Socio-Economic Potential of Regions – Theory and Practice

Abstract Research background: The paper refers to the social and economic potential of regions and their level of development. The crucial issue is not only how to measure the level of development but also their potential and what are the ways of defining this. Purpose: The principal aim of this paper is an analysis and evaluation of the social and economic potential of poviats of the West Pomeranian Province through the prism of their level of development. Research methodology: The measurements of the level of development were carried out using a synthetic measure of development. The level of poviats development was examined in aggregate for all specified factors and broken down into economic, socio-demographic, infrastructure and environmental protection factors. Data selection was made by using a factor analysis. As part of the study, a statistical analysis of potential factors was also carried out. The analysis refers to the following selected periods: 2008, 2014 and 2018 which allowed for an observation of phenomena over time in the investigated period. The research used the Central Statistical Office’s annual statistics for the specific districts. Results: The research results confirm the complexity of the study of the phenomenon of the level of socioeconomic development of LGUs, the large diversity of surveyed units regardless of the study period and their low level of development. Novelty: The novelty is that the analysis was conducted in stages, which allowed learning about the potential’s nature on the one hand and the factors forming it on the other. A material element of the research was also identifying possible directions for the use of the findings.


Introduction
The social and economic potential is a very crucial matter in the economy. It can be considered at different levels of aggregation in the economy, as well as with reference to various entities or participants of economic life. The social and economic potential is a multidimensional category. It is difficult to define it unambiguously or to quantify it. The literature devoted to the issue features a number of studies addressing the measurement of the potential or elements that form it. The following studies, among others, discuss this issue: (Schumpeter, 1960;Łuniewska, Guzowska, 2001;Dwilińska, 2005;Młodak, 2006;Mackiewicz, Malinowska-Misiąg, Misiąg, Tomalak, 2006;Nagiełło, 2006;Krawczyk, 2007;Lubińska, Franek, Będzieszak, 2007;Nermend, 2008;Dylewski, Filipiak, Gorzałczyńska-Koczkodaj, 2004Wiśniewski, 2011;Kopyściański, Rólczyński, 2013;Filipiak, Tarczyńska-Łuniewska, 2016, p. 13).
In the sphere of economics, the issues of potential-oriented research take a special place not only due to the specifics, nature or category of the potential. The direction of the practical use of findings that potential-related research holds is also crucial in this regard.
The study narrows down the direction of considerations to the social and economic potential of a selected group of local government units, where the potential was related to the level of their development in the social and economic sphere. The principal aim of this paper is therefore an analysis and evaluation of the social and economic potential of the districts of the West Pomeranian Province through the prism of the level of their development. The analysis took into account groups of factors that affect both the potential and the social and economic development of the districts. The level of districts' social and economic development was measured which made it possible to address the potential of both the province and the elements forming part of it. A statistical analysis of factors determining the social and economic development was also carried out within the research, thanks to which the occurrence of the potential in this regard was addressed. The analysis was carried out for three selected periods: 2008, 2014 and 2018. Such an approach to the analysis allowed the observation of changes over time in the investigated period. The research employed yearly data for districts from the Central Statistical Office.

Potential, social and economic potential -definition, essence of the problem
The concept of potential in the economy and its synonymous concepts have yet to be clearly and precisely defined. In the literature, as well as research carried out for economic practice, there are a number of studies addressing this issue. The considerations conducted in the literature include a contextual approach to defining potential. An in-depth analysis of these questions was conducted, e.g. in the study by B. Filipiak and M. Tarczyńska-Łuniewska (2016, p. 13).
Potential can be defined as "efficiency, capacity, possibility, especially of the state in a particular field" or "resource of capabilities, capacity, production capacity inherent in something" (Tokarski, 1980; https://sjp.pwn.pl/doroszewski/potencjal;5479032.html (access 2019); Dwilińska, 2005, pp. 113-132;Wiśniewski, 2011, p. 155;Lubińska, Franek, Będzieszak, 2007, p. 77). It should be noted that it is the resources inherent in an entity, region or country that form potential. Authors W. Janasz and K. Kozioł-Nadolna (Janasz et al., 2011, p. 53) point out that resources constitute assets, but the second factor of potential are the possibilities for their use, that is competences. This approach confirms that potential is a complex category, taking into account a number of determinants. One can also say that potential consists of many partial factors. In special situations, potential can be considered from a narrower or a broader perspective. This may mean that potential as a general category, e.g. social and economic potential, is a resultant of partial potentials (Filipiak, Tarczyńska-Łuniewska, 2016, p. 13).
Investigating potential-related issues holds a special place in the economy. Potential is most often seen as: business potential, economic potential, or social and economic potential.
The two first approaches in fact refer strictly to economic issues. The third term, apart from economic aspects (factors), takes into account social factors as well. Numerous definitions and terms relating to potential can be found in the economy, e.g. (Wójtowicz, p. 104;Ladd et al., 1989;Bartnicki, 2011, pp. 29-38). An interesting approach is also the methodological assumptions of the CSO (Markowski, 2011, pp. 27-49). It is worth highlighting that adopting a given definition of potential in the economy facilitates the identification and selection of elements forming it. It is all the more essential if the assumption is to measure potential.
In relation to LGUs (local government units), it can be said that potential has a complex, wider dimension. It is created by partial potentials reflecting the condition, resources and possibilities of a given administrative area (or region). It refers to a set of material, environmental and human resources as well as knowledge and competence, experience or skills in employing those in the future. Table 1 presents the components of LGUs' general potential in terms of resources; however, such an approach may be an indication for identification of groups of measures (components, determinant) of potential in other terms, e.g. from the point of view of an enterprise, market, sector, etc. The level of economic development depends on a number of interrelated factors. These factors illustrate the realization of conditions and occurrences in various spheres of social and economic life. Hence, an important element here is the interrelation occurring between potential and social and economic development. It can be said that there is interaction between these two categories. If, e.g. there is potential in a given area, realm or facility, development becomes more likely. The problem is the ability to make use of existing resources, and thus potential, in order to develop.
Using determinants of potential, a similar classification of factors affecting socioeconomic development may be done. In consequence, these factors will influence the level It is worth noting that this classification coincides with the factors taken into account in (Table 1).
Each group of general factors includes an array of detailed characteristics, thanks to which the level of social and economic development can be described (determined, measured). Such an angle highlights the complex nature of potential, taking into account at the same time various areas of its creation. In the question of measuring potential or the level of socio-economic development and their components, especially when using statistical methods, the adoption of such an approach to the problem facilitates the process of identification and selection of variables for the analysis.

Measurement Methods
When examining both the potential and the development of socio-economic entities it is a vital issue of which methods we choose to measure these two categories. It is important to take into consideration the methodological aspects associated with each phenomenon. We should also remember that only thorough knowledge of the level of socio-economic growth allows With no intention to diminish the role of qualitative methods in the analysis of socioeconomic development, in the further part of the paper the author has focused on several quantitative methods. These methods make it possible to study statistical regularities, which help to expand knowledge about the phenomenon of interest, to describe the direction of its trends or to define the interrelations among its factors. The group of quantitative methods offers a wide choice of options. Therefore, the main criterion for selecting a proper method is its highest utility for the projected study. There two several types of quantitative methods: -statistical-econometric methods, -multidimensional comparative analysis methods.
The first group of methods allows researchers to examine statistical regularities for scientific purposes. It also contains methods that can be helpful when identifying quantitative factors of socio-economic development or potential. These are the variable specification methods that support the selection of variables (development factors, potential factors) and indicate their statistical significance from the research objective point of view.
The measurement of the most complex values requires the use of the multidimensional comparative analysis (MCA). These are the most adequate methods for investigating the level of socio-economic development or its potential. Their structure allows for the analysis and/or measurement of values that are aggregate and directly measurable, such as the socio-economic development or the potential of LGUs. Due to their specific character, these methods can be used when constructing the development level index or the LGU potential index. In this matter, the most useful are the linear ordering methods, particularly the ones based on the concept of Hellwig's synthetic measure of development (Hellwig, 1968, p. 324). Moreover, the knowledge of the essence of the multidimensional comparative analysis methods, including the linear ordering methods, can be helpful in creating new methods or measures to analyse and measure aggregate values. The MCA methods can be also applied to identify the factors (variables) of the LGU socio-economic development and potential. We can use here the variable specification methods, e.g. factor analysis, principal component analysis or the k-means analysis. The MCA methods have been extensively discussed in the reference literature. What is more, they have been applied in a vast range of areas of economic studies (see e.g. Tarczyński, 1994;Tarczyński, Łuniewska, 2005;Hellwig, 1968, p. 324;Grabiński, Wydymus, Zeliaś, 1989;Grabiński, 1992;Gatnar, Walesiak, 2004;Batóg, 2006Batóg, , pp. 43-56, 2009Batóg, , pp. 382-389, 2010Kompa, Witkowska, 2009, pp. 391-397, 2010Dmytrów, 2018, pp. 88-96;Kompa, 2013, pp. 72-89;Nermend, 2006Nermend, , pp. 127-129, 2012Tarczyńska-Łuniewska, Nermend, 2013, pp. 85-100, 2015Łuniewska, Tarczyński, 2006;Tarczyński, Łuniewska, 2005, pp. 421-431;Rozkrut, 2006, pp. 143-153, 279-282;Rozkrut, Rozkrut, 2006, pp. 518-525;Strahl, 2006;Tarczyński, Łuniewska, 2003;Walesiak, 1993).

Research methodology -empirical example
The research employed a statistical analysis in terms of potential's factors, which made it possible to address the likeness and/or differences occurring between them. Moreover, the without weights. Calculation formulas can be found e.g. in (Hellwig, 1964, p. 324;Tarczyński, 1994, pp. 275-300). In conformity with the aforementioned classification, the groups of socio-economic development factors were defined. The factors were selected according to the approach based on grounds of substance related with the analysed subject. Consequently, a set of variable 'candidates' was created. The results of this selection are shown in (Table 2). Its content was a base primary to the analysis.
Then a statistical analysis of the selected factors of socio-economic development was performed. Its findings are shown in (Table 3).
When analysing the data in (Table 2)   At the second stage the variables were selected (from the primary base) by means of factor analysis methods. Based on the factor analysis findings, the set of variables was reduced and the subsequent selection of variables for the sake of further analysis was made -see (Table 4).    Table 5  Although the best obtained measure is much lower than 1, it still seems to be high in comparison to the lowest one. Such a situation confirms the dispersion of development levels in individual

Data in
LGUs The level of socio-economic development of poviats can be related to their socioeconomic potential. This can be done on the basis of the synthetic development measure rooted in the development pattern. The difference between 1 and the value of the development measure calculated for a given poviat (i.e. the deviation from the pattern) can be treated as its existing, but untapped socio-economic potential. This particular information is vital from the point of view of poviat voivodeship management. Therefore, the knowledge of factors shaping the socio-economic development provides more information about a given LGU (which indirectly determines its potential) and helps identify the factors that directly constitute its potential. It is a role of management bodies to skilfully use this information with a view to activating this 'sleeping' potential, thus encouraging local socio-economic development. So, referring to the changes in the values of synthetic measures, we can say that in some LGUs where the measure rose over time the existing potential was fully exploited.
The analysis of data in (Table 6)    Source: own calculations. Synthetic measures calculated for the groups show which group of socio-economic factors is predominant in a given poviat. In other words, the synthetic measures reveal which groups of factors determine the local development level (create growth) or the local potential. When analysing the dynamics of changes in the development levels by the groups of factors (Table 7) we find out in which of the groups the changes were the biggest and what their direction was. Here, the increments in various groups of factors differ significantly. When addressing the local potential, the assumptions related with the synthetic measure should be applied. The analysis of the data presented in (Table 7) shows that the unused potential is where the synthetic measures are the lowest. Such inference results on the one hand from the specifics of the construction of the synthetic measure used to describe the level of development of poviats. On the other hand, it should be remembered that the synthetic measure arises as a resultant of the factors that create it. Identifying low, "weighing" factors for measure size or high, positive factors may, therefore, be important for assessing the potential of a local government unit.
The findings of the individual analysis are also a valuable source of information from the perspective of local or regional development. Moreover, it is easier to identify the groups of factors influencing LGU development and determining their potential.

Conclusions
The potential is a complex notion and can be seen from many angles, such as its constituent factors, elements or information. We can say that the potential is represented by diverse factors coming from different areas of socio-economic development, of both an economic and noneconomic nature. We should also take into consideration aspects of environmental protection and geography which in certain situations are also responsible for building the LGU potential.
As the present study shows, it is appropriate to measure it by means of quantitative methods: the statistical/econometric methods including the multidimensional ones. The measurement performed with the use of the selected methods of structure analysis (arithmetic mean, median, standard deviation or the coefficient of variance) helps to ascertain the nature of phenomena influencing the socio-economic development. From the point of view of the local potential, it is vital to identify the existing, rather than the untapped assets. Then we can further investigate the ways and directions of using this information. Due to the specific character of the examined problem, the findings of the present analysis can usefully be applied in studies on LGU management or in sustainable development programmes.