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This paper which was commissioned by the Swedish Ministry of Enterprise, Energy and Communications during the current Swedish EU presidency aims to identify and discuss some of the most important territorial potentials in the European Union. According to the EU Green Paper on Territorial Cohesion, the territorial diversity of European regions is a vital asset in economic development and competitiveness. The purpose of EU Cohesion Policy at the European level is to contribute to the Lisbon and Gothenburg objectives for growth, jobs and sustainable development. More specifically, the Cohesion Policy should promote the cohesion of the EU-territory by improving the use of all available resources in Europe's regions. The concept of territorial potential relates to numerous factors. These factors can be divided into tangible assets, such as natural and human resources, and intangible assets, like organisation, culture, social issues and governance. Un-mobilised territorial assets constitute territorial potentials that may be realised through policies and actions at various administrative levels. Seen against the backdrop of the deepest global economic slowdown in generations the identification of regional potentials and, furthermore, the elaboration of strategies and policies that might enable and facilitate the European regions to fully exploit these potentials, is more important than ever. To strengthen competitiveness one of the main challenges facing policy-makers and other concerned actors across the regions of Europe is to identify and mobilise the territorial potentials necessary for the creation of new jobs and sustainable economic growth. Understanding the nature of territorial potentials requires a process of analysing access to different types of resources in order to gain a more detailed knowledge of the economic base of the region. However, it also requires a regional process for prioritising and coordinating relevant stakeholders and policy-fields in order to implement the necessary policy initiatives.

The findings contained in this report and developed within the East-West Window project, financed under the umbrella of the BSR INTERREG IIIB-Neighbourhood programme (TACIS strand), provide valuable insights into the search for evidence-based information on the Baltic Sea Region's territorial capital and its potentials for spatial integration, which can be meaningful for the current elaboration of two transnational strategic policy papers for the Baltic Sea Region (BSR), namely, the Long Term Perspective (LTP) for the BSR, on the one hand, and the EU Strategy for the Baltic Sea Region, on the other. The first is tasked with identifying the most important challenges currently hampering spatial integration within the region and between the region and its surroundings as well as with pinpointing the most important elements for a spatial strategy or vision with a time horizon up to the year 2030. The intention here is to approve the Long Term Perspective (LTP) at the VASAB Ministerial Conference in September 2009. The second policy paper with DG Regio in the lead has as its aim to coordinate the efforts of various actors in the Baltic Sea Region so that by working together they promote a more balanced development of the region. The Strategy will be presented to the European Council in June 2009 and will feature as one of the main priorities of the Swedish EU Presidency during the second half of 2009. The ongoing EU level debate, launched by the European Commission's Green Paper (October 2008) on Territorial Cohesion is also connected to this process. The goal of this debate is to come to a better and shared understanding of territorial cohesion and its implications for policy-making and territorial cooperation. The current report contains multifaceted analytical findings regarding the BSR's territorial capital. Issues such as population development, labour market dynamics (specifically in small and medium-sized cities and towns), he international functions of metropolitan areas, transport networks, mobility, accessibility, ICT and finally, energy production and distribution are explored. The report concludes with an extended discussion of current strategic issues in respect of spatial planning, policy-making and programming with a view to further contributing to territorial cohesion and spatial integration in the BSR.