High-order services and spatial change in the central and eastern European countries

This paper examines the level of high-order services in the CEECs. These services are of growing strategic importance across the whole range of production sectors in developed economies (Bailly and Coffey, 1994). They are both the cause and the consequence of globalization, in a cumulative process. It is through high-order services that large cities, and the regions around them, become closely interconnected within global networks. These services are fundamental features both in the changing pattern of regional disparities across an enlarged EU and in the process of metropolization (Bourdeau-Lepage, 2004a and Bourdeau-Lepage Huriot, 2002 and 2004). The development of high-order services will be a key factor in the successful integration of the CEECs in an enlarged EU. One point is worth noting in respect of EU enlargement: the successful integration of the CEECs will depend on their overall performance in terms of GDP, but it will also depend on their involvement in the post-industrial production system in which high-order services play a leading part. For decades these countries operated with planned economies. Industry was predominant and the proportion of workers employed in the service sector was relatively low (e.g. 33.9% in Poland in 1992 compared with 58.4% in 2000). With the deregulation of business, economic coordination has taken on a new form. Coordination is no longer achieved through central planning; the old regulations and routines are no longer operative and new economic agents have adopted western market practices and business strategies (Bourdeau- Lepage, 2004b). This has led to a rise in services in the CEECs, and especially in services related to production (producer services and finance). This reflects a change in the production structure which will determine whether or not their integration in the EU is successful. The aim o f this paper is to appraise the potential of CEEC regions for integration in the ‘EU ' through the most prominent features of their production structures with special emphasis on the relative importance of high-order services. The paper is organized as follows. First, the main features of production structures in the CEECs are described. By comparing the classification by country (section 2) and by region, national and regional effects are identified (section 3). Large disparities among the CEECs are revealed at national and regional levels. Regional inequalities may be partly explained by features specific to national settings, termed "country effects", and also by geographic, capital-city and historical factors specific to regions, termed "region effects". Second, regional production potentials are assessed by calculating (Euclidean) distances between the employment structure by sector in each region and the average employment structure of EU countries (section 4). This evaluation of production potential shows a shortfall compared with the EU average. Then, the resulting classification of regional disparities is compared with per capita GDP. The results confirm the relationship between employment structures and GDP but show that these two criteria have distinct but complementary meanings. So, there are clearly unequal potentials for EU integration explained by three interdependent factors: the location effect, the historical effect and the urbanization effect (section 5).