UNIVERSITY OF PÉCS Faculty of Natural Sciences Doctoral School of Earth Sciences Industrial subregions in the catchment area of Dunaferr PhD dissertation theses Tamás Kıkuti Supervisors: Dr. Norbert Pap

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UNIVERSITY OF PÉCS Faculty of Natural Sciences Doctoral School of Earth Sciences Industrial subregions in the catchment area of Dunaferr PhD dissertation theses Tamás Kıkuti Supervisors: Dr. Norbert Pap associate professor Dr. András Trócsányi associate professor Pécs, I. Introduction Subregions, being characteristic of the economic dominance of only one corporation on the labour market, are in a unique situation as they are intensely specialized and strongly depend on the corporation. The present survey is extremely important as due to its region formation effect may change the region either in a positive or a negative direction. If economy relies only on one pillar or builds on one dominant centre the consequences of its downfall are incalculable and reach out to every point of the region. One of the most severe problems of developed market economies is the high unemployment rate and the high rate of those becoming long-term unemployed. This fact has a dramatic effect both on society and economy. Known from experiences, economic development does not directly result in a decrease in the number of unemployed as technical improvement may make complete professions or particular branches redundant. In monocultural milieu a very strong system of dependency can evolve as economy and society both gather around the same central point. Proven by several surveys the statistical subregion of Dunaújváros and its actual catchment area are not congruent. The role of the city is significant in the region. Processes taking place here affect the Central and South- Transdanubia regions, in certain relations they even stretch over the line of the Danube. Therefore if we would like to think over the region s future development we most certainly have to take into account the geographic location of Dunaújváros and its region formational power. 2 Picture 1: The area of Dunaújváros Up until recent times (mainly till the appearance of Hankook) Dunaferr PLC was the driving force and almost exclusive controller of local development, where in the mid-1990s they decided not to send people to the streets for economic changes and further development but rather choose to reorganize labour force according to the company s needs. Dunaferr bound itself to employment rate in its official human resources strategy and since its coming into existence the inner and outer relations have changed. A large scale staff work force reduction is continuously in the air but it is rather complex question having an effect on the city, moreover to the entire subregion. The topic is very much on the agenda, the company is aware of the fact that from the seeming labour shortage of earlier times they got to temporary redundancy in certain areas. It has been proved that in certain areas redundancy while in other areas labour shortage occurs. 3 Reorganization would be necessary but the country s training system and mobility habits do not allow that. The occurrence of hectic depression in steel industry and the change in the ownership further strengthened these impacts. The changes that happened in the past two years somewhat changed this partiality and helped to decrease the defencelessness coming from the dependence on only one corporation. My choice of topic after all the facts mentioned above is also motivated by my personal relation to the area. I was born in Dunaújváros and all my family members for generations have worked in the Danube Ironworks and later on in Dunaferr. Just like in the life of the majority of the inhabitants many phases of my life so far was strongly connected to the fate of the main employee of the region. In this fragile situation of this Subregion the role of communication gets upgraded, therefore in this dissertation the chapter related to social dialog is treated with a special emphasis. II. Aims The aim of the researches described in the dissertation is to give a comprehensive picture about the subregion s main concern, the vulnerability arising from lack of diversification in employment. The unhidden aim of the dissertation is to provide a comprehensive, transparent basis for further research. I wish to show that to what extent the intensified regional differences influence the operation of the society and economy, their efficiency, and find the answers to the question of what effect economic differences have on societal development and vice versa. Therefore, I will approach the problem from two sides. On the one hand how regional processes influence economic differences, while on the other hand how economic differences affect the origination and formation of regional inequalities. The effect of urban spatial structure and economic situation on society in the past and present has also been examined. 4 In the focus of analyses there are questions researching the economicsocietal problems of the region and searching the possible solutions. As a conclusion it can be said that drawing up an economic spatial-structure and framing spatial types that can characterize the regional structure of economic and social environment is justified. The dissertation presents and analyzes the economic and social specifications of Dunaújváros subregion in a strong correlation to the development of Danube Ironworks. While dealing with the topic I will also present the composition of workers/expert of the company and the changes of its labour force. The dissertation states that similarly to national processes, differentiation and segregation strengthened in the examined district as well. Both in the dimensions of economy and settlements I presumed the widening of relations. The relations, even if to a small extent, moved from the hierarchic state towards the horizontal. The dissertation with regards to the details is willing to fulfil the following aims: Analysing the wider environment of the society and economy. Examining the demographic structure, the age composition of the inhabitants and analysing the educational level of the population. Revealing the possibilities and dangers through characterization of the strengths and weaknesses of the subregion. Answering the question of what changes the local economy went through and the effect they had on the economy. Introducing the changes in the employment policy of the Danube Ironworks. Describing the mode of actions of the changes Dunaferr had on the subregion. The effects of recent investments (mainly the appearance of Hankook). Presenting the unemployment situation of the given subregion. 5 Presenting the social communication mainly based on questionnairing of the subregion. While studying the reference literature of the aforementioned subregion intensively I found that the interdisciplinary aspect characteristic of urban geography is not so frequently applies, therefore I concentrated on complexity in this respect as well. 6 III. Research methods From the point of view of the research aspect the preparations of the dissertation cannot be linked to any of the paradigm. The methods reflect both the aspect that wishes to certify the theory via statistics and the geographic mentality of individual questionnairing that searches for the general rules of individual decision making and behaviour. When surveying regional units the biggest problem is the adequate choice of the regional unit. Researches so far have determined several subregions, from statistic subregion to educational subregion. The problem is that only in the smallest proportion of these cases do determinations coincide. They often overlap but almost never are identical. In Hungary a different subregion can be assigned to every process. Settlements are getting assigned to the processes and not the system adapts to the subregion. Since the topic area is being researched a complex survey was never carried out. Earlier data, research results connected to Subregional Research Team, HCSO 1 data, OFA 2 researches and data and thoughts of the Development Plan have never been summarized in one study. Statistical data can be found separately for given topic areas, but they are not systematized, they do not constitute to a complex whole. To accomplish the aims of my dissertation survey of the subregion seemed the most appropriate as monocultural labour market specifications prove most effectual here and the application of space-perception may be the most resultful in this context. There are several lookouts throughout the dissertation for the comparison and interpretation as well as for the better understanding of the analysis. 1 Hungarian Central Statistical Office (KSH) 2 National Employment Foundation (OFA) 7 The topic of the dissertation requires the use of statistical data. The published statistical data used as primer source comes from the databases of HCSO and the census of 2001, from the HCSO s 2002 database of Fejér county, from OFA researches and from the works of the Subregional Research Team. In the framework of individual research besides statistical data analysis and data processing other methods were also applied such as document analysis, questionnairing the majors of the settlements in the subregions and interviews with local workers. The unique features of the methods applied to the topics of the certain chapters: Describing the regional structure those data could be processed the best which strongly reveal the regional differences. Thus among the economic indicators for example the number of enterprises per capita, among the societal indicators the number of divorces per a 1000 inhabitant and the number of secondary school students per a 1000 inhabitants were the most suitable. Among the societal and social indicators employment and unemployment rata play a highlighted role. These data and indicators were selected from county yearbooks published by HCSO and from the Labour Market Mirror and systematized them with spreadsheet application. Besides the past demographic processes demographic data also reveal the attraction of a city, therefore provide reinforcement to the explanation of several processes. Analysing the composition of population according to several different aspects was effective in understanding regional processes and in the long-term outlook. When analysing the documents I reviewed those laws and plan documentations Development Plan, municipal law, decrees, Labour Law, National Spatial Development Concept that bear some relations to economy and society. Data of educational institutions well represent institutions of the subregion taking into account their local characteristics. 8 In case of the catchment area in the commuter relations I compared the relations between the residence and the workplace of commuter workers, for this analysis the employer provided the necessary data. I made interviews with the leadership of the main employer as well as with the prominent leaders of higher education. I also visited the municipalities of the subregion, where usually the focus of conversation fell on the economic strategy of the settlement and the subregional social communication. As a crucial element of the research a questionnaire analysis was carried out that included all majors of the subregion in order to aim at the tripartite principle (municipality employer representation of interest). In connection to this a focal point was the cooperation between employers and employees in a monocultural environment. The content of the questionnaire was about getting familiar with the characteristics of the representation of interest that are in social communication with the municipalities and employers, analysing the framework and operational rules of this connection, revealing the demands on both individual and subregional levels. A significant novelty of the dissertation is the above described and applied, combined research method the help of which the occurring synergic combination of effects was exploited. For the period of the survey I chose the time of the millennium ending in 2002 that was indicated form several aspects. On the one hand I relied on the data of the census of 2001 for comparative analyses, while on the other hand statistical subregional system was intact at this point, therefore data can be compared to earlier subregional data. The new regulations acknowledged in 2003, implemented 1 January 2004 reorganized the earlier structure of the subregion of Dunaújváros. The statistical subregion previously consisted of 17 settlements, now it disintegrated into smaller, multifunctional subregions. Besides Dunaújváros, the earlier chief town of the district Adony appeared as subregional centre, and another small 9 town, Ercsi (earlier belonging to Dunaújváros) has also received a new subregion. The changes of radically made it difficult to carry out the comparative analysis in subregional processes, and after that it would have only been possible to build it up from statistical data of the settlements, and it is impossible to follow certain economic and social processes this way. The statistical analysis and data of the short period that passed since the reformation of the subregional structure is not yet suitable to present an exact picture of the freshest social, economic and other processes of the subregion. However, I intended to support the changes happening in the subregion, the developments and real-economy processes with actual data and according to the present state. Last but not least the preparatory phase of the privatization of Dunaferr membership group coincided with this period after which a new era started in the life of the corporation. IV. Findings It is worth organizing the findings of the survey into certain groups. The first set summarizes the results of those analyses based on which the conclusions of swot analysis revealing the situation of the subregion become ascertained. The second set includes the researches based on demographic relations, economic activity and unemployment characteristics connected to the subregion s human resources, the questionnairing and structured interviews and their conclusions. The third set marks the power centre that determines the commuter, entrepreneurial and educational catchment area of the surveyed subregion s urban spatial structural texture along the lines of the conclusion of the related analyses, in addition proves the special region-organizational role of the main employer by revealing the labour force marketing and the special labour force catchment area. The 10 above listed sets will be shown based on the research finding of the dissertation. 1. The most important statements of the swot analysis carried out in the course of the dissertation revealing the situation of the Subregion are the following: Up until recently the economic development of the subregion was determined by Dunaferr in 65-70%. Besides Dunaferr significant investments except the Paper Factory of Dunaújváros (Dunapack JSC at present) were not present in the region. Partly due to the infrastructural development and the newly built M6 motorway-section Hankook Tire was established in 2007 and became active in the summer of Hankook Tire is the world s seventh biggest South Korean tire factory providing job for 1500 people up until 2008 in the first phase. Due to the shortage of this period it is impossible to picture the effect of the investment on the subregion in an exact way, but it is a fact that a new power-centre came into existence in the structure of the subregion, which both directly and indirectly, and in every indicator caused fundamental changes in the economic and social structure of the subregion. It would be excellent to establish a logistic centre in the subregion as due to its geographic location and possibilities it would highly suit this need. Regarding water transport the limitations towards the South are dissolving, the subregional expansion is strongly influenced by the building of the Danube-bridge; furthermore it would allow the development of a public harbour. After the building of motorway M6 Dunaújváros and its area has become and is becoming an attractive settlement for investors. Since the opening of the Budapest-Dunaújváros section of motorway M6 it is a great advantage for the region. M6 partly overtook the busy and less safe main road 6 and made it possible to reach the capital within a long desired hour. Motorway 6 is part of the huge European highway system (Corridor Vc) that connects the Baltic region with the South Adriatic region (Gdansk-Ploce). The 11 influence of the opening of this short, altogether 60 km long section of the motorway can already be felt, mainly in the appearance of international corporations and in the quicker and more efficient commuting of employees living in settlements along the motorway. However, the motorways will only reach its full effect when the entire Hungarian section of the motorway is finished, it reaches the borders and connects to the international networks. A small defect is the delay of the Budapest-Érd section which makes it impossible to reach M6 from M0 for now. The Dunaújváros Bridge also called Pentele bridge was built after a long planning and preparation between together with the roads connecting to it. For now the bridge only established local connection with Dunavecse on the opposite bank as the building works of the connecting roads and motorway M8 have not even started yet. However, the local effects of the bridge can already be felt in the increased number if commuter from the small settlements of the Great Hungarian Plain which actually coincided with the start of production in Hankook. The building of M8 and its being connected to motorway M4 may bring out the real value of the bridge, which at the same time may make Dunaújváros not only a North-South but also East-West point of junction. Railway freight traffic is outstanding on a national level however railway development and expansion of track would be necessary. The service sector is present but strongly connected to the certain industrial companies (mainly to Dunaferr). The subregion has trained, innovative labour force and its professional composition adapts to the employment demands of Dunaferr. The training spectrum of the region ensures the constant increase in the level of qualification of the labour force, its recurrence and adequate qualification for the demand of new labour force, the composition of qualification and furthermore in the future it may provide a possibility to keep young intellectuals in the region. The accessibility of public services in the industrial areas has improved, an industrial park and incubator house were established, that slowly got full of entrepreneurs, but they are not suitable for satisfying further large-scale demands. The basic public utilities vital for 12 operate enterprises are available (occupational health, water, electricity etc.) but further development is necessary. In the field of forming an informational society the subregion is underdeveloped however it fulfils the technical requirements. The regional institutional system is developed but does not show signs of bureaucratic and information economy. The small region has a well-developed bank system. In the energy sector on a national scale this area was amongst the firsts where wind power plant was introduced (small investment) and its significant expansion is planned. From the point of energy supply this subregion is suited to employ energy-intensive branches of industry. In the fields of telecommunication and communications the accessibility of mobile services, the landline telephone services can fulfil the demands. Public transportation satisfies the demands of the subregion both on intra and inter-town level moreover it would be suitable for further demands as well. In the subregion occupational health, general practitioner and health conditions are well-accessible, fulfilling the demand. Treating hazardous waste is taken car
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