In 2004 the regions with a GDP per capita above 30,000 euro were Bavaria, Lombardia and Baden-Württemberg.
In terms of annual growth, the Veneto's GDP per capita increased by 3.8% in 2004, 0.8 percentage points above the national average. This is the highest growth after Cataluña (+4.9%).
If we look at a longer period, from 2000 to 2004, the rise in GDP per capita is in line with that of other Italian and European competitors. Of the regions selected, only Cataluña's increase in GDP per capita is above 20 percentage points.

In economics literature the great importance of investment in Research and Development has been recognised and it has been proven that productivity increases proportionally with increased expenditure on R&D.
Europe is still far from the objective set in Lisbon in 2000 which aims for 3% expenditure by 2010. Equally distant is the 2.5% set for Italy.
The last year for which there is data available for a comparison with European regions is 2003 and the Veneto recorded a slowdown in growth of R&D expenditure as a percentage of GDP (-2.4%).
In 2003 expenditure on R&D amounted to 0.72% of regional GDP.
Baden-Württemberg is the only region which has already surpassed the Lisbon target with 3.88% of GDP for R&D.
Bavaria (2.95%) and Rhône-Alpes (2.61%) are very close to the 3% target, while all the other selected regions are below the European average (1.9%).
Looking at growth from 2000 to 2003, while remaining the lowest, the Veneto's expenditure on R&D grew more than that of all the other competitors (+34.1%).

In recent decades, community institutions have paid particular attention to the promotion of research and development as a driver of Europe's economic and social growth. This culminated in the definition of the Lisbon strategy during the European Council in March 2000.
The Lisbon objective of having two thirds of expenditure on R&D financed by the industry sector has already been attained by many countries in northern Europe, and has been more or less met by the EU15 and is close for the EU25.
In the German regions considered, the share of firms' expenditure on R&D is about 80% of the total expenditure. Rhône-Alpes and Cataluña have also met the Lisbon objective with almost a 70% share financed by firms.
Of the Italian regions only Piemonte is managing to keep up with its European competitors, with 77% of expenditure on R&D coming from the private sector.
The smaller size of Italian firms is one of the main obstacles to research and development. Not only can larger firms innovate more, but they are also in a position to employ more highly qualified staff.
In 2003 Veneto firms' expenditure on R&D was 0.30% of the regional GDP and was down -3.9% on the previous year.
Expenditure on R&D is spread almost equally between firms and university, with 41.7% coming from firms.

A region's infrastructures are crucial for its competitiveness as they determine the extent to which it can be reached by other regions. Accessibility can be defined as the main "product" of a transport system, and the main function of its infrastructures is to favour geographical interaction, that is the mobility of goods and people for social, cultural or economic activity. It is important not only that firms can easily obtain the supply of raw materials necessary for their production cycle or reach their end markets, but also that individuals can use the means of transport and services which facilitate their movement and the development of both their work and leisure activities and their social ties and interests.
The European Community has set the development of the accessibility of its territories as an objective since it believes that "good accessibility of European regions improves not only their individual competitiveness but also the competitiveness of the whole of Europe".
The rate of accessibility calculated by the Bak Basel Economics Institute measures the connection of a region with those of other continents. In the five years taken under consideration, of all the regions looked at Baden-Württemberg always had the best global accessibility, followed by Bayern, Lombardia and Rhône-Alpes; the Veneto comes fifth, with a significant break. The data highlight a positive change in the last year for all the regions, in particular for Bayern (+3.2%).

The previous section was about global accessibility, a driving force for Europe's competitiveness towards the rest of the world. Equally important is continental accessibility, that is connection between European regions, especially after the entry of new member states and the subsequent eastwards movement of the continent's barycenter. The basic assumption is that areas with the best access to supplies of raw materials and to end markets, ceteris paribus, are more productive and competitive and thus are more successful than more distant, isolated regions.
If we take into consideration the indicator of continental accessibility calculated by the Bak Basel Economics Institute, we do not get the same results as for the global indicator. Even Baden-Württemberg, which remains by far the best region, in the five years considered registers a slight drop. In the last year, however, two Italian regions, Lombardia and Piemonte, recorded a negative change (-0.7 and -1% respectively).
Cataluña, however, has made the most progress: +5.2% in five years and +2.2% in the last year. Together with Bayern, in the last two years the Veneto has had the second highest percentage variation (+1.8%), but for the last available year it has ranked 6th of the 9 regions compared, confirming the presence of strong weaknesses/criticalities in its transport system, as reported in chapter 5 of the first part of this Statistical Report.

Also compared in this section are some of the main cities of the regions considered.
Barcelona has the highest population concentration with over 15,000 inhabitants per square km from 1999-2003. Its density is thus more than double that of Italian cities such as Milano and Torino. Venezia has the lowest population density with 650 inhabitants per square km.
Cities do not however have the highest employment rates, indeed they are generally lower than the regional figures. The exception is Munich, whose employment rate is higher than ever (on average over 75% of the population is employed) and well above the high employment rate (around 70%) of its region, Bavaria. Of the cities considered, the other German city mentioned also stands out for its higher employment, while in third place is Bologna, the top of the five Italian cities. On the other hand Emilia-Romagna is the region with the highest employment rate, which is now close to the 70% objective set in Lisbon.
The effort to improve the quality of life in city centres also involves the restoration of the urban environment and the reduction of polluting factors. For instance to make urban areas more inhabitable it is essential to dedicate part of the areas to public green areas, a factor which varies considerably in the different centres considered. Once again it is the German cities and Bologna which have the highest amount of green areas, particularly Munich with 37 square metres per person. Most of the other cities are below the threshold of 15 square metres, particularly low is Barcelona which is also the most densely populated centre.

1. The seven indicators calculated by ESPON - European Spatial Planning Observation Network - are: GDP per capita, GDP per employed person, Employment rate, Employment rate of persons aged 55-64 years, Spending of GDP on R&D, Dispersion of regional (un)employment rates, Long-term unemployment rates. For the remaining seven there are no available regional data. The analysis thus focuses on economic indicators and does not take into account all the aspects of the Lisbon Agenda (for instance environmental indicators are not included).