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Voronchuk I.
Capabilities and posibilities for human resources in Baltic Sea region
The aim of this paper is to provide information on the Baltic Sea region (BSR) competitiveness and to point out advantages and disadvantages of the region. To be more specific, let us start with the focus on the issues of cooperation and competition on labour markets of the Baltic Sea region countries.
The boundaries of the region could be defined considering different criteria -watershed, intensity of cultural and economic interchanges, etc. For the purposes of this paper the author will follow the definition by Dr. Christian Ketels and Professor Orjan Solvell [1, p.14]. According to it the BSR consists of:
1) the Baltic countries (Estonia, Latvia, and Lithuania),
2) the Nordic countries (Denmark, Finland, Iceland, Norway, and Sweden),
3) Northern Germany (Hansestadt Hamburg, Mecklenburg-Vorpommern, and Schleswig-Holstein),
4) Northern Poland (Pomorskie, Warminsko-Mazurskie, and Zachodnio-Pomorskie),
5) parts of Russia’s Northwestern region (excluding the four regions least connected to the Baltic Sea region: the Republic of Komi, Arkhangelskaya oblast, Nenetsky autonomous region, and Vologodskaya oblast).
The exact boundaries, especially in terms of the inclusion of more German and Polish regions, are somewhat arbitrary [1, p. 14].
The Baltic Sea region is the home for about 50 million people which are less than 1% of the world population, but its share of the 2005 world GDP is about three times as high, at 2.7%.
The Baltic Sea region also has a limited economic size, which means that its subregions are relatively small. Its markets have relatively low attractiveness for foreign investors, even more so if they look at individual countries rather than the region as a whole [1, p. 15].
Regional cooperation between neighboring countries can be a strong positive force to improve their competitiveness. Both history and location are factors that any effort to create an effective strategy for cooperation across the Region has to take into account.
The Central Baltic Interreg IVA Programme can be considered as an example of successful cooperation between municipalities of Estonia, Finland, Latvia, Sweden and the Aland archipelago. There can be found both uniting and separating features between different member states and Aland - at the same time challenging and offering great possibilities for the programme to come [2, p. 4].
The Central Baltic Programme area covers 180 000 square kilometres, which is 5% of the total land area of the European Union. At the same time the population of this area is only about 2% of the EU population. The population density throughout the area is rather small, at an average of 50 inhabitants per square kilometre. There are, however, large differences in population density within the area. The capitals of all four participating countries and the Aland archipelago, along with several of the largest cities, are situated in the Central Baltic Programme area. The Swedish and Finnish regions are some of the most densely populated in the respective countries. In contrast, there are also mainly rural, very scarcely inhabited areas in Estonia, Latvia and in the Aland archipelago.
On an aggregated level the population has increased during the last years. Again, this growth has been uneven within the Central Baltic Programme area. The distribution of the population follows a global trend and is predominantly concentrated to the main cities and coastal areas. The population growth has been dominant in the regions of Finland, Sweden
and the Aland. On the other hand, Estonia and Latvia as well as most of the islands have experienced a decrease in population. As for the islands and archipelagos, only those of Stockholm, Visby on Gotland and the main Aland have a population that increases. A similar, unequal development can be seen in Estonia, where only the largest cities or their surrounding areas have been able to reverse the trend and increase their population [2, p. 14].
The slow population growth in the area is due to relatively low birth-rates and a rapidly ageing population. The trends of migration have not provided a considerable change to the situation so far.
Due to different methods of measuring unemployment, these figures are difficult to compare. The lowest rate is found on the Aland, whereas the rates in the other regions inside the programme area vary between 6-10%. Again, there are large differences within the regions in each country. The large cities provide a large share of job opportunities. Commuting for long distances is a growing trend within the programme area. Methods for distance work are also being developed in many parts. There is a risk of brain drain in the programme area and some parts already face a shortage of skilled labour force.
The Central Baltic Programme area has a fairly similar labour market. In general it can be said, that manufacturing, trade, health, social services and other services are the most important sectors as regards employment. The exceptions are Latvia, where health and social services are not a significant sector and the Aland, where manufacturing and other services are not predominant sectors. On the other hand, transport, storage and communications are very important sectors on the Aland. At large, the primary sector is still more important in the archipelago and island regions than the national average in the Central Baltic Programme area. Agriculture and forestry are important sectors in many parts of the programme area. On the islands and in the archipelagos, tourism is an important sector. Fishing is another branch strongly related to the islands and archipelagos [2, p. 16].
The aim of the next co-operation steps is to promote better integration of the territory of the European Union in all its dimensions, including creation of new enterprises and work places.
One of the BSR advantages is its relative strengths in skills and knowledge-driven services. In comparison with other regions this is the region’s economic asset. The region’s developed business environment can be also seen as an advantage, it can even have permanent effect on some company’s location choice. As another advantage of the region one can mention its business infrastructure which includes physical infrastructure and also highly-skilled workforce. Nevertheless, it may become also a risk factor - if foreign businesses compete for it. But the BSR’s input as a part of the EU will be the most valuable if the win-win solutions are the choice. It requires reflection and reconsideration of basic tenets of general management, Human Resources Management (HRM), and even international relations (IR) theories and practices. There are theoretical considerations for better solutions, but battle-field traditions of history have their inertia. That is why the task of creating desirable and possible future is not an easy one. The vision of another style of relations between states, any institutions and interpersonal attitudes is a necessary precondition for win-win strategies producing synergy effects. The integration of different disciplinary knowledge fields is needed. These include such related topics as Human Development (HD), Human Resources Development (HRD), Human Resources Management (HRM), Organizational Development (OD), general and personnel management, often using different terminology for similar concepts.
There has been some tendency for the term 'human resources' to be adopted as an alternative to 'personnel' simply for a change, or to move away from an image that has been associated with previous eras. It has also been adopted by some to avoid the word 'manpower', seen as sexist in phrases like 'manpower planning' and 'manpower administration'. Also,
personnel managers seem constantly to suffer from paranoia about their lack of influence and are ready to snatch at anything - like a change in title - that might enhance their status.
There is a more substantial difference that needs to be explored, even though the nature and degree of the difference remain largely matters of opinion rather than facts, and the similarities are much greater than the differences.
Personnel management is workforce-centered, directed mainly at the organization's employees; finding and training them, arranging for them to be paid, explaining management's expectations, justifying management's actions, satisfying employees' work-related needs, dealing with their problems and seeking to modify management action that could produce unwelcome employee response. The people who work in the organization are the starting point, and they are a resource that is relatively inflexible in comparison with other resources like cash and materials.
Although indisputably a managerial function, personnel is never totally identified with management interests, as it becomes ineffective when not able to understand and articulate the aspirations and views of the workforce, just as sales representatives have to understand and articulate the aspirations of the customers. There is always some degree of being in between the management and the employees, mediating the needs of each to the other [3, p. 15].
Human Resources management is resource-centered, directed mainly at management needs for human resources (not necessarily employees) to be provided and deployed. Demand rather than supply is emphasized. There is greater emphasis on planning, monitoring and control, rather than mediation. Problem-solving is with other members of management on human resource issues rather than directly with employees or their representatives. It is totally identified with management interests, being a general management activity, and is relatively distant from the workforce as a whole, as employee interests can only be enhanced through effective overall management [3, p. 16].
Underpinning personnel management are the twin ideas that people have a right to proper treatment as dignified human beings while at work, that they are only effective as employees when their job-related personal needs are met, and that this will not happen without personnel management intervention in the everyday manager/subordinate relationships. Personnel managers are involved in a more direct way in the relationship between other managers and their subordinates, because the personnel aspects of management are often perceived by line managers as not central to their role.
Underpinning human resources management is the idea that management of human resources is much the same as any other aspect of management and an integral part of it and cannot be separated out for specialists to handle. People have a right to proper treatment as dignified human beings while at work, and they will be effective when their personal career and competence needs are met within a context of efficient management and a mutually respectful working relationship. The specialist role is directed towards getting the deployment of right numbers and skills at the right price, supporting other managers in their people management and contributing to major strategic change.
This is how we interpret the distinction between personnel management and human resources management.
There is very little difference in fact between the two, but there are some differences that are important:
first, that human resources management concentrates more on what is done to managers
rather than on what is done by managers to other employees;
second, that there is a more proactive role for line managers and
third, that there is a top management responsibility for managing culture.
Evaluation and future of the personnel function
The members of any personnel functions need to evaluate their activities regularly to ensure that they are achieving what they wish to achieve and fulfilling expectations held of them.
How the personnel function will change in the future is a subject that has produced regular prognostications, one of a way is a regular personnel audit.
As the continent of Europe gradually reduces barriers between countries, so the degree of cultural constraint becomes less. Not only will personnel managers have to adapt practices and procedures to meet new European legal requirements, they will also have to develop practices to deal with a wider range of nationalities seeking employment in the Baltic countries.
Specifics of human resources in the Baltic Sea region are based on the region’s advantages and disadvantages. In the Central Baltic Interreg IV A Programme 2007-2013 (cross-border co-operation programme under the European Territorial Co-operation objective) the SWOT analysis has been set up using information and data from the different regions in the Central Baltic Programme area. This table is the result of cross-border co-operation between representatives of all partners resulting in an analysis of the Central Baltic Programme area [2, pp.29-30].
The first section concentrates on the strengths, weaknesses, threats and opportunities the Central Baltic Programme is facing in its current socio-economic situation.
SWOT Analysis for the Central Baltic Programme (CBP)
Strengths Weaknesses
Strong relation between regions and cities in the area due to common and cultural background. Weak role of small and medium sized enterprises in the CBP economy. Lack of new business creations and entrepreneurship. Difficulties in accessing the market.
Capitals and major cities in the area are attraction poles in various areas. Insufficient coordination and co-operation between the educational and business worlds.
Strong presence of well-managed and experienced successful global companies. Considerable area of the CBP consists of small, peripheral areas which are difficult to reach. In some cases, these areas have lower economic and social development which limits the possibilities for co-operation.
High level of innovation capacity and a strong IT and R&D infrastructure. Communication within the CBP, such as language issues, administrative and cultural capacity.
Large number of good universities, centers of excellence and networks of excellence. Underdeveloped transport connections combined with large distances within the area and to the main European markets.
Diverse and attractive nature. High threshold and low mobility on the labour markets for certain groups.
Skilled and highly educated workforce. High unemployment for certain groups.
Opportunities Threats
Gateway to Russian and Asian markets. Slow response of educational sector to market needs.
Further development and specialization of sectors in Increased risk for major environmental disasters within the region.
which the regions excels or has a strong potential to excel in
Internal market represents a considerable potential for growth with a potential access to large, stable and locally fast growing markets. Local environmental problems.
Better connections and use of ICT opens up for new target groups and enables development of life-long learning, involvement of youth, e-learning, e-governance.
Co-operation in policy-making, common welfare development, close positions at the EU level (government, policies) and common interests in the EU. Disability of public sector to keep up with the demands of an ever faster changing and globalizing society.
Co-operation between universities and R&D units, including more investments in research, strengthening cooperation between universities, educational institutions and enterprises, business clusters and improving the exchange of knowledge and experience. Effects of ever globalizing society and economy on the CBP.
Potential to develop better sustainable transport and infrastructure links, with a focus on ports and maritime connections. High level of mobility of highly educated work force within and outside the Central Baltic Region (CBR).
Co-operation between regions, cities and municipalities (urban and rural) to address common issues. Increasing disparities between sectors and regions with regards to availability of skilled workers.
Common promotion and marketing of the Central Baltic Area.
As we know, weaknesses at the same time can be interpreted as opportunities:
If we see a weak role of small and medium sized enterprises in the CBP economy and lack of new business creations and entrepreneurship, that means we should take a better look at qualities of business environment, support to venture and entrepreneurial start-ups and to consider our possibilities to make things better. A historical review of developments in management theory and practice, recent research of management education, integrated efforts of public and business administration reveal the ways of improvement in different levels of governance. Not all the opportunities are the lost ones.
If we find the threats in educational sector, we have to take necessary actions, revising underlying values, standards, procedures with courage, wisdom and commitment.
It can be concluded that in terms of global competition the Baltic Sea region is in a quite advantageous situation, but it has to be taken into account that advantages are not forever, because other countries are also investing in their resources like infrastructures and human resources. Keeping the position among the prosperous countries of the Baltic Sea region demands a thorough strategy for human resources development.
References:
[1] Dr. Christian Ketels and Professor Orjan Solvell. State of the Region Report 2006. The Baltic Sea Region - Top of Europe in Global Competition. Page 14. Retrieved January 23, 2007, from:
http://publish.capteco.com/bdf/summit 2006/website/State of the Region Report 06 .pdf
[2] Central Baltic Interreg IV A Programme 2007-2013. Cross-border co-operation programme under the European Territorial Co-operation objective. Third Draft of the Programme Document (15th of December 2006).
[3] Derek Torrington, Laura Hall. Personnel Management: A New Approach, Printice Hall International (UK) Ltd, 1991.
