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Latest Results of the Győr Cooperation Model1

Civic Review, Vol. 14, Special Issue, 2018, 195-209, DOI: 10.24307/psz.2018.0413

Dr Dávid Fekete, Senior Lecturer, Széchenyi István University, Department for Regional Sciences and Public Policy (This email address is being protected from spambots. You need JavaScript enabled to view it.).

Summary

Nowadays partnership cooperation and city networks are of increasing significance in the operation of large cities. The essence of the model is that the key to local economic development, boosting innovation and increase in competitiveness is close cooperation between higher educational institutions, economic stakeholders and governing bodies to form the future of the region. Győr, a county capital, is the 6th largest city in Hungary. It is the centre of the most rapidly growing economic region, with its main employer being AUDI Hungaria, which in 2017, employed more than 12,000 people directly and nearly another 10,000 indirectly. The Győr Cooperation Model has four main stakeholders at the moment: the Hungarian government, the Municipality of Győr, the Széchenyi István University and the economic partners, especially AUDI Hungaria. They have established a scheme of cooperation which significantly increases the city’s and region’s competitiveness and contributes to the development of its infrastructure. In this study the recent activities performed in the framework of the said cooperation and having a significant role in urban development, such as the improvement of the economic environment of Győr, the organisation of EYOF, the integration of the university and the growing importance of the city becoming the centre of knowledge, are described. Three processes influencing the future development of Győr are highlighted in the article: development in the framework of the Modern Cities Programme, the further development of the university by the establishment of a connecting technology park, and the tender directed to winning the title of European Capital of Culture in 2023. To achieve these goals a close cooperation is required between all the mentioned partners.

Journal of Economic Literature (JEL) code: N94, O18, P25, R51, R58
Keywords: triple helix model, urban development, urban regime, cooperation model, city network


City networks as forces in urban development

Nowadays partnership cooperation and city networks are of increasing significance in the operation of large cities. In Hungary an increasing number of communities recognise the necessity of systematic consultation or formalised organisational cooperation between the various parties making efforts for the benefit of the city. In the international literature, one of the most important related theories is the triple helix model. The essence of the model is that the key to local economic development, enhancement of innovation and increase in competitiveness is close cooperation between higher education institutes, economic stakeholders and governing bodies in shaping the future of the region (Etzkowitz and Leydesdorff, 1996; 2000). According to Lengyel (2010) and others, the reason for the need to strengthen cooperation is that regional units compete to improve the living standards of inhabitants in their respective regions or cities, and to boost regional and local economic growth. Once cooperation has been strengthened, one of the city’s important task is to identify its position in competition.

The triple helix model generated extensive discussions in the literature, many volunteered to expand the scope of participants in the model and/or to criticise it. The author of this article belongs to the latter, as in a previous research (Fekete, 2015) he pointed out that a focussed examination of the municipal dimension is necessary and the government is not identical with the central government bodies. Carayannis and others extended the scope of participants of the triple helix model to the civil society, thus giving it the name “quadruple helix model”, and then also included the factors related to the natural environment in the model, thus establishing by it the notion of a “quintuple helix” (Carayannis and Campbell, 2012; Carayannis et al., 2012; Vas, 2012).

Multi-party urban development cooperation and their operation are often termed as “urban regimes” in the literature. For the purpose of city development, new cooperation were established in the 1980’s in the USA, and this process forms the basis of the urban regime theory (Stone, 1989; Stone and Sanders, 1987). According to Pálné (2010), the urban regime school shows many similarities with the community-based development school advocating the economic approach that local development policy practices can often offer a more successful alternative to the main or central economic development approaches. In the urban regime analysis, the contribution of new-type development coalitions to the development of a city is important (Pálné, 2010). The procedures in urban economic governance have been analysed on several occasions (Somlyódyné, 2014; Fekete, 2017c), with cooperation between the organisations in the region, the level of dialogue between them, the extent of institutionalisation and its effect on the development of the region used as factors. It is also important to note that a key element of a city’s growth and development parallel to focusing technological and knowledge-intensive activities in a region is coordinated and effective cooperation between the government, the municipalities, the university and other economic stakeholders (Filep, 2014).

As indicated above, in many urban spaces, procedure analysis and the examination of interaction between the stakeholders of the city have an important role and many representatives of this field in the Hungarian and international literature deal with this subject. In this article I show the most recent results, including the antecedents of cooperation and possible future scenarios of the urban development coalition I call the Győr Cooperation Model.

Strengths of the city

Győr is the 6th biggest city in Hungary. It is a city with county rights, the capital of Győr-Moson-Sopron County and Győr district. The number of inhabitants in Győr is 129,372 (KSH, 2015), its area is 174.5 km2. Győr is situated in the Budapest, Vienna and Bratislava triangle, and for centuries it has been an important economic and transport centre. The city has a direct access to the motorway in the directions of Budapest and Vienna, it has its own airport (Győr-Pér Airport) and river port (at Győr-Gönyű). Győr is the centre of Hungary’s strongest economic region, its largest employer being AUDI Hungaria, which in 2017 employed more than 12,000 people directly and almost an-other ten thousand indirectly. AUDI has a special economic and social effect on Győr (Czakó, 2014). Among the 23 cities with county rights, the highest amount of business tax is paid here, a trend of improvement indicates the strength of Győr. In 2016, HUF 145 billion (EUR 500 million) of business tax was collected by the cities with county rights, of which HUF 22 billion (EUR 73 million) in Győr (Table 1).

By now the Győr economic region has become Hungary’s most prosperous centre. According to experts studying the city’s economic development, throughout history procedures linked to the cooperation of the various city-forming factors can be observed. Applying the territorial capital theory to Győr, Rechnitzer states that the concentration of the city’s territorial capital elements was dense already in the past centuries and this is the reason why Győr managed to accomplish certain structural changes (in the 19th century the city was transformed from a military to a trading centre and then in the 20th century to an industrial city) (Rechnitzer, 2016).

The Győr cooperation networks have been studied by several people recently (Filep et al., 2013). In the latest study by Rechnitzer and his colleagues highlighted the most important elements of the model. Researchers examined the model mainly from the aspect of personal contact points and gave account of the cooperation network of the higher education industry and the municipal sector, emphasising the fact that this is a predominantly informal network based on personal contacts. Unfortunately, the analysis does not discuss the central government’s role, despite the fact that it is clearly important in the development of Győr. The article considers facts mainly from the university’s perspective and lists the specific industrial projects (the new building of the Department of AUDI Hungaria Internal Combustion Engine, the AUDI Hungaria Faculty of Vehicle Engineering founded in 2015) and community projects (University Sports Hall, the Jedlik Bridge opening up the university grounds) that served the benefit of the University as well as joint programmes (e.g. University for Senior Citizens and various voluntary programmes). Researches criticised the model for the lack of formalised organisational operation (Rechnitzer et al., 2016).

Although only two years have passed since the last publication assessing the situation, the findings listed in the next chapter clearly indicate the intensity of cooperation between the four mentioned sectors and rapid growth in the city.

Latest achievements of the Győr Cooperation Model

Based on the above-mentioned fact, currently the four most important participants of the Győr Cooperation Model with regard to resource generating capacity2 are the Hungarian government, the Municipality of Győr, the Széchenyi István University and the economic stakeholders operating in the city, especially AUDI Hungaria.

There is a list of the recently completed and the currently running investments and urban development actions requiring the cooperation of at least three of the four participants (Table 2) as initiators, sponsors or beneficiaries of the particular investment.

EYOF

In 2017 Győr had the privilege to organise the European Youth Olympic Festival. EYOF was the first Olympic event in Hungary using both Olympic symbols (the flame and the flag). In 2011 Győr submitted a tender jointly with the Hungarian Olympic Committee to organise the event, and the European Olympic Committee granted the right of organisation to Győr in 2012. The minutes of the General Assembly reveal that more than 2500 athletes between 14 and 17 years of age from 50 countries took part in the event. The total number of participants, including accredited athletes and their staff was 3600, and in addition to the work of the organising committee additional 1500 volunteers helped on the event. EYOF generated very large interest and almost 80 thousand people visited the event.

For the successful organisation of EYOF, the collaboration of the government, the city and private capital was essential, as there was a great demand for infrastructure development. Most of the sport venues were financed by the Hungarian government: the new multifunctional hall, the 50-meter competition pool with its outdoor pool, and the Olympic sports park (track-and field and sports halls), from HUF 15 billion (EUR 50 million) granted by the government. Győr contributed to HUF 2 billion (EUR 6.7 million). In addition, the city developed its road network by constructing a new bridge for HUF 10 billion (EUR 33 million) (GYMJVÖ, 2017).

The university was the key beneficiary of the sports events, as one of the venues of the Olympic village was the newly constructed dormitory (AVLI) with the recently renovated adjacent buildings financed jointly by government and municipality. The government allocated HUF 6 billion (EUR 20 million) to the project and HUF 3 billion (EUR 10 million) from the city. The new basketball court was also built with the financial support of the city. The other venue of the Olympic village (AVL II) also amply illustrates the importance of the cooperation model. The site of the former oil factory was bought by the municipality and a private property developer (OTP Ingatlan Zrt.) was invited in to construct an apartment building with 200 flats. After the EYOF the company sold the flats thus easing the existing pressure on the Győr property market3 (Figure 1).

Organisation cost nearly HUF 5 billion (EUR 16.7 million), which was provided by the city of Győr, and the city realised an income of HUF 1.2 billion (EUR 4 million) from the participation fees. Besides AUDI, the sponsors of the event included almost all the significant companies and businesses of Győr. EYOF played a predominant role in the life of the city. A modern sports infrastructure adequate for the 21st century was established, a higher number and better sports facilities became accessible, the transport infrastructure of the city was significantly improved and university students’ housing was upgraded.

Case-by-case government decisions

The Government of Hungary introduced the opportunity of development funding based on case-by-case government decisions in 2004. Based on the decision of the government, large companies investing in development in Hungary and thus providing new job opportunities can apply for development subsidies. The government probably wishes to encourage businesses which, either due to their size or other reasons, are ineligible for EU funding to invest in development.

Table 3 clearly reveals that in the past seven years, five enterprises developing premises in Győr received support based on a case-by-case governmental decision. Some of the companies were supported several times within the framework of this scheme, and AUDI received development support in several stages (4 times between 2011 and 2018), which contributed to the creation of about 2600 new jobs. These schemes are apparently based on mutual benefits: the government supported the creation of nearly 3300 new jobs in Győr, while the affected enterprises, and of course, the city of Győr benefited from the increased amount of business taxes paid on increased production volumes (as shown in Table 1). With a rise in the number of people employed, the government could also increase its tax revenues.

Urban economic development

The municipality of Győr is the most important party that shapes the economic environment through its institutional system and through its related businesses. Recently an increasing number of emerging evidences indicate a shift in economic governance. The most important decision of the city of Győr has recently been a reduction in the business tax rate: as of 1 January 2018, it was cut from 1.8 to 1.6 percent, which means that among the cities with county rights Győr and Kecskemét impose the lowest business tax rates (the other 21 cities with county rights impose the maximum allowed rate of 2 percent). The Győr International Industrial Park Ltd. (Győri Nemzetközi Ipari Park Kft.) fully owned by the city, offers numerous services to businesses whether relocated or already in operation there. The most recent development project included the expansion of the industrial park, financed by the municipality, after completion of the expansion of the factory siding.

The city budget earmarks significant amounts every year for economic research. As a result, Győr has built more exploration roads to the industrial park and the logistics park of AUDI, and moreover, it has provided fast access to the industrial territories by the improvement of certain transport nodes in the city. The construction of the eastern ring-road (main road no. 813, see Figure 2) will change life in the city, as from the spring of 2018, vehicles will be able to reach the industrial territories of Győr directly from the highway, and the truck traffic across the city will be eliminated. This latter investment is funded by the Hungarian Government.

The fact that justifies joint organisational framework also results from a recent development: the Mobilis Interactive Exhibition Centre (Mobilis Interaktív Kiállítási Központ) has been operated by a company in the joint ownership of the Győr municipality and the university since 2015. The Mobilis Interactive Exhibition Centre plays an important role in career guidance, attracting young people to natural sciences and technical sciences (engineering). This is not the first case that the university and the city join forces in business organisation. The incubation centre of Győr, INNON-ET Nonprofit Kft. is operated in a similar joint ownership structure. INNONET was founded in 1997, with the aim to establish and operate an innovation and technological centre, which is still in the profile of the company.

Although Rechnitzer and others miss formalized cooperation in Győr (Rechnitzer et al., 2016), there have been city initiatives in this direction in the past few years. With the cooperation of the government and educational organisations operating in the city, AUDI and the related SMEs, the university and the city, two cooperation organisations were established and take an active part in the economic governance of the region: the Győr District Employment Pact (Győri Járási Foglalkoztatási Paktum) and the Automotive Industry Career Model Cooperation in Győr. Moreover, in order to be able to use the opportunities in cultural and creative economy, the Győr Local Community was also established. It works in close collaboration with the city in order to be awarded the title “European Capital of Culture” in 2023.

New direction in strengthening the city’s role as a knowledge centre: Higher Education and Industrial Cooperation Centre (HEICC)

Besides the above-mentioned city investments to improve university infrastructure, the year 2017 was decisive in the life of higher education institutions, as two new faculties were added to Széchenyi István University.4 With the association of the former Apáczai Csere János College, engaged in teacher training and tourism and operating in Győr for centuries, and the former College of Agricultural and Food Sciences, operating in Mosonmagyaróvár, a town at about 40 kilometres from Győr, the university took a major step towards becoming a university of sciences. The government decision on integration was facilitated to a major extent by the joint support and lobby of the municipality and the economic actors of the city.

Széchenyi István University, AUDI Hungaria and the city of Győr elaborated the HEICC concept in 2013, following a comprehensive analysis of the current situation. The establishment of the centre was supported by the government of Hungary by about HUF 14 billion (EUR 47 million), using national and European Union resources. State financing was granted against the backdrop of central efforts to indirectly boost regional economic growth. After 2010 the government took a number of actions to strengthen and stabilize the local economic environment, including the above form of financing, the new public finance system that forms the basis of a stable national economy development (Lentner, 2015) and municipal debt consolidation (Lentner, 2014). Support to modern industrial centres and university knowledge hubs is another important direction (Lentner, 2007).

HEICC will add three new buildings to the university: automotive innovation research, development and testing will be carried out in the Building of Dynamometers, which will also contain an e-training laboratory, and in the Packaging Test Laboratory. The Management Campus Building will focus on activities related to the development of SMEs, with lecture rooms and creative spaces. The buildings will have been completed by the summer of 2018. Their acquisition cost will add up to nearly half of the HUF 6.4 billion (EUR 21.3 million) support, and the remaining amount will be used for purchasing the necessary equipment for the university. Besides infrastructure developments, HEICC also has numerous important forward-thinking research topics. The sub-project Legal questions of the application of automated vehicle systems focuses on the recognition that the emphasis in determining the direction of automotive research is on self-driving cars, but the legal regulation of such highly automatized vehicles is incomplete, and there is a need to prepare and update a legislation of an international level. The Electromobility Research Group responds to another important future direction in the automotive industry: the modelling and development of alternative electrical engines, in this case especially the ones related to electrical driving. The Infocommunication Technologies (ICT) Research Group deals with the questions of industry 4.0 and digitalisation, with special regards to the questions of industrial applicability of cloud-based sensory services. As the only accredited packaging test laboratory of Central Europe is found at Széchenyi István University, equipment development and research in this field have also become part of the HEICC project in the framework of the subtopic Logistics, packaging technology. Self-motivated student groups catalysed applied research in many fields at the university (e.g. the SZEngine development team). HEICC also endeavours to have an increasing number of similar creative student communities at the university, with support from the sub-project entitled Student innovation – self-motivated student communities.

The vertical directions of the above-mentioned sub-topics are crossed along a horizontal focus by the sub-topic on Development of services supporting the international competitiveness of SMEs (Fekete, 2017d). This means that research in each of the sub-topics present a point of contact with the SME development sub-topic, as the aim of research in certain sub-topics is to realize joint product- and service development with industrial partners to enable SMEs to more effectively connect to the international division of labour. Although Győr has an outstanding network cooperation and organisations in the field of economic development, none of the companies has yet decided to include SMEs in the international division of labour to strengthen their supplier qualities. HEICC undertakes a trailblazer role in SME development, and responsibility for elaborating a fundamentally new methodology (Fekete, 2017a). The significance of HEICC lies in its ability to raise the competitiveness of a group of the city’s SMEs to an international standard and thus serve a more diversified, sustainable economic development of the city.

Modern cities programme

In March 2015, Prime Minister Viktor Orbán announced the Modern Cities Programme in Sopron. With the conclusion of the 23rd such agreement in Hódmezővásárhely in May 2017, all of the cities with county rights had been promised access to significant development resources. According to the summary of the Prime Minister’s Office, cities with county rights can count on development resources in the total amount of about HUF 3400 billion (EUR 11.3 billion) in the future. The Modern Cities Programme has opened a new dimension in the life of cities with county rights in terms of financing resources and in approach, and has provided unprecedented financing resources for the Hungarian network of cities. Implementation is expected in the next decade, and the programme will have a pivotal role in the development of national economic power centres, in population retention and in the improvement of the quality of life.

On the basis of the agreement concluded in April 2017 in Győr, the city will be able to implement developments in an amount of about HUF 120-130 billion (approx. EUR 400 million), falling into the following groups: traffic development, research-development and innovation, strengthening of sports economy, cultural and tourism developments (Fekete, 2017b).

As several criticisms have been worded against the Modern Cities Programme, namely, for failing to related to the strategic objectives of certain cities, the Table 4 has been compiled to establish whether the planned projects meet the objectives of the vision included in the Urban Development Plan of Győr valid up to 2030 (Fekete, 2014). It can definitely be stated that a remarkable part of the development projects included in the agreement are related to the exact objectives of the urban vision in the way shown in the table, while the developments which cannot be classified among them (e.g. ring-roads) also indirectly contribute to the attainment of set objectives in a significant way.

Summary and outlook

In this study I have set the objective to present the latest achievements of the Győr Cooperation Model. A review of the most important statements of the related literature (triple helix model, urban regime theories and regional competition) reveals that the regional competition between Hungarian cities also urges Győr to raise more significant resources in order to develop by strengthening its internal cooperation network. The city is a traditionally important intersection of trade routes, and has been one of the most significant industrial centres of Hungary since the end of the 19th century. I have examined the cooperation networks between the elements of four sectors: the local government of the city, the Hungarian government, the economic stakeholders active in the city (with special attention to AUDI) and Széchenyi István University, a knowledge basis.

It has become apparent that previous criticism regarding the absence of a formal network beyond the informal relationships is less effective nowadays: more organisations have been formed which deal with certain segments of economic governance in the city. Through the cooperation of the reviewed stakeholders, significant infrastructure development projects were implemented in the city during the 2010s, and moreover, city image building international events such as the EYOF also took place. The continuous strengthening of the economy is a positive message for the companies operating in Győr.

I am convinced that the outstanding network of relationships between the decision-makers and the leaders of organisations is an important driving force behind the success story of Győr. This requires political support from the government (since 2010 the leaders of the country and the city have been provided by the same party), stability in the administration of the city for 12 years (since 2006 Zsolt Borkai has been the mayor of the city), and outstanding personal relationships between the current leaders of AUDI and the university. In addition, the political leaders of Győr have often held positions in the national administration in the past few years and this has increased the lobbying power of the city: the submission of the EYOF tender were probably supported by the facts that the mayor of the city was the president of the Hungarian Olympic Committee between 2010 and 2017, and both of Győr’s members of Parliament elected in individual districts are ministers of state.

In addition to the retention and improvement of the current cooperation systems, three trends prevail in the city’s future expectations. Through the implementation of the Modern Cities Programme, the procedures launched in the city (including the development of different infrastructure networks, continued urban planning, and the strengthening of new economic trends) will be reinforced. By combining government resources and the local economic power, Győr can experience a new large-scale development and the synergies between certain operators can be reinforced, and the city can be more rapidly integrated in the European city network. The HEICC programme facilitates the evolution of a knowledge centre, the university’s internationalisation and the shift towards the most recent R&D, while the digital development centre to be implemented in the framework of Modern Cities Programme can bring along the formation of a new technological park. All these may strengthen the international competitiveness of SMEs in Győr. If the city is awarded the title of European Capital of Culture in 2023, it would be a community event similar to the EYOF and would allow new large projects. The right of organisation would boost cultural life and the local creative economy just as in the case of the EYOF, which has moved Győr towards sports economy.

Notes

  • 1. Supported by the Count Bethlen István Research Centre, Győr.
  • 2. This does not mean, of course, that civil organisations and public initiatives in Győr are important, but in this model, the institutional involvement of the civil sector has not yet been resolved, most frequently, the population and NGOs have the opportunity to enforce their views in the preparatory phase of a specific development project.
  • 3. The labor demand of companies operating in the city could only partly be met in the past by intra-country migration. At the same time, the housing market in Győr was unable to follow the significant increase in the number of employees, which resulted in a significant increase in rental fees and shortage in rental housing. The building of flats for the EYOF, housing developments in the city, and the 1200 new dormitory places have a positive effect on the situation of workers and renters.
  • 4. Széchenyi István University currently has 9 faculties: Apáczai Csere János Faculty, AUDI Hungaria Faculty of Vehicle Engineering, Deák Ferenc Faculty for Law, Faculty of Health and Sports Sciences, Faculty of Architecture, Construction and Transportation, Faculty of Mechanical Engineering, Information Technology and Electrical Engineering, Kautz Gyula Faculty of Economics, Faculty of Agricultural and Food Sciences, and the Faculty of Arts.

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