Smahó, Melinda
Working Paper
The Role of Knowledge in Regional Development.
Theoretical Considerations and the Case of the
Austrian-Hungarian Border Region
WIFO Working Papers, No. 355
Provided in Cooperation with:
Austrian Institute of Economic Research (WIFO), Vienna
Suggested Citation: Smahó, Melinda (2010) : The Role of Knowledge in Regional Development.
Theoretical Considerations and the Case of the Austrian-Hungarian Border Region, WIFO
Working Papers, No. 355, Austrian Institute of Economic Research (WIFO), Vienna
This Version is available at:
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The Role of Knowledge in Regional
Development
Theoretical Considerations and the Case
of the Austrian-Hungarian Border Region
Melinda Smahó
(Hungarian Academy of Sciences)
355/2010
WORKING PAPERSÖSTERREICHISCHES INSTITUT
FÜR WIRTSCHAFTSFORSCHUNG
The Role of Knowledge in Regional
Development
Theoretical Considerations and the Case
of the Austrian-Hungarian Border Region
Melinda Smahó
(Hungarian Academy of Sciences)
WIFO Working Papers, No. 355
January 2010
E-mail address: smahom@rkk.hu
2010/017/W/0
1
The role of knowledge in regional development: theoretical considerations
and the case of the Austrian–Hungarian border region
Melinda Smahó
Hungarian Academy of Sciences Centre for Regional Studies
West-Hungarian Research Institute
9022 Győr Liszt Ferenc u. 10.
Hungary
E-mail: smahom@rkk.hu
Abstract
Economic growth and development theories have neglected the role of knowledge and space
for a long time. However, it is widely accepted that knowledge has played a more and more
important role in economic development, and – due to its spatial characteristics – also in
regional development. The aim of this paper is to explore the role and some spatial
characteristics of knowledge, as well as their impact on regional development, also in regard
to border regions. After some theoretical considerations, the paper investigates some features
and cross-border cooperations of knowledge holders in the Austrian-Hungarian border region.
Keywords: knowledge, universities, cross-border cooperation, Austrian-Hungarian border
region
EconLit Codes: D830, O150, O330, R110, R230.
2
Introduction
Knowledge and new ideas have always affected economic and social development during
the history of mankind. According to Mokyr „technological progress has been one of the
most potent forces in history in that it has provided society with what economists call a „free
lunch”, that is an increase in output that is not commensurate with the increase in effort and
cost necessary to bring it about” (Mokyr, 1990, 3.p.). However, there are essential differences
between the role and importance of knowledge nowadays and in the past. These
dissimilarities can be perceived along the following three dimensions:
 the amount of knowledge;
 the number of people employed in science;
 the process of generating, diffusing and exploiting knowledge.
The amount of knowledge was drastically growing during the last half century: 95 percent of
the nowadays available knowledge stock evolved during the last 50 years (Dőry 2005). On the
same lines, the number of people employed in science has been showing a dynamic growth as
well: 95 percent of scientists have been ever living during the history of mankind, are working
nowadays (Simai 2003), their proportion approximates 5 percent of the population (Dőry
2005). The way of genearating knowledge has also changed: while new ideas evolved as a
result of spontaneous disclosure during the past centuries (Mokyr 2004), in the last decades,
conscious R&D activity has become one of the most important source of knowledgegeneration.
Since the 1960’s, knowledge has become the basis of developed countries’
economic performance (Innovation Management... 2004; OECD 1996).
However, a plenty of publications stay at our disposal about the impact of knowledge on
economic and social processes, and different changes caused by them, as well as about new
phenomena and tendencies, but much less authors are dealing with the appearance of
knowledge in theoretical frameworks as well as with its incorporation into growth models. All
of these things arise the problem of measurability of knowledge, after all in economics – first
of all in its strongly mathematized neoclassical school –, where always a greater attention was
paid to the measurable factors (capital, labour) (Kocsis–Szabó 2000). Thus, knowledge has
always challenged economic science. The evolution of the knowledge economy continuously
enhances this challenge.
Furthermore, mainstream economics also neglected the role of space. Economic theories –
except for some authors who can be regarded as forerunners of regionalists (e.g. Thünen,
Lösch, Marshall) – handled space maximal as an exogenous factor (Lengyel–Rechnitzer 2004;
3
Meyer 2005), even international economic theories regarded the economy as a „wonderland
of no spatial dimensions” (Isard 1956, 251
The first part of my study deals with the interpretation and characteristics of knowledge by
some famous economic growth theories or theoretical directions. Next to stressing the
differences, I also try to shed light on the role of space, and the features of knowledge
according to the versions of mentioned theories complemented by spatial dimension.
However, spatial characteristics of R&D (Grosz 2007; Lados 2005) and higher education
(Rechnitzer 2009) were analysed by more authors in Hungarian relations during the recent
years, I associate cross-border situation as a further dimension to the analysis. Thus, the
second part of my study contains a case study about the Austrian-Hungarian border region
with the focus on knowledge holders of the West-Transdanubian region as well as their crossborder
relations.
, cited by Lundvall–Maskell 2003). Paul Krugman
drew attention to the importance of space again: he and his school of new economic
geography take space into account as an endogenous variable by explaining economic
phenomena. Transition to the knowledge economy has valued the role of regions in the world
economy. Nowadays, regions serve as seedbed of innovations (Gertler 2005).
1
Isard, Walter (1956): Location and Space Economy. MIT Press, Cambridge.
4
1. Knowledge and regional development: theoretical considerations
According to the classical location theories, natural resources, geographical proximity to
input and output markets, such as minimizing transport costs determine the location of
enterprises underlying regions’ economic performance (Lengyel−Rechnitzer 2004). From the
point of view of the international economics, Adam Smith explained regional specialization
and development by absolute advantages, while David Ricardo introduced comparative ones.
Both type of these advantages depended mainly on natural resources of regions, while
knowledge and technology appeared in their evolution only in an indirect way, as a factor of
increasing labour productivity (Armstrong−Taylor 2004; Cooke−Leydesdorff 2006; Deane
1984; Smith 1992 [1776]). Thus, according to the neoclassical growth theory, spatial
disparities of traditional factors of production weren’t generated by knowledge, but much
more by differences in regions’ advancement (Armstrong−Taylor 2004; Lengyel−Rechnitzer
2004). After all, paralell with the evolution of the knowledge economy, knowledge became a
more and more important factor in explaining economic growth and development.
But, at the same time, geographical proximities became easily bridgeable as a result of
globalization processes, among others as a result of rapid development in infocommunication
technologies, diminishing transport costs as well as breakdown of trade barriers.
Globalization has changed several factors of production into ubiquity (Malmberg−Maskell
2005), because production became spatially transferable, and knowledge can be transmitted
globally (Cséfalvay 2004). Although knowledge can be transmitted globally, spatial
differences in regions’ advancement did not equalize, moreover, we are witness of even more
unequal geographical distribution of production and innovation (Gertler 2005). All of these
theoretical findings have led me to suppose that knowledge disposes of such spatial
characteristics, which make it resistive against globalization processes, and in this way, make
it (one of) the most important factor of regional development. Thus, my first hypothesis (H1)
states that knowledge has been playing a more and more important role between the factors
influencing regional growth and development.
Some classical economists (e.g. Smith, Ricardo, Thünen, Senior) already handled knowledge
as one of the factors of production, however, they described its characteristics and appearance
in different ways. According to the economic literature, Alfred Marshall – one of the founders
of neoclassical economics – recognized the economic importance of knowledge. In his work
’Principles of Economics’ (1890) he wrote that „knowledge is our most powerful engine of
production; it enables us to subdue Nature and force her to satisfy our wants” (Marshall
1961[1920], 138.p.). On the contrary to this, the majority of neoclassical economists did not
take knowledge into account, except for price information. They assumed that economic
5
entities were perfectly informed, thought rationally and took logical, rational decisions (North
2005). Neglecting knowledge can be partially originated in the fact that they were not able to
incorporate knowledge into the strongly mathematicized models preferred by them, and
instead of this, they put aside knowledge in form of simplifier assumptions (Meusburger
1998). Other authors went on other ways: Joseph Schumpeter (1911) emphasised the role of
innovations and discovered that Kondratieff’s long waves (Kondratieff 1935) were set off by
cyclical group of innovations. Friedrich August von Hayek stressed the role of knowledge and
information in economic decisions (Mátyás 2003). In his point of view, the most important
economic problem of the society was the way of utilizing scattered knowledge, which cannot
be totally possessed by one individual (Hayek 1995 [1945]).
1.1. The role of knowledge in growth theories
Growth theories of the last half century as well as new institutional and evolutionary
economics also tried to incorporate knowledge, however, they attributed different
characteristics to it (Table 1). Neoclassical growth theory – based on Solow’s second model
including technical change – assumes constant returns to scale, and regards technology as an
exogenous factor. This theory considers knowledge as a pure public good2
Endogenous growth theories from the 1970-80’s eliminate the inadequacy of neoclassical
growth theory, additionally from more points of view. Endogenous growth theories regard
knowledge as an endogenous factor of production i.e. as an output of conscious research and
development (R&D) activity carried out by profit-oriented organisations (Meyer 1995;
Czeglédi 2006; Ács–Varga 2000). Therefore, these theories take into account the costs of
knowledge production as well. It follows that producers of knowledge are interested in
excluding unjustified users from taking advantage of the costly produced knowledge.
, which means that
technology is anywhere and for anybody available. Since technology is exogenous, the model
does not deal with questions and costs of technological development: knowledge is assumed
to be disposable and utilizable for free. It follows that this theory does not count neither with
temporal nor with spatial diffusion mechanism of knowledge (Armstrong–Taylor 2004; Ács–
Varga 2000; Czeglédi 2006; Lengyel–Rechnitzer 2004; Solow 1957). Therefore, differences of
regional growth rates can not be explained by inequal spatial distribution of knowledge, but
they can be originated from the uneven spatial distribution of traditional factors of production
(capital, labour, natural resources) (Armstrong–Taylor 2004; Döring–Schnellenbach 2004).
2
Pure public goods are non-rival and non-excludable goods. Non-rivality means that more users can enjoy
the advantages of goods both parallel and successively. Non-excludability denotes that exclusion of unjustified
users is very costly for the originator of the good (OECD 2001, 13.p.).
6
However, different means of intellectual property (e.g. patents) can be applied, but these are
not able to ensure neither perfect protection, nor a perfect excludability of knowledge.
Unintended knowledge flows – knowledge spillovers3
Table 1 (Spatial) characteristics of knowledge by different economic theories
– can arise because of injuring
intellectual property rights or publishing informations during the patenting procedure (Ács–
Varga 2000; Erdős 2003; Romer 1990). Furthermore, the physical availability of knowledge
is limited by space, i.e. it is not perfectly mobile, which results that space can contribute to the
partial excludability of knowledge as well (Karlsson–Johansson 2004; Romer 1990; Varga
2004).
Neoclassical
growth theory
Endogenous
growth theory
New institutional and
evolutionary economics
Characteristics
of
knowledge
• Exogenous
• Pure public good
• Endogenous
• Mode 1 (R&D)
• Partially excludable
• Institutions (D. North)
• Heterogeneity
• Mode 2 (interactive)
Space and
knowledge
• Perfect mobility • Local knowledge
spillovers
• Regional knowledge
base
• Absorptive capacity
• Regional innovation
system
• Regional knowledge
base (Cooke, Holzinger)
• Learning regions
Source: own construction.
First of all, the diffusion of new and still not codified (tacit) knowledge4
3
Knowledge spillovers mean the diffusion of knowledge between non-market conditions, i.e. these
knowledge flows are not paid at all or the paiment is smaller than the value of the gained knowledge (Varga
2004).
in form of knowledge
spillovers, has a crucial importance for innovations. Whereas the diffusion of tacit knowledge
is geographically limited, knowledge spillovers have a local character. However, the effects of
knowledge spillovers differ by regions, in particular it depends on the stock of accumulated
knowledge in the region as well as on the regional institution system. It follows that each
region is able to produce new knowledge in order to enhance its productivity, while others are
forced to import the technology. Knowledge producing as well as knowledge absorbing
capacity of a region depends on the stock of human capital, the institutional environment and
the collective learning process. The bigger the stock of accumulated knowledge of a region is,
4
Michael Polányi distinguished between two types of knowledge: explicit (codified) and implicit (tacit)
knowledge. Explicit or codified knowledge can be easily conceptualized in form of words, and can be
transmitted by the formal language (Polányi 1997 [1966]). It can be obtained by reading books, attending
lectures or accessing different data bases (OECD 1996). On the contrary, implicit or tacit knowledge has a
personal character, encumbering its formalization and transmission (Polányi 1997 [1966]). It can be obtained
only by following and imitating the maestro for a long time. This requires frequently repeating personal
interactions, which are limited by space (Karlsson–Johansson 2006; OECD 1996). (In detail see later.)
7
the more able is it to learn i.e. the more knowledge it is able to absorb. Thus, in the
endogenous growth theory, not only economic factors, but also the local social, cultural and
political institution system and – as a part of it – also the knowledge base of a region play an
important role in the explanation of permanent differences in regions’ advancement
(Armstrong–Taylor 2004; Döring–Schnellenbach 2004; Dőry 2005).
1.2. Interpretation and role of knowledge in evolutionary and new institutional economics
Knowledge also has a central role in the evolutionary and new institutional economics.
However, these directions of economics are not uniform, they have some common
characteristics. They broke with the typical – homogenous, perfectly informed and totally
rational – economic man of the neoclassical economics, and assume economic actors to be
heterogenous and only bounded rational, while information is assumed to be asymmetric
(Hanusch–Pyka 2005; North 2005). Individuals do not interpret the world and do not take
their decisions according to perfect information, but much more according to their so called
shared mental models (North 1993; North 2005). “Mental models are the internal
representations that individual cognitive systems create to interpret the environment”
(Denzau–North 1993, 2.p.). Mental models are based on individuals’ cultural heritage, which
is composed of norms, values and knowledge accumulated and transferred over generations.
Then they are shaped further by experience individuals obtain in the local environment, as
well as by knowledge they get through formal learning5
Common cultural heritage as well as similar experience likely result in the evolution of
convergent – dominant – mental models. The communication between individuals with
similar mental models is usually easier and more effective, these people usually have similar
opinions. Over time, formal (written and unwritten law, rules, prescriptions) and non-formal
(traditions, behavioural norms) institutions as well as ideologies emerge from dominant
mental models. “Institutions are the rules of the game of a society” (North 1993, 5.p.), their
most important function is to reduce uncertainty. Therefore, institutions with their rigid and
slowly-changing nature can be regarded as fundamental building blocks of societies. At the
same time, institutions contribute considerably to economical, social and technological
. Consequently, mental models have a
plenty of variations changing continuously over time. (North 1993; Denzau–North 1993,
2.p.).
5
Formal learning usually takes place in educational institutions, and it is honored by a certificate (in case of
finishing successfully). (Memorandum… 2000, 7.p.)
8
changes: in form of positive as well as negative incentives they ensure the stability that is
necessary to manage changes (Johnston 1992; North 2005).
Thus, knowledge, especially tacit knowledge plays a more and more important role in the
explanation of economic growth and development, while the theoretical considerations of
knowledge creation have also changed. These tendencies can be recognized in the economic
theories as well, even if in a weakener extent than necessary (Kocsis–Szabó 2000). While
some endogenous growth models originated knowledge from traditional research and
development activity (R&D), recent economic directions (evolutionary and new institutional
economics) as well as management theories consider knowledge creation as a social or
interactive process (Leydesdorff–Scharnhorst 2003; Romer 1990). Gibbons called the first
procedure Mode 1, while the second one Mode 2 knowledge creation process (Leydesdorff–
Scharnhorst 2003).
According to – one of the recent management theories – the Nonaka-Takeuchi model, new
knowledge is generated through a conversion between different types of knowledge. The first
step of the process is sharing tacit knowledge (socialization), which is followed by
externalization, i.e. knowledge will be codificated (explicit knowledge). Then, different
explicit knowledge elements will be combined, recontextualized and synthetized, which
process also generate new knowledge. Finally, explicit knowledge will be converted into tacit
knowledge through understanding, traditional learning as well as learning-by-doing
(internalization). Thus, generation of new knowledge is a continuously growing spiral
process, which starts from the level of the individual and go on toward community as well as
organization level. Finally, it crosses the border of the organization and overreach to interorganization
level (Nonaka 1994; Nonaka–Takeuchi 1995; Sándori 2001) (Figure 1).
Figure 1 Types of knowledge conversion
Tacit
knowledge
Explicit
knowledge
Socialization
Combination
Internalization Externalization
Tacit
knowledge
Explicit
knowledge
Nonaka–Takeuchi 1995, 71.p.; Mészáros 2001
9
Also, originally all knowledge has a local character, namely in double meaning. On the one
hand, knowledge is geographically and historically determined, which means that it comes
into existence in a given (historical) time period, and between different conditions, e.g. in
diverse geographical location, by several people, facilities and institutions. In this context,
generating knowledge means not only a traditional invention, but it also covers an active and
creative constitution process, which takes place in a given geographical area, according to the
local rules, habits and conditions. On the other hand, local character of knowledge means that
the nature and features of knowledge are considerably influenced by the conditions (e.g.
material and histirocal conditions as well as related social interests) of its generation. The
reason is that knowledge creation is a social process, thus, knowledge comes into existence
from the geographically and historically changing social habits. Consequently, knowledge is
deeply embedded in the society of several areas, and its local character does not mean only
the knowledge which is characteristic or concerning in a given geographical area, but it
always refers to the context of its generation (Johnston et al. 2000).
However, all knowledge is local at the time of its generation, one part of it will separate from
the knowledge creator person during the so called knowledge codification process. As a
result, one part of knowledge becomes explicit, while the other part remains tacit knowledge.
While explicit knowledge can easily be formalized and transmitted by words and formal
language (e.g. by reading books or listening lectures), the verbalization and transmission of
tacit knowledge is very difficult, due to its personal and informal character. Acquiring tacit
knowledge usually takes plenty of time, and happens often unperceived (e.g. by observing and
following the maestro) (Karlsson–Johansson 2006; OECD 1996; Polanyi 1997 [1966]).
Obtaining tacit knowledge requires mutual trust and understanding, a common language and
frequent personal interactions i.e. the physical presence of both deliverer and recipient of
knowledge. However, a growing geographical distance between the actors raises the cost and
diminishes the frequency of personal interactions. Thus, the dispersion of tacit knowledge has
geographical boundaries (Audretsch 1998; Cooke et al. 2007), and therefore it is called sticky
(von Hippel 1994). Furthermore, tacit knowledge composes an essential part of a region’s
knowledge base6
as well.
6
The knowledge base of a region encompasses all knowledge and experience that a region possesses, can offer
and use. It is based on cultural foundations and local values, evolves slowly and organically and rootes deeply in
the local culture (Holzinger et al. 1998).
10
The link between knowledge and regional development are established by innovation i.e. the
application of knowledge. New institutional and evolutionary economics understand
innovation as an interactive learning process. Whereas new knowledge – the basis of
innovation – is local and contextual, innovation can be compassed as a socially and spatially
embedded, interactive learning process inseparable from its institutional and cultural contexts
(Asheim 1999). It follows that differences in regions’ innovation activity can not be explained
by classical location factors but more and more by economic actors’ networking abilities
(Koschatzky 2004). Sharing tacit knowledge became one of the most important motivation
factors of networking and underlies the process of collective learning (Oerlemans–Meeus–
Kenis 2007).
Since collective learning is based on sharing tacit knowledge – which requires spatial
proximity, mutual trust, common language and common values –, it is a local process
(Malmberg–Maskell 2005). Trust in the partner enhances the willingness to share knowledge,
which results in joint knowledge. This leads – through accelerated innovation – to an increase
in the business performance (R1). The more an organisation learns, the bigger absorptive
capacity it can possess, which improves further the organisation’s efficiency in knowledge
sharing process (R2). In progress of time, a successful cooperation enlarges the trust between
partners, which follows that interactions become more and more frequent. Due to the mutual
conformation of partners, common habits evolve, which tends to deepen the trust between the
partners (R3) (Figure 2) (O’Callaghan 2006).
11
Figure 2 Self-reinforcing loops of interorganizational knowledge transfer and learning
Source: O’Callaghan 2006, 7.p.
According to the regional innovation system approach based on the new institutional and
evolutionary economics, innovation and learning processes taking place in a region are
encouraged by different organisations (e.g. universities, research institutions, science parks,
innovation centres, technology transfer organisations and other educational institutions) and
also by regional political measures (Figure 3). However, intensive interactions of the
mentioned organisations with local firms are an important prerequisite of knowledge
production, diffusion and application process (Cooke et al. 2007).
12
Figure 3 Regional Innovation System
Regional Innovation System
R&D
competencies
Skilled
labour
Brokering
Finance - Subsidies - Innovation
and Cluster Policies
Knowledge generation and diffusion subsystem
Public
research
organizations
Educational
organizations
Technology
mediating
organizations,
incubators, etc.
Knowledge application and exploitation subsystem
Clusters
Customers
Collabo-
rators
Contractors
Competitors
Industrial companies
Regional policy subsystem
Policy
institutions
Regional development
agencies
Socio-
institutional
factors
Socio-
institutional
factors
NIS
organizations
NIS
policy
instruments
International
organizations
EU policy
instruments
Other
RIS
Other
RIS
Source: Cooke et al. 2007, 54.p.
Higher educational and academic research institutions inside of a region underlie the
knowledge production sub-system, where traditional knowledge generation i.e. R&D is taking
place (Mode 1). Nevertheless, according to some views, traditional knowledge production
process of universities is increasingly shifting to the interactive knowledge generation (Mode
2). It means that knowledge is not generated solely in doors any more, but it originates from
the collaboration of state, industry and academic sectors (triple helix). During this process,
each sector partially undertakes the roles of others, e.g. universities – as entrepreneurs –
participate increasingly in the transmission, communication and economic utilization of
knowledge generated by them (Cooke et al. 2007; Etkowitz 2002).
Knowledge accumulating through local learning processes continuously increases and forms
the knowledge base of a region as well as its institutions (Koschatzky 2004). However, this
slowly, cumulative and path-dependent process contributes to the regional development, the
region also needs external stimulus. Shortage in external information comprises the danger of
lock-in, therefore incorporation of external information into regional knowledge base is of
key importance. This goal can be achieved by joining to global networks (Capello 1999;
Fuchs–Wassermann 2005; Malecki–Hospers 2007).
13
1.3. The special case of border regions
Development of border regions – being in a very special situation – can also be explained on
the basis of these theories. Border regions with at least two different knowledge cultures can
develop into a common knowledge space through the coevolution process of space, milieu
and knowledge. The starting point of the process is that border as a social space structure
influences the actions and interactions taking place in the border region. The continouos
repetition of these actions and interactions leads to the development of common routines and
habits, actors obtain more and more knowledge about each other knowledge culture. These
knowledge elements slowly infiltrate into the informal rules and institutions of the area, and
later they reflect in the formal institutions as well. The increasingly proceeding of common
formal and informal institutions in the cross-border cooperation results in the evolvement of a
new common knowledge culture which makes possible the social reconstruction of the areas
divided by the border (Fichter-Wolf 2008) (Figure 4).
Figure 4 Coevolution of space, milieu and knowledge
Source: Fichter-Wolf, 2008, 43.p.
14
Universities are usually considerable regional actors, additionally, in more point of view.
Universities are deeply embedded in the local environment, and have remarcable effects on
the regional economy (Rechnitzer–Hardi 2003; Hamm–Wenke 2002; Mezei 2007).
Furthermore, as a part of the regional innovation system they have a key role in knowledge
creation and mediation (Cooke et al. 2007). Nowadays, interaction and communication play a
more and more important role in the knowledge generation process, also in the traditional
knowledge creation process. Therefore, cross-border relations can remarkably enhance the
knowledge creation capacity of universities, and – through this process – they also can
contribute to development of the whole border region.
2. Cross border cooperations of West-Transdanubian higher educational institutions
Most of the international cooperations of West-Transdanubian higher educational institutions
evolved during the 1990s, after opening the borders. In the second half of the decade,
opportunities as well as financial sources of the cross-border cooperations were expanded.
The starting of Hungary’s EU-accession process opened the pre-accession funds, out of which
Phare CBC Program supported especially cross border cooperations. Since that time, needs
for and possibilities of cross-border cooperations have changed. The EU-accession of
Hungary as well as the introduction of the credit system at the Hungarian higher educational
institutions can be expected to result in a growing interest for universities in the Austrian–
Hungarian cross-border region. Hungarian universities – first of all in the Austrian–Hungarian
border region – are expected to compete for students more and more strongly, and Austrian
higher educational institutions are likely to appear between the competitors (Rechnitzer–
Smahó 2007).
On the other hand, according to the mentioned new institutional and evolutionary economic
theories, knowledge flows and local learning processes enhanced by frequent personal
interactions are essential for a region’s development. Therefore, finding the possibilities of
cooperation in the competiton would be profitable for both Austrian and West-Transdanubian
higher educational institutions. My second hypothesis (H2) states that higher educational
institutions in the Austrian-Hungarian border region do not utilize totally the advantages
originating from their geographical proximity and cross-border position. I try to prove this
hypothesis by analysing the features of knowledge holders and their cross-border
15
cooperations first of all at the Hungarian side of the border, sometimes referring to the point
of view of the Austrian higher educational institutions as well.
2.1. Knowledge holders in the West-Transdanubian region
According to the statistics, there are ca. 26 thousand students and ca. 1200 teachers in WestTransdanubia
(Table 2). In 2008, the seats of two universities and one college can be found
within the region (Figure 5). The biggest university of the region is the West-Hungarian
University, with its seat in Sopron. Four of its actually ten faculties, namely the Faculty of
Forestry, the Faculty of Wood Sciences, the Faculty of Economics and the Faculty of
Benedek Elek College of Pedagogy are located in Sopron. It has further faculties in
Mosonmagyaróvár (Faculty of Agriculural and Food Science), in Győr (Faculty of Apáczai
Csere János Teacher Training College), and in Székesfehérvár (Faculty of Geoinformatics),
the last one is located out of the region. Actually, it has further three faculties in Szombathely,
because on 1st January 2008 Berzsenyi Dániel College, consisted of three faculties, became a
part of the West-Hungarian University, and functions at present as Savaria University Centre
(its faculties are currently called Faculty of Humanities, Faculty of Sciences, Faculty of
Physical Education, Visual Arts and Music).
Table 2 Number of students and academic staff teachers in the
West-Transdanubian higher educational institutions, 2008
Number of students Academic staff teachers
West-Hungarian University 15458 828
Széchenyi István University 10732 394
Theological College of Győr 292 35
Total 26482 1257
Source: Statistical Yearbook of Education, 2008/2009.
16
Figure 5. Seats of universities and Regional Development Agentures
in the Austrian-Hungarian Border Region
Source: Strohmeier 2007, 262.p.7
7
Berzsenyi Dániel Főiskola was integrated into the West-Hungarian University and nowadays operates as
Savaria University Centre in Szombathely.
17
2.2. Characteristics of cross-border relations
Higher educational institutions may have diverse international contacts, which can be
categorised by several aspects, e.g. content, time span, intensity and other characters of the
cooperation. According to the interviews carried out in frame of an empirical research
programme in the border region8
Figure 6 Hierarchy of international relations
, the system of international relations of the WestTransdanubian
higher educational institutions can be put into the following hierarchical
system (Rechnitzer–Smahó 2007) (Figure 6).
Source: Rechnitzer–Smahó 2007.
Strategically important cooperations of the institutions stay at the top of the pyramid. Typical
forms of these are trainings that give a common degree, and strategic research directions done
together with foreign universities. These types of cooperations require very stable, intense,
and well-established institutional relations, and in case of the West-Transdanubian
universities and colleges there can be found only a few example of them. The overall
contracts can be found on a lower level, which are contracts of long-term, general cooperation
agreements, that are mainly of educational type but may expand on research cooperation.
These framework agreements are generally indefinite, i.e.valid till resolution or withdrawal
(Rechnitzer–Smahó 2007).
8
Uniregio – Universities in Cross-border Cooperation. AT-HU-05-01-018 Interreg IIIA project, carried out
by the Hungarian Academy of Sciences Centre for Regional Studies West-Hungarian Research Institute and its
partner institutions, Fakultät für Interdisziplinäre Forschung und Fortbildung Wien and Danube University
Krems.
18
The great majority of higher educational institutions engages in international scholarship
programs (Erasmus, CEEPUS) through which they are members of an international
institutional network. Regarding their content, these contacts cover students’ and teachers’
exchanges between institutions, both sending and reception. Universities and colleges – with a
foreign partner's approval – may take part in different EU programs, for example in Phare
CBC, Interreg, CADSES, as well as in EU5, EU6 and from 2007 EU7 research framework
programs. However, project cooperations have often an ad-hoc character. It means, that these
relations are generally not durable, and after finishing the project their intensity is often
declining. Without conscious intensification, these relations do not lead to the evolution of
strategic cooperations. The lowest level of the international contact hierarchy stay the nonformalised
cooperations, personal vocational contacts, individual actions. Generally, these are
the most extensive contacts, since a lot of foreign country relations are on the institutions'
teacher’s, who attend different international conferences (committee membership, review,
guest instructor, stb.) and international scientific community (foreign country publications,
international acknowledged) (Rechnitzer–Smahó 2007).
The system of international relations in case of a higher educational institution has been
formed for decades. It follows that traditional universities have more extended and more
stable contacts than the younger institutions. Both the age and the type of institutions have an
impact on the system of intertanional contacts. Colleges provide mainly educational
functions, in their case research cooperations and international contacts receive a much
smaller emphasis, than at a traditional university (Rechnitzer–Smahó 2007).
Almost all West-Transdanubian universities and colleges have Austrian relations. The partner
institutions are mostly located in Vienna, but a numerous number of contacts with other
Austrian higher educational centres was explored, for example with Linz and Graz. There are
traditional cooperations, which can be originated from the common history of the institutions
(e.g. West-Hungarian University Faculty of Agriculural and Food Science in
Mosonmagyaróvár and University of Natural Resources and Applied Life Sciences in
Vienna), while other relations are based on similar institutional profiles, personal contacts (all
institutions), common applications and research programs (e.g. Széchenyi István University–
TU Wien), or common educational cooperations (e.g. Széchenyi István University–TU Wien–
Technical University Bratislava). The actions are primarily teacher and student exchanges
within the frame of the Tempus program, but there are also direct agreements at institutional
level (Rechnitzer–Smahó 2007).
19
On the contrary of the exisiting and explored cross-border contacts, our research stated that
the institutions do not take all advantages of their cross-border situation, for example
geographical proximity, similar profiles, easy and quick accessibility or opportunities of
common applications. More reasons were explored that hold up the cross-border cooperations
of West-Transdanubian universities and colleges (Rechnitzer–Smahó 2007).
At first, the insufficient language skills of both teachers, researchers and students should be
mentioned, because these actors are the participants of educational and research cooperations,
teacher and student exchanges as well as different foreign language courses and lectures. In
Győr-Moson-Sopron county ca. 20-25 percent, while in Vas and Zala counties 15-20 percent
of the population speaks at least one foregin language, according to the data of the last census
in 2001. Although, these proportions around or over the national average of 19.2% are quite
good in Hungarian relation, the language skills of the Hungarian students and population are
lagging behind of those of the West-European inhabitants (Rechnitzer–Smahó 2006).
Consequently, Hungarian students are not really interested in courses held in foreign
languages, while the lack of these courses of the West-Transdanubian universities encumber
the reception of students arriving from the foreign partner institutions (Rechnitzer–Smahó
2007). Fortunately, this situation has been started to improve with the introduction of some
courses held in foreign languages in the West-Transdanubian universities.
Furthermore, cross-border cooperations of West-Transdanubian higher educational
institutions are hindered by lack of administrative capacities and financial resources, wagedifferentials,
and in some cases by the different training structure of the institutions.
Interviews with West-Transdanubian higher educational institutions’ leaders show that
international research projects are going on departmental and faculty level. Consequently,
international projects and cooperations are also handled at this levels, but not at university
level. Therefore, the system of international cooperations within the West-Transdanubian
universities and colleges are very fragmented and not embraceable at all, which slower and
hinder both the building of strategic contacts and the developing its directions. Austrian and
German higher educational institutions develop their international relations much more
consciously, based on an internationalization strategy, which is not typical for the WestTransdanubian
higher educational institutions at all. The fragmentation of international
contacts make it difficult to develop an internationalization strategy at university level
concerning future international cooperations (Rechnitzer–Smahó 2007).
The Vienna University of Economics and Business Administration (WU) defined more
criterias in its internationalization strategy which have to be fulfilled by the potential partner
20
institutions. Between the criterias are mentioned for example the membership in international
networks (PIM, CEMS), the rank of the university or business college; accreditation (EQUIS,
AACSB), excellence, elasticity, openness, compliance towards WU; the partner institution's
accommodating ability to WU structures; foreign language courses, and German language
skills of the partner institute (Sporn 2002). However, Central and Eastern European countries
appear as potential cooperation target area of the WU, but the university don’t strive to take
advantage of geographical proximity. Instead of this, it builds up cooperations with the
leading business universities of the neighbouring countries (e.g. Corvinus University,
Budapest). It indicates on the one hand that the quality of the partner institution is much more
important for the Austrian universities than geographical proximity. On the other hand it
proves that advantages of geographical proximity aren’t utilized adequately by the higher
education institutions in the Austrian-Hungarian border region.
2.3. Cross-border relations from the student’s point of view
Results of an empirical research carried out in the West-Transdanubian region show that 7,4%
of questioned students9
Figure 7 Future plans of students (%), (N=1304)
would like to move abroad after graduating and seek a job in a foreign
country, while additional 1,7% of them plan to study further abroad. Thus, overall 9,1% of
respondents think out some future plans for the time after graduation (Figure 7) (Páthy–Tóth
2007).
Source: Páthy-Tóth 2007, 174.p.
9
For the methodology of the questionnary see Páthy–Tóth 2007.
25,08
19,4
8,284,67,36
18,17
1,7
15,41
Stayin in the university
town and seeking a job
Moving to the home town
and seeking a job
Moving to an other
settlement and seeking a
job
Moving to Budapest and
seeking a job
Moving abroad and
seeking a job
Studying further in
Hungary
Studying further abroad
21
2,1% of asked students reported about an accomplished foreign scholarship, while ca. one
third of respondents plan a foreign scholarship during their studies (before graduation). This is
a small proportion at the level of desire as well, and the research found that only a small
proportion of these plans will be realized. The most preferred destination countries are the
English and German speaking ones: Great Britain, Germany and Austria (Páthy–Tóth 2007).
The neighbour country Austria stays at the third place, which also indicates that geographical
proximity is not the most important factor in setting up preferences (Table 3).
Table 3 The 10 most preferred destination country
Country
Number of
mentions at
the 1st place
Number of
mentions at
the 2nd place
Number of
mentions at
the 3rd place
all
mentions
Great Britain 97 63 41 201
Germany 79 68 38 185
Austria 44 43 29 116
Italy 36 14 15 65
Spain 19 21 21 61
USA 14 23 24 61
France 9 18 15 42
the Netherlands 8 16 13 37
Finland 14 4 18 36
Switzerland 5 6 20 31
Source: Pátyh–Tóth 2007, 175.p.
The fact that 65,5% of the asked students does not plan a foreign scholarship in the future at
all is schocking and shows a high level of students’ immobility. Naturally, international
relations and cooperation treaties of universities influence the possibilities of students widely,
but some other essential reason was also explored. 26% of students alluded to financial
problems, namely scholarships usually do not cover all costs of study and residence abroad,
and the majority of students can not undertake the additional financing. 19% of questioned
students answered that they are inhibited from studying abroad by their language problems.
Finally, the most shocking fact is that almost one quarter (22%) of respondents are not
interested in a foreign study at all (Páthy–Tóth 2007).
22
All of the mentioned facts and results show that there are still reserves in cross-border
cooperations in case of West-Transdanubia. These advantages should be better exploited in
order to dynamize the Austrian-Hungarian border region and develop its knowledge base.
3. Suggestions for accelerating cross-border cooperations
The role of international cooperations has significantly changed from the beginning of the
nineties till our days: international relations become more increasingly a need instead of an
opportunity. This tendency is expected to continue and get stronger in the future: international
cooperations will influence and determine the competitiveness of higher educational
institutions more increasingly, thus they will become one of the key of their future success. It
follows that universities and colleges should focus on the development of new international
contacts as well as on the extension and intensification of their existing international relations.
Although the intention and the interest for international cooperations are existing in the
majority of the West-Transdanubian higher educational institutions, universities and colleges
do not consider international relations as strategically significant (Rechnitzer–Smahó 2007).
From the side of the West-Transdanubian universities, it would be necessary to lay the
emphasis on the developing of its internationalization strategy and according to this, on a
more conscious building of its international contacts. In order to realize this, they should have
to review the already existing but not systematized departmental and personal contacts and
research projects, and after that they sould have to define the possible and desired future
directions of international contacts (Rechnitzer–Smahó 2007).
In order to develop foreign country contacts, it is important to improve the teachers’ and
students’ language skills, and to introduce foreign language trainings and courses into the
training supply of West-Transdanubian universities and colleges. Some of them already have
started to realize the mentioned suggestions. They are planning to launch different training
courses in German and/or English involving their Austrian partner institutes (Rechnitzer–
Smahó 2007).
To sum up, it can be said that West-Transdanubian higher educational institutions should
develop their internationalization strategy, define their own goals and opportunities and try to
fulfil the requirements set up by the potential partner institutions in order to reach a long-term
success. Finally, we have defined some possible developmental directions of cross border
cooperations according to the following (Rechnitzer–Smahó 2007):
23
• Get to know each other properly, introduction, and launch of cross border communication
programs in order to generate and motivate cooperations.
• To create organizational frameworks for the cooperations (e.g. Cross-border Rector’s
Council, institutional delegates on organizing the contacts, secretariat, etc.).
• To organize a common conference about the situation of our macro region in Europe, and
to held a forum about the possible higher educational cooperations. The frameworks are
given within Centrope and Jordes+ programs, but numerous additional programs motivate
the actors to take advantage of its cross-border situation and accelerate multiregional
cooperations.
• Get to know of each other’s research capacities and research results in order to be able to
plan fruitful future cooperations based on regional capabilities and economic characteristics.
• To make out a survey on the training supply of different disciplines (at bachelor, master,
postgraduate and doctoral level), and to make it available for the students of the cross border
region.
• To ecourage student mobility through harmonization and mutual acknowledment of
training programs.
• To publish the list of partner institutions on the universities' website, and in this way to
increase the attractiveness of the institutions between the potential students.
24
Conclusions
According to the literature of general economics and regional science I have studied, it can
be stated that authors and economical directions interpret the concept of knowledge in
different ways. They grasp different dimensions and appearance forms of knowledge, as well
as emphasize its different role in economic and regional growth and development.
Endogenous growth theory, new institutional and evolutionary economics, as well as their
regional concerns are relevant by explaining the relations of knowledge and
economic/regional development.
Endogenous growth theory as well as new institutional and evolutionary approaches
acknowledge that innovation is influenced by numerous local factors. Out of them, first of all
the qualitative factors – knowledge base and institutions – are region-specific, thanks to their
path-dependend development process. These factors mean and generate actually the main
differences between regions, which cannot be equalized in the short run. It follows that
qualitative dimensions of knowledge – on the contrary to the standard production factors –
could not be homogenized in the age of globalization as well. Moreover, their immobility and
individual characteristics upvalue the role of spatial proximity and underpin regional
competitiveness and development. According to these all, my first hypothesis can be regarded
as proven: it can be really stated that knowledge has been playing a more and more important
role between the influencing factors of regional growth and development (T1).
Thus, recent theories stress that personal interactions and communication play a more and
more important role in the knowledge creation process. Based on these approaches, a border
region could be dynamized and developed through the coevolution process of space, milieu
and knowledge. Universities as knowledge creators and regionally embedded institutions may
have key role in this process. In case of the Austrian-Hungarian border region it was assumed
that universities do not use totally the cooperation possibilities arising from their geographical
proximity. My study concludes that West-Trandsanubian higher educational institutions
should develop their own internationalization strategies and broaden their international
relations in a more conscious way. Furthermore, a rise in the education quality including
language skills would also considerably contribute to the development of the border region.
To sum up, it can be stated that the development of the Austrian-Hungarian border region
could be dynamized by bracing the mentioned knowledge flows, and by using the reserves of
the border region.
25
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