Regional Governance and PrivatePublic Partnerships Vittorio Modena V

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Regional Governance and Private-Public Partnerships Vittorio Modena V. Modena - Regions for economic change.

Regional Governance and Private-Public Partnerships Vittorio Modena V. Modena - Regions for economic change. Bruxelles, March 7 th, 2007

The triple (quadruple? ) helix Researchers Enterprises Policy makers Private investors seeking scientific results

The triple (quadruple? ) helix Researchers Enterprises Policy makers Private investors seeking scientific results seeking expansion seeking sustainable economic development seeking profit V. Modena - Regions for economic change. Bruxelles, March 7 th, 2007

How to make it work? What laws, what schemes, what organizations, what networks will

How to make it work? What laws, what schemes, what organizations, what networks will make these different interests converge and make the region blossom? V. Modena - Regions for economic change. Bruxelles, March 7 th, 2007

Multiregional governance - a European challenge Many projects are very suitable for the multi-regional

Multiregional governance - a European challenge Many projects are very suitable for the multi-regional level: -What legal/political problems accompany them? -What are the best forms of governance for such projects? V. Modena - Regions for economic change. Bruxelles, March 7 th, 2007

Public-Private Partnership, Rationale and Framework -The private sector seems to be more efficient in

Public-Private Partnership, Rationale and Framework -The private sector seems to be more efficient in managing projects -The public sector funding is needed to overcome market failures Incentives to attract private capital and management and overcome market failures Restrictions to direct the investment into publicly desirable projects V. Modena - Regions for economic change. Bruxelles, March 7 th, 2007

PPP - Guidelines Incentives Should be: - Strong enough to address market failures -Not

PPP - Guidelines Incentives Should be: - Strong enough to address market failures -Not enough to make anything worth while e. g - Grants, loans, tax allowances (national, regional and local) Restrictions Should be: -Strong enough to direct the investment into publicly desirable projects -Not strong enough to make projects commercially impossible e. g. - to invest only in certain geographic areas, to invest only in certain sectors, to run precompetitive research projects V. Modena - Regions for economic change. Bruxelles, March 7 th, 2007

PPP - Dangers -Forgetting the regional/local comparative advantage -Bureaucracy -Public agenda interfering with commercial

PPP - Dangers -Forgetting the regional/local comparative advantage -Bureaucracy -Public agenda interfering with commercial decisions -Private investment departing from the original mission Wasting public moneys V. Modena - Regions for economic change. Bruxelles, March 7 th, 2007

PPP example - the ESTER project in Latvia (I) A public fund of funds

PPP example - the ESTER project in Latvia (I) A public fund of funds was set up with 16 m. It has coinvested (at 50%) into three seed funds with private entities. -Both the private investors and the managements companies received strong incentives. -Funds are restricted to invest into small firms and up to a certain amount per firm (seed capital). -Management is strictly private with public sector only allowed to monitor V. Modena - Regions for economic change. Bruxelles, March 7 th, 2007

PPP example - the ESTER project in Latvia (II) Public Fund of Funds 50%

PPP example - the ESTER project in Latvia (II) Public Fund of Funds 50% Private 50% investors Company Start-up fund (private) Company V. Modena - Regions for economic change. Bruxelles, March 7 th, 2007

Thank you ! Email: vmodena@fastwebnet. it Tel. +3933574288951 Web www. venturepolicy. com ESTER Project

Thank you ! Email: [email protected] it Tel. +3933574288951 Web www. venturepolicy. com ESTER Project http: //www. unipv. it/ester/index. html V. Modena - Regions for economic change. Bruxelles, March 7 th, 2007