XXI. MEZINÁRODNÍ KOLOKVIUM O REGIONÁLNÍCH VĚDÁCH. SBORNÍK
PŘÍSPĚVKŮ.
21ST
INTERNATIONAL COLLOQUIUM ON REGIONAL SCIENCES.
CONFERENCE PROCEEDINGS
Place: Kurdějov (Czech Republic)
June 13-15, 2018
Publisher: Masarykova univerzita, Brno
Edited by:
Viktorie KLÍMOVÁ
Vladimír ŽÍTEK
(Masarykova univerzita / Masaryk University, Czech Republic)
Vzor citace / Citation example:
AUTOR, A. Název článku. In Klímová, V., Žítek, V. (eds.) XXI. mezinárodní kolokvium
o regionálních vědách. Sborník příspěvků. Brno: Masarykova univerzita, 2018. s. 1–5.
ISBN 978-80-210-8969-3.
AUTHOR, A. Title of paper. In Klímová, V., Žítek, V. (eds.) 21st
International Colloquium
on Regional Sciences. Conference Proceedings. Brno: Masarykova univerzita, 2018. pp. 1–
5. ISBN 978-80-210-8969-3.
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© 2018 Masarykova univerzita
ISBN 978-80-210-8969-3
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DOI: 10.5817/CZ.MUNI.P210-8970-2018-3
STATE-OF-THE-ART ON CURRENT METHODS AND
PRACTICES FOR EVALUATION THE POTENTIAL OF
REGIONAL DEVELOPMENT
Aktuální metody a postupy pro hodnocení potenciálu regionálního rozvoje
LUKÁŠ MELECKÝ
Katedra evropské integrace
Ekonomická fakulta
Vysoká škola báňská - Technická univerzita Ostrava
Department of European Integration
Faculty of Economics
VŠB - Technical University of Ostrava
 Sokolská třída 33, 702 00 Ostrava, Czech Republic
E-mail: lukas.melecky@vsb.cz
Annotation
The question of how to measure development has attracted the attention of economists and other social scientists
as well as non-government organizations and policy-makers for many decades. Nowadays, the problem of
determining the internal reserves of socio-economic development of region becomes more important, the solution
of which requires development of new approaches to the definition of essence, structure, methods for assessing
the socio-economic potential. Regional development policies based on local potential triggers a shift in the
economic structure of territories. Developments are conducted in the form of planned changes in various aspects
of social life by exploiting all the potential of human resources, natural resources, and institutions available in the
area. This process has however proven difficult as contemporary views on measurement of regional development
are presented as multi-dimensional concepts. Measurement of territorial progress with regards to achieving the
developmental potential plays a crucial role in improving the prosperity and quality of life in any territories.
Several methods of evaluating the level of development exist, most of methods have their own limitations. The aim
of the paper is to review the existing and relevant approaches to evaluate the potential of regional development
based on comprehensive analysis of scientific literature.
Key words
database, European Union, indicator, method, potential of regional development, territory
Anotace
Otázka měření rozvoje přitahuje pozornost ekonomů a dalších vědců v oblasti společenských věd i nevládních
organizací a politiků po mnoho desetiletí. Problematika identifikace potenciálu socioekonomického rozvoje
regionu je dnes důležitější mnohem vice než dříve, což vyžaduje rozvoj nových přístupů k definici podstaty,
struktury a metod posuzování sociálně-ekonomického potenciálu. Politiky regionálního rozvoje založené na
místním potenciálu vyvolávají posun v ekonomické struktuře daných území. Rozvoj probíhá ve formě plánovaných
změn v různých aspektech společenského života tím, že se v této oblasti využívá veškerého potenciálu lidských
zdrojů, přírodních zdrojů a institucí. Tento proces se však ukázal jako obtížný, neboť současné pohledy na měření
regionálního rozvoje jsou prezentovány jako vícerozměrné koncepty. Měření územního pokroku s ohledem na
dosažení rozvojového potenciálu hraje zásadní roli při zlepšování prosperity a kvality života všech území. Existuje
několik metod hodnocení úrovně rozvoje, většina metod má však svá vlastní omezení. Cílem článku je tudíž
analyzovat stávající a relevantní přístupy k hodnocení potenciálu regionálního rozvoje na základě komplexní
analýzy vědecké literatury.
Klíčová slova
databáze, Evropská unie, indikátor, metoda, potenciál regionálního rozvoje, území
JEL classification: B41, C82, O10, O18, R11, R12, R58
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1. Introduction
Improving the standard of living and quality of life for societies has undoubtedly become one of the most important
objectives across the world. The achievement of this developmental objective is a complex and difficult issue.
Greater emphasis has thus been directed towards the collective improvement of social, cultural and economic
aspects of areas (Pike, Rodríguez-Pose, Tomaney, 2007). Economic development in this regard has been viewed
as an important process which asserts an enhancement of both qualitative and quantitative features in regions
contributing to higher levels of prosperity. However, as a multidimensional process, the measurement of the
progress which societies have made in their developmental efforts, has proven to be difficult (Stiglitz, Sen,
Fitoussi, 2009).
As reviewed Poledníková (2017), generally, the term development can be defined as the process of positive
quantitative or qualitative changes. The development also has a number of dimensions from multinational, through
regional to a local level (Ďurková, Čábyová, Vicenová, 2012). Regional development is a complex of processes
taking place within the regions that affect economic, social, environmental and other changes of a region. Regional
development involves economic as well as social and ecological development providing good conditions for
increasing regional cohesion and competitiveness. Regional economic and social development may be described
from various perspectives using different criteria, often oriented in different directions. With respect to the
multidimensionality of development concept, there are a number of economic, social or environmental factors and
indicators that can be used to assess territorial development potential and performance. Although the phenomenon
of development has been discussed by many researchers, academics, authorities and institutions for decades, there
is no uniform theoretical approaches and consensus on the measurement and assessment. Evaluation of the level
of development, its potential and main determining factors are the most important conditions for developing the
economic and regional development policy in effective and effectiveness way. Therefore the main purpose of the
paper is to identify the specific aspects influencing the potential of regional development. The main aim of the
paper is to analyse the existing quantitative approaches to measuring the potential of regional development based
on comprehensive analysis of scientific literature.
2. Literature review and definition: dimensions of the concept
In broad interpretation the term potential can be considered as a source of opportunities, resources, stock, which
can be activated, used to solve a problem or achieve a certain goal; capabilities of the individual, society and state
in a particular field (Cheymetova, Nazmutdinova, 2015). Baksha, Gamukin and Svintsova (2001) understand the
concept of potential as a system of material and labour factors (conditions), ensuring the achievement of the
purposes of production, and an opportunity through the use of resources to solve complex tasks entrusted to it.
Svobodin (1991) considers potential as a set of co-operating resources with the ability to produce a certain amount
of production. There are various factors influencing the level of development and number of indicators that can be
used for the assessing of development potential, growth and performance of given territory. Regions differ mainly
in the economic level, based on Ďurková, Čábyová and Vicenová (2012), this level is affected by the following
factors: localization of enterprises in the region, their frequency, branch structure, economic stability, the intensity
of intra-regional economic relations, types of organizational forms; quantitative and qualitative characteristics of
the population and its movement; technical and social infrastructure in terms of complexity, quality and quantity;
the available natural resources and their utilization rate; and direct and indirect impacts of the state economic
policy. Viturka (2014) evaluates development potential of regions in an integrative way, from factual (integration
of economic, social and environmental factors) as well as spatial (integration of territorial structures) perspectives.
Based on Boryczko (2007) to achieve successful regional development three components are necessary, i.e. genius
loci or spirit of the place (economic and academic traditions, natural conditions, business climate, liability, physical
attractiveness, human capital, competition with other regions); tangible assets established by people in terms of
technical, educational, social infrastructure and economic base (educational institutions, transportation,
telecommunication, R&D framework, technical infrastructure, economic structure); regional strategy and all
efforts enhance the development (relationships between academic and business circles, cohesive strategy of
regional development, grassroots initiatives, partnerships among public, private and non-profit players). Capron
(2002) deals with the importance of capital for regional development and differs natural, productive, creative,
human and social capital. Cheymetova and Nazmutdinova (2015) describe the structure of the socio-economic
potential by four basic approaches, while three approaches have common elements as labour and natural resources,
population, production or infrastructure. The fourth approach reflects the best the possibility for a comprehensive
assessment of the socio-economic potential of the area and highlights the availability of resources, their use and
also reflected the willingness of the region to economic reform and development.
The regional resource potential can be divided into three related blocks: environmental, social and economic
potentials. Most of the authors thus point out that the regional development should be the view from different
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perspectives taking into consideration not only economic conditions but also social or environmental as well as
exogenous and endogenous factors (characterized by quantitative and qualitative indicators). Some common
factors/indicators describing the development potential and growth of the European territory can be identified:
research and development, innovation, entrepreneurship, human capital, creative potential, learning networks,
infrastructure (financial, social, economic, technical), regional specialisations, geographical proximity, etc.
Generally, regional development and solution of regional problems is determined by exogenous and endogenous
factors that influence the potential of local development as endowment, resources, human and social capital,
accessibility, infrastructure etc. (e.g. entrepreneurial skills, local production, technological progress, the diversity
of industry, the regional specialization, quality of local actors/institutions, innovation, knowledge, creative
potential of population, learning networks, physical proximity, agglomeration advantages), see e.g. Antonescu
(2015), Capello and Perucca (2015), Raszkowski and Głuszczuk (2015), Jóna (2015), etc.
For example Antonescu (2015) stated, the endogenous potential factors at the regional level can be grouped into
four important categories: 1. The endogenous factors specific to the East EU regions. The location on the border
of the EU-15 and the presence of capital cities has been interpreted as support of the regional differentiated growth.
The location next to the EU-15 has generated a higher market potential, while the presence of the capital-cities has
represented the main economic and social assets, necessary for the growth pattern in these regions. 2. An important
role is played by knowledge and innovation. 3. Group of factors referring to the presence of the physical
infrastructure and accessibility are interpreted as pre-conditions for obtaining the knowledge and information. The
accumulation of knowledge is strongly rooted and anchored in the characteristics of the economic, social, cultural
and institutional process, thus some areas have a more an innovative character pronounced than others. 4. The
fourth group of factors consists of the presence of certain sectorial components which explain regional growth.
Changing the sectorial structures may represent an important explanatory element, in particular, for new regions
of the EU.
According to ESPON (2006), the base for regional development in the EU is natural capital, productive capital,
creative capital, human capital, social capital. Coe, Hess, Wai-chung Yeung, Dicken and Henderson (2004) say
that endogenous factors are necessary, but insufficient, to generate regional growth in an era in which competition
is increasingly global. Economies of scale and scope embedded within specific regions are only advantageous to
those regions – and bring about regional development – insofar as such region-specific economies can complement
the strategic needs of trans-local actors situated within global production networks. Regional development thus
depends on such a coupling process that evolves over time in relation to the rapidly changing strategic needs of
global production networks and the rather slow transformations in regional economies of scale and scope. Regional
development at any particular historical moment requires the necessary co-presence of three interrelated sets of
conditions: the existence of economies of scale and scope within specific regions; the possibility of localization
economies within global production networks; and the appropriate configurations of ‘regional’ institutions to ‘hold
down’ global production networks and unleash regional potential.
The importance of endogenous factors is also emphasized by other authors. Keune (2011) discusses four major
areas that are intimately interrelated and overlapping and are found to be of major importance in promoting
regional development: technology transfer, innovation and information; training, retraining and employment
creation; support to particular groups of enterprises, promoting inter-firm cooperation in horizontal networks,
vertical networks and/or sectoral clusters; promotion of inward investment. Şorcaru (2014) stressed that human
potential, by labour force, employment, unemployment, educational level, gender structure, aging, reflects the
level of economic development of a region is strongly influenced by demographic realities (total population, age
structure, sex, residence, etc.) and economic realities (number of jobs). Muštra and Škrabi (2014) point out that
institutions are an important force in the regional growth process. GDP, quality of governance (voice and
accountability, political stability and absence of violence/terrorism, government effectiveness, regulatory quality,
rule of law, and control of corruption institutions are an important force in the regional growth process.
Interdependence between social and institutional proximity indicates the necessity of combining different
institutional factors for harmonious regional development.
Also, as in the case of development potential, there are many factors that determine the dynamics of regional
growth and disparities and they differ according to the particular countries. Jóna (2015) stated that numerous
similarities exist between the patterns of economic growth and territorial capital growth. Regional economic
growth and development are also directly and significantly determined by the endogenous and exogenous assets;
both have to be analysed together, this is the main reason why the concept of territorial capital is applied. According
to Raszkowski and Głuszczuk (2015), the dynamics of regional development depends on the efficiency of socioeconomic
processes implementation and the resources available in a region, resulting in its sustainable
development; the importance of efficiency of territories also analysed Staníčková (2017a). Regional creativity
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issues are gaining importance among people and organizations responsible either directly or indirectly for the
processes enhancing regional development dynamics. Kondratiuk-Nierodzińska (2016) points out that economic
growth is a process of long-term transformation shaped by the complex interactions between technology, economy,
institutions and social factors. Technological advancement may be one of the most important determinants of
economic growth and development creation of new knowledge is usually placed at the heart of innovation systems
and considered one of the most important capabilities determining economic development. From the innovation
capabilities, concept author determines the relationship between knowledge creation capabilities and economic
development in Polish regions. The main assumption is that differences in knowledge creation capabilities of
Polish regions have a good explanatory value of regional variations in GDP per capita. Also, Makkonen and
Inkinen (2013) see the innovative capacity educational attainment (the availability of human capital) as the key
drivers of economic growth.
American researchers Stephens, Partridge and Faggian (2013) stated most growth theories are based on the notion
that the “human factor” is the real engine of growth. Factors such as self-employment, human capital, creativity,
university spillovers and high-technology clusters are considered. Policymakers need to consider the costs of any
economic development approaches, but that supporting entrepreneurship and small business development appear
to be promising. Australians Beer and Kearins (2004) stated that strategies and actions focussed on assisting the
growth of individual regions to have the potential to make a significant contribution to national economic
performance. However, the value of such approaches is not universally recognized. Regional Australia Standing
Council (2013) confirmed the key determinants of long-term regional economic growth are human capital,
particularly education and skills (Improvements in human capital can enhance the innovative and productive
capacity of a workforce); sustainable (economically, environmentally and socially) communities and population
change (population is one of the most important resources of a region.
3. Measuring of development potential
An approach based on Baksha et al. (2001) reflects the best the possibility for a comprehensive assessment of the
potential of regional development. This approach highlights all the necessary conditions: the availability of
resources, their use and also reflected the willingness of the region to economic reform and development. The first
part continues natural resources, economic and geographic and demographic, as they fully reflect the resource base
of the region – the availability of natural resources, their reserves, the climatic zone of the territory; reproduction
and population of the region; the existence of transport infrastructure and the density of economic activity. The
second part consists of the labour potential, which reflects the region's enterprises providing human resources and
their effective use; production potential – the existence and development of the power industry, production of their
products; social and infrastructural potential determines the conditions and quality of life of the population, i.e. the
development of vital infrastructure. Budgetary potential, showing the change only the revenue and expenditure of
the regional budget, is supplemented by financial content. The third part carrying out the processes for
development of territory is not possible without the willingness of the population of this region, so this unit is
turned on intellectual and volitional capacity, reflecting the level of professional development of the population,
its ability for the sustainable choice of objectives and activities to implement them. Structuring of the potential of
regional development is based for a comprehensive evaluation of the effectiveness of its use and development,
which is essential in the generation options and the rationale of strategic choice of territorial development, the
formation of economically justified both state and regional policy, for more information see Tab. 1.
Suitable databases for selection the relevant indicators, with respect to specified dimensions and territorial interest
of analysis (i.e. the EU NUTS 2 regions), are the EU statistics – Cohesion Policy reports and ESPON applied
research projects in categories Attractiveness (ATTREG), Economic crisis (ECR2), EU Directives (ARTS), EU
2020 Strategy (SIESTA), Globalisation (TIGER), Governance (TANGO), Growth Poles (SGPTD), Specific types
of territories (GEOSPECS), Territorial Cooperation (TERCO), Territorial impact assessment (TIPTAP),
Neighbour Regions (ITAN), Scenarios (ET2050); and these will be subjected to further analysis (Melecký, 2017b).
In relation to the potential of regional development and synthesis of selected indicators, Žítek and Klímová (2013)
aimed to compare the economic performance of north-eastern Baltic Sea regions on the NUTS 2 level in the EU
Member States, and focused on evaluating the present position of the regions in relation to the dynamics of their
development. There are several indicators of regional development potential that are processed by different
theoretical or empirical scientific methods and specific quantitative methods of research. Following Tab. 2 reviews
the predominated approaches to regional development potential and growth.
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Tab. 1: Structuring the dimensions for evaluating the potential of regional development
Potential of regional development
Part of resource potentials,
opportunities for economic
development of the region
Part of potentials, ensuring
economic development of the
region
Part of potentials of the readiness to
the economic development of the
region
Natural resources Labour aspects Socio-economic readiness aspects
Economic and geographical aspects Industrial aspects Regulatory readiness aspects
Demographic aspects Social and infrastructural aspects
Scientific and methodical
readiness aspects
Market infrastructure aspects Intellectual and volitional aspects
Investment aspects
Budget and Finance aspects
Source: own elaboration based on Baksha et al. (2001); processed by Melecký (2017b)
Sborník příspěvků XXI. mezinárodní kolokvium o regionálních vědách Kurdějov 13.–15. 6. 2018
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Tab. 2: Review of main approaches to regional development potential evaluation
Author/Journal (Year) Title of paper Territory Factors/Indicators Method
Berea, R. C., Otoiub, A., Bucerzan, I.,
Procedia Economics and Finance (2014)
Determinants of Economic Growth in
Cities Acting as Growth Poles in
Regions from Romania
cities (growth poles)
university students, unemployment, R&D
expenditure, population, migration
Panel data models – econometric modelling
Boryczko, A., SPNA Review (2007)
Economic Development Potential Of
The Krakow Region
region
high technology, the spirit of the place,
tangible assets, regional strategy
Description – statistical treatment
Crescenzi, R., Rodríguez-Pose, A.,
Papers in Regional Science (2012)
Infrastructure and regional growth in
the European Union
regions
infrastructure, R&D investment, GDP per
capita, structural characteristics
Two-way fixed-effect (static), GMM-diff (dynamic)
panel data regression estimation methods
Cheymetova, V.A., Nazmutdinova,
E.V., Asian Social Science (2015)
Socio-Economic Potential of the
Region and Its Evaluation
regions
local potential, labour potential, potential
socio-economic readiness
Systematic and comparative analysis; expert
assessments; principal component analysis;
econometric modelling
Čingule, S., Economic Science for Rural
Development (2009)
Regional Development and Economic
Potential of the Counties of Latvia
states, municipalities infrastructure, entrepreneurship, innovation,
intellectual capacity
Description – statistical treatment
Dańska-Borsiak, B., Laskowska, I.,
Comparative Economic Research
(2014)
Development: An Analysis Of Spatial
Relationships
NUTS 3 regions GDP per capita, human and social capital
Global spatial autocorrelation tested using the Global
Moran’s I statistic; for local autocorrelation calculated
LISA statistics.
Ďurková, K., Čábyová, Ľ., Vicenová, E.,
Review of Applied Socio- Economic
Research (2012)
Regional Development in Economic
Core Regions
economic core regions,
metropolitan, peripheral
and rural regions
localization of enterprises, population,
technical and social infrastructure, the available
natural resources, impacts of the state
economic policy
Description – statistical treatment
Ezcurra, R., Gil, C., Pascual, P., Applied
Economics (2005)
Regional Welfare Disparities: the case
of the European Union
NUTS 1 regions
national component, the spatial location, the
productive structure, R&D expenditure
Non-parametric approach; welfare index
Kalnina-Lukasevica, Z., Shape and be
Shaped: The Future Dynamics of
Regional Development (2003)
Development of Regions in Latvia Growth
Factors, Policy Alternatives,
Synthesized Development Model
NUTS 3 regions
innovations, knowledge, human capital,
learning, export, infrastructure
geographical location, distance from the centre
of economic activities, etc.
Synthesized Model of regional economic development
Miłek, D., Nowak, P., Equilibrium.
Quarterly Journal of Economics and
Economic Policy (2015)
Regional Specialisation as an
Endogenous Factor in the
Development of Poland’s Provinces
NUTS 2 regions employees, gross value added Krugman dissimilarity index
Smętkowski, M., Wójcik, P., Regional
and Local Studies (2010)
Regional Development in Central and
Eastern Europe.
NUTS 3 regions
economic structure, labour productivity, labour
market situation, the condition of enterprises,
R&D sector, human capital, infrastructure and
external attractiveness
Beta and sigma convergence analysis, for kernel density
estimation, transition matrices, spatial autocorrelation
and multi-dimensional comparisons
Rivera, P.P., Journal of Economic Issue
(2012)
Crisis and Regional Distribution in the
European Union: Considerations of
Economic Policy
NUTS 2 regions
population, work activity, unemployment rate,
activity rate, production, income
Analysis of the variation in the level of spatial
concentration of production and per capita income;
index of regional potential
Viturka, M., Ekonomie E+M (2014).
Integrative Model for Evaluation of
Development Potential of Regions and
its Application on an example of the
Czech Republic.
NUTS 3 regions
economic, social and environmental factors,
spatial perspectives
Main components of the model are business
environment quality (BEQ), innovation potential of
companies (IPC) and use of human resources (UHR)
Source: own elaboration based on reviewed references, 2018
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In addition to the approaches listed in Tab. 2, very frequently used approach to the measurement and evaluation
of the socioeconomic development represents composite indices (CIs). CIs construction related to the issue of
development summarizes e.g. Santos and Santos (2014). Meyer, Jongh and Meyer (2016) constructed a composite
regional development index that successfully measures all the dimensions of development in a quantitative
manner. Index assess regions on a national, regional and local level and consisted of four dimensions
(demographic, social, labour and economic). Glebova and Kotenkova (2014) suggested a system of the regional
innovation potential indices. They calculated the integrated indices of innovation-driven development of three
regions in the Volga federal district in Russia over 2005-2010 years. Morrison (2014) identifies the operational
elements of effective regional governance in USA and Australia, based on the premise that measuring and
monitoring the potential for regional governance enables an assessment of the capacity of regional institutions to
cope with the diversity of problems that may arise. He proposed a regional governance index and used four
indicators of regional governance enabling measurement of (1) engagement in regional networks; (2) diversity
and synergies across the instrument mix; (3) robustness and adaptability in instrument design; and (4) broker
fiscal, administrative and democratic support. Wang (2007) created the regional development index for China
which consists of ten field indices (and one reference index) to measure regional development in different fields
(level of economic development; productivity and R&D; human development; education; social equity; public
services; social security). Each of the ten field indices directly presents a certain field of development, and together
they constitute the overall index. Each field index consists of a few sub-indices, which are based on one or more
basic indicators. In total, seventy basic indicators are used. The eleventh field index presents the natural
endowments of a province, which act as conditions for development, not as achievements of development. Also,
in the EU there are some examples of CIs that contributes to regional development potential evaluation in a
different way, as summarizes Melecký (2017a) or Staníčková (2017b). The EU stated that based on the available
data from Eurostat, the EU, therefore, proposes to develop a territorial performance (in all the aspects)
indicators/indices, which can provide additional insight into the future potential of territorial (especially local and
regional) authorities in meeting the EU targets. The available data could be clustered around the key indicators.
The performance indicators would show for each territory (especially EU NUTS 2 region), whether it has
improved, stagnated or declined in relation to the EU targets. These indicators could also be used to benchmark
territories in the EU and to detect successful strategies in promoting growth and competitiveness in Europe
(European Commission, 2016).
There are also CIs which do not represent an official EU approach (approach of an international institution or
country), however these CIs evaluate the territories in selected topic, e.g. Social Progress Index (Porter, Stern,
Green, 2016), Resilience Index Measurement and Analysis model (United Nations, 2016) or OECD approaches
to quality of life and well-being in the form of CIs evaluation (OECD, 2016, 2015), and many others.
Related to the topic of development and its link with CIs, in the EU there are some examples of CIs that contributes
to regional development potential evaluation in a different way. Grunfelder, Rispling and Norlen, (2016) counted
the Regional Potential Index for Nordic countries (Denmark, Finland, Iceland, Norway, Sweden, and the Faroe
Islands, Greenland, Ålan) and included criteria as regional potential, demographic potential, labour market
potential, economic potential. The ranking does not take into account any qualitative dimensions, such as
experienced life quality. The same approach is also used by Rispling et al. (2016) to analyse trends and potentials
in the Baltic Sea Region. Silva and Ferreira-Lopes (2013) created a Regional Development Index for Portugal
NUTS 3 regions based on the methodology of the human development index from the United Nations
Development Programme. As with the original HDI, the income index is calculated based on the natural logarithm
of the minimum and maximum values. Perišić and Wagner (2015) constructed the development index for Croatian
regions which is a composite indicator calculated as a weighted average of five socio-economic indicators. The
development level assessment and categorization of Croatian local and regional units is based on the value of the
development index which is the main instrument of Croatian regional policy.
Conclusion
Regional development is a complex of processes taking place within the regions that affect economic, social,
environmental and other changes of a region. Regional development involves economic as well as social and
ecological development providing good conditions for increasing regional cohesion and competitiveness. With
the regional development is related the term potential that can be considered in general as a source of opportunities,
resources, stock, which can be activated. The aggregate potential of the territory must be considered, first of all,
the socio-economic, including not only the economic potential of the region but also the social dimension, which
characterises the relationship between the people on the creation, development and effective use of resources in
the region. Therefore, nowadays the problem of determining the internal reserves of regional development
becomes more important, the solution of which requires the development of new approaches to the definition of
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essence, structure, methods for assessing the potential of regional development. To detect the potential and
challenges of a region, it is important to analyse its global and future challenges and potential.
A territorial focus on the external trends and processes of globalisation and regionalization entails detecting current
and future trends affecting the region, such as environmental changes, shifting demographic structures and
technological developments. It also requires a focus on the potential and challenges of cultural and economic
globalisation processes and the ways in which politics and policies on a variety of scales are imposed on a region.
In the paper, approach to consider the potential of regional development is based on a set of resources area and
properties that define how the sustainable and effective functioning of the socio-economic system under varying
environmental conditions. The paper confirms the urgency of measuring the potential of regional development.
The paper offers a suitable starting point for further analyses of specialisation, diversity and determinants of
regional dynamics.
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The paper is supported by the SGS project (SP2017/111) of Faculty of Economics, VŠB-TUO and the
Operational Programme Education for Competitiveness – Project No. CZ.1.07/2.3.00/20.0296.