IZVIRNI ZNANSTVENI ČLANEK - ORIGINAL SCIENTIFIC PARER
Prejeto/Received: Avgust 2013 Popravi jeno/Revised: September 2013 Sprejeto/Accepted: Oktober 2013
REGIONALIZATION OF SLOVENIA BY ESTABLISHING FUNCTIONAL REGIONS
Regionalizacija Slovenije z vzpostavljanjem funkcionalnih regij
Leonida Šnajder
Doktorska študentka na Ekonomsko-poslovni fakulteti, Univerza v Mariboru leonida.snajder@gmail.com
Vito Bobek
Univerza v Mariboru, Ekonomsko-poslovna fakulteta vito. bobek@uni-mb. si
Abstract
Slovenia is a country with a plurality of municipalities that are (in most cases) too small in terms of development and in need of more inducements for tourism, greater investment opportunities, and the establishment of shopping and logistics channels. Of Slovenia's 212 municipalities, 111 do not meet the statutory minimum level for the establishment of a municipality, which is reflected in the uneven development in various parts of the country. A similar problem has been faced by other countries (e.g., Austria), but they have resolved this problem to a satisfactory level, particularly by applying the concept of functional networking. The design and development of uniform regions, their connectedness, and their openness to cross-border cooperation are all crucial for the effective development of Slovenia as a whole, which will stimulate regional development based on functional integration. The purpose of this article is to examine whether it is possible to establish a functional region in Slovenia; we will explore the legal foundations, methods, and effects of such an establishment.
Keywords: regional development, functional region, establishment and effects of functional regions in Slovenia
Naše gospodarstvo / Our Economy Vol. 60, No. 1 -2, 2014 pp. 26-36
DOI: 10.7549/ourecon.2014.1-2.03
UDK: 332.14(497.4) JEL classification: H70, H83
Izvleček
Slovenija je država, ki bi morala biti zaradi velikega števila premajhnih občin - zlasti v razvojnem smislu -bolj zanimiva za turizem, naložbene priložnosti ter vzpostavljanje nakupovalnih in logističnih verig. V Sloveniji imamo 212 občin, od katerih jih kar 111 ne dosega zakonsko določenega minimalnega praga za ustanovitev občine, kar se odraža na neenakomerni razvitosti posameznih delov države. S podobnim problemom se soočajo tudi druge države, npr. Avstrija, kjer pa so ta problem zadovoljivo rešili, zlasti s konceptom funkcionalnega povezovanja. Trdimo, da so oblikovanje in razvoj funkcionalnih regij, njihova povezanost in odprtost za čezmejno sodelovanje ključnega pomena za učinkovit razvoj Slovenije kot celote, pri katerem bodo gonilo razvoja prav takšne regije. Namen članka je preveriti, ali je možno vzpostaviti funkcionalno regijo v Sloveniji; zanimali nas bodo pravne osnove ter načini in učinki vzpostavitve.
Ključne besede: regionalni razvoj, funkcionalna regija, vzpostavitev in učinki funkcionalne regije v Sloveniji
1 Introduction: Defining the problem
The increasing decentralization and devolution that mark the building of modern countries and the development of cooperation in Europe serve to increase the role of regions and municipalities, indicating that the institutional framework is getting ever closer to the needs of the regional economy. European trends reflect the general belief that economic growth, self-sustainable recovery.
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(lie quality of public services, and cili/en's democratic participation are more effective if the universally authoritative institutions are not generally centralized (Lindstrom, 2005; Vlaj. 2008). Nevertheless, since ils independence in 1991. Slovenia lias been considered one of the most centralized countries, even without a regional administrative level between (he cenlral government and the large number of mostly small municipalities (212 as of 2013).
In looking comparatively at the Slovenian position relative to indicalors of competitiveness among llie European Union (EU) member countries, it becomes evident that development in Slovenia is quite unbalanced (Kovacic, 2006). In accordance with applicable legislation and the rapid introduction of the reform of local government in Slovenia, we have municipalities that arc small, fragmented. and dependenl on the slate while also being functionally insufficient as smaller municipalities are incapable of performing numerous tasks. Consequently, this role has been taken over by (he slate, lo which power, influence, and centralization accrue. With the concentration of economic activities and population in a few areas, divergent conditions for life and work have been created. Differences have emerged in the spatial distribution of jobs, unemployment rales, and the educational structure of the population as well as in inadequate transport links. These problems arc particularly evident in the structurally less-developed and economically weaker areas with a predominantly agrarian orientation, in areas with demographic problems and low per capita income as well as in economically and socially unstable areas. The development of a particular area depends on ils cliaracleristics and potential utilization of a defined area over which they can exploit the potential A diverse country like Slovenia is difficult to control exclusively from (lie center: thus, decentralization, subsidiarity, and partnership represent primarily economic categories and not simply political categories.
In this brief article, we seek to highlight the complexity of any solution to the problem ofrcgionalization in Slovenia and present the integration and design of functional regions. Over the course of the article, we propose answers to the key questions necessary for the effective establishment of functional regions in Slovenia—namely, how lo conned small spatial units while taking into account their diversity and heterogeneity, which international comparisons (within (lie EU) to consult, and which arc the key parameters for the design (model). To this end. we first introduce regionalism in Slovenia as a basis for further reading in the second chapler. At the same lime, wc provide an example of how a similar issue was resolved in Austria. In the third section, wc present the definition of functional regions. Wc continue with Ihe legal basis for the eslablishment of a functional region, and in the fifth chapter we present the processes and mechanisms that wc propose for the establishment of functional regions in Slovenia. Wc conclude with the anticipated effects of the establishment and discussion.
2 Regionalism in Slovenia
After reviewing the history of Slovenia's rcgionaliza-tion. il becomes evident (hat the regionalizalion process was undertaken by numerous experts. Dirnbek and Hacek (2008) analyzed various existing regional divisions in Ihe areas of government administration, public administration. and the civil society sphere. By analyzing the so-called territorial elements used in constituting regions, they established thai a variety of factors leads to Ihe forinalion of specific areas that can be defined as regions (in the field of civil socieiy organizations, the wider public sector and public adininislration). At the same time, they found that organizations at the regional level are organized differently as a rcsull of specific activity units ai various levels coordinated by the headquarters. Slovenia is an extremely diverse country, and in thinking about the regionalization of Slovenia as an administrative organization, each physical geographical dimension gives rise to questions and doubts (Perko. 1998: Vlaj. 2008: Vriser. 2008).
The very process of regionalization in Slovenia has long been present, but it is far from being complete. With the reform of the Slovenian local self-government (1994). wc acquired a large number of small municipalities, most of which arc dependent on the stale as they arc unable to perform many tasks, which then devolve to the state and consequently serve lo enhance centralization inslead of regionalizalion. Today wc have small, fragmented and mostly unbalanced municipalities, especially in eastern Slovenia, which is evident from the carlogram depicted in Figure 1. This cartograin shows the population by municipality in Slovenia according to each dimension, from which it is evident that the majority of municipalities with populations below the statutory minimum threshold (al least 5.000 inhabitants) are in the eastern part of Slovenia.
The efficiency of the municipality depends on Ihe financing of tasks in accordance with (he constitution and the law. performed by municipalities and regulated by the Law on Local Government Financing (Financing of Municipalities Act, ZFO. Ur.l.RS 32/2006). Municipalities in Slovenia independently address local matters of public interest (original work), which is regulated by the acl or determined by law. For a local community lo do so effectively, it must achieve a level of autonomy in the area of finance, where Ihere is a need for a diverse range of financial resources with which to cover the cost of public goods. Brezovnik and Oplotnik (2003) compared the system of financing municipalities lo Ihe regime of financing schemes in the EU accession countries and in some EU member states. They concluded that the current model of financing for municipalities in Slov enia is unsuitable for the furl her development and even (he exislcncc of municipalit ies in Ihe future European environment.1
Kor more on the financing of local self-government in Slovenia, see Oplotnik and Brezovnik (2012).
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Figure 1. Number of people (by municipality) with regard to each stratum in Slovenia (Information relative to 01.07.2012— HALFYEAR 2012H2)
HALFYEAR: 2012H2
MEASUREMENTS: TOTAL POPULATION
382-2,416 (42) 2,432-3,958 (42) 3,992-5,993 (42) 6,022-11,960 (42) 12,119-280,278(43)
Source: Statistical Office of the Republic of Slovenia. Source limits areas: The Surveying and Mapping Authority of the Republic of Slovenia
Source: Statistical Office of the Republic of Slovenia (SURS. 2013)
Figure 2. Municipalities' income in terms ofpopulation in 2012
600 500 400 300 200 100 0
Municipal administration costs per capita in year 2012 (€)
557,8
529,54
258,84
Small municipalities (to 5,000 inhabitants)
i	r
Municipalities (from 5,000 to 10,000 inhabitants)
City municipalities (over 10,000 inhabitants)
Source: Statistical Office of the Republic of Slovenia, our own calculations (2013)
The establishment of a municipality (a small one) is usually associated with development and is a very good development tool, but only until financial problems arise, because the creation of a county carries with it considerable responsibility and liability. Accordingly, proposals have already been made to the government for combining smaller municipalities in the form of a citizens' initiative (Republika Slovenija, Vlada Republike Slovenije, 2013). At the same time, the Council of Europe Expert Group came before the Congress of Local and Regional Authorities to recommend the regulation of local self-government
in Slovenia. This indicated that the number of municipalities is still increasing and that stricter enforcement of the Slovenian Law on Local Self-Government, which sets a minimum of 5,000 inhabitants for the establishment of new municipalities, is desirable in order to avoid fragmentation, coupled with insufficient funding (Cokert, 2005).
It can be deduced from the graph in Figure 2 that smaller municipalities are more expensive; Figure 2 shows the cost of local government per capita in 2012 and municipal revenues to cover appropriate use in 2012. Using data from
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Leonida Snajder, Vito Boeei;: Regionalization of Slovenia by Establishing Functional Regions
Table 1. NationaVStructures (NUTS)
	NUTS 1		NUTS 2		NUTS 3		LAU 1		LAU 2	
AT	Gruppen von Bundesländern	3	Bundesländer	9	Gruppen von politischen Bezirken	35	-		Gemeinden	2357
SI	-	1	Cohesion region	2	Statistical regions	12	Administrative units	58	Municipalities	210
AT: Austria, SI: Slovenia.
Source: European Commission, Eurostat (2011)
the Statistical Office of the Republic of Slovenia, we made our own calculations. The municipalities are divided into three classes: Small municipalities are those below the legal limit of (at least) 5,000 inhabitants, accounting for 110 municipalities in Slovenia. The next class is medium-sized municipalities, ranging between 5,000 and 10,000 inhabitants; 48 of these are in Slovenia. Finally, municipalities with more than 10,000 inhabitants account for 53 municipalities in Slovenia. Figure 2 clearly shows the highest cost per capita for municipal administration in the small municipalities—namely, €557.8 per capita—followed by medium-sized municipalities at €529.54 and larger municipalities at €258.84 per capita.
A similar problem arose in the neighboring country of Austria, where—compared to Slovenia—they have an even larger number of small municipalities. The problem was addressed by establishing what were called "small regions" (Kleinregionen). A small region can be founded by voluntary cooperation among several municipalities that are geographically contiguous and whose fundamental purpose is the effective implementation of municipal functions, use of synergies, development potential, and the creation of a regional consciousness (Andrieu, 2008).
Table 1 shows the dominance of small municipalities in Austria—that is, the less populous ones. According to data from 2011, this includes 210 municipalities in Slovenia and 2,357 in Austria (ratio 1:11, 22), while the population ratio is 1:4.1. The comparison is based on lower territorial units (municipalities), called local administrative units (LAU2), which are not subject to the regulation NUTS3 (SURS, 2012).
In this area, both Slovenia and Austria have pursued the EU development strategy and are trying to turn disadvantages into opportunities for development. To achieve this goal, the key structure of regional governance in this case referred to the need to develop innovative and inclusive regional structures for local governance, ones that will support the process of compliance with the EU Structural Funds, particularly the European Regional Development
• To meet the demand for statistics at the local level, Eurostat established a system of local administrative units (LAUs) compatible with NUTS (European Commission, Eurostat, 2011). ' The NUTS classification (nomenclature of territorial units for statistics) is a hierarchical system for dividing the EU (European Commission, Eurostat, 2012).
Fund (Bobek, 2010). The goal of effective, proportionate development involves independent regions defined on the basis of functional characteristics, whereby they established the concept of a regional economy—namely, an area in which they operate markets that lead to the agglomeration of benefits and to subsequent networking sites (i.e., networking), the operation of competition, cooperation, etc.
3 Definition of Functional Regions
A functional region is a territorial unit, resulting from organized socio-economic ties, regardless of its geographical features or historical relations. From this, it follows that the functional integration of municipalities constitutes a functional region, which is characterized by strong, system-related spatial units marked by a high frequency of internal, regional economic interactions, such as trade goods and services, a well-developed internal regional infrastructure, job mobility, and other activities. Within the functional regions arise numerous economic and social interactions. Functional regions are mainly composed of one or more centers and their hinterlands. The size of a functional region is a very important indicator of the size and importance of the labor market (Konjar et al., 2010: Noronha, 1986; OECD, 2012).
Several authors have examined the potential establishment of functional regions. Drobne and others have analyzed the decentralization of Slovenia, using three approaches in terms of the demarcation of functional regions as follows: Based on daily commuters to work, the labor market method is to be used: the method involving areas of labor mobility and the multi-integration method follow. During the research they encountered many difficulties. They indicate that the choice of method is one of the key problems in the demarcation of functional regions; just because the method has been used successfully in many countries does not necessarily mean that it is also appropriate for Slovenia.
Slovenia shows the need for the introduction of regional planning and a level of regional local government, which would allow the decentralization and transfer of state powers to the region, as it will help considerably in striking a balance between local communities and the state (Drobne et al., 2010). This marks the starting point of our study as the process of building functional regions, as mentioned, brings together the interests of the population as well as sustainable development of national spatial policies. In a
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simple and cffcclivc form, the cslablishmcnl of a functional region allows municipalities to engage in strengthening cooperation, so that each municipality retains its autonomy and identity. At the same lime, the cslablishmcnl of a functional region increases the quality of services, works against state centralization, and provides a stimulus for regional economic development, as evidenced by international examples of successful development breakthroughs for companies, cities, regions, and entire countries.
One instance of development breakthrough among undeveloped areas with functional integration is Vulkanland in Austria. With the aim of promoting local, green, and high -voltage self-management, they functionally conncclcd 79 municipalities through a regional project with the help of the umbrella brand. They have developed a competitive and sustainable business strategy and gained funding from the EU through the regional project. Vulkanland has become an attractive destination to live and work (Peer. 2010; Pfciffcr. 2010).
The aim is to enhance the functional integration of municipalities. specifically through Ihc establishment of functional regions for several municipalities, the main objective of which is to link regional purchasing power and the domestic regional market—a link that can stabilize most of the sectors and development. Functional regions increasingly play an independent role in the know ledge economy. They represent a dynamic market, including other functional regions associated with the flow of information, knowledge, goods, and services.
4 Legislation
4.1 Slovenia
The history of the local government in Slovenia reveals the strong role of the Constitutional Court, which, with its audits in accordance with the constitution, has established an understanding of the principles of local self-government, and the concept of the county, as it was in the previous decade in the field of local self-government in Slovenia, is very dynamic. When Slovenia gained independence in 1991. the new constitution established a renewed basis for modern local government. Two years later, the Local Government law was enacted in the same year as the law on local elections and the 1994 Law on the Financing of Municipalities. These new municipalities (147) were established on January 1. 1995. At independence. Slovenia had 62 municipalities: today, it has 212. of which 111 do not meet the statutory' threshold of 5.000 inhabitants because, in the process of their foundation, geographic, border, ethnic, historical. and economic reasons have prevailed. The period following the implementation of local self-government brought many changes as the number of municipalities increased. An increasing number of the smaller municipalities have not been able to perform many tasks, which has intensified the process of centralization, only deepening the differences between areas
In accordance with the applicable legal criteria for the establishment of a municipality in Slovenia, there have to be at least 5,000 inhabitants. In certain circumstances. for geographic, border, ethnic, historical, or economic reasons, a municipality with fewer than 5.000 can be established. but not one with fewer than 2,000 inhabitants. As the basic local governments within the frame of the constitution and the law. municipalities independently execute their affairs and exercise functions that arc transferred to them by law (Local Government Act. ZLS. Official Gazette of RS. no. 71/93). Twenty-six municipalities in Slovenia have fewer than 2.000 residents, which is below the statutory threshold (the smallest is Hodos, which lists 381 inhabitants, according to 2012 data; we considered the average population of municipalities in 2012 according to SURS).
In Slovenia, the so-called "development regions" do not have legal effects as autonomous regions do as they do not have their own regional legislation or even regional budget.
The legal basis for Ihc establishment of functional regions in Slovenia is already enshrined in the Constitution of the Republic of Slovenia (Official Gazette of RS. no. 33/1991), which states that people exercise local self-government in municipalities and other local communities (Constitution. Article 138). The municipality comprises the settlement or several settlements associated with common interests and the needs of the population (Constitution. Article 139). With prior consent from the municipality or w idcr self-governing local communities, the state can transfer by law to the municipality or wider sclf-govcr-ning local community individual tasks under national jurisdiction as long as it also provides the necessary assets. In matters where the local authorities have received such transferred tasks from the state, the state authorities also provide supervision over their proper and professional work performance (Constitution. Article 140). Municipalities are free to decide to join the wider local community or the region to regulate and manage local affairs of wider importance. With the state's agreement, they can transfer certain matters under state jurisdiction in their original jurisdiction and determine Ihc participation of these communities in proposing and performing under national jurisdiction. Such principles and criteria for the transfer of power as discussed herein arc regulated by law (Constitution. Article 143).
In addition, the constitution is the basis for the establishment of functional regions in the Law on Local Self-Go-vcrnmcnt (Official Gazette of RS, ZLS. no. 94/2007), which states that the local self-governing communities should work together on the principles of solidarity and voluntary action; to this end, they can combine means and establish joint bodies, organizations, and agencies to address common issues. Local self-government is also involved with the local communities of other countries and with international organizations and local communities (ZLS. Article 6). For this purpose, the establishment of associations can pool resources and, in accordance with Ihc law, establish joint
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authoritics and joint municipal authority administration as well as set up and manage funds, public institutions, public companies, and institutions. We arc dealing with public institutions and enterprises: the founder is the state or the local government. State and local governments are territorial systems whose duties, powers, funding, decision-making bodies, etc.. arc determined by the law.
Financial incentives for the association of municipalities in terms of establishing a municipal government arc set out in the Act on the Financing of Municipalities (Official Gazette of RS. ZFO. no. 123/2006). Municipalities are to be provided with additional funds from the state budget for co-financing (implementation of speci fic tasks orprograms. investments, joint municipal administration task performance) (ZFO. Articlc 18). This indicates that the municipalities. with the cooperation of public services or the activities of their contractors (joint public institutions and companies), must (Milatovic el al., 2002, p. 126):
-	ensure the implementation of the statutory duties of municipalities (including public services):
-	implement the founder's rights and obligations: and
-	ensure the mutual congrucncy of decisions.
4.2 Austria
After Austria's accession to the EU in 1995. the Federal Chancellery, together with the provinces, succccdcd in developing an innovative and inclusive regional governance structure for local consistency, particularly the European Regional Development Fund. In small organizations, associations. orsocictics (members of these associations include municipalities, businesses, and individuals) for regional management, they have managed to establish thousands of projects in the region to meet the needs of the population al the local level and regulate the balance betw een the city and country (European Commission—Panorama. 2012).
The legal basis for the functional regions is Law § 20 on Spatial Planning (Raumordnungsgesetz 1974). Furthermore. the cooperation between municipalities falls under the guidelines of the Association Law. meaning both associations of municipalities (Gemeindenverbtinden) and administrative communities (Verwaltimgsgemeinschafleri) can be formed (Gcsctzesstand ROG. 1977).
In Austria an ideal structure for a functional region is a group of 6 to 12 municipalities, with approximately 19.000 to 38.000 inhabitants, which can cope effectively with future challenges. In Slovenia, in terms of population, an ideal structure would consist of two to four municipalities; however, in every case there can be a different number of participants. The design concept of functional regions is voluntary and represents a path toward and incentive for the more intensive integration of municipalities. This kind of cooperation is an effective form of municipal regional governance at the local level, thereby meeting needs al the local level. Al the same time, such an association aims to ensure a fair balance between the central and peripheral parts of the country.
5 Processes and Mechanisms in the Establishment
of Functional Regions in Slovenia
The discussion on the origins of future landscapes in Slovenia has stalled, and through the article we provide new solutions—namely, new processes and mechanisms of cooperation between municipalities, establishing functional regions (i.e., the implementation of the regional economy ) that would not view specific areas (e.g., industry, energy, agriculture, forestry, tourism, marketing, services) separately, but as more integrated. A regional economy equates living space with commercial space, so that in a small diverse country like Slovenia, integration based on functional characteristics is crucial for the competitiveness of regions within the country, which is rcllcctcd in the European court. With the development of functional regions, the borders of municipalities are exceeded and cooperation w ithin the newly created regions w ith the help of external assistance explores and takes advantage of unused potentials.
The concept of the development of functional regions includes measures affecting economic areas, tourism, agriculture, and infrastructure as well as the field of supply, waste disposal, and energy. Spatial planning is beyond the boundaries of municipalities. In this way. it can take intermunicipal needs into account and can promote the integrated development of functional regions. The concept of the development of functional regions requires extensive discussion among the municipalities involved in the functional region and the construction of a basis for positive development in the future.
Based on strategic planning through the concept of the development of functional regions, such regions can also plan for the continuous implementation of common tasks. This includes community management (human resources, procurement, supply resources, information technology) and economic development agencies, such as entrepreneurial centers or structured coopération in the field of tourism. In addition, a functional region can include the construction of infrastructure, such as schools, roads, and childcare facilities.
Each functional region consists of those municipalities combined in various fields. Such integration can only succeed if it is v oluntary and based on a careful discussion of the potential in each functional region.
Each municipality elects its mayor as the leading authority of the functional region, where decisions arc made. This body then appoints the chair, which is the external representative of the functional region. This representative is expected to alternate, but the continuity of this function demands at least a few- years. Important decisions involving functional regions can be made in a joint meeting of all members of municipal councils/municipalities that comprise the functional region.
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Figure 3. The concept of the development offunctional regions
Source: Authors
Critical to the quality of partnerships and the sustaina-bility of functional municipal regions is the monitoring of and support for the process. In the framework of the development and implementation of functional regional development, a concept for functional regional development and professional support for municipalities in implementing the development concept must be provided. This process of monitoring competences is adapted to an individual functional region; county authorities can then gain professional know-how through seminars and courses. To assist in ensuring the exchange of experience and the achievement of goals arising from the participation that contribute to a common municipal consciousness, annual events can be observed (e.g.. Functional Region Day).
Priority should be given to cooperation projects among municipalities in terms of creating functional regions involving region/province/country (in the case of Slovenia, which does not yet have the management level in place, this role should be taken over by the state). For these purposes, it would be necessary to develop programs for advancing the formation of functional regions, which would provide additional incentives for the creation of such projects.
6 Expected Effects of Establishing
Functional Regions
The development of a functional region also implies the formation of regional identity, which will have a sustainable positive effect on further development in the region.
To ensure the better use of resources in a functional region, the first task is to emphasize and highlight the existing infrastructure, schools, municipal buildings, etc., and any pre-existing cooperation. One outcome of the establishment of a functional region and its development concept is the creation of regional brands and products. For the general population in the region, a new consciousness of regional identity, new ideas, and products based on these regional brands and products will be developed from the bottom up. By building on new regional identity, added value will later accrue; such value will be impossible to ignore after a few years. The formulation of a wholesome corporate identity (logo, website, etc.) is therefore a logical consequence of such development.
Within a functional region, solutions for regional tasks and issues become decentralized and are based on direct contact with citizens. As citizens will work together in finding solutions, over time the importance of these regions will increase. The key effects of the establishment of functional region are therefore as follows:
Cost savings (saving plans). For the cost-effective performance of tasks within the jurisdiction of municipalities (water supply, sewerage, waste disposal, flood prevention, etc.), it makes sense to go beyond municipal borders and unite efforts with other municipalities facing the same challenges. At the same time, an important source of savings is the use of renewable energy sources as risky imported energy, resource scarcity, and climate conditions will even-
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Leonida Snajder, Vito Bobee: Regionauzation of Slovenia by Establishing Functional Regions
Figure 4. Successive building activities of functional regions
Phase 1: Formal establishment of functional region
The founding agreement on integrated sustainable development for the region
Mayoral election as the leading authority of the region (chairman)
Decisions made by municipal councils
Actors involved
Assembly (Mayor and municipal council)
Management of functional region
Management of functional region (directors of the management board)
Professional support (experts) Affiliate Consultants
Project team
	Role	
f Decision on the development concept of		
	functional region	
Coordination/establishment of functional region
Professional knowledge
Monitoring process (experts' knowledge)
I
Phase 2: Preparatory phase
Definitions of the region's identity and core competencies (workshops, conferences of the future of the region and evaluation processes) of values and regional competences
\
Development of a coherent vision for the region
Establishment of functional regions and regional management:
•	formation of project group for regional initiatives,
•	"regional hub"—center for events and training,
•	definition of the actions and concepts necessary for their activities particularly in terms of potential job creation
Definition of a regional brand
Phase 3: Implementation phase
Creation of a common regional consciousness
Associated range of local products and services (regional brands)
Education, training—from mediation to business courses and project management
Regional media content, a single web portal
Establishment of partnerships and technical assistance in the implementation of ideas
Linked and coordinated events, awards system, and acknowledgments
Establishment of cross-border networks (Vulkanland in Austria)
Source: Authors
NG, :■'■ . 1 -2/2014 l/'.'IKN /'NAM i IVI Kl :IAN /O -NA ■ :l NI I C fvV'E I'
tually take a toll at the global, national, and regional levels. Energy savings and the use of renewable energy sources (wind, forest, the sun) will have positive effects not only on the environment, but also on the budget and the regional economy.
Establishment of logistics and shopping channels. The regional center is an effective instrument for joint intcrur-ban action in the transport sector as increasing mobility, the growing volume of traffic, and the need for a safe and quality-oriented habitat arc major challenges for municipalities. Long-term measures will be needed to maintain mobility through regional means of transport in the way of preserving the habitat and with the participation of several municipalities and counties.
Obtaining EU funding. Bccausc of the need for the long-term. active support of the regional government, as well as businesses and NGOs (non-governmental organizations), an "entrepreneurial ccntcrto attract EU funding to the region" should be established.
Providing jobs. Especially for large projects, cooperation between the public and private sectors is increasingly important. It is crucial that communities focus on broad objectives as cooperation with other municipalities has great potential and. with proper financial management, can make the best ideas into reality.
7 Conclusion
Slovenia is a land of varied historical, geographical, demographic. economic, cultural, and linguistic dimensions. Consequently, the regionalization of Slovenia since the preparation of the Constitution of the Republic of Slovenia has been a real scientific problem. Proportionate development is a fundamental societal challenge: it is ncccssary to reduce the differences and activate endogenous potential countries to cncouragc municipalities to conncct in order to promote competitiveness and maintain identity—not just in the region, but in the country as a whole.
Individual parts of Slovenia have unequal positions, so integration is necessary because only together can we reduce the gap between the more developed and less developed parts of Slovenia. Many international comparisons. the European Union documents, and research offer guidance to fill the gap between the (loo) small municipalities and (lie state and the establishment of functional regions (i.e.. regions with their own indigenous identity): we can create an environment that will enable the implementation of the principle of subsidiary in ordcrto achieve an effective development of the country. All of this will not be possible without the activation of social capital in the community. Perhaps it is the time of economic crisis that will draw us to our potential, thereby allowing a greater sensitivity to com-munitv-connccting projects. The desirability of integration enables the establishment of a functional region, which represents not only a strongly related spatial unit with a high frequency of internal regional economic interactions, a wel-
l-developed regional infrastructure, but also an execution of the so-called regional self-sufficient economy, which represents the basis of scicntific. technological, and entrepreneurial knowledge in the form of knowledge in companies and other organizations as well as the human factor that functions in a functional region.
Integration into the European space requires regions that act decisively and are able to identify their competitive advantages. The basic instrument for enhancing regional development and. thus, competitiveness is fundra-ising. Slovenia, as an EU member, has the opportunity to obtain financial incentives from the EU Regional Development Fund and therefore fulfill the needs and interests of the regional population. It is necessary to bear in mind that vvc arc talking about long-term development and creating a more competitive environment, which is a fertile space for the persistent and the innovative. The process of the creation of succcssful regions is closely linked with a clear vision and an appropriate regional marketing. In this proccss. a key role is played by the management of municipalities that act as initiators of an innovative and cffcctivc approach. The policy of the regional cconomy equates the habitat to economics, but always bears in mind the nature that is the foundation of all actions. The lives of the residents of the region arc closely linked with nature, sustainable development. quality (bio) products, and mutual cooperation.
According to the characteristics of Slovenia, it is possible to create many functional regions as spatial planning and development should not be limited exclusively to individual municipalities, but groups of municipalities. Accordingly, they must develop a common infrastructure, as business decisions and decisions of foreign investors also depend on the flexibility and offers of the best infrastructure. The future is based on strengthening the mutual cooperation of neighboring municipalities apart from the fact that cach municipality retains its autonomy and identity.
The aim is to strengthen communities through the establishment of functional regions in which several municipalities will be included. Through functional regions, municipalities can adopt a simple and cost-effective form to:
-	provide a higher quality of their services;
-	act against centralization in the country;
-	give a joint initiative for regional economic
development:
-	contribute to the synergy effects of inter-municipal cooperation in all fields: and
-	maintain identity as a community and as a region.
Through the joint development conccpt. creating functional regions to promote regional cohesion is stimulated. The joint concept has positive impacts on regional development. quality of life, and the more efficient execution of the tasks and ultimately on helping to overcome the challenges of the future.
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Li' :kiiîa Šk.-\i>i k. Vu- ■ B- k: Ri■ -h >i ai /am. ;k > >i S< »vima 1 E ii\g F..n-:iionai Ri¡s
The functional regions have lo represent (lie central concept of the landscape as they understand the needs, opportunities, and threats of the region and arc able to effectively shape the future. The functional region will create a permanent base for cooperation, which is independent of the current arrangements and programming periods. The functional region in Slovenia represents an entirely new phenomenon. Based on the positive experiences from the neighboring Austria (Yulkanland) and the presented formal-legal aspects of the establishments in Slovenia, it is reasonable to claim that the functional region can be model of Slovenia in practice.
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NG, st. 1 -2/2014 Izvirni znanstveni članki/Original scientific papers
Leonida Šnajder graduated from the international trade program at the Faculty of Economics and Business of the University of Maribor. She is employed in the economy sector, where she is acquiring experience for a better understanding of the economy and the business system in the international environment. She is a student in a doctoral study program of Economic and Business Sciences at the Faculty of Economics and Business. Her work focuses on regional development.
Leonida Šnajder je diplomirala na Ekonomsko-poslovni fakulteti Univerze v Mariboru na smeri Mednarodna menjava. Zaposlena je v gospodarstvu, kjer pridobiva izkušnje za boljše razumevanje gospodarstva in poslovnega sistema v mednarodnem okolju. Na Ekonomsko-poslovni fakulteti je študentka doktorskega programa Ekonomske in poslovne vede. Njeno raziskovalno delo je usmerjeno v obravnavo regionalnega razvoja.
Vito Bobek, Ph.D., currently works as a professor of international management at the University of Applied Sciences FH Joanneum (Graz, Austria) and the University of Maribor (Slovenia). He is also a manager and owner of Palemid—Consulting, Research, Education LLC. He serves as a member of the supervisory board at KBM Infond (Investment company, Maribor, Slovenia), regional editor for Central and Eastern Europe at European Journal of International Management, member of the editorial board at International Journal of Trade and Global Markets, member of the editorial board at Imago Europae (Florence, Italy), and member of Team Europe Slovenia. His research interests are related to international business, strategic management, regional economic integration, cross-cultural management, and management of cities and regions.
Prof. dr. Vito Bobek trenutno deluje kot profesor mednarodnega menedzmenta na Univerzi za uporabne znanosti FH Joanneum v Gradcu v Avstriji in na Univerzi v Mariboru. Hkrati deluje tudi kot direktor in lastnik Palemid - svetovanje, raziskovanje, izobrdževanje, d. o. o. Je član nadzornega sveta pri KBM< Infond (investicijska driižba, Maribor), regionalni urednik za srednjo in vzhodno Evropo pri časopisu European Journal of International Management, član uredniškega odbora pri časopisih International Journal of International Management in Imago Europae (Firence, Italija) ter član Team Europe Slovenije. Njegova raziskovalna področja so povezana z mednarodnim poslovanjem, strateškim menedžmen-tom, regionalnim gospodarskim povezovanjem, medkulturnim menedžmentom ter upravljanjem mest in regij.
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