Assessing regional competitiveness: analysis of stock indicators and flows variables

The purpose of this paper is the identification and definition of approaches and tools for the assessment and measurement of territorial competitiveness. Territorial competitiveness can be defined as an area that is able to face up to market competition whilst at the same time ensuring environmental, social and cultural sustainability, based on the dual approach of networking and inter-territorial relationships. The rationale behind this work is that territorial competitiveness is a concept characterized by a high level of complexity: therefore in order to understand the dynamics and the factors responsible for the competitive development of an area it is necessary to use a combination of tools that can measure both the territorial stock (tangible and intangible assets) and the economic flows between the actors (households and institutions) of a region. The Territorial Competitiveness Index (TCI) \u2013 SAM approach proposed in this paper aims at integrating a Territorial Competitiveness Index, which measures territorial assets, with a Social Accounting Matrix (SAM), that measures the economic flows within a given area, in order to define a composite model that combines sectors\u2019 potential resulting from the multipliers based on SAM with the Index. The integration of these \u201cstock and flows\u201d measurement tools will enhance the capacity to identify territorial potential (both expresses and latent) and to assess territorial development scenarios. The usefulness of this approach resides therefore first and foremost in its capacity to provide the policy makers at local and central level with a simple visualisation of information to better target strategies and policies and to better allocate resources. By recognizing the importance of interdependencies among actors, sectors and spaces, the tool is also suitable to capture the multi-dimensional nature of territorial competitiveness and to support policy makers in the identification of the most appropriate territorial development policy mix