MAIN FACTORS ATTRACTING INVESTORS

Conditions offered by a region or a settlement for a new project that would ef­

fect its operation are always considered by the investor. The range and quality of such factors, their presence or absence in distinct settlements or regions have raised the issue of regional competition. Since the requirements of new industries are changing, impor­

tance of these factors may decline or increase that involves perpetual re-evaluation of regions. The range of attractive factors may be enhanced improving the conditions of the investments that results in further competition.

In the followings, the main factors considered by foreign investors when setting up a long-term strategy are enlisted. The factors include a number of elements and their structure depends on the specific demand of industries. National and international eco­

nomic and social factors should be accounted with, which are completed by specific motivations influencing the choice of a location.

The systematisation of main factors attracting investors and the comparative analysis of the aggregated data at regional level makes it possible to give a sketch of the present situation in Hungary. Decisions about the location of investments are made in a multi-variable system. The comparison at county and regional level will give an expla­

nation of the advanced position of the North Transdanubian region and provide a method to set up strategic planning proposals for the region (Table 4).

The first group of factors included data referring to the labour supply in the re­

gions (change in the number of population between 1990 and 1994, migration balance between 1980 and 1989 and the number of retired people, showing the economic activ­

ity of the population).

The region as whole is characterised by favourable demographic trends. There is a constant immigration (that exceeds the emigration from the region) stimulating con­

sumption and the labour market (through enhancing the supply). Fejér County is char­

acterised by the most favourable parameters. Since the average age of the population is fairly low, there is a considerable labour asset in the region, particularly in the villages and small towns.

The cost and qualifications o f labour are measured by average wages, ratio of professionals within the active population and number of students in higher education.

Table 4. Some indices o f spatial disparities (1994)

Industrial employment (%) 18.8 Budapest 43.4 Fejér 2.31 1.85

Service employment (%) 42.1 Fejér 76.3 Budapest 1.81 1.42

sand HUF per head) 7.0 Tolna 142.4 Budapest 20.34 7.94

Monthly gross wages

linked dwellings, %) ^{16.3 Pest 89.4 Budapest 5.48 3,15}

Waste disposal (ratio o f

In this respect, the region is spatially segmented. The qualifications of labour is above

The factor of transportation and communications includes elements, such as the proportion of first rank arterial roads in the whole network, motorcar and telephone provision, and the accessibility of Budapest and the county seat. The quantity and qual­

ity of the road network are lagged behind the dynamics of the regional economy. The regional average of telephone supply has exceeded the national average recently, but there are significant spatial differences that effect the accessibility and so the economic performance of several small regions and towns badly. As a consequence of the favour­

able geographical position of the region, the accessibility of Budapest and European metropolises is good. The northern-southern links are weak, neither the quality, nor the quantity are sufficient for servicing of the expanding regional and international relations.

The infrastructure provision o f the settlements can be measured by housing conditions, such as number of dwellings, sewage supply, consumption of electricity and proportion of dwellings integrated into the system of domestic waste disposal service.

The aggregated index of the region exceeds the national average, particularly in the case of waste and sewage treatment. The provision is below the average in Vas and Zala counties that disguises considerable differences. In this sense, Fejér is also a backward county: the average level of the infrastructure is particularly low in the rural areas that may exert a negative impact on the competitiveness of the whole county.

The provision of social infrastructure in the region is at the level of the na­

tional average, in terms of the number of general practitioners and specialist doctors, and of the number of elementary school teachers. The region is above the average in respect of capacities of hospitals. Since the existing network of institutions is a result of an earlier equalizing policy, there are no significant differences between counties. Ex­

isting capacities provide a framework for satisfying the needs of population at a fairly high level, but increasing costs of the operation of institutions may enhance the process of spatial differentiation.

Devices for promotion o f local economies, in terms of number and extension of (duty-) free industrial and business parks, of proportion of settlements gaining revenues from industrial and commercial taxes, and of the amount of financial support gained from national funds are spatially differentiated in the region. Advanced producer serv­

ices of the market are developing and expanding which increases the supply of sites available for economic activities (industrial parks in Győr, Ajka, Szentgotthárd, Székes- fehérvár and incubation centres for local enterprises in Szombathely, Veszprém, Zalae­

gerszeg and Székesfehérvár). Local governments also promote local enterprises (sup­

plying industrial and commercial sites, promoting infrastructure development, setting local taxation preferences and organising local economic promotion programs) and they have increasing role in gaining support from national economic promotion funds.

The factor of local economic activity includes retail turnover, monthly gross expenditure of households, housing prices in the county seats, personal income taxes, housing construction and proportion of accumulation and costs of capital transactions of local governmental expenditures. The region as a whole is above the national average considering these elements except the average household expenditure. Demand on the local markets is inspired by the fairly high incomes (on the level of households, local governments and enterprises as well). Looking at these trends, it may be predicted that the recent level of consumption of quality goods and services will be stabilised or in­

crease. Public expenses are also additional, stabilising element to the local demand. The Central Transdanubian region is spatially differentiated. The economic activity is below the national average. The reasons for this performance are the rather low level of con­

sumption (Fejér County) and incomes, furthermore, the decline of construction activities (Komárom-Esztergom County). The spatial division may result in increasing tensions in the North Transdanubian region.

Living standards are evaluated through the quality of environment (protected areas), level of cultural services (number of visitors of theatres and exhibitions), public security (rate of crimes), and vitality o f community life (number of civil societies and foundations and amount of individual donations). Standards are above the national level, cultural environment and community life are colourful and lively. Traditions of civil communities survived in the former political system that is an attractive element for entrepreneurs. This favourable picture is spoilt by the weaknesses of the cultural back­

ground (due to a lack of institutions and a lower level of consumption) and by the less vivid community life in Vas and Komárom-Esztergom counties. Living standards in Fejér County are lagging behind as compared with the economic performance. It is a consequence of the proximity of Budapest that offers a wide range of cultural facilities and absorbs the demand of the county (Table 4).